What Is Startup Culture?

What is Startup Culture?

Culture is a powerful driver of success for any company, but in the startup world it’s critical. An intense staff commitment, coupled with rapid growth requires more from culture than in slower growth industries. When things are constantly changing, culture is what grounds you. That’s why digital leaders like Google, Zappos and Facebook have some of the most celebrated cultures.

Startup culture is a recently discovered work culture that is aimed at easing communication, breaking barriers and overcoming hurdles in growth within new startups. Startup culture is mostly known for being creative, laid back instead of rigid, and passion-driven, unlike large corporations.

The term “startup” refers to a company in the first stage of its operations. A startup as its name is suggesting has just been started. With one or more a demand in a certain market is spotted. The group or the individual then sets up a business to supply this demand.

Characteristics of Startup Culture

Corporate culture is an organisation's system of shared values, social norms, symbols, and attitudes that shape how employees make decisions, how they act and how they generally feel about the environment at work.

It can include examples of leadership style, relationships with colleagues, customers, etc. and how decisions making steps are approached and made. All these are grounded in a company’s culture and 86% of a company's executives believe that employee performance is greatly affected by culture.

startup culture
Source: Global Human Capital Trends - Deloitte University Press

Every type of organisation will set up and build their own culture depending on the type, size and requirement of the organisation. There are three key factors that indicate the importance and characteristics of the best startup culture.

  • Agility. Startups need to have the ability and knowledge to make sure the business process and information flows through the firm seamlessly. To carry this out, every employee must understand the startup culture and the hierarchy, what is expected out of their work.
  • Multitasking. Startup work culture differs from those of large corporations. Startups usually have small teams of employees with the chain of command being quite horizontal in comparison to mature companies. An individual in a startup needs to wear multiple hats and take on multiple roles that may be outside their key areas of expertise whereas in mature companies, job scope for an individual is clearly defined and they are required to focus on their area of expertise only.
  • Extensive Collaboration and Teamwork. Author Ken Blanchard, of Collaboration Begins With You, shares four vital traits that are essentially found in startup cultures:

    Startup culture is being open to accept differences and actively seek different points of views and encourage debate. Blanchard says the conflict in collaborative groups is good and encouraged, as long as it focuses on the issues and resolving those timely for the business and doesn't get personal.

    Their focus is on nurturing safety and trust. Trust is the key to effective collaboration within a startup. Be sure you are accessible, authentic and dependable by your peers and colleagues.

    Seeking opinions and active involvement of everyone in decision making is fundamental. Leaders should work with others to create a clear purpose, values and goals (which should include collaboration!). Then hold each other accountable for sticking to those agreements.

    Empower yourself and others. This means encouraging and supporting one another to take initiatives, develop new skills, and contribute their opinions, even if they disagree. Disagreeing with a degree of respect and guiding and aiding each other towards the objectives of the organisation is a high priority.
  • Passion and Creativity. Most startups are born through entrepreneurs needs to unlock their creativity and do something they are passionate about to make a living.

    Passion doesn’t just make a business fulfilling–it might make it successful. A 2012 paper in the Human Resources Management Review suggests that the work that has been done shows that passion for the work has a direct, significant effect on company growth. the reason work doesn’t always feel like work and why the long hours feel worth it. It’s what defines the existence of the business and acts as a great motivator for the team.

How Do You Build a Successful Startup Culture?

One of the most renowned and best-known startup culture is that of Zappos. Zappos started as an online shop of shoes in the prehistory of the eCommerce, back in 1999. Its founder, Tony Hsieh, invested $500,000 from his own pocket to launch the project.

In 2005, the company doubled its turnover and Jeff Bezos, CEO of Amazon, wanted to buy it. But Hsieh turned down the offer, claiming that he did not want his brand and everything that he had achieved with it (its corporate culture, its reputation, its approach to the customer) got lost in the immense Amazon business structure. 

Two elements are concluded from the Zappos story: Firstly, it is important for startups to build their culture since as early as Day 1. Secondly, many startup business owners are reluctant to sell their business or add investors because they fear they will lose control over their business culture and that it will be contaminated by external opinions.

Startup culture vs corporate culture
Startup Culture vs. Corporate Culture

There are key areas and important points that entrepreneurs should take note off when building their startup culture and growing their startup as a whole.

  • Hire the right personnel. Clearly, hiring the right kind of personalities and backgrounds has a huge effect on how a company operates culturally. Carefully thought out and intellectually hiring employees that can really help make a difference in the early stages of culture building. Hiring the right people is more than just finding the most qualified candidate or best resume. Consider their emotional and physical health, what it takes to motivate them, and if they fit with the rest of your team.

    Not just the 'right' people but incorporate diversity as well. Without diversity, your startup culture will be less creative and flexible. Bringing different viewpoints and backgrounds to your company will help you understand your customers from a variety of different perspectives, and that can open up your products to entirely new markets and directions.

    Hsieh, CEO of Zappos explains how culture for his startup begins at the process of hiring:

"Once hired, the employee goes through a 4-week training program. Tony states: “On it, we go over Zappo’s history, the importance of customer service, our long-term vision and philosophy about company culture, summed by 2 weeks or taking customer support calls. We also offer everyone $2,000 to quit as we want to be sure everyone is there for more than a paycheck.”

CEO and Founder, Zappos, Tony Hsieh
  • Establish Values. Define your startup values early on, and talk about them often. You can also ask your team members to sit alone and write down the company values they feel are related to your company. For example, what is your approach to flexible work hours? These can seem like minor details, but knowing your values beforehand will help you prevent any surprises down the road and become a great contributing factor to achieve your ideal startup culture.

    The amount of time you spend on an activity is one of the best ways you can show to your employees what really matters.
  • Acknowledge people’s achievements. Many highly motivated and driven people just want to power on through to the top. However, more often than not, some team members need to be acknowledged for their work and accomplishments. This creates a powerful motivating and encouraging startup culture, employees feel valued and be more productive towards their work.

    Caring for your employees is the next step in building your startup culture. Once you have the right team members it is vital that you actually care about their wellbeing and success. How much can you expect them to care about the work they are doing for you, if they don’t think you care about them. 
  • Transparency in Communication. Be clear and transparent when communicating with your employees. They need to know if the company is growing, what type of effort will be rewarded or whether there is a career path for them. This is not very tricky to incorporate into your startup culture because the organisation size supports ease of communication. Even when the news is bad, you should clearly communicate with your team and explain what is going on within the company.

    Create time to listen to all employee concerns and do your best to solve them. Keep an open channel of communication and get their feedback when necessary. Do regular one-on-one meetings with your employees, as culture thrives when everyone has their voice heard. Once your company becomes larger, get your team leaders to do one-on-ones with their team members.
  • Provide a positive work environment. Create room for serenity and refreshments for your employees. Startup culture should help boost their morale and productivity and will help them enjoy their time at work. It also shows employees that taking breaks is not only allowed, but encouraged.

    When your employees want to take a break, having a nice space for them to relax is important. Your startup will reap the benefit of employees who work harder and stay put longer.

"Disrupted" by Daniel Lyons

Disrupted: My Misadventure in the Start-Up Bubble is a book written by American author and journalist Daniel Lyons. The book describes the author's experiences working at the software company HubSpot and offers a strong critique of the company's management and culture. He gives the perfect insight into startup culture through his first-hand experience, at HubSpot, a software start-up based in Cambridge, Massachusetts.

Entering the world of a start-up as a 50-year-old was a strange new experience for Lyons, but he was willing to adapt

Lyons became an official HubSpot employee in April 2013, and it was then that he was introduced to the company’s odd, cult-like practices, and a new world of missions, culture codes and spiritual leaders. He quickly learned that HubSpot wasn’t just out to make money; it was on a “mission” to change the world through unique marketing software. He also learned that HubSpot’s co-founder, Dharmesh Shah, was being referred to as a “spiritual leader” by some employees and clients.

"This hazy way of doing things continued when he spoke to Shah and Halligan, the two founders of HubSpot, about what they’d like me to do. Even though we had a lengthy conversation, it was never made clear what exactly my role at HubSpot would be"

They came closest to outlining a specific task when Halligan talked about providing “missions” for Lyons to go on – but this just sounded like they wanted him to improve their blog to raise brand awareness. While his initial meetings at HubSpot were confusing, Lyons was willing to adapt and tried to remain open to new ways of doing things. A few things that Lyons noticed about HubSpot's startup culture that he outlined in his book are listed below:

  • At HubSpot, employees were encouraged to adopt a strange lingo and dress code as a way to inspire uniform happiness. This meant that if an employee was true “HubSpotty” they would apply the principles of HEART to “make magic.” At HubSpot, HEART stands for humble, effective, adaptable, remarkable and transparent.
  • The most HubSpotty people also regularly wear orange and religiously obey fearless Fridays, a monthly ritual where employees do something they’re afraid of, unrelated to work.
  • The language at HubSpot is so confusing that the company created a Wiki page to help newcomers decipher the jargon. People in meetings might talk about SFTC, getting an SLA or ask about the KPI, rather than talk about solving for the customer, service-level agreements or key performance indicators.

The working environment at HubSpot was quite a culture shock for an older employee like Lyons.

While they might be odd, the practices at HubSpot were meant to inspire teamwork and unity. It wasn’t long, however, before Lyons began feeling like a misfit. As an older man, Lyons wasn’t used to open-plan offices that afforded employees zero privacy. The people at HubSpot were hunched over laptops.

But more than that, Lyons had never worked at a company where the startup culture emphasis was placed on forcing “fun” upon employees. This was definitely the case at HubSpot, which featured multiple areas of the workplace that resembled playgrounds. They had a “nap room” that contained a hammock; an area with musical instruments intended for spontaneous jam sessions, though the instruments were never used; and the conference room doubled as a game room, with ping-pong, foosball, pool tables, as well as video games. Lyons was particularly taken aback by how proud HubSpot was of its so-called “candy wall” – an entire wall in the cafeteria composed of glass cases containing a variety of candy bars and junk food.

But this perhaps wasn’t as odd as the time when HubSpot asked its employees to talk to a teddy bear. Lyons was especially bewildered when his boss claimed to have come up with an innovative management breakthrough. Alas, the idea was nothing more than bringing a teddy bear named Molly into meetings to represent the customer they were always trying their best to serve. This was a bit disheartening for Lyons, whose previous boss was the Pulitzer Prize-winning author Jon Meacham. Now he was working for a man who thought that talking to a stuffed animal was an innovation.

Startup Culture in Malaysia

Startup culture also affects the bottom line. Even if a company manages to attract the best employees, a negative workplace culture can contribute to a higher employee turnover, decreased motivation, and overall decreased productivity.

E-commerce and fin-tech are booming. The 2018 Global Startup Ecosystem Report (GSER), a worldwide compilation by Startup Genome, saw Malaysia’s e-commerce sector grow 47% since 2015 and noted an economic worth of $2.4 billion. The state of Penang, with its large number of tech-related manufacturers, has garnered the nickname “Silicon Valley of the East.”

Malaysia has been steadily building an ecosystem supportive of startup entrepreneurs and innovators. The country is making its presence known in the digital world and becoming known as an entrepreneur incubator. If trends continue, Malaysia’s economy will continue to grow and birth startups across industries.

Malaysia has produced a lot of innovative companies with some that have taken regional positions, while others are going global. A lot of startups are blooming because Malaysia has a got a good startup culture and ecosystem because of being multilingual, multiracial, and a gold pot in terms of talent and culture. Due to this, the digital economy contributes about 18 percent of Malaysia's GDP which is not small. And Malaysia aims to grow it even more for the future.

Successful Malaysian Startups of 2020

2020 was a year of budding startups in Malaysia. Listed below are some of the successfully running startups

Lapasar is a B2B marketplace integrated with the e-procurement system to connect buyers and vendors.

Plush Services is a short-term rental management company that is designed to manage their client's Airbnb property for them.

Parkit Malaysia is a P2P online parking platform that helps you find a free parking spot.

Zcova is a diamond company that allows people to purchase diamonds and jewelleries conveniently from their home.

Curlec is a fin-tech company that makes businesses of all sizes to be able to collect recurring payments and control their cash flow.

Click here to read more about Successful Startups and NEXEA's role behind them!

Closing Thoughts

According to Glassdoor's 2019 Mission and Culture Survey, before applying for a job, nearly four in five employees and job seekers consider a company's mission and culture. This is only becoming more important as younger people move into the workforce. 65% of 18-to-34-year-olds are likely to place culture above salary; that's higher than any other age demographic surveyed.

What exactly is good startup culture? Great startup culture allows employees to be themselves, do what they do best, and speak freely to upper-management teams and coworkers. In this article, we took a deep dive into what startup culture really means and how growth-oriented entrepreneurs and innovators leverage the power of culture to achieve accelerated startup results.

If you want to have a competitive advantage in today's market, you must invest in creating an outstanding company culture. Startups that prioritise culture maintain motivated team members that produce better results.


Building Culture Within Your Business

Malaysian startups are booming. Here's the reason why they'll get even bigger.

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Written by Meerat Qureshi

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