Why Culture Matters So Much in a Startup

Why Culture Matters So Much in a Startup
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In modern business, culture is everything. It’s also become something of a cliché, and you’ll find no shortage of people who’ll be more than happy to talk about culture, its effect on your company and the steps you can take to start to develop it.

But the truth is that every company on the planet has a culture, whether they’re aware of it or not. Companies are made up of people, and whenever people come together they start to recognise and emphasise their shared characteristics. Just look at the camaraderie you see between sports teams and military units.

Luckily for us, you don’t have to be on the playing field or on the battlefield to develop a culture, and it comes with a whole heap of benefits. Startups in particular are well-placed to develop a strong culture because the companies are still young and they face less inertia along the way, but companies of all shapes and sizes will benefit from developing and emphasising their culture. Here’s why.

1. Customers love it

Call me cynical, but I’m convinced that a great reason to develop a strong culture is that it’ll boost customer loyalty. Companies with stronger cultures tend to be those that foster innovation and develop products that people love. Apple, for example, is obsessed with simplicity, and it’s this obsession that filters through to great products like the iPod and the iPhone which just work exactly how you want them to.

I’m not saying you should foster internal culture purely as a marketing tool. If you do that, people will be able to tell that you’re being insincere. That said, the potential extra profit is a great reason to get started.

2. Potential employees love it

Let’s face it – a strong company culture is a great reason for potential hires to join you. Millennials in particular are keen to work for companies that are committed to values and ethics, with almost half of the workforce (42%) now looking to work for a company that has a positive impact on the world.

Millennials will make up 75% of the workforce by 2020, so if you’re failing to cement a solid company culture then you’re going to struggle to make a hire. This is particularly relevant for startups because the marketplace for top talent is so competitive, especially in key areas like Palo Alto and San Francisco.

When it comes to employees, culture is becoming increasingly important. It’s no longer an optional extra but a vital aspect of running a business.

3. Potential investors love it

Venture capitalists and angel investors are used to seeing hundreds (if not thousands) of startups per year, and you’ll need to have something special if you want to stand out from the crowd. Your company’s culture could be just the thing to do that, especially if it aligns with the companies that are providing the money.

Having a healthy culture also achieves something else. It shows to investors that your company is something more than just a ragtag collection of people – and that there’s something there that will stay behind if the eccentric founder or experienced CEO leaves the company.

4. It boosts morale

Most people want a job that doesn’t feel like a job – and which leaves them excited to get out of bed each morning. A strong culture will boost morale and encourage people to make themselves at home, whether you’re installing a pool table or whether you’re setting up a company outing.

It can also show employees that you’re listening to them. After all, your culture should be influenced by everyone who works there and not handed down to employees from senior management. Culture is for everyone – and nothing boosts morale more than something that every employee can share.

5. It adds value

Every asset that a company has will add value to it when it comes to valuations and acquisitions. Sure, tangible assets – such as physical equipment – are all well and good, but so are intangible assets like culture. It might be difficult to measure exactly how much value it’s adding and to tie it back to a traditional return on investment, but the value is there.

6. It makes you more than just a startup

Startups are a dime a dozen. That’s not a slight towards anyone who’s launching a business or building a career as an entrepreneur but rather a fact based upon the current state of the market. We’re at the point where there are reality TV shows about running startups and little kids are telling their parents that they want to grow up to launch a business.

That’s why the companies that succeed will be the ones that are more than just a startup. Facebook and its employees, for example, are united in their goal to connect the world by following the company’s “move fast and break things” ethos. Google wants to make it as easy as possible for people to find the information that they need and has a big commitment to diversity and inclusive employment. What does your startup stand for?


Culture has always been important, and it will continue to be so in the coming years. The companies that stick around will be those with their own recognizable internal cultures.

Times are changing, too. It used to be that Google was the one great example when it came to company culture, but while they’re still well-known for their strong internal culture, they’re hardly the only company that’s making waves by putting employee engagement first.

Some are even starting to offer unlimited paid leave to their employees, which makes a strong comment if nothing else. If a company can offer unlimited leave to their employees, it shows both that they trust their employees and that their employees are loyal enough not to take advantage of the system. Everybody wins.

Culture means different things to different people. But as long as you’re thinking about it in the first place, you’re off to a good start. Good luck.

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