Startup Culture: Values vs. Vibe

I hear some form of the following question a lot from founders that are starting to have early success:

“How do we hire a bunch of new people and grow the company quickly without losing the culture we’ve worked so hard to establish?”

I’ve been fascinated by different company cultures for as long as I can remember (maintaining culture is also a hot topic at our CEO Lunches each month) and I’m frequently asking entrepreneurs to describe the culture of their companies. Over time I’ve come to realize that when you break down culture descriptions you’ll often find a mix of two components: values and vibe. Although each component can have a significant impact on the overall feel of a company, the way you establish and manage the two should be different.

Values

I think of values as the guiding principals or a code-of-conduct upon which a company was founded and which it operates on a daily basis. If you establish the right set of values early, these principals won’t change with time. Values establish your company’s view of the world and determine how you treat others including employees, customers, etc. Most importantly, values serve as the foundation on which tough company decisions are made. Values are 100% controlled by the company and should be unaffected by competitors, market conditions, etc.

The people you hire will come with their own set of values. Every person you hire should have personal values that completely align with the values of your company. 95% isn’t good enough. In fact, if a team member violates a company value, the violation should result in removal of the individual from the company. Here are some other things to consider around establishing and maintaining company values:

– Document and talk about your company values with your team all the time. Consider publishing your values, and talking about them with customers, partners, etc. to add an extra level of scrutiny to your commitment.
– I believe a set of five or less documented values is ideal because you want all your employees to have them top-of-mind when making decisions. If you have too many values, people simply won’t remember all of them.
– Determine a set of tough “trade-off” questions that you can ask during the interview process they will help you determine if a candidate’s values align.
– Good values require tough decisions to be made in order for the values to be upheld. If you establish values that are never challenged, these values aren’t serving any real purpose.

This last point is particularly important. Watered down or generic values might be easy to uphold, but they also won’t establish a strong culture. Companies with unique cultures tend to have values that are unconventional and sometimes controversial. A famous example of a unique value is Google’s “Don’t Be Evil” (I believe the actual company published version is “you can make money without doing evil”). I’m guessing “don’t be evil” is discussed at Google hundreds of times of day when decisions are being made, and I bet it is surprisingly hard to stay true to this value even though the premise seems fairly simple. The fact that Google allowed this value to become public knowledge has resulted in a huge audience of observers that are constantly scrutinizing Google’s actions to see if they are staying true to their values.

Vibe

Vibe represents the emotional side of the company. Like all emotions, vibe can be fairly volatile and is highly influenced by outside factors. For example, think about the vibe of a company on the night that the first product is launched vs. the vibe of the same company when Apple announces they are launching a competing product or service. When it comes to vibe, management can certainly set a tone and try to lead by example, but the reality is the vibe of a company will naturally change with time as the company grows and the products/employees mature. The biggest influence on vibe is typically success. Most companies that are doing well tend to have an overall positive vibe.

When I first joined Aquent eleven years ago, I would have described one aspect of the culture as “a big family”. This aspect was all about the vibe and had nothing to do with the values of the company. The company was much smaller at the time and we spent a lot of time together during work and after work. As the company grew, it became impossible for every person to know every other person like a family member. The vibe changed…the values didn’t. Success continued.

As a leader, there are aspects of vibe that you will naturally want to try to control. However, you have to ask yourself a few questions:

– Is this aspect of the company important to our long-term success?
– Does this aspect need to be maintained forever and is it sustainable?
– Does this aspect apply to all areas of the company and to all employees?
– Will establishing this aspect help us make important decisions in the future?

If you answered, “yes” to all of the above, congratulations…you’ve just identified a new potential value. However, it can be fairly liberating to realize that the foosball table in the middle of the office is nice, but it isn’t crucial to the long-term success of the company.

I know this won’t be a popular statement, but I don’t think maintaining culture (as defined by most entrepreneurs I’ve encountered) is important. Instead, I think it critical to focus on establishing strong values early and hiring people that have aligning values. Maybe it is all just semantics on how you define culture, but I believe you shouldn’t sweat the vibe part. You’ll have an overall positive feel if you are successful and that is the only type of vibe that really matters.

News To Startup CEOs: You Can’t Outsource Marketing

Here’s a common scenario I see with some early stage tech startups…

Incredibly smart/tech-savvy people start a company around a cool idea. These founders build amazing tools/products that demonstrate their concept and their abilities. At this point they might decide they need to get funding. And, what will they use the money for? Often times, the word “marketing” will show up near the top of their funding needs (Sales and Business Development are also near the top, but that’s another post). Seems reasonable enough, right? I mean how else are people going to know about your company/product without marketing?

The trouble begins when you start to dig a little deeper on the “marketing” bullet point. The founders often won’t have a marketing plan yet. No problem they will explain, part of the funding will go towards hiring a marketing person. The basic thinking here is “we don’t know anything about marketing so we will hire someone who does.” If you are a startup CEO, and you think you are going to hire your way in to good marketing, I’ve got news for you: you are almost certainly going to fail. Why? I could write an entire book on this topic, but let’s start with a few basic points:

1) Marketing is not a bolt-on component of your company that you can outsource to another person. Marketing is an integral part of every decision the company makes. In my opinion, it is critical that the CEO drive the core marketing strategy in the early stages because all the major decisions around the company, the product and marketing are interrelated. A good marketing person can only help execute a plan that is based upon a strong vision that is set by the CEO. Hiring a marketing person before you know your marketing strategy is like hiring a developer before you know what platform/technology you are using to build your product.

2) If you don’t know anything about marketing, the odds that you can hire a good marketing person are pretty slim. Sure, a blind squirrel can occasionally find a nut, but I wouldn’t fund a business that was based upon such a rare occurrence. You can certainly get referrals from people you trust and respect. But, unless the person that is being recommended is coming from an identical business and you are planning to steel the previous employer’s marketing strategy (see point #1) there is little reason to believe the recommended person will be a good fit for your company/strategy.

3) If you don’t have a solid marketing strategy, your new marketing hire is either going to drive you crazy or accomplish absolutely nothing or both. If your new hire is motivated to do a good job, they will be constantly peppering you with questions you can’t yet answer in order to get some direction. You’ll be reacting to questions instead of developing a good strategy. If your new hire is bad, they will just sit back and wait for you. Either way, you lose.

So, how do you avoid this common mistake? Like a lot of growth opportunities it starts with self-awareness and acceptance. Once you accept your current understanding of the subject and you recognize the fact that you have to embrace marketing as your responsibility, you can learn quickly and make rapid progress on building an effective strategy for your company.

More thought on marketing strategy coming soon…

What if you built your business around one goal per year?

I’m getting old enough now that I’m measuring the personal milestones of my life in years.For example, 2005 was a great year because my son, Matthew, was born. 2005 is also the year we bought our current home in Boulder and the year I rediscovered my love for cycling. I can recall fewer milestones from the earlier years of my adult life. 1993 is the year I moved to Atlanta. That’s about all I’ve got for 1993. And, I don’t immediately associate 1994 with any significant personal milestone. Yikes, did I really lose an entire year?

I use the same unit of measure to recall my professional career. 1998 is the year I decided I could no longer work for a giant company (I worked for IBM at the time). 2004 is the year that we launched Robohead. 2007 is the year we launched MajorTom and the year we really solidified our current sales strategy.

What’s the point? In spite of the fact that I feel like I’m always really busy and getting a lot done, I’ve come to accept that I only accomplish one or two things a year that really matter. This realization has been one of the most important discoveries of my career. Here’s why…

Imagine how liberating and powerful it can be to recognize that you are only capable of accomplishing one…maaaaaybe two… major goals a year BEFORE you start each year. The last few years I’ve started the year by sitting down with our leadership team and asking them to help me answer the question “20XX is going to be remembered as the year that we (insert single goal here)”. I’ve found that it is really important that we limit ourselves to just one goal in order to get the necessary buy in and focus from each member of the team. Once we agree upon the goal, individuals can plan out their action items with a real sense of purpose. Any “to do” item that doesn’t have a clear impact on helping us achieve our goal will likely get tossed.

After we set our 2009 goal in early January, I reviewed all the strategic items that had been accumulating on my to do list, and I scratched off every item except one: “hire great people”. Of all the things that I wanted to do or that I thought I needed to get done this year, I realized that if I did nothing else but hire great people in 2009 we would have a great shot at achieving our goal. As time passes throughout any given year, my to do list naturally starts to expand and drift. As this year has progressed, I’ve added a few additional to do items to help us achieve our goal. More importantly, I’ve removed items before I’ve even started working on them when I realized they weren’t on goal.

Most of the people I meet who are in the early stages of launching a new business are passionate, ambitious, and seem to have boundless energy. And, I honestly don’t think you can be a successful entrepreneur without these attributes (being lucky certainly doesn’t hurt either). However, I’ve seen plenty of examples where these very same traits lead to unnecessary failure because the goals are too broad and so the energy and the passion aren’t directed.    Sometimes the only way to learn this lesson is to: try to do too much, do nothing particular well, and fail. On the flip side, if you are willing to put all of your energy in to just one goal, your chances of doing that one thing very well increase significantly.

Ask most successful founders why a particular business was successful and they’ll usually point to one or two key accomplishments across the entire life of the company. For a tech startup, it might be introducing a single killer feature or building one key partnership that leads to success. As the old saying goes, it is the quality of activities not the quantity of activities that will typically make the most impact on the success of your business. This is particularly true in an early stage business where there are few resources and lots of things you might want to quickly get in place.

I recognize that some people are far more productive than me. Others are probably never willing to accept just one goal a year. Either way, I suggest you try a trick I use every time I’m faced with a mounting list of stuff to do.    I simply review each item on my list and ask myself “if we executed this task to perfection, does it really help us get to where we want to be?” I’m always amazed how often the answer is “no” and I can just scratch the item. How does an item get on your list if isn’t going to make an impact? I’m not exactly sure, but I have a feeling it has something to do with the fact that high-energy people are willing to add stuff to their very full plates without thinking too much about the cost of the loss of focus.

If you’re feeling guilty or lazy about only accomplishing one major thing a year, just remember that you’ll likely work 45+ years in your life. That type of success rate ultimately adds up to a lot of wins along the way.