A couple weeks ago I posted a conversation with NewCo founder John Battelle that covered why we need to put mission and purpose back into startup culture. Let's follow the NewCo movement with some simple leadership principles that can get venture-backed companies back to building businesses that matter, for stakeholders and for employees. Shared mission. Shared purpose. Shared sacrifice. Here are four tips for fixing broken startup culture.
1. Preserve your reputation - It's more important than a contract.
As you and your organization develop, the speed of deals, strategy pivots and potential new initiatives ensure that if you haven't established trust in your business, opportunities will go elsewhere. It's pointless to have an A-list backer, a flashy title, or a hip workplace, if people don't trust you. Reputation matters. Myopic focus on the next hot idea or a quick exit feels unauthentic, fleeting and inconsequential. Work to build a better business, to improve lives, to develop an organization that goes about their work the right way. These days most deals take so long to actually close that only your reputation allows them to get off the ground in the first place.
2. Fly coach.
There was a time in my young career when I was loath to spend an extra $150 for a direct flight to my next business destination. My company, Parametric Technologies, was a high-flying startup with a world to conquer, expectations to meet, and options to make valuable. Every penny was managed, by everyone. It was a simple shared mission that bound us together from CEO to engineer. As a group we kicked ass, and as employees and options holders, we did our part on the cost side as well. Flying up front, nights at the W, lavish evenings of cocktails - the corrosive mindset that accompanies an organization with executives who flaunt spending is counter-productive in too many ways to list. It breeds a "gotta get mine" culture, and it bleeds cash.
3. Avoid the "rockstar" hire.
The vast majority of the "rockstars" in any discipline I have met in Silicon Valley simply don't clear the bar. You have seen the resumes. A couple years at PayPal or Neflix during the heyday does not a "rockstar" make. On top of the expense of missed expectations, the damage to organizational cohesion is too steep. Do add exceptional talent to your business, but not at the price of sowing dissent. The label and the mindset are not worth the trouble.
4. Pay employees what they are worth and not a penny more. Add options.
Forget breakfast, lunch, and dinner, and forget the Himalayan pink organic popcorn snack bags. A culture of entitlement is not a culture that can last unless you have a business model that prints money. Even then, why go there just because Google does? Entitlement is the opposite of sacrifice. Entitlement breeds a self-serving, capricious attitude. Let employees decide on their own dime if they need that bottle of Kombucha. Odds are they don't.
It comes as no surprise that Silicon Valley venture capital firms pay the highest rents in the United States. Why then is the VC world so surprised by the trend toward excessive spending (or high burn rates) inside the portfolio companies that VC's manage for their limited partners? Culture comes from the top. A leadership style predicated on the "do as I say, not as I do" mentality is not leadership.