The Next Big Opportunity for Startups
July 2, 2013 Editor 0
When I made the transition two years ago from working with a 100 year-old organization — one I had called home for almost eight years — to working with companies sometimes less than 100 hours old, I assumed I would see tremendous differences.
In my early career, I had experienced the textbook definition of outdated management thinking that centered on hierarchy and lack of trust.
Our physical presence at the office during the workweek was considered proof that we were doing our jobs. Someone was often assigned to stand at the door to make note of the people who were more than a few minutes late. Despite the fact that almost every employee was a working parent, if you wanted to see your child in a school play or take him or her to the doctor during work hours, you had to request a half-day off — time off was not allocated in hourly increments. There were also fairly rigid dress code requirements; for instance, if women wore skirts, we expected to wear pantyhose (and this was in 2003).
When I was finally in a leadership role at that older organization, I put a tremendous amount of energy into changing these outdated practices. I reached outside of the non-profit world and outside of our organization (an uncommon practice at the time) to people like Tony Hsieh, Jason Fried, and Seth Godin for insight and examples of what a better workplace could look like.
I think because I found so many examples of innovative workplaces in the startup world, when I transitioned to working with startups I expected that to be the norm. I expected that every founder would be building a company that was innovative not only in developing products but also in approaching the work itself.
There is a lot that is different: An idea can go from concept to creation practically overnight. Red solo cups are more common than red tape. Failure is seen as a bit more inevitable. The ping pong tables and the Kegerator purring quietly in the corner make work at a tech startup look different, too.
However, when you strip away those symbols, what’s left are rows and rows of people typing away at computers, looking pretty much like any company in America. Every company, even the massive companies that are now known for having horrible cultures, began as startups with cultures that were often positive and passionate. As new companies are being launched, we have an opportunity to shift that trajectory, but while we’re building better products, we’re doing very little to build better companies.
In the last two years, I have watched successful startups begin to crack at the seams when resentment and frustration build. For instance, when a new company grew from a team of six people to a team of 90 in less than a year, it appeared that the founders had never bothered to think through things like organizational culture or vacation policies.
I am often astounded by the personnel policies and employee handbooks of young companies that seem to be innovative but have severely outdated policies in place — similar to the policies I had worked to change at my old job.
A serial entrepreneur recently estimated that one-third of startup entrepreneurs prioritize their organizational culture and personnel policies, trying to do something innovative. One-third think about it but follow the template of how things were done in the past. The last third basically don’t consider culture at all.
This may be in large part because there are pressures, especially from investors, in the startup community that are driving entrepreneurs to focus on the product rather than the workplace. I’ve spoken to investors who agree that establishing a good culture is important, but what they feel comes first is creating a viable product that has some potential for creating value or generating revenue. Many investors just want to know that their investments are working tirelessly on making that product happen, even in some cases taking up practices like emailing their investments late at night to see how fast the person responds.
The zeitgeist of the startup world is that if you are not grinding it out, if you are not “crushing it” on evenings and on weekends, then you are not only less likely to make it, but you’re also not cut out to be an entrepreneur. It is a hazing ritual that says “you signed up for this. If you want to whine about the hours or about the toll on your life, then go somewhere else.”
But it is taking its toll. Suicides of well-known startup founders and the substantial number of people who privately suffer serious depression and other mental health issues are grave examples. Recently, I heard that an anonymous suicide prevention hotline is launching just for startup founders and their employees. This does not provide a good starting point for building organizations with positive cultures that maximize not only employee potential, but organization potential and sustainability as well.
Some may argue that a “survival of the fittest” mentality is essential in challenging professions such as running a tech startup and by weeding out those who cannot make it, you make the whole system stronger. It shouldn’t be this way.
Entrepreneurs are faced with a unique opportunity to not only build innovative products but also to build companies that break the cycle and do not play off of fear, false superiority, or treating work as simply an exchange of labor for money. Instead, startups can build companies in which every person they employ can flourish. The world will get better when we build better organizations, not just when we build better products.
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