Part of what everyone loves about startups is their culture. There's the archetypical foosball-table-and-everyone-running-around-in-hoodies vibe, but the pluses of early company culture generally go deeper than perma-casual attire and laid-back office design. Small companies are nimble, human, and exceptionally innovative. So as your company grows, it's key that you try your hardest to hold on to your original startup culture, right?

Not according to Twitter CEO Dick Costolo and Evernote founder Phil Libin. A recent post from iDoneThis founder Walter Chen highlights why these two über-successful startup leaders believe that cultural stagnation is just as dangerous for young companies as it is for corporate behemoths.

Chen relates the story of Libin going to Costolo for advice on how to keep his quirky company culture alive as the company head count grew rapidly. The essence of Costolo's response: Don't try.

"Startup culture shouldn't be taken for granted as something that's good," Chen writes. "You have to think critically about it, and that's the lesson Costolo passed on to Libin. Rather than preserving the culture as if it were already an artifact, the CEO's job is to take the lead on the direction and deliberately evolve the culture."

The Dangers to Startup Peter Pans

Refusing to grow up is tempting in business (as it sometimes is in life), but Chen insists that a stagnant company culture presents real dangers. Just look at the sexual harassment scandal at GitHub as a case in point. HR may seem dreary to cool startup kids, but adult reflection reveals all those policies and procedures are generally there for a reason. Resist implementing them at your company's peril.

"As your company grows, it operates at a larger scale in everything it does," says Chen. "If the proper protective measures aren't put in place in the early stages, a company has the potential to do tremendous harm to itself and others." Still, no one wants to see the baby tossed out with the bath water. Though you may need more guidelines and procedures as your company grows, you don't want to stymie creativity or lose your appeal to top talent, which are real dangers of overly corporate cultures.

How do you get the balance right between keeping the innovative spirit alive and putting in the necessary protections for a bigger business? Famed VC Ben Horowitz has highlighted Airbnb as a company getting this right, according to Chen. "In Airbnb's early days, when a guest ransacked a host's home and they were forced to go into crisis mode," Chen says. "It was a pivotal point--if the culture at Airbnb had failed to evolve beyond the fast and loose rules of startup culture, the company's existence would have been in peril." 

How concerned are you about preserving your company's culture as it grows?

Published on: Sep 8, 2014