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The most interesting thing I've seen over the years is that the startups that are hitting ten or more of these tend to think they only have four or five nailed and need to keep working on the rest. I think that's what drives them to continue for focus on their culture and keep getting it right.
On the other hand, there are a fair number of startups that only have two or three of these in place. They are more likely than not to think they already have them all.
It is amazing to me how wrong self-perception can be in both directions.
It is so easy to get distracted on non-essential ideas.
It is hard to say no to things, but start-up health depends greatly on focus and prioritization on P1 issues.
This seems to happen most often in VC-backed startups. Once big money is pushing the startup in a given direction, it's hard to change, even if it's painfully obvious the original idea was dead wrong. Too often startups get big quickly on that early idea and then it's too late to say "the emperor has no clothes". This usually results in a zombie startup that has to continue to function to spend the investment but has no soul, and no chance of success.
http://blog.teachstreet.com/wp-content/TeachStreet%20Core%20Values.jpg
Essentially just someone who did an MBA, and went to work for a VC after some consulting. These "lessons" are not welcome from someone with no real-world startup experience. Did this person found a company? Apparently not.
Besides, these "lessons" are all obvious. Ask anybody, they'll say you need great X, where X is the CEO + the product + the timing + the market + the team + anything else you can think of.
Useless and arrogant.
Good times... good times.
5 key characteristics of a great VC culture:
1. Great leadership
2. Great people
3. Great ability to raise funds
4. Great ability to pick investments
5. Great communication / energy / efficiency
Thanks for sharing your thoughts. I think a company of any size would benefit from the attributes you outlined in your article. These are not just for start-ups. See http://bit.ly/UuyLO to learn what I wrote about Leadership in business and you would see a lot in common in our thinking.
@seastart - I agree, risk taking is important. People need to feel like they can experiment and make mistakes.
Alex Castro
It's a understatement to say this list is useless.
A lot of successful start-ups are highly dysfunctional. In fact, most of them are, and lack many of the things on this list.
I don't understand why Greg only recently realized the importance of company culture. Unbelieveable!
Just talk to anyone who has worked at Oracle, Salesforce.com, Computer Associates, etc. during their early days -- it's not fun. They don't have great culture.
But, they had a product that addresses a customer problem and customer was willing to pay. They sold a hack out of it. And they had engineers who could build the product regardless of office politics.
As long as you have more than 2 people, you'll have office politics. The comment that "zero official politics" is obviously from a clueless VC who had never had real-world experience.
I continue to be shocked by the sorry state of venture capitalists in Seattle. No wonder Seattle had so many start-up blow-up lately.
A startup is like a laser: it's capability comes from it's ability to be focused on a point. That point will move, sometimes even chaotically, in response to developing understanding of the business opportunity, but lack of focus will kill a startup faster than anything else.
VCs do actually have one advantage in analyzing cultural factors that may influence success. That is that any sizable VC firm that has been around for a while has seen tens to hundreds of portfolio companies come and go. One can only assume that as a result they could make some reasonably good inferences about how much any of these 13 attributes correlate with success.
Contrast that with an entrepreneur with direct experience in 1, 2, or at the extreme outside maybe 5 companies. There is just not as diverse a range of data to go on.
I grant you that I'm assuming a VC who is involved, observant, and insightful. I hope that's not too big a stretch for this crowd.
And for the record, I am not a VC nor have I ever been one.
Here's hoping he/she gets the help he/she needs.
I feel sorry for him/her. Such a sad story. Let's all band together and think positively for poor Xeno.
Hater has his underwear is a twist in his posts all around this board.
As for pj, it must be depressing in the federal pen. your Entellium things just didn't work out well.
If you keep a second set of books, don't let anyone find them.
Inmate #877652348
Quite a few people in this group spend their time patting one another's back, and believing they are cool entrepreneurs. They even organize ceremonies, where a huge percentage of attendees receive awards everybody laughs at.
Perhaps, those who wrote this post is "fantastic" or "want to share with their team" are just trying to curry the favors of this VC guy, who seems to have never worked for any startup in his life (not to mention very obvious)?
Well, at least now I can see I'm not alone in terms of seeing past this BS.
Greg, There is no receipe for the VC model brother or your shallow analysis of what works -- if there was, you wouldn't fail 90+ % of the time. And it is absolute HOOEY! that you stress "equity-driven" when you bang the valuation drum so hard at the detriment of common.
So I call a bit fat BS on both of you!!!
And for those of you slinging personal shots, use your real name. Makes for better debates and potentially more useful comments. It's too easy to be anonymous. For the record, I've worked with Greg and find him to be very smart, adds value, and is an asset to any startup.
Alright, I'm ready for the flames:)
With respect to Greg's advice in general - sure, you can say it's a little obvious - but that's not the point. This advice may seem obvious, but it's also quite elusive. Look at how many companies fail to support these key elements of success.
If you're sincere about your efforts to do well in business, then I can't see how this advice would hurt. I take it as a simple reminder of some important concepts that if you instill in your company then you're better off than if you're missing them.
Finally, I will take a small issue with two items on Greg's list. Not so much the "concept" or these items, but I would warn leaders to be careful about how these items are executed in practice. Specifically suggestions 2 and 5.
In the case of item 2 (It’s not a job, it’s a mission.) - while I agree with this in general, you must be careful that the sense of mission doesn't evolve into a sense of "righteousness" - Google's "Do no evil" is a classic example of this. Some employees take the mantra and turn it into a license. Good leaders are careful to make sure that their teams don't lose sight of the trees for the forest. (Yes, you read that right!)
For item 5, (Equity-driven) - I'd spin this differently. The detail of Greg's comments are spot on... it can't be all about short term benefit, and it can't be all about cash. But I often see leaders who allow their unbounded optimism to spill over such that everyone on the team is "putting it all on black!" - I've been on an early team (first 20 employees) at a very successful company with a stellar IPO - some of us walked away wealthy - some of us bet the farm and ended up with nothing.
Greg, good thoughts. As Brad has said, if it were as obvious as the anonymous haters suggest, then all startups would exhibit most, if not all of these characteristics.
I think the right culture is critical in any organization, particularly startups. And several different mixes of cultures can win -- I'd say Apple's culture (at least as embodied by Steve Jobs and his fairly autocratic but quite visionary leadership style) is quite different than, say, Google's more open "let a thousand flowers bloom" style, but both are obviously quite successful.
You ask "What'd I miss?".
I'd add one that someone you and I both know well -- Greg Slyngstad -- put at the top of the list in our early days at VacationSpot.com and then again as he returned to Expedia: The Urge to Win, To Be #1.
Greg and I had many debates about the merits of whether this goes first on the values list, or whether the Sense of Broader Mission/Change the World Impact goes first. But we both agreed in their importance.
The competitive spirit did seem to ignite Microsoft to better and better achievements in its earlier heydey (along with a broader vision, and many other factors you mention). BillG's desire to win seemed to permeate every nascent project, impact who gets hired and who doesn't get hired, etc.
I don't think that cultural element still exists in many product groups at MSFT, but it may in some.
I am fascinated with how culture is often embodied in the stories that people tell of the early days at a company. To that end, the book "Founders at Work" is a great read on recent startups.
1. People are very passive-aggressive.
2. They all come from Microsoft so if they do not get their way, they try to do an end run and go bitch to a bunch of other people. Weird. There is a lot of "skip-level" activity as well (people having 1:1s with board members; board members communicating with junioir staff without the exec team's knowledge, etc.). Very unprofessional if you have ever worked outside of seattle.
3. Who is the person saying "P1", "P2" etc. That is just MSFT BS. Have you ever had a life outside of Redmond?
4. Seattle is a very small town and everyone knows everyone. Boards/execs have a hard time firing anyone since it is such a small place and people are so "nice". (except on this blog board :-) ) So that leads to culture clashes inside companies since people that don't fit the culture continue to stay at companies.
5. The fact that this blog is called "Techflash" but does not stray outside of the Pacific NW is a shame. John--branch out a bit besides your occasional links to PeHUB and you will find that there is a big world beyond the province of the emerald city.
- terry D.
- Lewis, SeattleInterviewCoach.com
I'm the guy saying it's key to say no to distractions and to have a culture that supports that. Challenge me on that thought, please, rather than my use of slang like "P1/P2" -- that clearly struck a culture nerve with you.
And while I did once work for MS, most of that work and particularly the fun parts were spent far away from Redmond -- MS Europe is culturally quite different actually from the mothership.
I really like all of the suggested additions above. For me, two that I especially regret not putting in are (1) ability to prioritize well (from Bob C and Bruce) and (2) urge to win, to be No. 1 (from Steve M). Startups often have a hard time prioritizing resources, and laser focus is essential to winning. I also think urge to win is critical. I might characterize it even a little stronger as in I-would-gnaw-off-my-left-limb-to-win-if-that-is-what-it-takes.
Please stop using dumb terms like "laser focus", etc.
"I also think urge to win is critical" - that's rich / new / deep.
:-)
Yes, but when taken to extremes, without the other values, you could well end up with an Enron, or a Bear Stearns.
To choose another example, I don't know, for instance, if I really want that value (tearing my arms off to win) to be the topmost value at, say, a biotech startup, or (to take an extreme) Johnson & Johnson if I am a customer, employee, or shareholder of theirs. But clearly, the competitive spirit is critical, and the desire to win and be recognized as the best drives most of the great companies.
Thus the debate we used to have...
Still, I think you make some good points. 2, 9, and 13 are different ways of saying the same thing so you're down to 11. In fact, I could argue integrity touches nearly all the other points. I'd suggest a good signal for determining when a start-up's culture is beginning to go sour is when it begins to differentiate between integrity and the other items on the list.
This is obviously your perspective as a VC. I've got a challenge for you since you're a guy who, ultimately, employs guys like me. Make some more lists and get feedback like what you're getting on this one.
1. What 10 things make for good company culture from the perspective of the rank/file?
2. What 10 things ruin company culture from the perspective of the rank/file?
3. What 10 things do you look for when evaluating a CEO's performance with respect to company culture?
4. What are 10 things an employee at a start-up should look for in their CEO?
5. What are 10 things an employee at a start-up should look for in their Board?
It's be interesting to see if anyone thinks any of the lists are aligned, even at a theoretical level.
1) some suck up to Greg with hope to get a meeting
2) some angry that madrona did not fund them or not have a chance to get same while trying to promote their lame idea
3) only few see the point
Greg, look from the people's point of view and not as an investor trying to protect the cash that put into the company
People want three things, and no need to go to bakery for more:
a) money, more is better
b) fun work and environment to work at
c) many want to work less and get more
Now try to find a middle ground between what you want and what you can get for your money. Good leadership helps to motivate people, but not for long. Here in Seattle you have very lazy execs, giving a bad example to employees. Go to Valley to find the leaders willing to work hard for what they get. Of course the Silicon guys will be spoiled soon by Seattle vacation resorts environment so need refreshments again
1) some suck up to Greg with hope to get a meeting
2) some angry that madrona did not fund them or not have a chance to get same while trying to promote their lame idea
3) only few see the point
Greg, look from the people's point of view and not as an investor trying to protect the cash that put into the company
People want three things, and no need to go to bakery for more:
a) money, more is better
b) fun work and environment to work at
c) many want to work less and get more
Now try to find a middle ground between what you want and what you can get for your money. Good leadership helps to motivate people, but not for long. Here in Seattle you have very lazy execs, giving a bad example to employees. Go to Valley to find the leaders willing to work hard for what they get. Of course the Silicon guys will be spoiled soon by Seattle vacation resorts environment so need refreshments again
There is no doubt that this type of attitude is completly distorting Greg's perception (and understanding) of what it takes to succeed. Let Greg go back to what he does best: raising and managing capital.
The irony here is that many of the same folks who say that VC's have nothing to add are exhibiting more arrogance in that very statement than the ones they criticize so often for arrogance.
For what it's worth, I've worked with Greg on a couple ventures, and have found him to be very insightful and driven.
Look, to me, if someone agrees with another's ideas, it simply means they agree with their ideas. It doesn't make them a suck-up, anymore than disagreeing makes that person an asshole.
As for the Seattle inferiority complex and the crazy attitude some have shown on the board, I'll say this: get over it. I've started a couple companies, one VC-funded and one bootstrapped. I've lived in Silicon Valley and worked for the giant software company here in the Northwest. I've seen lousy and lazy companies in the valley and great ones here, and I've certainly seen the reverse.
At the end of the day, I think Greg is fundamentally correct -- you need to focus on the team, the product, the market, and the culture of the organization that tackles the opportunity, regardless of whether your firm grows organically without outside institutional investors or internally.
Brutally trite stuff. Looking for inspiration not receipes.
McIlwain, Higgins, Hanauer -- these are VCs I want to hear from
I'd add two more.
First, "Maintain Intellectual Honesty." By that I mean, don't blindly drink the Kool Aid. Too many CEOs confuse "cheer-leading" with "leading". If something is broken, admit it and fix it. Don't modify a power point and convince yourself (and team) that the problem has gone away. Sounds basic but the majority of start-ups fail right here.
Second, create a "learning" and "modifying" organization. Very few great start-ups begin with the right plan. But they start with an idea, get out in the market and learn, and then modify their idea. Sounds basic but actually very difficult to execute.
But not suprised given your rally around the importance of culture ephiphany after < wait for it > TEN YEARS?!!!!
http://www.amazon.com/gp/offer-listing/07689144...
To Greg's credit, he was not claiming to be an "expert" but rather a discussion starter -- which I believe displays more humility than arrogance. And then the college sophomores showed up. In spite of this, some valuable insights have been added.
As a consultant, with several startup clients over the years, run by people who were by every definition "brilliant" it has often floored me that they were oblivious to cultural dynamics that were obvious to me as an outsider. Some of this is due to my training and experience, and to being a keen observer, but often it came from my vantage point. Not being in the line of fire gives one the luxury of a more panoramic view.
Those who lead the charge with trusted advisors on the sidelines seem to have the advantage. I have seen many brilliant leaders with brilliant ideas fail because of their lack of understanding about cultural dynamics. Generally, these were people who did not listen, and therefore, their observations were myopic and/or they lacked peripheral vision. These are leaders who lacked humility.
I can think of tragic examples of companies that have either failed or never reached their full potential because of the inability to create the type of culture that Greg has described. Unfortunately, these are not as "obvious" as some commenters have suggested.
May I suggest 3 more characteristics:
1. A leader with a healthy dose of humility (the sort of humility that allows for true confidence.
2. Reality-based -- including fearlessness in facing reality
3. A healthy view of mistakes, rather than environment crippled by the fear of making mistakes and therefore limiting creativity and brilliance.
Thanks, Greg. I will be using this list in assessing my client's environments.
At the end of the day what counts is that you know if the focus of the venture is the "end" or the "means".
What I mean is that many great companies focus on the result while other prefer enjoying the journey. The company's culture reflects this perspective.
Pesonally I think that the founders must have a very clear idea of the goals or mission the company is striving for, while at the same time offer an unforgetable experience not only to the employees, but to all the stakeholders.
At least, that's what we're trying to do and it's not easy...
At the end of the day what counts is that you know if the focus of the venture is the "end" or the "means".
What I mean is that many great companies focus on the result while other prefer enjoying the journey. The company's culture reflects this perspective.
Pesonally I think that the founders must have a very clear idea of the goals or mission the company is striving for, while at the same time offer an unforgetable experience not only to the employees, but to all the stakeholders.
At least, that's what we're trying to do and it's not easy...
Yeah. I've worked for several startups in both individual contributor and managerial roles. Trust me, any VC who takes the word of a CEO about the company culture is insane. And if you think a couple CEO-picked execs are going to give you a "real" perspective on the company's culture, you're drinking the kool-aid faster than the CEO is pouring it.
How about this for a novel idea? Actually contact rank and file employees and take them out to lunch... Talk to them about what it's like to work for the CEO and what type of culture he or she is creating. I'd bet a 100 bucks that the employees view of the company culture is radically different that what the CEO and his/her preening execs have told you around the board table.
Does this take extra time? You bet it does. Will it give you a view you aren't getting from the CEO who spends all of his time promising you that he's building a "killer start-up culture". Yes indeed.
If only board members, VCs, and angels spent an extra 10-15 hours a year talking with real-live employees of the companies they fund. It's not that much time. How many disasters and cluster f%#ks would be avoided because they actually got information from the ground floor and not the penthouse?
-Denny Chapin
I have worked for many start-ups that have all posted comments and creeds about the importance of it employees and it customer however they often fail I found that some many companies that I have worked for had great ideas but failed to build a sustainable business model, further more all of these wonderful “characteristics” are out the window come quarter or year end when management needs us to drag in the deals at any cost.
I read a great quote from a Portland VC firm’s website, “"More startups die of indigestion than starvation. Focus. Focus. Focus! "
quick learning through instant prototyping easy failing and creating lasting value
....startuping is a continuous process, evolving over time;-)
Cheers,
Ralf
PS.: Right now we are building up an action research driven innovation incubator based on the ideas around singularity. http://twitter.com/LockSchuppen
Yes in theory but show me the practice.
Also funny that most VC's can proselytize but cannot actually practice what they preach ;)
The problem I see is that quite a few of them reinforce notions that are wrongheaded and counterproductive.
I find #3 particularly objectionable as it creates a stifling, unbearable attitude at many companies which makes #1, #12 impossible.
Platitudes such as 'no politics' and 'intolerance' are not only divorced from reality, but they reinforce unrealistic and objectionable behaviors which make working at many firms impossible and is a recipe for creating sweatshops.
I've both experienced and spoken with other startup folks about the cultural disruptions that can occur as startups jump from say 8-10 to 20-25 people, and from 30-50 up to 80-100. It's in these periods of fast & dramatic growth that we most often see company culture become toxic. Some turnover is natural - early stage types, for example, often just don't want to work at a bigger company - and a 100-person company can't have the same culture as a 10 person startup. That being said, I've seen startups lose their entire founding engineering teams because of critically mis-managed cultural growth.
I don't know that there are any answers here, but I'm inclined to say that addressing culture/growth is more difficult than building an initial early-stage team & culture.
Is all this "obvious"? It's not rocket science but it always amazes me how frequently people don't engage in a little self-assessment from time to time. Many entrepreneurs are PARTICULARLY bad at this. So it's helpful to have a checklist of things to measure yourself against from time-to-time. I would add to this list "A true openness to Partnering". I know well from experience that all the items Greg listed are important but have also learned that sometimes startups who may score well on most of the 13 attributes above develop an NIH arrogance that impedes progress overall because a technology team or sales/marketing group balks at working with a partner because "we can do it better" or "cheaper". I'm not talking about core stuff, but stuff that adds value, either to the core product/service or is complementary. There are sufficient roadblocks to success that it makes no sense to gratuitously turn down opportunities to partner with outsiders who can help.
My thoughts: All you really need is a team with the will and desire and ability to execute. Even the best teams exhibit the worst behaviors. Its human nature.
It's a fallacy to say people want to work less and get paid more. At least, not the people I work with. The people I work with realize that we're only on this planet for a few short decades and if we want to kick butt and make a difference, then life is too short to be working somewhere where that isn't happening.
One of the best cultures I experienced was at MIT. MIT doesn't do legacy. MIT doesn't give honorary degrees. MIT is a pure meritocracy - they don't give a rats where you came from, but if you are the best on the planet, you are welcome there. Want respect at MIT? take the hardest classes, the toughest workload, and kick butt doing it. People there know that they are surrounded by the best. Google implemented a culture like that when they started, and you can bet that that's what I'm looking for whenever I'm involved in an organization.
Greg, thanks for summing this up - not only were your headlines good, but your examples were even better.
So many companies have failed recently only because VC invested in "I did it before" without looking beyond his clumsy napkin he came with.
1. The target moves if you take a year or two to develop a product -- if you don't keep up with the target you will miss the wave.
2. Focus on quantitative real market data consistently solves many of the other items: time-to-market is faster, focus is on real evidence not seat of the pants stuff, ends endless marketing/engineering arguments about most needed features, gives marketing the focus for simple messaging, provides a steady foundation for transitioning from 10 to 100 person company, gives "best practice" management style for the second, and third acts, provides investors with real world evidence that the company is on target with its audience.
While I recognize leadership, will to win, and other cultural factors are necessary, I feel strongly that solid and constant market based evidence steadies the ship and aims it at the right port of entry. It is foundational to any startup and takes a higher ranking than some of the other items that are really not controllable.
How is mediocrity objectionable? Is that to say that sucking is ok? Not giving your all is worthy of reward?
Perfection is a journey not a destination. As you make that journey dedication is required. Life is short. If your only desire is to do the minimum you're a threat and danger to a community.
I'll take an employee who gives their all and fails, before I take one who gives the bare minimum to nearly scrape by. At least the latter is living a honest life and will deliver the community to truth in a more timely manner.
I think this list provides a valuable analysis. More could be added but the fundamental message is clear and accurate. I'll subscribe and take a page from this book.
I used to think that business was about survival of the fittest. I've come to realize that it is about survival of the least dysfunctional. I describe it to people as a room full of people hitting themselves in the face with hammers. The last guy to hit the deck .. wins.
Your company could be a dysfunctional hellhole rife with politics and nepotism, but if your main competitor is a dysfunctional hellhole rife with politics, nepotism and an embezzling CEO, relatively speaking you're doing OK.
People should also evaluate startups before joining.
“http://tinyurl.com/lr6nwx”