Startup Culture: What It Is, Why It Matters and How to Build It

7 steps to build and maintain a strong startup culture.
Product Marketing Manager
October 18, 2021
Updated: February 22, 2022
Product Marketing Manager
October 18, 2021
Updated: February 22, 2022

For most people, the phrase “startup culture” springs to mind free-flowing kombucha, beer on tap and table tennis — perks that shout “We’re here to work hard and play hard.” In a hybrid or remote workplace, it might also include unlimited paid time off and work from anywhere policies.

But perks do not a culture make. Charisse Fontes, founder of the culture consulting firm CultureCircle, likes to call those “deepfake perks,” or perks masquerading as culture. When that’s all founders focus on, they often end up with a toxic workplace and stories of people feeling mistreated.

What Is Startup Culture?

Startup culture is the shared values, thoughts and beliefs that shape how people work. Startup culture is different from corporate culture because it typically reflects the personalities and passions of the team members. That’s not to say that employees don’t influence the culture of more established organizations, rather that individual contributions are more impactful at startups or smaller companies.

 

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Instead, Fontes defines startup culture as a set of shared values, thoughts and beliefs that shape how people work to reach the company’s goal. When Fontes works with startup leaders on their culture, she instead has them focus on how they want people to feel when they work for them.

“A little humanity goes a long way,” Fontes said. “Humanity will cross-pollinate the core functions of the culture from the way you recruit and hire, that first and last day experience and all the interactions in between.”

“A little humanity goes a long way.”

The best startup cultures are noted for how they place people — employees and customers — first. That approach manifests itself in open communication, free-flowing creativity, and yes, benefits like wellness stipends, flexible work hours and resources for child care. 

A healthy culture will not only keep employees around, but it can also impact their lives.  

“If you’re feeding the culture, watering the culture and doing the things it requires — which are very basic and simple things — it will yield you an enormous abundance that will touch beyond the core of your company,” Fontes said. “You will become a company that will birth humans that go out and do better in the world.”  

 

Why You Need to Establish Your Culture Right Away

Life in a startup moves fast.

Culture may not seem important when the company is just you and your co-founder, but startups can easily grow from two employees to five to 20 in a blink of an eye. If you aren’t intentional about setting that culture from the start, you’ll quickly lose control of it. This can lead to bad hires, employee gossip and toxic work environments.

That’s why the moment your idea turns into a business, you need to be thinking about how you want your employees to be treated, how you want them to act and what type of environment you want to create, Fontes said.

“As soon as you have that idea, start building that culture because you won’t be far off from what starts to manifest and speed up as you grow.”

Answering those questions will give your company a foundation from which to grow. It will guide you to people who reflect those core values or have the skills to introduce new values that expand on what you want to create, Fontes said.

When Fontes launched CultureCircle in 2016, she wanted it to be a place where people could show up and be human. That meant treating customers and each other with kindness and respect, giving people time to take a break when they’re not feeling well and balancing workloads.

“All of those things I’ve taken into account and modeled very early, so anyone who comes on experiences that or is gravitated toward that,” Fontes said. “As soon as you have that idea, start building that culture because you won’t be far off from what starts to manifest and speed up as you grow.”

Failing to answer these questions leaves your team susceptible to unwanted changes in your culture that can harm your business — think high turnover and poor retention — and ultimately cost you more time and effort as you work to change your culture.

How to Build a Strong Startup Culture 

Five Tips for Building a Strong Startup Culture

  • Take time to define your values
  • Practice what you preach
  • Be inclusive from the start
  • Regularly evaluate your culture
  • Choose kindness

 

Take Your Time to Define Your Values

Nothing is more important to your company culture than your values. It defines how you hire, how you fire and how you have difficult conversations with employees who aren’t treating the company right. They are the core of your company ethos and how you operate.

What you shouldn’t do, however, is create values for the sake of it. Values need to be unique and personal to you and your company.

“You do not want to mess this up and constantly change or over explain your values, or question if they are aligned,” Fontes said.

Start with deciding on what type of environment you want to establish. At one startup Fontes worked with, the founder established their culture with a simple expectation of respectful communication. It was something the leader followed through on and an expectation for anyone brought into the company.

“You do not want to mess this up and constantly change or over explain your values, or question if they are aligned.”

When you are ready to create your values, Fontes has a couple guidelines. For starters, it’s important to make sure they are personal to you and your employees. Remember, companies don’t have values, people do, Fontes said. In addition, don’t just copy and paste your values from other startups. Because if they aren’t natural to you as a leader, your employees will sense that and disregard them.

To help identify what those values might be, ask yourself:

  • What are your team goals?

  • What’s your company mission?

  • How do you want employees to behave?

  • How do you want to help customers?

If the answers don’t come naturally to you, you could also sit down with a leadership coach to help you identify what values are most important to you as a leader.

When you create your list, try to choose no more than five values. Any more than that and people tend to forget them, Fontes said. Make sure that the ones you do pick are clear and actionable. If you create a value like “We are a family,” that can mean something different to each person. It can lead to situations where managers expect employees to respond to texts outside of work and assign them tasks as “favors.”

“What it starts to do is, unbeknownst to the company that uses this language, it starts to add questions to the culture,” Fontes said. “People start to question: ‘What does family mean? Am I treated this way or that way?’”

At CultureCircle, for example, Fontes established three core values: humanity, Ubuntu and efficiency. Humanity represents a core belief for Fontes and means respecting each other and making space for a wide range of human emotions. If you’re exhausted and need a break, it’s OK to tell someone you need a moment. 

Ubuntu, which stems from a Zulu philosophy, means in part “I am because we are.” To her, it reflects the fact that everyone and everything is interconnected and needs each other to thrive. It removes the need for ego and competition, she said.

And efficiency, for Fontes, stands for focusing on tasks that value a person’s energy.  

Regardless of whether your company is still in its startup stages or well-established in the industry, defining your core values is vital to creating a strong, positive work culture and maintaining it as you grow. 

 

Practice What You Preach

Culture is set by leaders, maintained by employees and monitored by HR. Setting values and a mission statement, however, is merely half the battle — modeling the behaviors you want is the other. 

If senior leaders operate outside the rules, employees will view the C-suite as disingenuous and untrustworthy. A lack of trust breeds toxicity, leading to a bad company culture. This can cause employees to disengage and eventually leave the company.

“If they see that leadership isn’t practicing the values that doesn’t make the culture feel safe,” Fontes said. “And if the culture doesn’t feel safe, it starts to self-protect against everything. That is not something you want.”  

That’s why it’s so important for the values to be personal to the company leaders from the start, Fontes said.

“Whatever comes out personally will influence what you do professionally,” Fontes said. 

“If they see that leadership isn’t practicing the values that doesn’t make the culture feel safe. And if the culture doesn’t feel safe, it starts to self-protect against everything. That is not something you want.”  

Beyond that, take the time to train your team in your mission and core values. Ensure everyone is on the same page regarding what’s expected of team members, how these values will guide the company and why they matter.

Providing meaning not only helps employees understand the importance of upholding values, but also incentivizes positive behavior. Knowing how every action contributes to broader goals fosters a cohesive, mission-driven culture.

 

Be Inclusive From the Start

When establishing your company culture, inclusivity needs to be addressed from the start. Without it, you’ll end up with a company that not only lacks diversity but may even actively exclude people from diverse backgrounds from feeling welcome.

The first thing Fontes recommends company leaders ask themselves is: “How inclusive am I in my personal life?” That exercise will help you identify where you’re lacking inclusion and what you need to improve. 

From there, it’s important to review your hiring process and make sure it follows diversity, equity and inclusion best practices. This can include things like standardizing candidate evaluations to remove the potential for unconscious biases to influence decisions, expanding your recruiting pipeline and collect data on internal diversity numbers.

It’s also important to think through all of the human touch points at your company. It could be as simple as making sure your office meets Americans with Disabilities Act regulations and that it has a room dedicated for nursing mothers. Think about the language you want people to use and the vibe you’re creating in the office.

Then work your way backward to how you’re hiring and the backgrounds people typically have when they come to your company.

Companies can tend to leave out people who are experiencing homelessness from job opportunities, Fontes said. One way to tell is if your application requires an address, which a person who is experiencing homelessness may not feel comfortable sharing.

But to truly incorporate inclusivity into your culture, it has to come from the heart, Fontes said. It can’t be solved with a declarative DEI statement, or mapped to a step-by-step guide. It needs to be an ever-evolving process and a transparent process with your employees. 

“Don’t try to take on all inclusivity at once. ... Start where you can,” Fontes said. “What will be helpful when you’re starting to grow your culture is to say: ‘We’re really aiming for a healthy and inclusive workplace culture. There are areas that I know about that I’m working toward and practicing. And there are areas of inclusion that I don’t know about. I need the culture as we grow to share those areas with me.’” 

When you do that, you build trust with your employees and it creates an environment where people feel comfortable speaking up about what you’re missing.

“Through that co-creation, you start to build an inclusive environment,” Fontes said.

Read OnA Simple Way to Improve Diversity Efforts in Hiring

 

Regularly Reevaluate Your Culture

Whatever culture you establish when you start your company, it won’t be the same when it grows. Each person that joins your company will bring a new personality, new life experiences and a new way of thinking.

You have to make room for those variables and constantly reassess your culture to see what needs to evolve, Fontes said. If your culture doesn’t grow with your company, it can end up taking on a life of its own. What may have worked for you when you were smaller — like having a flat hierarchy — could cause communication issues now that your company has grown to 50 people.

In addition, remote work has become an expectation for a lot of employees. If your company decides to make hybrid or remote work a permanent part of its structure, your culture needs to reflect that. This includes thinking through remote communication strategies, activities to keep your remote employees engaged and hiring strategies.       

As you grow, don’t shy away from polling your people through employee engagement surveys to keep a pulse on what matters to your team and how they view your cultural evolution. After all, you can’t make improvements without first understanding what is no longer working.

 

Choose Kindness

While establishing a startup culture can seem complicated, the simplest step you can take to develop a healthy workplace is to choose kindness.

Being supportive and leading with empathy can have a huge impact on the people who will come to work for you. Fontes knows first hand the impact a healthy company culture can have on a person.

A huge reason for why she became passionate about culture and started her consulting company was because the culture of a company accepted her when she needed it most. At the time, she was without a home, taking care of two children and pregnant with a third.

“I was, on paper, a homeless, pregnant, two kids, human, and a culture took me in and changed the trajectory of not only my life but my kids’ lives. That’s how powerful company culture can be.”

The company hired her as a contractor, and from the moment she walked through the doors, everyone treated her with kindness. Everyone from the leaders in the office to junior employees took the time to answer her questions, just as it should be. When she told them she was pregnant, her manager made sure she had a job when she was ready to return. 

“I was, on paper, a homeless, pregnant, two kids, human, and a culture took me in and changed the trajectory of not only my life but my kids’ lives,” Fontes said. “That’s how powerful company culture can be.” 

Ultimately, startup culture isn’t about the team outings, the unlimited vacation or free cold brew, it’s just about treating people right. And if you do it well, your company can change lives.

An earlier version of this story was published by Kate Heinz in 2019.

 

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