Startups are taught to be laser-focused on the one or two critical things that will mean growth and success for their company, maximizing those metrics above all else. However, this leads to a paradox when it comes to the problem of building startup culture, a notoriously fuzzy and intangible concept to define, let alone execute on.

Far from being a growth metric, investing time in building culture doesn’t pay off in the short term, so it’s often discounted. Plus it can be very difficult to hire both for technical fit as well as culture fit1, effectively slowing growth and progress, but really it’s an investment in the long-term viability of your company.

But how many times have you been to a startup event where the speaker said “as a startup CEO/Founder, your number one job is to define culture.” Well, what exactly does that really mean?

Many startups lay the groundwork for their culture by declaring their core values2. This serves three primary functions: 1) It aligns the team to the mission the startup wants to achieve; 2) It communicates the unique characteristics and mythology of the company, as an example see Airbnb’s “Be a ‘Cereal’ Entrepreneur” story3; 3) It serves as a litmus test on any new hires to assess culture fit4.

Startups are always changing, evolving, growing (hopefully). Whether it’s the business plan, or the broader team dynamic; startups mobilize themselves like genetic algorithms, iterating towards the best scheme for market. So how are you supposed to build a good culture that can evolve and grow with a similarly evolving startup?

Iterate your culture the same way you iterate your business model
In our experience, the solution is to iterate our culture with the same approach we iterate the startup. We utilize a simple written feedback mechanism: a transparent two-way monthly interview between managers and employees to gauge morale and job satisfaction, with a commitment to rapidly implementing corrections (on both sides). We believe this system is also scalable with the size of the company, as it’s executed at the team level. The overall goal is to embrace flexibility and build better trust and interpersonal relationships, and serves as a good tool for managers to demonstrate their commitment to improving the startup and their employees’ experience. The interview lasts about a half-hour, and managers ask their employees 10 or so questions, just to get a conversation going.

Do you feel like the company makes good use of your skills and abilities?

Once upon a time, in the early days of our startup, we fired half the company in one day. The circumstances that led to us severing half our team stemmed from ongoing issues with members who over a period of months formed a silo. At the time, we were afraid of conflict, afraid of confrontation, and had never even heard of the concept of giving structured feedback. Our startup was our happy family and we did not want to ruin it. We thought that conflicts would resolve themselves or that we could live with them (actually letting resentments grow and fester). Almost a year later, we pulled the trigger and told them things weren’t working out, and how we needed to go our separate ways. In the process, we destroyed our morale and lost the confidence of people around us in the process. Looking back, problems needed to be addressed a lot sooner, and we as founders needed to accept that liking and caring about a team member does not necessarily imply right cultural fit.

Culture isn’t a buzzword, it’s your people
By constantly seeking feedback from our employees, treating them as if they were our customers and iterating our practices accordingly, we are able to build a dynamic culture, beyond establishing core values, without consciously setting out to do so. Culture shouldn’t be a buzzword that founders flaunt to appear like progressive thinkers, it’s not ping-pong tables, hoodies and beer or Fridays. Culture is the unique character of the startup, and changes with the people that make up the company.

Do you have any suggestions for ways to improve our startup?

The first time we realized that we were actively building a company culture was three years after founding ExVivo. We were conducting an exit interview for an employee leaving due to circumstances beyond her control, and she said “kudos to you guys for building a culture where I can openly express my concerns without having any pre-conceived fears! I could just tell you what I’m thinking and I’d be sure that you would listen.” She mentioned the word “Culture” three times, and that’s when we realized that we’ve been building a culture without even knowing it.

Talk to your customers employees
When we first started conducting the monthly feedback interviews, we were concerned that meeting with our employees once a month and asking them a set of questions would turn into an awkward experience. To our surprise, employees felt comfortable and opened up a lot. We were also able to ask our employees whether anything in their personal lives was affecting their work.

How is everything going for you outside of work-life?

Their feedback typically ranged from “I waste a lot of time searching for office supplies, can you please order some?” to “I’d like to discuss how my current role will evolve, helping me reach my career goals.” We’d also like to emphasize that while this is the time to address any concerns you have with your employees, and set up a corrective course of action. Don’t put off giving regular feedback between these meetings either – this tool simply allows for feedback to be documented and transparent.

Founder influence isn’t sustainable
The default culture at the beginning of a startup is generally just an extension of the values of the founders, and what they deem important. This is typically fine in early days with small teams. At this stage, founders really just have to worry about their relationships with each other, and building the necessary trust and open communication to prevent them from killing each other.

However, as progress continues, and the team begins to scale from initial hires to when eventually your hires are hiring new hires – say that three times fast – the values and leadership of the founders can’t have the same direct and immediate impact. Even if the founders have invested a lot of time instilling culture into their core team, as the company scales and silos naturally form, negative culture can take root and easily get out of control. For that reason, doing these feedback interviews, and investing the time and energy to build better relationships, can save the company’s culture from rotting away.

‘Fire fast’ is overly binary
Too often culture seems like an unwritten, unspoken quality. The clearest wisdom of tangible action is: fire fast, keep the bad apples out and minimize their impact.

However, this perspective is overly binary, since everyone who remains in the “right fit” category is never a perfect fit, every individual is an adjustment, and the earlier they join the startup, the bigger their influence is going to be on the future culture of the company.

So if a person is a “right fit” category, how do you integrate them into the team without threatening the positive dynamic of your existing team’s status quo?

Be the mosaic, not a melting pot
In our experience, we’ve learned that rather than approaching our company culture like a melting pot where we want everyone we hire to eventually conform to the present dynamic and values, we can be flexible and embrace the natural evolution of our company.

Is the team complete? What skills should be added?

By employing written and transparent 2-way feedback interviews, between managers and employees, to gauge morale and job satisfaction, the company as a whole grows together. It builds trust and stronger interpersonal relationships, and we can make simple corrections to improve everyone’s morale. This is the point where culture becomes a conversation, written and explicit, rather than nebulous.

This transparent approach to building culture and treating it as an evolving business model has been a simple but positive tool we’ve adopted to grow our team, and much like our startup, it’s a work in progress.

Acknowledgements & Useful Readings
We would like to acknowledge Joe Greenstein and Semira Rahemtulla (Innerspace YC S15), who facilitated the Founder Communication Workshop that was organized for our YC batch, and inspired us to build tools to enhance our team’s trust and communication. Also, our mentor Jay Shah (Bufferbox YC S12, now director of Velocity, Waterloo Canada) who encouraged us to read The First 90 Days by Michael Watkins. Its points can be well applied to onboarding and integrating new hires.

Full Set of Feedback Interview Questions:
• Do you feel encouraged to come up with new and better ways of doing things?
• Does your work give you a feeling of personal accomplishment?
• Do you have all the tools and resources to do your job well?
• Do you feel that you have clearly defined goals?
• Do you feel that the company makes good use of your skills and abilities?
• Is the team complete? What skills should be added?
• Do you feel the company does a good job of communicating to employees about things that will affect them?
• Do you feel the company is helping you reach your career goals?
• How involved do you feel in decisions that affect your work?
• Considering everything, how satisfied are you with your job? (%)
• Is there anything that could be changed to get to 100%?
• Do you have any suggestions for ways to improve the company?
• How can we (managers) be better?
• Is there anything that makes you feel insecure or anxious at work?
• How is everything going for you outside of work-life?
• Where do you want to be in the future?
• Is there any sort of personal or professional development you want to pursue?


Notes
1. The Social Radar: What I Did at Y Combinator – Jessica Livingston.
2. Creating Good Company Culture (and Sticking to It) – 2016 Female Founders Conference – Kathryn Minshew.
3. Culture (Brian Chesky, Alfred Lin) – How to Start a Startup Lecture #10.
4. Hiring and Culture, Part 2 (Patrick and John Collison, Ben Silbermann) – How to Start a Startup Lecture #11.