For the better part of the last 15 years, I’ve worked with start-ups and scale-ups in many capacities: co-founder, employee, consultant, advisor, mascot. Ok, maybe not the last one, but you get the idea 🙂
At this point, I’ve started noticing some common pitfalls. Today I wanted to address a big one: founders assumption that their company culture’s future is clear, and how this causes them to systematically overlook some top talent.
Founder’s challenges
As a founder, you have plenty of challenges ahead of you. Most of them are around product development, positioning, keeping costs down, execution strategy, etc. Naturally, when you interview for your first employees, you’re looking for people who enjoy those challenges and gravitate towards them. You want sparring partners and guides in those areas.
As a result, you get your best impressions from people who keep the conversation glued to these areas, who seem to ‘hit the ground running’ and could potentially take charge of these problems today.
In contrast, some people you interview seem weirdly fixated on random details. They don’t seem to get the big picture, so it’s a hard pass from you in favor of some of those people who seem to understand the right level of abstraction you’re dealing with and can give you help with what you’re dealing with right now.
So you continue talking to the latter and ignore the former.
First employees aren’t psychic 🔮
Here’s the core of the problem: you know how you behave but your potential employees do not. For them, the biggest challenge is you, or, more specifically the kind of culture you will create in turbulent times, and their place in it going forward. This is their huge concern that you might be overlooking.
Predicting the founders’ culture as an employee
Let’s step back for a moment and assume you’re an employee that’s joining a large, established company. You’ll get a certain story from management, another from your potential colleagues, another from HR, one from ex-employees and others that you piece together into a mosiac of what it’s like to actually work in that company. Then, from your side, it’s just a matching problem. Do you personally match the image you’ve assembled? If so, then the company is a culture-fit for you. If not, then you pick something else.
You don’t have that luxury in a small start-up. A bulk of the company culture is going to be decided in the future. If the founder(s) have run companies before, then you might learn something from the previous companies, but even then, previous company cultures came from an amalgam of people, many of whom aren’t present in the new configuration.
Sure, the founders will have a vision and will present that vision and (hopefully) a rough timeline/roadmap on how to get it realized, but what happens when there are bumps in the road?
For example:
- A key employee has a life-changing experience (death of relative, disease etc) and wants to take a year-long sabbatical
- A potential customer enters the sales pipeline that some employees find morally objectionable
- The CEO had an emergency meeting with the board and now you have to either radically shorten your runway or backtrack on promises to major customers
- Traction comes from a user segment you weren’t expecting, and it makes financial sense to pivot around them even though it would change the mission of the company
These are very broad examples of unexpected bumps that come from real life. Each of these challenges define the company culture going forward, but there’s no comprehensive list of ‘every random thing that could happen’ out there. As a founder, you have to decide how to handle these things in the moment, and you probably have a default strategy for it.
The basic strategies are top-down or bottom-up.
Top-down
You could go into a closed room somewhere with board members, advisors, friends and others and come out proclaiming a solution. Many founders approach this extreme because they feel it’s expected of them. They feel their job is to project a sense of certainty and competence, so they’ll prioritize doing that.
In this extreme, employees have no ownership of the problem (which might be fair – is it their fault funding dried up?) but no influence on the solution either (less fair).
Bottom-up
On the other hand, you could set up a giant, open, ‘what do you think?’ town hall meeting. On the surface, this seems quite inclusive, but when done in real life, they tend to be highly unstructured and feel like a panic move, even with the best intentions. Even worse is when the unstructured nature leads to a bad decision that leadership doesn’t want to actually do, so they quietly negate the outcome of the meeting. This might be the right business move, but it usually feels worse than having had no meeting.
In this extreme, employees have lots of influence (probably fair) but also extreme ownership (less fair – it’s essentially kicking the problem over to them, even if they don’t have the right information or expertise needed to make a sound call), with the even worse possibility of actually having none of each once the dust settles.
The real concern
The reality is that both these dimension occur on a spectrum, and every situation will have some amount of ownership and influence spread between the founders and employees. The exact nature of this mix is usually the founders’ call.
Going back to the first employees’ concerns, it’s around this. When one of these culture-defining moments happen, how much influence will they have? Will they get to have their say? Will it matter?
Also, how much ownership will they have? Will it be fair, or will you ‘pass off’ decisions to them collectively in a haphazard manner and call it democratic/inclusive?
It’s incredibly difficult to predict future behavior like this. You might not even know yourself, but the results of these kinds of moments will make or break your employees’ experiences in the company.
They need to know that they have the right influence in these moments with the right level of ownership. It’s not enough to simply say ‘yes, you will’ because there’s a ton of untested assumptions in that statement. To feel secure in their decision to work somewhere, they need to know exactly how much of these they can expect. And that’s what the random fixation on details is. Most people that have worked in at least 1 or 2 start-ups have witnessed a particular culture-defining moment where their assumptions didn’t match with how the situation was handled. They want to avoid repeating that exact situation, but also those situations in general.
The ones that seem to hit the ground running? Many of them are making very good-intentioned but generally untested assumptions. They assume these extreme situations will either never happen, or that they’ll resolve themselves ‘well’ because they and the founders are ‘reasonable’. To be fair, sometimes they’re right. But when they’re not, these kinds of assumptions and hopes are the ones that end in protracted lawsuits. Something goes sour, but then the handling of that something goes even worse when untested assumptions get tested for the first time. Oftentimes it’s not the original problem but the handling of it that leads to the most extreme consequences.
The bottom line
As a founder, you have a lot of influence over yourself and your own assignment of responsibility when unexpected challenges occur. While recruiting employees, you need to be clear on how much influence you will give them over you and how much responsibility they have when such challenges come up. So, while interviewing, use examples. Play out their concerns in scenarios. Figure out if you can build a culture together, and if so, do it 🙂 Happy interviewing!