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The #1 Law and 5 Harsh Truths of Building a Startup Culture

The #1 Law and 5 Harsh Truths of Building a Startup Culture

What I learned about culture during my career in the startup world

Giammarco Pacifico
January 24, 2024

Company culture is that fuzzy concept that everybody agrees it’s important but everyone forgets about it once things get busy.

After spending years in a bunch of different startups and also helping founders build theirs, I’ve learned a few things about the importance of culture…sometimes the hard way.

Most people think company culture is something you decide one day by coming up with values and putting them on the wall.

Nothing could be further from the truth so let’s dive in:

#1 Law: Startup culture is a mirror of the founders

Startup culture is the shared way everyone does things and these principles come from past experiences, usually the founders’. And because everyone learns more from moments of difficulty, culture usually reflects how you deal with conflicts and challenges.

The behaviours of the leaders get mimicked by every single person at every level of the company:

If the founder immediately replies to emails or internal inquiries from employees, the company will be rapid at execution
If a founder is aggressive in negotiation, the other employees will also become tougher while negotiating, both internally and externally
If a fonder keeps overspending compared to the budget and has loose cash flow management, everyone will start wasting money

Every founder leads by example and creates a culture, whether they are intentionally doing it or not. Every action and every decision compound.

Culture is what happens when that person is not in the room.

Instead, management always requires someone to watch over the shoulder of someone else to make sure they are doing their job as expected.

Note: With the word “founders” I mean the people who were there from the very beginning and were by definition the only people manifesting the culture.
In many companies, the CEO is also a founder but sometimes this is not the case. If the founder is still actively involved (even not as CEO), their weight will always be felt, otherwise the CEO is usually the emblem of the culture.

Harsh truth #1: Culture is defined every time you hire, fire or promote someone

It does not just impact that person because everybody else is watching and taking note of what happens.

Once a company establish how people are rewarded, everybody's behaviour adapts.

Harsh truth #2: Great culture is not about free perks. It’s about paying people what they are worth

When startups say that they cannot pay employees market salaries because they don’t have money, it’s nothing more than an excuse (especially if they are not willing to give stock options).

Offering free gym memberships or free soft drinks attracts the wrong kind of people. And it creates weird incentives around rewarding performance.

Harsh truth #3: Great leaders foster autonomy and distribute power

They never hoard it.

Sometimes this happens because they fully trust their team from day 0. Most of the time because they know there is no other way to build a successful company.

Harsh truth #4: It’s not about what you say. It’s about what you do

Defining values and sharing them with all employees has become very popular in the past few years. Yet, a lot of companies copy values from other successful companies without embracing them.

When CEOs speak of idealistic values to their employees but then behave differently, employees lose trust.

❝

We hire smart people who are fast learners and great team players.

Said every startup ever

Harsh truth #5: a startup is not a family. It’s a team

A family tries to stick together no matter what, during good and bad times. You cannot choose your family members but have to care for them even if you would rather not.

A team is built for performance. Each player is selected based on what they bring to the team and it’s common for players to come and go.

Players still care for each other but they do it by choice because they know each one makes the other better and increases the chances of success.

Launching a new series…wanna join?

I’ve been thinking about a new format that is useful and actionable to all of you and I decided to launch a series that answers your most common questions.

In the next issues, I’ll select a few questions submitted by you on careers in the startup world (and beyond) and I’ll give you my honest take. No fluff, I promise.

Which questions did you always want to ask but never did?

This week's top scientific reads

Programmable CRISPR Delivery (Nature Biotechnology)
We Drink Water and Plastic (PNAS)
Astrocytes Unveil Brain Regeneration (Nature Medicine)
Metal-Free Magnetic Gel for Medical Implants (Cell)
Inhalable Vaccines for Viral Immunity (Nature)

Read my comments on these articles here.

Latest European funding rounds in health & bio

Membion raised €5M for a membrane bioreactor that is used to improve wastewater treatment 🇩🇪
CellVoyant raised €8.9M to further advance their AI imaging technology that improves the manufacturing process of stem cells 🇬🇧
Disco Pharmaceuticals closed a €20M round for their R&D platform that identifies proteins across the cancer cells’ surface and designs new drugs 🇩🇪
QDI systems raised €5M to advance their manufacturing process for a fluid made of quantum dots, used as an X-ray detector for medical imaging 🇳🇱
Onera Health raised €30M for its polysomnography (PSG) kit that can perform advanced sleep tests at home instead of in a hospital setting 🇳🇱
Stalicla raised €16M to develop their pipeline of precision medicine assets against neurological disorders 🇨🇭
Timeline closed a €60M Series D round to develop nutrition and skincare products to support healthy ageing 🇨🇭
Circadacare raised €1.5M to further advance their monitoring platform that uses circadian light technology to assist people with dementia 🇬🇧
Kinvent raised €16M to commercialise their devices and sensors used in physiotherapy testing 🇫🇷
SQIM raised €11M to develop their engineering and manufacturing platform to deliver naturally grown products using fungal mycelium 🇮🇹
Whispp raised €750k for their technology that converts speech diminished by stuttering, throat cancer and ALS, into the person’s original voice 🇳🇱

If you enjoyed this issue, share it with someone passionate about startup culture.