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Think of culture as a company’s foundation.
Whether a startup or corporate giant, the interactions between an organization's people, the mindsets they share, the expectations and goals they bring to meetings and water coolers—these form the bedrock beneath product and revenue. Companies like Stripe, Atlassian, and Google outperformed their peers because they designed their culture as the primary support structure beneath product development and market growth strategies.
This takes work, and many companies miss the opportunity to lay the groundwork for culture early. I've noticed that a leading indicator of a successful business is the CEO or founder’s investment in building a workplace where employees embrace a company's mission, vision, and goals throughout the company’s evolution. This foundation is the “secret sauce” that helps companies reach aggressive revenue targets and, ultimately, win.
If a founder wants to build an outlier company and become a talent magnet as they scale—culture must become a priority from the start. (As one example, Coalition founders wrote out their cultural values before even writing a business plan.)
Why Being Culture-First Matters
Looking at culture as the foundation of a group is not a novel idea. Sociologists and historians can point to myriad examples where the rise and fall of a people or civilization hinged directly on the continuation—or dilution—of the values and beliefs within them. Take a closer look at the "failures" and "collapses,” so to speak, throughout history, and you often see the people focusing on goals and objectives a long way from where the culture began.
I hear founders use the term "reduce friction to adoption." Culture works similarly, except culture reduces friction to performance. Check out the attached image. When a company is three people, communication works like a triangle; there are three lines. But as a company grows to six, suddenly there are fifteen. At nine, there are 36. At fourteen, there are 91. Containing ideas and messages gets unruly quickly. (The formula here is L = n(n-1)/2 )
We hear echoes of this today: "Giant Company X used to have such a clear mission, but Y reasons grew up around them, and they fell apart." I've noticed there are three main reasons for Y.
The first is talent efficiency. When a company is in the seed stage, each employee "in the garage" (or living room, or wherever they're getting going) is deeply onboard with the mission. They wouldn't be there otherwise. And as such, they almost always find their work deeply rewarding: they are building something exciting, and even if today's progress means sorting the recyclables, the mission—the hope—is so clear that grunt work is kinda fun.
But as the headcount increases, process piles on, and by the time a company crests the 100-employee mark, if they aren't careful, objectives have become murkier—"Everyone seems to have a say these days"––or weighed down by processes.
The second area where the wrong culture can undercut a company's growth is personal alignment on an individual level. In the early stages, most hires have been pulled from the founder's network—and everyone is aligned with the vision. But as the company scales past 100-125 employees, usually around the B round, employees' alignment with the product peaks. New leadership has differing views on how to scale the product. Meanwhile, personal (literal) investment becomes unbalanced as early employees vest their options and new hires arrive with a thinner slice of the pie. Without the strong hand of leadership, that early sense of alignment with the mission and vision diminishes.
The third is with the belief in the company: trusting that the incredible amount of time an employee spends each day is worth it, both from a financial and a morale point of view. Where the graphs of the first two areas I just mentioned look like a line moving down and to the right, this curve looks more bell-shaped. At the start of a company, the belief in innovation and product (not the mission, an important distinction) needs to be higher. Everyone knows when the demo clunks, how to submit a bug report, and what features to gloss over. It's early days; everyone wants to get a minimum viable product out the door.
Then investment comes, the company grows, and with it, the resources to innovate grow. People can try new features and ideas—they are a collection of entrepreneurs bettering the product under a single flag. This is the lightning in a bottle founders must preserve: that balance between innovation and scale. Because as a company hits those later rounds of investment, board members will finally understand where the gold is; they'll start pushing priorities from the top down, and while it might be in line with the company's mission, it may be way out of line with how employees had expected to accomplish it.
Planning: Define Mission, Values, and Goals
Put another way, culture should be defined no later than when you’ve reached 50 employees. This ensures that as you grow when there are challenges and as leaders come and go, your company and employees can operate in a repeatable, clear, and mutually understood way.
Mission
What is a mission? Think of your mission as your company’s reason for being, purpose. Missions statements will seem unattainable:
- Nike - “Bring inspiration and innovation to every athlete in the world." "If you have a body, you are an athlete.”
- Google - “Organize the world’s information and make it universally accessible and useful.”
- Microsoft - “To empower every person and every organization on the planet to achieve more.”
These examples are good because they’re wildly ambitious but define what these companies do and who they do it for. Google, in particular, is great because it can be broken down into achievable parts. At first, Google was all about collecting data from disparate sources and presenting them on a search results page. Eventually, their thinking evolved because of the understanding that user intent may differ depending on the query. This led them to redesign their results page to present richer media for certain searches. This bold redesign really delivered on the second half of their mission statement, to make the world’s information “universally accessible and useful.”
Values
What are values? These are the beliefs and behaviors that you want to exist in your organization that enable everyone to work together toward a shared set of goals. I think of values as principles defining “how work gets done” at your organization.
Some good examples:
- Atlassian - these are the same values that existed when I worked there over a decade ago
- Coalition - to my earlier point about doing the work sooner than you need to, Coalition specifically states that they “take culture so seriously that our founders wrote our cultural values before they wrote our business plan”
- Stripe - incidentally, these values have changed since Stripes' inception, which is ok
These particular examples explain how to make a decision. Consider Atlassian: anyone would know that all decisions must be transparent, in service of the customer, and with our entire team in mind. This creates a lot of clarity and autonomy for employees to work efficiently and impactfully. Without this guidance, it’s like what Claire Hughes Johnson (Stripe) said in The High Growth Handbook by Elad Gil:
“You know why playing a game is fun? Because it has rules, and you have a way to win. Picture a bunch of people showing up at some athletic field with random equipment and no rules. People are going to get hurt. You don’t know what you’re playing for, you don’t know how to win, you don’t know how to score, and you don’t know what the objectives are.”
Unclear values = directionless employees. To help founders ensure values are imbued throughout their employee lifecycle, I’ve created a simple rubric system.
Here's a story from my own career: I joined Stripe in 2020 as the head of people operations. I was employee 1900—ie. I joined when the company was in full swing—and like most employees, I underwent an onboarding designed to help me fully understand the mission and values of the company. This was training and a level of insight far deeper than what I had learned during the interview process or what I, or anyone, could glean from Stripe's public-facing persona. We learned things like why there was room in the market for Stripe to exist and how to write for Stripes. It was a full tour of the company's DNA and expression of it.
Shortly after completing this, I was scheduled to participate in my first quarterly business review. In anticipation, I spent a lot of time—and I mean a lot—reviewing the goals and our measures to determine if we were on the right track—and what was the right track. Because of this deep analysis and the rigorous onboarding, I realized one of our most important ops initiatives was off-track. I took no pride in telling management that a critical campaign needed to be revamped, but hadn’t I received the onboarding I had—I wouldn’t have been able to help guide the campaign back on track.
Was the plan perfect? Of course not. But to crib from General Dwight D. Eisenhower: The value was in the planning, not the plan itself.
Goals
Goals are pretty straightforward. If values tell people how work gets done, then the goals tell people what they should accomplish. There are a million different goal-setting frameworks (SMART goals, Google’s OKRs, Salesforce’s V2MOM).
To make this simple for an early-stage founder with a million competing priorities, when done well, goals should:
- Define outcomes, not actions
- Establish ownership and accountability
- Be measurable
- Delineate how progress is reported
Additionally, you should have a long-term vision, like a five-year plan. It’s in the process of planning these aspirations where there’s value because the goals that ladder up to your vision will undoubtedly change, so don’t be too precious about developing them.
Amazon went from being “the online bookstore” to “the everything store” to being a leading cloud computing provider (and also the world’s biggest e-commerce store). Each new vision required the creation of new goals and outcomes to support the teams executing them.
Build Culture Early
Culture is the defining characteristic of great companies that scale. Early-stage founders should consider their talent strategy a critical lever to scale their business, not an afterthought.
While the innovation of the product may help the company scale to a Series B or C investment—after that, a weak cultural foundation will expose leadership’s ability to build a great business successfully. Because at scale, the new employees stress the cultural fabric woven by the founding team. This is all measurable by their talent’s efficiency, personal alignment, and belief in the company.
As I will discuss in subsequent posts, there are strategic ways leadership can instill the values, mission, and goals throughout an employee’s lifecycle that help scale culture.
