What Can We Learn From Startup Cultures?

Working for a startup is very different from working for a larger company. Popular culture would have us believe that startups are all the product of twenty-something college graduates, writing code in sweat pants, after been given tens of millions of dollars by venture capitalists. The true anatomy of a startup is often older, less gritty and unfunded. Regardless of which version of the startup you embrace, the truth is that larger, more established organizations can learn from startup cultures.

Eric Ries author of The Lean Startup, says that those working for startups are doing so “under conditions of extreme uncertainty.” In spite of this uncertainty, job satisfaction remains high. This may be because startups “stand for culture and fun, just as much as work,”[1] with 93% feeling valued within their team and by company founders, according to this APA study.

Employee satisfaction is considerably lower in more established businesses. According to a global Gallup survey, unhappy employees outnumber happy employees on a scale of two to one. A staggering 63% of workers are “not engaged,” with a further 24% being “actively disengaged.” Only 13% are “engaged” workers who enjoy their work. This means that a total of 87% of workers “are emotionally disconnected from their workplaces and less likely to be productive.” This is one of the main reasons that over 2 million people quit their jobs in America, every single month.

Clearly, larger companies can learn a lot from the working culture of startups—starting with these three common characteristics that make startup environments uniquely satisfying.

1. Greater Transparency

Having more information about the overall state of a business increases an employee’s level of confidence and job security.[2] This, in turn, increases satisfaction rates. As a rule, most startups practice a high level of transparency with all employees and often extend full transparency to key employees. The company that developed Buffer, a social media management tool, is a great example, exceeding even the standards of fellow startups. At Buffer they practice “radical transparency,” both internally and externally. To give you an idea of what radical transparency means, here are a few of their key metrics shared publicly on their blog.

What does this level of transparency do for Buffer?  Even entry level jobs get thousands of applicants, and they’re only a team of 17. While radical transparency may not work in your organization, opening up a little will likely increase the satisfaction of your employees and help them feel more a part of what’s going on.

2. Job Perks

With great uncertainty comes great reward. Employees at startups are rewarded well, with perks and flexibility if above-market salaries are not an option.

Expensify, an online expense-reporting startup, for example, takes all its people offsite every year for an entire month to work, bond, and play, in a foreign country. One year it was Vietnam, the next, Thailand, on a beach, for a month.

For most startups, however, the perks happen in the office. The following have become commonplace amongst startups: free meals, massages, unlimited coffee, office beer, happy hour, free snacks, discounted gym memberships, casual dress, electric go-carts, foosball and all manner of ways to have fun at work.

When it comes to perks, a growing body of research suggests that focusing on fun and spontaneity is more effective in motivating employees than are performance-based cash and rewards. Apparently, being rewarded for doing good work can actually demotivate people, while unconditional rewards and perks that focus on making work fun and enjoyable contribute greatly to employee happiness and satisfaction.

3. Strong, Values-Based Culture

When was the last time you sat down and thought about your company’s values? Can it be said that your people are living them?

Jeff Lawson, CEO and Co-founder of Twilio, a cloud communications company, defines his startup culture in terms of values-based decisions and states, “Culture is how you, as [CEO] are confident that every one of those decisions is the right one. In an environment where you say, you know, people aren’t allowed to make decisions; that obviously doesn’t work.”[3]

Tony Hsieh, CEO of Zappos, is often praised for his work in establishing a great culture. He feels it comes down to the recruitment process and making sure every hire is a great fit with the company culture. Hsieh knows that: “Many companies have core values, but they don’t really commit to them. They usually sound more like something you’d read in a press release. Maybe you learn about them on day one of orientation, but after that it’s just a meaningless plaque on the wall of the lobby.”[4]

Both Hsieh and Lawson consider culture their number one job. In larger organizations the HR department often has a great influence on the culture, which is why it should ensure that culture permeates onboarding, training, employee review sessions and hiring decisions. Dane Atkinson, founder of the analytics firm SumAll, believes a strong culture of employee ownership creates an “environment in which your team members are owners of the process, so they’re dedicated.”[5]

Imagine having an engaged and satisfied workforce like these startups, backed by the resources of your larger corporation. Imagine what you could accomplish. There are a lot of things that small, nimble companies can do that are not possible for large, complex organizations to emulate. These three factors are not those things. Greater transparency, fun rewards and a value-based culture are all well within the reach of any established organization that is willing to commit to change.


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