Culture Code: Creating A Company YOU Love

March 9, 2013

This article is available at -- the slides and content will be updated periodically. I'm working on a really big project on the topic of culture.  Follow me on twitter (@dharmesh) to get an update on March 20th when it comes out in public beta.

This article represents the notes and slides related to a talk I'm about to give (in less than 60 minutes) at the #LeanStartup event at #SxSW 2013.

Here are my notes on the talk.  Note:  I'm writing these roughly 90 minutes before I go on stage, so they're a bit rough.  

1.  Posted the historical recurring revenue numbers of HubSpot.  Rationale:  Transparency is one of our core cultural values at HubSpot.  So, every year, we post our financial deck with details   

2. Entrepreneurs don't spend many calories thinking about or working on culture.  There are several common reasons for this:

a) Culture?  We don't need no stinkin' culture!  We're putting a dent in the universe.  That's our f*!#ing culture!

b) Culture?  Relax.  We got this one covered.  We have free beer and a ping poing table.

c) Culture?  You can't really create that.  It has to be built organically. It just comes from the behaviors and example of the founders.

All of those are reasonable positions to take.  They're misguided, but they're reasonable.

a) Most of the startups that did end up putting a dent in the universe didn't really know that they were going to succeed at it.  And, one of the few common characteristics of super-successful companies is that they have a distinct culture.  Google.  Facebook. Zapps. Netflix.  The list goes on and one.  

b) Maybe you can't create a culture -- but you can certainly destroy it through neglect.  The 2nd Law of Thermodynamics applies here.  Left alone, most things degrade to crap.  In the early days, it's OK to rely on the behavior of the founders and early team to set the culture.  That works great.  The problem with this model is that as you start to grow, there's a fair amount lost in translation.

3. Convention over Configuration.  Yes, you could just let people make decisions organically based on their best interpretation of whatever they think the right model/framework is.  But, I generally favor convention over configuration.  Why not just have a convention (i.e. culture) that makes a large body of easy decisions and a small body of hard decisions easier?  The result is more efficient and more consistent decision-making.   

4. product:marketing :: culture : recruiting
product is to marketing as culture is to recruiting.  Yes, you might be able to do amazing marketing -- but it's not going to matter if the product isn't amazing.  It's a tough slog.  Similarly, if you're looking to recruit amazing people (who isn't), you're going to need to a great culture.  The kind of culture that will appeal to the right kinds of people and get them to self-select.
5. The interest on culture debt is really high.
You've heard about technology debt.  That's when you take short-cuts today, because you *need* to get something out the door.  You willingly take these short-cuts, because time is suer-valuable (just like cash is valuable when you take on financial debt).  But, you understand that there will be a time to pay off that debt.  And, the debt carries an interest rate.  Culture debt is when you take a short-cut -- hire someone now because they have the skills you need and you're *hurting* for people -- but they're not a good culture fit.  You let the "culture bar" down.  You might do this for logical reasons.  For the same reason you might incur technology debt or financial debt.  
I'm going to posit that the effective interest rate on the culture debt you take on is often higher than that of technology debt.  That is, when it comes time to pay off the debt -- a lot of damage is done.  There are a couple of reasons for this:  1) When you incur technology debt (like not adding sharding to your database), you generally will start feeling pain at some point, and you'll then decide to pay off that debt.  It's a *known* problem and when you solve it, you'll sort of know you did. That's not the case with cultural debt.  Culture debt is insidious.  It creeps in slowly.  It's hard to measure.  2) Technology debt is often "forgiven".  This happens when a short-cut you took ends up not being a bad thing anyways.  An example might be that you hacked together an MVF (minimum viable feature) for something in the app.  The code is crap.  You're not proud of it.  Then later, you decide to abandon that particular feature.  Guess what, your tech debt on that feature was just forgiven.  That almost never happens in cultural debt.  If you bring on people that aren't a fit, they'll infect other parts of the organization, and will be really hard to get back to where you want to be.
6. Create the culture you want, not the one you think you should have.
There's a lot of content out there regarding "winning" startup cultures.  Some will advocate for an open/transparent culture.  Some for a design-focused culture.  Some for a service and customer-centric culture.  Fact is, any of these will likely work.  The key is to understand what it is that defines your culture (and importantly, what makes it differetn from other companies) -- and to build alignment around that culture.  And, in order for the culture to survive long-term, you need to love it.  You need to believe in it.  If you simply try to tweak the culture based on what you think the right answer is, you'll lose steam and lose conviction.  Game over.
Summary:  You can nudge your culture.  It's worth it.  You're going to have a culture anyways -- might as well build one you want.  

Written by Dharmesh Shah

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