Startup Culture Quotes

no company has a culture; every company is a culture.

By positioning Theranos as a tech company in the heart of the Valley, Holmes channeled this fake-it-until-you-make-it culture, and she went to extreme lengths to hide the fakery.

Every culture has a myth of decline from some golden age, and almost all peoples throughout history have been pessimists. Even today pessimism still dominates huge parts of the world. An indefinite pessimist looks out onto a bleak future, but he has no idea what to do about it. This describes Europe since the early 1970s, when the continent succumbed to undirected bureaucratic drift. Today the whole Eurozone is in slow-motion crisis, and nobody is in charge. The European Central Bank doesn’t stand for anything but improvisation: the U.S. Treasury prints “In God We Trust” on the dollar; the ECB might as well print “Kick the Can Down the Road” on the euro. Europeans just react to events as they happen and hope things don’t get worse.

A startup is a team of people on a mission, and a good culture is just what that looks like on the inside.

Dov Frohman, the founder of Intel Israel, later said that to create a true culture of innovation, “fear of loss often proves more powerful than the hope of gain.

In stark contrast, China’s startup culture is the yin to Silicon Valley’s yang: instead of being mission-driven, Chinese companies are first and foremost market-driven. Their ultimate goal is to make money, and they’re willing to create any product, adopt any model, or go into any business that will accomplish that objective. That mentality leads to incredible flexibility in business models and execution, a perfect distillation of the “lean startup” model often praised in Silicon Valley. It doesn’t matter where an idea came from or who came up with it. All that matters is whether you can execute it to make a financial profit. The core motivation for China’s market-driven entrepreneurs is not fame, glory, or changing the world. Those things are all nice side benefits, but the grand prize is getting rich, and it doesn’t matter how you get there.

What’s new is that in this internet-ruled age, when a guru can be godless, when the barrier to entry is as low as a double-tap, and when folks who hold alternative beliefs are able to find one another more easily than ever, it only makes sense that secular cults—from obsessed workout studios to start-ups that put the “cult” in “company culture”—would start sprouting like dandelions. For good or for ill, there is now a cult for everyone.

Hypergrowth for a company also requires hypergrowth of the people inside it.

The entrepreneur’s mind-set is completely different to the employee’s mind-set. The entrepreneur finds it abhorrent to conform to organizational norms, whilst the employee finds joy and stability in all that’s tried and true. It’s not that one’s wrong and the other is right. It’s the mind-set that differentiates the two.

Investors are people with more money than time. Employees are people with more time than money. Entrepreneurs are simply the seductive go-betweens. Startups are business experiments performed with other people’s money. Marketing is like sex: only losers pay for it.” “Company culture is what goes without saying. There are no real rules, only laws. Success forgives all sins. People who leak to you, leak about you. Meritocracy is the propaganda we use to bless the charade. Greed and vanity are the twin engines of bourgeois society. Most managers are incompetent and maintain their jobs via inertia and politics. Lawsuits are merely expensive feints in a well-scripted conflict narrative between corporate entities. Capitalism is an amoral farce in which every player—investor, employee, entrepreneur, consumer—is complicit.

I simply don’t have it in me to define my life’s success playing someone else’s game and following someone else’s rulebook.” --Dipa to her Grandfather

Think big. Start small. Scale fast.

The culture that a founder creates is one of the most durable aspects of the company, outlasting the founder itself and carrying on the tradition of the firm.

When it first emerged, Twitter was widely derided as a frivolous distraction that was mostly good for telling your friends what you had for breakfast. Now it is being used to organize and share news about the Iranian political protests, to provide customer support for large corporations, to share interesting news items, and a thousand other applications that did not occur to the founders when they dreamed up the service in 2006. This is not just a case of cultural exaptation: people finding a new use for a tool designed to do something else. In Twitter's case, the users have been redesigning the tool itself. The convention of replying to another user with the @ symbol was spontaneously invented by the Twitter user base. Early Twitter users ported over a convention from the IRC messaging platform and began grouping a topic or event by the "hash-tag" as in "#30Rock" or "inauguration." The ability to search a live stream of tweets - which is likely to prove crucial to Twitter's ultimate business model, thanks to its advertising potential - was developed by another start-up altogether. Thanks to these innovations, following a live feed of tweets about an event - political debates or Lost episodes - has become a central part of the Twitter experience. But for the first year of Twitter's existence, that mode of interaction would have been technically impossible using Twitter. It's like inventing a toaster oven and then looking around a year later and discovering that all your customers have, on their own, figured out a way to turn it into a microwave.

Westrum’s description of a rule-oriented culture is perhaps best thought of as one where following the rules is considered more important than achieving the mission—and we have worked with teams in the US Federal Government we would have no issue describing as generative, as well as startups that are clearly pathological.

those companies, I knew they existed, and with a little time, capital, and effort, they would have their moment. I’d soon come to see that there were other people with checkbooks who believed that, too. Marlon Nichols, Troy Carter, and Suzy Ryoo at Cross Culture Ventures; John Henry at Harlem Capital Partners; Kesha Cash and Stefanie Thomas at Impact America; Aaron Holiday at 645 Ventures; Monique Woodard at 500 Startups; Charles Hudson at Precursor; Austin Clements at Ten One Ten; and Freada

Love is the surprising emotion that company builders cannot ignore.

No company has a culture, every company is a culture

When strategy, culture, and brand harmonize, they amplify one another and resonate loud and clear.

the culture was strong enough to transcend the original company.

Educating people about why their support is necessary and valuable goes much further in securing their support than

What you permit becomes your culture.

I run Venture for America, a nonprofit organization that recruits dozens of our country’s top graduates each year and places them in startups and growth companies in Detroit, New Orleans, Las Vegas, Providence, Cincinnati, Baltimore, Cleveland, Philadelphia, and other cities around the country. Our goal is to help create 100,000 new US jobs by 2025. We supply talent to early-stage companies so that they can expand and hire more people. And we train a critical mass of our best and brightest graduates to build enterprises and create new opportunities for themselves and others.

FAILURE IS NOT AN OPTION. Nobody in the startup world could have such a mug, I mused; it would be ridiculous. My experience is full of situations where reality proved too unpredictable to avoid failure.

When you're thinking about where is the best place to start a business, there's a lot to consider - It's about culture, it's about physical infrastructure, it's about how educated the people are, it's about the housing, it's about the natural ecosystem, it's about the regulatory and legal frameworks, it's about the local transportation system and the efficiency of all the other systems that are there. But location matters.

good luck and please do read those books, watch The Office, and believe in the people who disagree with you…Lying is a disgusting habit, and it flows through the conversations here like it’s our own currency. The cultural disease here is what we should be curing before we try to tackle obesity…I mean no ill will towards you, since you believe in what I was doing and hoped I would succeed at Theranos. I feel like I owe you this bad attempt at an exit interview since we have no HR to officially record it.

The cultural differences between Israel and the United States are actually so great that Intel started running “cross-cultural seminars” to bridge them. “After living in the U.S. for five years, I can say that the interesting thing about Israelis is the culture. Israelis do not have a very disciplined culture. From the age of zero we are educated to challenge the obvious, ask questions, debate everything, innovate,” says Mooly Eden, who ran these seminars. As a result, he adds, “it’s more complicated to manage five Israelis than fifty Americans

The short version is that if a tech company is about technological innovation first, and company culture second, a startup society is the reverse. It’s about community culture first, and technological innovation second. And while innovating on technology means forecasting the future, innovating on culture means probing the past.

Since tech became a consumer phenomenon, thousands of nontech people have come up with great ideas that use technology. But if their startups outsource their engineering, they almost always fail. Why? It turns out that it’s easy to build an app or a website that meets the specification of some initial idea, but far more difficult to build something that will scale, evolve, handle edge cases gracefully, etc. A great engineer will only invest the time and effort to do all those things, to build a product that will grow with the company, if she has ownership in the company—literally as well as figuratively. Bob Noyce understood that, created the culture to support it, and changed the world.

It is best to be the CEO; it is satisfactory to be an early employee, maybe the fifth or sixth or perhaps the tenth. Alternately, one may become an engineer devising precious algorithms in the cloisters of Google and its like. Otherwise, one becomes a mere employee. A coder of websites at Facebook is no one in particular. A manager at Microsoft is no one. A person (think woman) working in customer relations is a particular type of no one, banished to the bottom, as always, for having spoken directly to a non-technical human being. All these and others are ways for strivers to fall by the wayside — as the startup culture sees it — while their betters race ahead of them. Those left behind may see themselves as ordinary, even failures.

When I’m consulting to start-up founders, I often have to tell them that many of their people aren’t going to be competent in the new world order they’re heading into as they scale. Usually they respond, “But I like them and they work hard and they’re really great!” But the questions are: Can they do the job at scale? Are you going to need them to do tomorrow the same job they’re doing now? What’s your plan for them?

A company that is not designed to create high-tech products is very unlikely to have the culture or the DNA that it takes to create high-tech products. So if you are a high-tech person in that company, then you're basically a glorified typist in some sense. It's very unlikely that the kind of people who would be successful in an entertainment company would even understand what programmers do that makes them more than typists.

It is well-known that a big percentage of all marriages in the United States end in divorce or separation (about 39 percent, according to the latest data).[30] But staying together is not what really counts. Analysis of the Harvard Study data shows that marriage per se accounts for only 2 percent of subjective well-being later in life.[31] The important thing for health and well-being is relationship satisfaction. Popular culture would have you believe the secret to this satisfaction is romantic passion, but that is wrong. On the contrary, a lot of unhappiness can attend the early stages of romance. For example, researchers find that it is often accompanied by rumination, jealousy, and “surveillance behaviors”—not what we typically associate with happiness. Furthermore, “destiny beliefs” about soul mates or love being meant to be can predict low forgiveness when paired with attachment anxiety.[32] Romance often hijacks our brains in a way that can cause the highs of elation or the depths of despair.[33] You might accurately say that falling in love is the start-up cost for happiness—an exhilarating but stressful stage we have to endure to get to the relationships that actually fulfill us. The secret to happiness isn’t falling in love; it’s staying in love, which depends on what psychologists call “companionate love”—love based less on passionate highs and lows and more on stable affection, mutual understanding, and commitment.[34] You might think “companionate love” sounds a little, well, disappointing. I certainly did the first time I heard it, on the heels of great efforts to win my future wife’s love. But over the past thirty years, it turns out that we don’t just love each other; we like each other, too. Once and always my romantic love, she is also my best friend.

How to build a strong culture44 1. Have strong hiring filters in place. Explicitly filter for people with common values. You need to be careful that this does not act as a mechanism to inadvertently filter out diverse populations. You can have both a common sense of purpose and a diverse employee base at the same time. See later sections and the interview with Joelle Emerson for more information. 2. Constantly emphasize values day-to-day. Repeat them until you are blue in the face. The second you are really sick of saying the same thing over and over, you will find people have started repeating it back to you. 3. Reward people based on performance as well as culture. People should be rewarded (with promotions, financially, etc.) for both productivity and for living the company’s values. 4. Get rid of bad culture fits quickly. Fire bad culture fits even faster than you fire low performers.45 This chapter focuses on #1 above:

The grand, collectivist experiments of the earlier part of the twentieth century were discarded in favor of a narrow attentiveness to the desires and needs of the individual. The market rewarded shallow engagement with the potential of technology, as startup after startup catered to the whims of late capitalist culture without any interest in constructing the technical infrastructure that would address our most significant challenges as a nation. The age of social media platforms and food delivery apps had arrived. Medical breakthroughs, education reform, and military advances would have to

Kevin Kelly: The biggest invention in Silicon Valley was not the transistor but the start-up model, the culture of the entrepreneurial start-up. Marc Porat: It’s the style of thinking and behaving that’s called “being an entrepreneur.” Megan Smith: I grew up in it. It’s extraordinary. An entrepreneurial culture of like, “Hey, how can we solve this?” And really caring about helping each other. Carol Bartz: It really is just this need to change as fast as possible to enable the next great thing. We don’t even have to imagine the next great thing yet. We just have to get the tools to do something and use trial and error until we have the next great thing.

In Webvan’s case premature scaling was an integral part of the company culture and the prevailing venture capital “get big fast” mantra. Webvan spent $18 million to develop proprietary software and $40 million to set up its first automated warehouse before it had shipped a single item. Premature scaling had dire consequences since Webvan’s spending was on a scale that ensures it will be taught in business school case studies for years to come. As customer behavior continued to differ from the predictions in Webvan’s business plan, the company slowly realized it had overbuilt and over-designed. The business model made sense only at the high volumes predicted on the spreadsheet.

asked him to imagine the following: If I selected an employee of the company at random, from any level or function or region, and that employee had an absolutely brilliant idea that would unlock a dramatic new source of growth for the company, how would he or she get it implemented? Does the company have an automatic process for testing a new idea, to see if it is actually any good? And does the company have the management tools necessary to scale this idea up to maximum impact, even if it doesn’t align with any of the company’s current lines of business? That’s what a modern company does: harnesses the creativity and talent of every single one of its employees. Jeff answered me directly: “That’s what your next book should be about.

Focus on People, Perseverance, and Passion These “Three P’s” are the keys to successful entrepreneurship. People are the most important, particularly in the first year of a venture. To maximize their value, spend as much time as you can assembling the best possible team that really complements your skill set and can lead a little bit into where you’re heading, not just where you are. Creating the right kind of dynamic in terms of culture and commitment is really critical. Perseverance: never underestimate the value of really caring about your idea and being unwilling to drop it. If you have a big idea, and you know in your heart it’s going to happen (Passion), but know there will be roadblocks and challenges along the way. In this regard, a high degree of passion and commitment is extremely important. In my experience, really big ideas often take a decade to reach fruition. Sign

The VCs were prolific. They talked like nobody I knew. Sometimes they talked their own book, but most days, they talked Ideas: how to foment enlightenment, how to apply microeconomic theories to complex social problems. The future of media and the decline of higher ed; cultural stagnation and the builder’s mind-set. They talked about how to find a good heuristic for generating more ideas, presumably to have more things to talk about. Despite their feverish advocacy of open markets, deregulation, and continuous innovation, the venture class could not be relied upon for nuanced defenses of capitalism. They sniped about the structural hypocrisy of criticizing capitalism from a smartphone, as if defending capitalism from a smartphone were not grotesque. They saw the world through a kaleidoscope of startups: If you want to eliminate economic inequality, the most effective way to do it would be to outlaw starting your own company, wrote the founder of the seed accelerator. Every vocal anti-capitalist person I’ve met is a failed entrepreneur, opined an angel investor. The SF Bay Area is like Rome or Athens in antiquity, posted a VC. Send your best scholars, learn from the masters and meet the other most eminent people in your generation, and then return home with the knowledge and networks you need. Did they know people could see them?

Having studied workplace leadership styles since the 1970s, Kets de Vries confirmed that language is a critical clue when determining if a company has become too cultish for comfort. Red flags should rise when there are too many pep talks, slogans, singsongs, code words, and too much meaningless corporate jargon, he said. Most of us have encountered some dialect of hollow workplace gibberish. Corporate BS generators are easy to find on the web (and fun to play with), churning out phrases like “rapidiously orchestrating market-driven deliverables” and “progressively cloudifying world-class human capital.” At my old fashion magazine job, employees were always throwing around woo-woo metaphors like “synergy” (the state of being on the same page), “move the needle” (make noticeable progress), and “mindshare” (something having to do with a brand’s popularity? I’m still not sure). My old boss especially loved when everyone needlessly transformed nouns into transitive verbs and vice versa—“whiteboard” to “whiteboarding,” “sunset” to “sunsetting,” the verb “ask” to the noun “ask.” People did it even when it was obvious they didn’t know quite what they were saying or why. Naturally, I was always creeped out by this conformism and enjoyed parodying it in my free time. In her memoir Uncanny Valley, tech reporter Anna Wiener christened all forms of corporate vernacular “garbage language.” Garbage language has been around since long before Silicon Valley, though its themes have changed with the times. In the 1980s, it reeked of the stock exchange: “buy-in,” “leverage,” “volatility.” The ’90s brought computer imagery: “bandwidth,” “ping me,” “let’s take this offline.” In the twenty-first century, with start-up culture and the dissolution of work-life separation (the Google ball pits and in-office massage therapists) in combination with movements toward “transparency” and “inclusion,” we got mystical, politically correct, self-empowerment language: “holistic,” “actualize,” “alignment.

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” George Bernard Shaw On a cool fall evening in 2008, four students set out to revolutionize an industry. Buried in loans, they had lost and broken eyeglasses and were outraged at how much it cost to replace them. One of them had been wearing the same damaged pair for five years: He was using a paper clip to bind the frames together. Even after his prescription changed twice, he refused to pay for pricey new lenses. Luxottica, the 800-pound gorilla of the industry, controlled more than 80 percent of the eyewear market. To make glasses more affordable, the students would need to topple a giant. Having recently watched Zappos transform footwear by selling shoes online, they wondered if they could do the same with eyewear. When they casually mentioned their idea to friends, time and again they were blasted with scorching criticism. No one would ever buy glasses over the internet, their friends insisted. People had to try them on first. Sure, Zappos had pulled the concept off with shoes, but there was a reason it hadn’t happened with eyewear. “If this were a good idea,” they heard repeatedly, “someone would have done it already.” None of the students had a background in e-commerce and technology, let alone in retail, fashion, or apparel. Despite being told their idea was crazy, they walked away from lucrative job offers to start a company. They would sell eyeglasses that normally cost $500 in a store for $95 online, donating a pair to someone in the developing world with every purchase. The business depended on a functioning website. Without one, it would be impossible for customers to view or buy their products. After scrambling to pull a website together, they finally managed to get it online at 4 A.M. on the day before the launch in February 2010. They called the company Warby Parker, combining the names of two characters created by the novelist Jack Kerouac, who inspired them to break free from the shackles of social pressure and embark on their adventure. They admired his rebellious spirit, infusing it into their culture. And it paid off. The students expected to sell a pair or two of glasses per day. But when GQ called them “the Netflix of eyewear,” they hit their target for the entire first year in less than a month, selling out so fast that they had to put twenty thousand customers on a waiting list. It took them nine months to stock enough inventory to meet the demand. Fast forward to 2015, when Fast Company released a list of the world’s most innovative companies. Warby Parker didn’t just make the list—they came in first. The three previous winners were creative giants Google, Nike, and Apple, all with over fifty thousand employees. Warby Parker’s scrappy startup, a new kid on the block, had a staff of just five hundred. In the span of five years, the four friends built one of the most fashionable brands on the planet and donated over a million pairs of glasses to people in need. The company cleared $100 million in annual revenues and was valued at over $1 billion. Back in 2009, one of the founders pitched the company to me, offering me the chance to invest in Warby Parker. I declined. It was the worst financial decision I’ve ever made, and I needed to understand where I went wrong.

Leaders create growth trajectories by creating chains from five dimensions of growth: customer group (current or new), product (built or acquired), geography (current or new), capabilities (current or new), and culture (current or new).

Spinner at one point comes up with an idea to get some publicity. “We should pitch a story about you working here at HubSpot, and how you’re learning a whole new thing,” she says. “We can call it ‘Old Dog, New Tricks.’” I look at her as if to say, You must be kidding. She tries to backpedal, saying she didn’t mean it as an insult. She thinks it’s really cool that I’ve joined this company with such a young culture and I’ve done such an awesome job of fitting in. I want to believe she means well. I tell her I’ll think about

and follow these stupid rules. Worst of all, I have to spend a horrendous amount of time in useless meetings.” The creative magic begins to wane as some of the most innovative people leave, disgusted by the burgeoning bureaucracy and hierarchy. The exciting start-up transforms into just another company, with nothing special to recommend it. The cancer of mediocrity begins to grow in earnest. George Rathmann avoided this entrepreneurial death spiral. He understood that the purpose of bureaucracy is to compensate for incompetence and lack of discipline—a problem that largely goes away if you have the right people in the first place. Most companies build their bureaucratic rules to manage the small percentage of wrong people on the bus, which in turn drives away the right people on the bus, which then increases the percentage of wrong people on the bus, which increases the need for more bureaucracy to compensate for incompetence and lack of discipline, which then further drives the right people away, and so forth. Rathmann also understood an alternative exists: Avoid bureaucracy and hierarchy and instead create a culture of discipline. When you put these two complementary forces together—a culture of discipline with an ethic of entrepreneurship—you get a magical alchemy of superior performance and sustained results.

Frohman had long tried to cultivate a culture of disagreement and debate at Intel Israel, and he had hoped this ethos would infect Santa Clara. “The goal of a leader,” he said, “should be to maximize resistance—in the sense of encouraging disagreement and dissent. When an organization is in crisis, lack of resistance can itself be a big problem. It can mean that the change you are trying to create isn’t radical enough… or that the opposition has gone underground. If you aren’t even aware that the people in the organization disagree with you, then you are in trouble.” In

Frohman had long tried to cultivate a culture of disagreement and debate at Intel Israel, and he had hoped this ethos would infect Santa Clara. “The goal of a leader,” he said, “should be to maximize resistance—in the sense of encouraging disagreement and dissent. When an organization is in crisis, lack of resistance can itself be a big problem. It can mean that the change you are trying to create isn’t radical enough… or that the opposition has gone underground. If you aren’t even aware that the people in the organization disagree with you, then you are in trouble.

You do not want to preserve culture; you want to collectively steer the right evolution of the culture.” —Patrick Collison

I think there are five top responsibilities of a CEO: being the steward of and final arbiter of the senior management; being the chief strategist; being the primary external face for the company, at least in the early days; almost certainly being the chief product officer, although that can change when you’re bigger; and then taking responsibility and accountability for culture.

But the start-up was the land of mercenaries, young men whose spirits ran counter to traditional corporate culture but who were vastly capitalistic in their personal financial ambitions and their sacrifices. As risky as start-ups were, given that most failed, these employees had little notion or expectation of stability. In addition, start-ups often paid less than comparable corporate jobs but required more hours. To offset the low compensation and lack of job security, start-ups offered equity in the form of stock options. And if the stock options paid off, the newly rich early employee often became difficult to manage. The dynamics were more similar to joining a pirate ship than the Royal Navy.

About the Bacharach Leadership Group: Training for Pragmatic Leadership™ “Vision without execution is hallucination.”—Thomas Edison The litmus test of pragmatic leadership is results. The Bacharach Leadership Group (BLG) focuses on the skills necessary to lead and move agendas. Whether in corporations, nonprofits, universities, or entrepreneurial start-ups, BLG instructors train leaders in the core competencies necessary to execute change and innovation. At all levels of the organization, leaders must master ideation skills for innovation, political skills for moving change, negotiation skills for building support, coaching skills for engagement, and team leadership skills for going the distance. The BLG approach: 1. ASSESSMENT BLG will assess your organizational challenges and leadership needs. 2. ALIGNMENT BLG will align its training solutions with your organization’s challenges and culture. 3. TRAINING BLG training includes options for mixed-modality delivery, interactive activities, and collaboration with an emphasis on application. 4. OWNERSHIP BLG provides continuous follow-up, access to the exclusive BLG mobile apps library, and coaching. Whether delivering a complete leadership academy or a specific program or workshop, BLG will partner with you to get the results you need. To keep up to date with the BLG perspective, visit blg-lead.com or contact us at info@blg-lead.com.

Although lean production techniques are powerful, they are only a manifestation of a high-functioning organization that is committed to achieving maximum performance by employing the right measures of progress over the long term. Process is only the foundation upon which a great company culture can develop. But without this foundation, efforts to encourage learning, creativity, and innovation will fall flat—as many disillusioned directors of HR can attest.

The norm is that if you launch a big initiative and it fails (in any department, not just tech), it would certainly limit your career. In more agile cultures, failure isn’t punished. Instead, it’s a learning opportunity. The mindset of embracing risk and tolerating failure is a huge part of the software ethos. It’s also one of the biggest things that old companies avoid—even those with leaders who claim, as many do, that they want to become more like a startup.

Although the primary changes that are required in an adaptive organization are in the mind-set of its employees, changing the culture is not sufficient. As we saw in Chapter 9, lean management requires treating work as a system and then dealing with the batch size and cycle time of the whole process. Thus, to achieve lasting change, the QuickBooks team had to invest in tools and platform changes that would enable the new, faster way of working.

As Lean Startups grow, they can use adaptive techniques to develop more complex processes without giving up their core advantage: speed through the Build-Measure-Learn feedback loop. In fact, one of the primary benefits of using techniques that are derived from lean manufacturing is that Lean Startups, when they grow up, are well positioned to develop operational excellence based on lean principles. They already know how to operate with discipline, develop processes that are tailor-made to their situation, and use lean techniques such as the Five Whys and small batches. As a successful startup makes the transition to an established company, it will be well poised to develop the kind of culture of disciplined execution that characterizes the world’s best firms, such as Toyota

The challenge here is to create a mechanism for empowering innovation teams out in the open. This is the path toward a sustainable culture of innovation over time as companies face repeated existential threats. My suggested solution is to create a sandbox for innovation that will contain the impact of the new innovation but not constrain the methods of the startup team.

An aspiring entrepreneur who spends a year in an incubator is no more likely to start a company than those entrepreneurs who skip the incubator and go directly about the business of organizing a new company. Because the culture of incubators is designed to be encouraging, supportive, and mostly uncritical, an aspiring entrepreneur can spend weeks and months working on ideas that previously have been tried and failed or that have little prospect for market appeal. In that environment, it seems less, not more, likely that an aspirant will confront the reality of business startups and redirect his energy to potentially more productive work.

There are downsides to working at consultancies. The most common: Career development-wise, these companies usually don’t offer paths to above staff engineer-level, which is one step above senior engineer. The scope of work is limited to what the customer sets. Consultancies are generally hired for projects that a customer considers to be outside its core competency. Not much focus on good software engineering practices. Clients pay for short-term results, not for a developer to work on long-term things like reducing tech debt. It might be hard to switch to product-focused companies later. Companies that build products like Big Tech, startups, and scaleups tend to have very different cultures where maintainability is important, as is taking the initiative. Working at a consultancy for too long can make the switch to these places harder.

Good people are the key to a happy life. Integrity and authenticity are the key to self-respect. Trust is the key to good business.

Good collaboration leads to improvement. Great collaboration leads to innovation.

Topics & Questions for Discussion In Chapter One, “Cyrus Jones and the Magic Funeral,” Asha describes Cyrus as “mostly human, a little bit cartoon, a tiny bit ghost.” Having read the book, what do you think of Cyrus as a character? Have you met anyone like him in real life? Think back to your high school crush(es). Do you recall that first feeling of attraction? How would you react if you happened upon that person now? What does Asha’s relationship with her older sister Mira bring to story? How does she add to your understanding of Asha as a person? Jules is a source of support, emotional and financial, for Cyrus and Asha. What other roles does he play in the novel? Recall the manifesto Cyrus writes in Chapter Three: “We don’t try to convince people to buy things We don’t spy on anyone We don’t sell our souls (we don’t sell anything) and We are equal partners and make all decisions together.” Did you predict any of these points might falter? Were you correct? Consider what kind of workplace Utopia is. Would you like to work there? What elements would you like to see in your current work situation? At the end of Chapter Five, Asha thinks about the cultural differences between her and Cyrus, contemplating his “whiteness.” To what extent do you think their differences affect their understanding of each other? Have you had to think about cultural differences in a similar way? Besides WAI, several other app ideas are mentioned in the novel: Consentify, LoneStar, Buttery, Flitter, and so on. Discuss your favorite, or if you have any other start up ideas. Asha, Cyrus, and Jules must delve into all the logistical aspects of starting and growing a business, from assembling the right team to sourcing funding. What seem to be the biggest challenges to starting a business? The novel deals with themes of gender dynamics and white male privilege throughout. At what points can you see these dynamics at play, and how do the characters respond? If you were Asha’s friend, or family member, how would you react to her relationship with Cyrus? Would you have warned her or supported her? What does or doesn’t seem to work about their marriage?

David versus Goliath Asymmetry lies at the heart of network-based competition. The larger or smaller network will be at different stages of the Cold Start framework and, as such, will gravitate toward a different set of levers. The giant is often fighting gravitational pull as its network grows and saturates the market. To combat these negative forces, it must add new use cases, introduce the product to new audiences, all while making sure it’s generating a profit. The upstart, on the other hand, is trying to solve the Cold Start Problem, and often starts with a niche. A new startup has the luxury of placing less emphasis on profitability and might instead focus on top-line growth, subsidizing the market to grow its network. When they encounter each other in the market, it becomes natural that their competitive moves reflect their different goals and resources. Startups have fewer resources—capital, employees, distribution—but have important advantages in the context of building new networks: speed and a lack of sacred cows. A new startup looking to compete against Zoom might try a more specific use case, like events, and if that doesn’t work, they can quickly pivot and try something else, like corporate education classes. Startups like YouTube, Twitch, Twitter, and many other products have similar stories, and went through an incubation phase as the product was refined and an initial network was built. Trying and failing many times is part of the startup journey—it only takes the discovery of one atomic network to get into the market. With that, a startup is often able to start the next leg of the journey, often with more investment and resources to support them. Contrast that to a larger company, which has obvious advantages in resources, manpower, and existing product lines. But there are real disadvantages, too: it’s much harder to solve the Cold Start Problem with a slower pace of execution, risk aversion, and a “strategy tax” that requires new products to align to the existing business. Something seems to happen when companies grow to tens of thousands of employees—they inevitably create rigorous processes for everything, including planning cycles, performance reviews, and so on. This helps teams focus, but it also creates a harder environment for entrepreneurial risk-taking. I saw this firsthand at Uber, whose entrepreneurial culture shifted in its later years toward profitability and coordinating the efforts of tens of thousands. This made it much harder to start new initiatives—for better and worse. When David and Goliath meet in the market—and often it’s one Goliath and many investor-funded Davids at once—the resulting moves and countermoves are fascinating. Now that I have laid down some of the theoretical foundation for how competition fits into Cold Start Theory, let me describe and unpack some of the most powerful moves in the network-versus-network playbook.

The next billion-dollar startup will only have three employees.” The culture of that startup would be “AI first,” and it would use autonomous AI agents to get work done. All marketing and sales would be automated via AI bots, and the three employees would be: The CEO, who would handle vision and purpose and lead public-facing marketing. She would also code and be involved in engineering. The Product Lead, who would interface with customers and team to manage the product roadmap and drive development The Operations Lead, who would be responsible for the outcome of the AI bots and handle finance and legal and smooth operations. We

great for the role, but he seems borderline or outright bad culturally. The right strategy is to not hire the person. “If there is a doubt, there is no doubt” unfortunately proves itself to be true over and over again.

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Microsoft had a video site and so did a litany of start-ups, like Revver and Metacafe, and crass shock portals, like Big Boys and eBaum’s World. Each featured footage on their own websites or applications, but they lacked a way to let videos play everywhere else on the web. YouTube had found a way

In general, be it at startups or aggressive companies like Facebook, there should be a cultural bias for launching. The perfect is very often the enemy of the good, and as the Facebook poster screamed from every wall: DONE IS BETTER THAN PERFECT. Very few companies have died due to launching early; at worst, you’ll have a one time product embarrassment (as Apple did with the first version of its iPhone Maps app). However, countless companies have died by losing the nerve to ship, and freezing into a coma of second-guessing, hesitation, and internal indecision. As in life, so in business: maintain a bias for action over inaction.

Jack Dorsey, the cofounder of Twitter and founder of Square, has an interesting approach to his weekly routine. He has divided up his week into themes. Monday is for management meetings and “running the company” work. Tuesday is for product development. Wednesday is for marketing, communications, and growth. Thursday is for developers and partnerships. Friday is for the company and its culture.9 This routine helps to provide calmness amid the chaos of a high-growth start-up. It enables him to focus his energy on a single theme each day instead of feeling pulled into everything. He adheres to this routine each week, no exceptions, and over time people learn this about him and can organize meetings and requests around it. TACKLE

DOGS AT WORK AND YOGA AREN’T CULTURE Startups

Some of the same forces have come to bear in the business world, where many companies in thriving talent-dependent industries embraced a new workplace ethos in which hierarchies were softened and office floor plans were reengineered to break down the walls that once kept management and talent separated. One emerging school of thought, popular among technology companies in Silicon Valley, is that organizations should adopt “flat” structures, in which management layers are thin or even nonexistent. Star employees are more productive, the theory goes, and more likely to stay, when they are given autonomy and offered a voice in decision-making. Some start-ups have done away with job titles entirely, organizing workers into leaderless “self-managing teams” that report directly to top executives. Proponents of flatness say it increases the speed of the feedback loop between the people at the top of the pyramid and the people who do the frontline work, allowing for a faster, more agile culture of continuous improvement. Whether that’s true or not, it has certainly cleared the way for top executives to communicate directly with star employees without having to muddle through an extra layer of management. As I watched all this happen, I started to wonder if I was really writing a eulogy. Just as I was building a case for the crucial value of quiet, unglamorous, team-oriented, workmanlike captains who inhabit the middle strata of a team, most of the world’s richest sports organizations, and even some of its most forward-thinking companies, seemed to be sprinting headlong in the opposite direction.

Oscar Wilde once said, “Experience is the name everyone gives to their mistakes.” The mourners at Startup Funeral are among the many people in the American technology culture who regularly celebrate said experience. Since the rise of the Web, the Silicon Valley crowd has decided that failure in the quest to build a business is not only OK, but cool. “Fail often” is a guiding aphorism.

I’ve made billions of dollars of failures at Amazon.com. Literally. None of these things are fun, but they also don’t matter. What matters is that companies that don’t continue to experiment or embrace failure eventually get in the position where the only thing they can do is make a Hail Mary bet at the end of their corporate existence. I don’t believe in bet-the-company bets.

In all my experience in both startups and large companies, including and especially at Facebook, I would always prefer - a hundred times prefer - being subject to the rigors of the market, the fickleness of luck, and the whims of users than to navigate the popularity-contest politics of a large company, surrounded by the mediocre duffers who've succeeded in life through nothing more than guile and appearances.

...remote work, and many other perks [..], will work or fail because of the company culture, not because of the perk itself.

There’s a country that does something a little like this. Its young people, including its very best educational prospects from all different backgrounds, spend two or three years training and solving problems in a nonhierarchical environment and get together every year. Many then collaborate to start companies. This country leads the world in venture capital investments per capita (over $170, versus $75 in the United States in 2010).1 It has more companies on the NASDAQ than any non-US country except for China, despite having a population of less than eight million.2 Its quarterly gross domestic product (GDP) growth rate was above 5 percent in 2011 and it’s in the top thirty globally in per capita GDP, above Spain and Saudi Arabia, among others.3 This country is Israel, where eighteen-year-olds complete two- or three-year tours in the military, getting to know each other in highly selective military units. They operate at a high level of autonomy and responsibility and then travel the world for months before heading to college and/or grad school. In Dan Senor and Saul Singer’s book Start-up Nation, this network and training ground is credited as helping give rise to a culture of risk taking and entrepreneurship. By the time Israelis graduate from college, they’re in their midtwenties and mature; in many cases, they’ve already been in operating environments and borne life-and-death responsibilities. This cocktail of experience gives rise to a mixture of both courage and impatience. As one entrepreneur put it, “When an Israeli entrepreneur has a business idea, he will start it that week. The notion that one should accumulate credentials before launching a venture simply does not exist. . . . Too much time can only teach you what can go wrong, not what could be transformative.”4 Another observer commented, “Israelis . . .  don’t care about the social price of failure and they develop their projects regardless of the economic . . . situation.”5

I had several friends from law school who were very enterprising guys, much more so than the average law student. They each started businesses after practicing law at large firms for multiple years. What kind of businesses did they start? They started boutique law firms. This is completely unsurprising if you think about it. They’d spent years becoming good at delivering legal services. It was a field that they understood and could compete in. Their credentials translated too. People learn from what they’re doing and do it again on their own. It’s not just lawyers; the consulting firm Bain and Company was started by seven former partners and managers from the Boston Consulting Group. Myriad boutique investment banks and hedge funds have spun out of large financial organizations. You can see the same pattern in the startup world. After PayPal was acquired by eBay in 2002, its founders and employees went on to found or cofound LinkedIn (Reid Hoffman), YouTube (Steve Chen, Jawed Karim, and Chad Hurley), Yelp (Russel Simmons and Jeremy Stoppelman), Tesla Motors (Elon Musk), SpaceX (Musk again), Yammer (David Sacks), 500 Startups (Dave McClure), and many other companies. PayPal’s CEO, Peter Thiel, famously made a $500,000 investment in Facebook that grew to over $1 billion. In this sense, PayPal is one of the most prolific companies of recent times. But if you look at any successful growth company you’ll start to see their alumni show up doing parallel things. Former Apple employees founded or cofounded Android, Palm, Nest, and Handspring, companies that revolve around devices. Former Yahoo! employees founded Ycombinator, Cloudera, Hunch.com, AppNexus, Polyvore, and many other web-oriented companies. Organizations give rise to other organizations like themselves.

the immigrant population in the United States is a terrific example of how the combination of embracing constraints and being surrounded by a new culture can lead to an explosion of creativity. Immigrants are more than twice as likely to start a business as native-born Americans, and 52 percent of Silicon Valley start-ups include an immigrant. Forty percent of the Fortune 500 companies were founded by first-generation immigrants or their children.7 Peter Thiel, cofounder of PayPal, makes this powerful statement about the importance of avoiding cultural entitlement: "Doing what we already know how to do takes the world from 1 to n. But, when we create something new, we go from 0 to 1. Unless companies invest in the difficult task of creating new things, they will fail in the future no matter how big their profits are." If you want to keep innovation alive, look for ways to combine something old with something new.

If this book has shown anything, it is that becoming a force in technological innovation or disruption far beyond Silicon Valley has never been easier than it is today—but unimpeded access to the internet is essential. New entrepreneurs worldwide are creating ways to collaborate and solve local, regional, and even global problems. And governments should note that while these innovators are passionate about their homes and culture, they have also never been more mobile. If pushed, they can seek out other countries that embrace their talent. In addition to losing their best and brightest, emerging nations will have trouble competing if their legal environments squelch innovation.

The culture of a startup is that you’re on a mission, not just doing a job.

Company culture” doesn’t exist apart from the company itself: no company has a culture; every company is a culture. A startup is a team of people on a mission, and a good culture is just what that looks like on the inside.

This was a success in itself, but it came with an added and unexpected benefit: The act of thinking about the problem and responding to it was invigorating and rewarding. We realized that our purpose was not merely to build a studio that made hit films but to foster a creative culture that would continually ask questions. Questions like: If we had done some things right to achieve success, how could we ensure that we understood what those things were? Could we replicate them on our next projects? Perhaps as important, was replication of success even the right thing to do? How many serious, potentially disastrous problems were lurking just out of sight and threatening to undo us? What, if anything, could we do to bring them to light? How much of our success was luck? What would happen to our egos if we continued to succeed? Would they grow so large they could hurt us, and if so, what could we do to address that overconfidence? What dynamics would arise now that we were bringing new people into a successful enterprise as opposed to a struggling startup?

But entrepreneurs should take cultures of extreme dedication seriously.

A solid process lays the foundation for a healthy culture, one where ideas are evaluated by merit and not by job title.

The point of school, after all, isn’t to do homework. The point of school is to learn. It was a mistake to assume that teachers—or anyone else, for that matter—automatically knew what was best for me. Rules are there to help us—to create a culture, to streamline productivity, and to promote success. But we’re not computers that need to be programmed. If you approach your bosses or colleagues with respect, and your goals are in alignment, there’s often room for a little customization and flexibility. And on the other side, those in positions of power shouldn’t force people to adhere to a plan for the sake of protocol. The solution, always, is to listen carefully—to your own needs and to those of the people around you.

We've all seen it. A #startup begins with a #dream, a #passion to do something others have missed or overlooked.

you must remove the walls between your sales and marketing organization and product development. You must move quickly to an integrated growth organization and foster a culture that prioritizes growth across the company.

Leaning out, or walking away, doesn’t mean that you’ve given up. This

If you’re an entrepreneur or business executive the charge is equally clear: you must remove the walls between your sales and marketing organization and product development. You must move quickly to an integrated growth organization and foster a culture that prioritizes growth across the company.

For example, consider one of Intuit’s flagship products. Because TurboTax does most of its sales around tax season in the United States, it used to have an extremely conservative culture. Over the course of the year, the marketing and product teams would conceive one major initiative that would be rolled out just in time for tax season. Now they test over five hundred different changes in a two-and-a-half-month tax season. They’re running up to seventy different tests per week. The team can make a change live on its website on Thursday, run it over the weekend, read the results on Monday, and come to conclusions starting Tuesday; then they rebuild new tests on Thursday and launch the next set on Thursday night. As Scott put it, “Boy, the amount of learning they get is just immense now. And what it does is develop entrepreneurs, because when you have only one test, you don’t have entrepreneurs, you have politicians, because you have to sell. Out of a hundred good ideas, you’ve got to sell your idea. So you build up a society of politicians and salespeople. When you have five hundred tests you’re running, then everybody’s ideas can run. And then you create entrepreneurs who run and learn and can retest and relearn as opposed to a society of politicians. So we’re trying to drive that throughout our organization, using examples which have nothing to do with high tech, like the website example. Every business today has a website. You don’t have to be high tech to use fast-cycle testing.” This kind of change is hard. After all, the company has a significant number of existing customers who continue to demand exceptional service and investors who expect steady, growing returns. Scott says, It goes against the grain of what people have been taught in business and what leaders have been taught. The problem isn’t with the teams or the entrepreneurs. They love the chance to quickly get their baby out into the market. They love the chance to have the customer vote instead of the suits voting. The real issue is with the leaders and the middle managers. There are many business leaders who have been successful because of analysis. They think they’re analysts, and their job is to do great planning and analyzing and have a plan.

His biggest hit so far is making the first investment in Pinterest, the popular social network used to share photos, organized as collections of pictures on a pin board. Launched in March 2010, it has become one of the most visited sites, with 23 million users in 2012 and a valuation of over $1.5 billion. Pinterest was founded in Palo Alto, Silicon Valley, by three youngsters under 30. “I helped them start and guided them as a mentor to become what they are,” says Cohen. “With this single investment I’m done. As soon as I get my liquidity event I will party like there’s no tomorrow.” All the angels dream of “the big hit,” says Cohen, who has written a book on the subject.[24] They are the ones providing 90% of startup capital, by writing checks out of their own pocket. But they don't do it just thinking of financial returns. “I think we do it because it’s fun. There’s no question that everyone thinks he or she is smarter than everyone else,” the Chairman of the New York Angels says half-jokingly. “In reality no one makes money, although some are luckier and hit the jackpot. Then there is the fashion factor. Everyone today wants to be an angel because it is cool. In other words, we are the prima donnas; we have a big ego. But there is also the idea of doing good, to have the satisfaction of helping start new emerging companies.” The pleasure of giving back: an important part of Jewish culture, and of American culture in general.

I ask my young, white, male colleague to imagine that instead of saying that older people (gray hair and experience) are overrated, Halligan said that gay people are overrated, or women, or African-Americans, or Jews. Imagine Halligan saying, “We’re trying to build a culture specifically to attract and retain white people, because when it comes to technology, white people do a much better job than black people.” “But he didn’t say that!” my colleague responds. “He didn’t say anything about gays, or women, or black people!” As the Bible says: Jesus wept.

So we should not be surprised when The Economist tells us that “in Beirut, Cairo, Dubai, Riyadh or even Gaza City, small technology firms are multiplying.”18 We should not be surprised that in many Middle East cities women comprise 35 percent of Internet entrepreneurs, three times the global rate for such startups.19 We should not be surprised that in high-growth industries twice as many entrepreneurs are over fifty as are under twenty-five.20 Entrepreneurs are everywhere. Opportunities to nourish them are everywhere, too.

DON’T LET YOUR CULTURE BECOME TOXIC SUCCESSFUL START-UPS often begin with a culture where people challenge one another directly and even fiercely, but also show they care personally.

So how do you help your Band-Aid solution stand out with people who don’t know they’re cut? You cut them! Of course, I’m not suggesting you cause any physical harm to your customers. Rather, you should adopt an approach that clearly conveys the problem you solve in advance of communicating the way you solve it. For example, back at my third start-up, when positioning our new-age feedback, coaching, and recognition solution, we could have invoked statements like: “We help employees get the feedback they need to perform their best and grow their careers.” “We help managers become great coaches.” “We help promote your amazing culture by making winning behaviors visible.” All imply that employees don’t get enough feedback at work, managers can often be poor coaches, and your people do amazing things that not everyone sees: fair points and all problems there is value in addressing. But they are also statements that are easy to dismiss. After all, many organizations already feel they provide their employees with sufficient levels of the feedback, coaching, and recognition they crave. We found prospects were much more responsive to our pitch when we preceded those statements with messages like: “Seventy percent of people leave their company because of a poor relationship with their manager.” “Most millennial employees use the word ‘hate’ to describe how they feel about performance reviews.” “Four out of ten employees are actively disengaged at work and cost companies millions in lost productivity.” Why did this approach work so well? The messages were striking. They were laden with specific and compelling statistics. And they invoked real business pains. They made the customer realize that they were already experiencing a loss. In other words, they were bleeding and in need of a Band-Aid.

I’ve never respected the profession. It’s business that has to take the majority of the blame for being the enemy of nature, for destroying native cultures, for taking from the poor and giving to the rich, and for poisoning the earth with the effluent from its factories. Yet business can produce food, cure disease, control population, employ people, and generally enrich our lives. And it can do these good things and make a profit without losing its soul.” Chouinard shaped Patagonia around his personal values,

At the heart of Lean management is giving employees the necessary time and resources to improve their own work. This means creating a work environment that supports experimentation, failure, and learning, and allows employees to make decisions that affect their jobs. This also means creating space for employees to do new, creative, value-add work during the work week—and not just expecting them to devote extra time after hours.

Silicon Valley’s and China’s internet ecosystems grew out of very different cultural soil. Entrepreneurs in the valley are often the children of successful professionals, such as computer scientists, dentists, engineers, and academics. Growing up they were constantly told that they—yes, they in particular—could change the world. Their undergraduate years were spent learning the art of coding from the world’s leading researchers but also basking in the philosophical debates of a liberal arts education. When they arrived in Silicon Valley, their commutes to and from work took them through the gently curving, tree-lined streets of suburban California. It’s an environment of abundance that lends itself to lofty thinking, to envisioning elegant technical solutions to abstract problems. Throw in the valley’s rich history of computer science breakthroughs, and you’ve set the stage for the geeky-hippie hybrid ideology that has long defined Silicon Valley. Central to that ideology is a wide-eyed techno-optimism, a belief that every person and company can truly change the world through innovative thinking. Copying ideas or product features is frowned upon as a betrayal of the zeitgeist and an act that is beneath the moral code of a true entrepreneur. It’s all about “pure” innovation, creating a totally original product that generates what Steve Jobs called a “dent in the universe.” Startups that grow up in this kind of environment tend to be mission-driven. They start with a novel idea or idealistic goal, and they build a company around that. Company mission statements are clean and lofty, detached from earthly concerns or financial motivations. In stark contrast, China’s startup culture is the yin to Silicon Valley’s yang: instead of being mission-driven, Chinese companies are first and foremost market-driven. Their ultimate goal is to make money, and they’re willing to create any product, adopt any model, or go into any business that will accomplish that objective. That mentality leads to incredible flexibility in business models and execution, a perfect distillation of the “lean startup” model often praised in Silicon Valley. It doesn’t matter where an idea came from or who came up with it. All that matters is whether you can execute it to make a financial profit. The core motivation for China’s market-driven entrepreneurs is not fame, glory, or changing the world. Those things are all nice side benefits, but the grand prize is getting rich, and it doesn’t matter how you get there.

Venture capitalist Ben Horowitz defines company culture as how employees make decisions when their boss isn’t there. In a company with a strong culture, employees “just know” what to do when confronted with a nonroutine issue.

Cultures in scaling startups can fracture in two ways. First, “old guard versus new guard” conflicts may arise if early team members resent the growing power of specialists or some new employees’ lack of initiative and commitment. Recent hires, in turn, may be jealous of early employees who’ve amassed enormous stock option gains (“That engineer in the next cubicle does the same thing I do, and she just made $5 million”). Second, as specialists are added to the staff and their units expand, functions can develop their own subcultures. Employees may feel a stronger sense of attachment to their functional unit—say, marketing or warehouse operations—than to the venture overall.

Goldberg and Fab’s management team conducted cohort analysis and had a handle on deteriorating LTV/ CAC trends, but they did not act quickly enough on this data. In October 2013, three months after raising the VC round that made Fab a unicorn, Goldberg wrote in a memo to his team, “We spent $ 200 million and we haven’t proven out our business model… we haven’t proven that we know exactly what our customers want to buy.” He added a litany of his own mistakes as CEO, including: I guided us to go too fast. I didn’t insist on homing in on our target customer. I spent too much on marketing before we got the consumer value proposition right. I didn’t build enough discipline around costs and business metrics into our culture. I allowed us to over-invest in Europe. I didn’t see the need to course correct fast enough.