Transcript for:
Lecture on Culture, Vision, and Mission in Startups

okay I hope tonight we have one word for you at the end of the evening which is inspiration I really feel inspired tonight because we've got a group of entrepreneurs here who started a company in a way that for me is absolutely exemplary and that is salsifi so before I do anything I just want to have the salsifi team just stand up and I'll quickly introduce them and then uh we'll get going for the rest of the workshop so Jason Jeremy and Rob great so you'll be hearing from the salsifi team as they come through this evening and that's really the value of these workshops just to be clear I'm here as sort of food uh but they're really the main course um and the the important thing is to get an example of how this actually impacts your business so we'll talk about the cify case study as we go through this and I'll bring a few others to light too but I encourage you to pose questions to them to engage them both before during and after and then as I say I'll I'll put the Frameworks up to try to give you some sense of this thing now one of the things I'm excited about tonight is that we had so much feedback on company formation which used to be one session uh and it was always squeezed that we've actually broken it into two because what people said was look vision mission and culture are so important we want you to focus on that and we want more examples on that so you'll see this a bunch of new material uh since the last couple of years of doing this and then we've got next Workshop uh as Jody said November 7th we're going to focus on the people piece that comes after this which is how do you hire and uh get team building going and they they very much go together so you know watching one without the other is not going to make much sense because actually if you don't have a very clear vision mission uh it's going to be very hard to hire people and your culture is very much a central part of how you hire people too but then of course there's a whole series of skills that are involved in hiring and uh team building and so that'll be next week's uh workshop and we'll have a lot of fun on that one too so I always love to start with why I mean you're a gracious audience you're always here you're always very attentive it's it's great to have another full house but why are you here um you've probably got your own reasons but I will give you my reason for putting this agenda so early on in a startup's life it's as simple as this if you don't have the people to execute and the culture to select the right people and Empower them to do the right thing and then the vision to actually engage focus and unify everybody on getting the result you want it's really almost impossible to execute on building anything whether it's a product or a company or a long-term business it just is fundamental and so I'm going to just put this in perspective by saying we've talked a little bit about the value prop it is an important starting point obviously if you don't have an idea for what you can build that's going to solve a really meaningful problem which we covered in that particular Workshop you probably don't have this the basis to start a company but I also often get asked this question is it worth starting a company if you have a great group of people and you don't yet have your value proper your idea together and the answer is yes um I'm doing a spin out of MIT at the moment which is really based on the quality of people they're just world-class experts in a particular discipline and we've done exactly that in things like open source or in e-commerce where the people actually had already the basis for forming a team with a Clarity of purpose that was worth starting a company around so this is actually not sometimes um started with a value proposition it is sometimes started with a great team and a great group of people but if you have the value prop then obviously people follow and execution which is what I was talking about how um this will impact is next and the vision mission is where you're headed and I would look at it this way i' would say that if you know you've got a great value proposition and you've got a great problem to solve what we're going to try to do is craft a Clarity of purpose as to what will be the impact you can have in the marketplace that you're addressing and that's your vision mission and then how will you establish a culture uh that will build an an enabling company and I want to make a very quick statement here because there's a lot of flip discussion about you know lean startups and the lean methodology and it basically pays zero attention to culture and I don't think you should pay uh lip service to this because for all and you've seen me do pneumonics before in this case the pneumonic is for all the listening and learning that you do for all the iterating and pivoting you do there is one thing that I think should stay consistent in your business and that's the culture so I don't I don't believe that no matter how many times you might change for example something like your product definition or your uh business model or even a focus on a segment all those iterations are great but but if you're constantly doing all that I can tell you underlying that you're going to want a foundation that feels solid and that's going to be your culture it's the one thing I really believe that should be consistent it's the thing you shouldn't be iterating um you shouldn't have to you know recreate your culture halfway through building your business that is really hard to do and uh for many people by the way uh when they see that kind of change and chop in a company for example you know turnover in leadership and then changes in culture it's a signal that something's wrong and so this is why early on establishing what your culture is what the values are that are important to you is so critical because if you can build that consistency it becomes the basis on which people can start to feel rooted in working with you um as a as a startup and it can really build the value of your business so let's just simplify all of that and say the following your value proposition is a starting point your vision mission is what you're aiming for your people and team are obviously the basis on which you execute and your culture is the underlying enabler so that's how we're going to talk about things tonight that's kind of our agenda for the evening so let's Jump Right In the vision and Mission is something that many people also skip over they tend to think of hey we're building some great product or we've got some great idea and we've got some challenge that we're trying to get through you could skip it but I actually think it's important for three reasons if you don't have a vision and Mission and all you're talking about is the feature or functional product you're building it's very hard to get inspired about well what impact does that have and I know most people whether you're at Harvard or MIT many of you in the community here have some very Noble projects some very impactful projects you're wanting to change Healthcare in the third world for example I know there's a team here that's for example changing the way that that vaccines are delivered uh in the world that's highly impactful and they have a vision that's very meaningful which is how to reduce the cost of healthcare for you know the underdeveloped communities that's the kind of thing that's very inspiring and if you can get specific about it it can help align people it can help focus them and it can help Empower them so let's talk a little bit about how would you go about developing your vision and Mission most people have at least some idea of a Marketplace that they're addressing and once you have that idea the first question I'd ask for yourselves is how will the market evolve how do you see it developing what do you see changing so if you're for example developing a mobile application obviously something that's changing is the fact that everybody's got now many different ways that they can access the web and the device that they're carrying with with them is 24/7 always on and always with them so that actually changes a lot it means you can make assumptions about the kind of information people have at their fingertips how they might use it etc those are the kinds of things if you haven't got a vision statement you might start to use to form it so you might say something like our mobile app is going to enable people to access information any time any place and to be able to move their business process forward from wherever they are in the world in order to in whatever your company is going to do uh and an example might be in order to enable mobile workers to drive the the uh delivery of their products and services to to a much um you know greater efficiency and you know we've got many examples of these things but I'll pick one for you one of our companies that does that made a mission statement which was as simple as this which is we they wanted to empower mobile workers to have the fastest access to information to save lives okay that sounds meaningful um so at that point you've got something that's very clear very compelling and very impactful and that's a lot more interesting than saying we're going to build a mobile app that can be used in hospitals I mean it's pretty obvious to state that but that's the difference between having a vision mission and not having one so how the market will evolve and how you lead it is the basis to ask for yourselves what should be your vision and vision mission by the way they they're sometimes combined some people like to split them some people to make like the vision be very long term and Mission be a little closer term and a little bit more specific I like to think about the mission if you're going to split it and being an inspiring statement of intent in other words when you deliver this leadership you will have an impact of one short form or another so let's jump in and use an example here how many of you use Google I should ask the other question actually does anybody in this room not use Google it's a verb now I mean okay so we get that now let's go back and imagine that Serge and Larry were starting a company where what they said was we are going to just index all the world's information okay yeah and now what I mean it's a techy interesting thing to say but I don't think your mom would be using that or you yourselves or your potentially your grandchildren be using it if all that's the that's all they did was they indexed all the information so that wasn't what they said they didn't say we're just going to index the information in the world and please come join us they made a vision and mission statement which was to organize the world's information and make it universally AC accessible and useful now at that point you start to get a sense of aha okay that's why you're indexing it all that's what you know the purpose of Google is and it becomes interesting for everybody to speculate and think about wow what if you could get access to all the world's information information that's in libraries information that's on the web information that's now you know being captured for example with cars driving around uh streets you know to to give you Maps um all that information could be combined and collected and used for many many different things and that's why no hands had to go up when I said does everybody use Google because it's all becoming accessible it's all becoming very useful and so this is the kind of mission statement that not only makes sense but ultimately hopefully makes uh a basis for somebody to get inspired for you to make a hire for you to also keep people focused and for many of the uh things that are going on beneath the radar at go Google to have a purpose now one of the companies that's hot in the news and I always like to keep these lectures current is Twitter how many people use Twitter here I'm embarrassed to say I finally do because I was forced into it a long time ago um okay anybody who showed up their hands what do you use Twitter for anybody go ahead news news so are you a reader or are you an actual Twitter both so you do you read it or and do you share it as well I read it share it I come up with my own tweets I it's sometimes comical sometimes serious it depends on the great so uh it's news for you that was in one word so what do you think Twitter's um vision and Mission should be connecting the world connecting the world I I like that that's that's very empowering too yeah um what do you think it was when they started providing an easy tool for companies to communicate okay well the good news is no matter what you said it would have been better than what they had because they didn't have one so uh Twitter actually came out of as in um many cases with the startups it came out of an experience actually from a company called podio who was doing podcasting that didn't work out and um the founders realized that actually what they needed to do was simplify everything and they figured out as they were developing what became Twitter that if they really simplified messaging down to this level it could be really useful um well since then they've grown a lot and most of you will now know they're about to go public um that's about the most badly kept secret in the world right now um and they've evolved to saying they give everyone the power to create and share ideas and information instantly without barriers and I think it's pretty cool now imagine if they'd actually started with that uh we might have all understood what the hell Twitter was for for starters uh and and I might have actually been able to figure out whether I should have used it earlier on but obviously they've been very successful despite of it so I'm making the point here because it isn't critical that you have a mission statement and a vision statement up front they've been very successful without it but as it becomes clear what your mission and vision is it's a lot easier for people to grasp okay should I engage with them should I go join them or or you know should I be part of this movement or not and I think as in Twitter's case it's become clear that uh both can be successful both starting without one and then obviously developing one that can be empowering afterwards and I'd like to just have Jason share with you what salsifi does and how they've developed their mission yeah so we're one of those companies that um we're still in the process of figuring out what our mission statement is but I I I just a couple comments on um to add to what Michael said I I worked at a couple companies before salsify we just started it last year I worked at Inda who's familiar with Inda really good Boston company did search and browse started about 10 11 years ago and and we powered about um half of the internet retailer top 100 for e-commerce search and browse so sites like Walmart and Home Depot um ended up uh very successfully uh um integrating the company with Oracle um uh in 2011 before that parametric technology which was another Boston company that did 3D computerated design before there was 3D printing uh so both of those companies I think were were interesting to me because we didn't have formal mission statements at either one of them but when we didn't have the mission statement in the minds of folks was very clear that um it was sort of clear when things were going wrong so I think back to Inda we 10 years up and down there were times where we were incredibly successful there were times where I think back to to ' 08 where everything was falling apart we had a hard time keeping everybody focused when we didn't have that mission statement that kept everybody in the company aligned that that the management team was able to push down to folks it was incredibly difficult to retain people um which which as you're growing a startup keeping people on board and retained is incredibly hard and important and so that was one of the things that for us solfi we said we really need to make sure that we've got something that unites us it's not what we're working on day-to-day it's not what folks are doing but we should be able to tie everything back to that and for us we were going after a problem that we saw in e-commerce who's familiar with e-commerce um who's got some exposure to the space all right so try to keep it fairly basic you've got um everybody who's selling products online whether it's Amazon or Walmart or Target has to collect the product information that they use to put on the product detail pages and it turns out that's a incredibly stupid process people are sending spreadsheets around they're picking up the phone you go to a drugstore.com there's a whole floor of people who are doing nothing more than picking up the package of the product they're selling and typing the information into their internal systems you would think that it would be a totally automatic you know publish subscribe really slick process for sharing this stuff doesn't work that way at all um and it's incredibly inefficient and it's a really big problem for folks now because got companies trying to expand their assortments to compete you know create marketplaces to compete with with Amazon and um you've got brands that are really trying to do a better job at showcasing their their products through different channels so we looked at this problem and said there ought to be a way to um really create a a network of product information that Brands can publish out and retailers and and users application authors can subscribe to and consume product content and so we said that's what we wanted to do it's a big Network that we want to create it's a long-term play it's something that's going to take a very long time to deliver but we we knew that even though we were going to start with the small process we wanted to have that unifying us and having that that concept even though it's not necessarily what the engineers are building every day it's not necessarily what we're selling from a beach head perspective every day having that is incredibly helpful when we're you know pitching candidates when we're just internally prioritizing what we're going to do and and talking other folks so I it's not something that we necessarily put up on a slide um when we're in meetings every time but I can tell you that having it um is very helpful to have just as an aligning principle thank you very much so what's great about Jason's Story is that in the very early days of engaging with Jason and his team he actually came to one of these workshops so he and his team were here in this workshop and uh subsequently came and said to me would you like to come spend some time with us as a team there were only three founders at the time they were about to hire the first couple of Engineers and we sat down and we didn't talk about you know what the product was going to do or what the 10 things were that they were building we talked about this you know mission statement and the guys described to me their Vision which I thought was brilliant and that was that information would flow so seamlessly between those people who were creating product and those people are selling them and all the Distributors and potential uh outlets for those products that uh you would literally be able to buy anything anytime anywhere with the right information at the right time and it's incredibly hard to do as it turns out you know the more we beg to dig into it it turns out that products are constantly changing the channels are constantly changing people are selling things globally now they do it through through two-tier distribution in many instances and the faster the product Cycles occur of course the faster that information has to flow through all those different channels oh and by the way it's a two a world too cuz people now comment and review and rate products and that turns out to be an important about part about how they hire them they add things like their own videos and how toos on products and so this is like not going to work in the old model it was a clearly broken problem so you know for those of you here for the value proposition this was a mission critical broken process you can't sell if you don't have the right information on it it's as basic as that so Commerce would grind to a halt without these guys so what's exciting for people who do know the e-commerce world is that that mission statement is really compelling it me means that they're going to be effectively the lifeblood think about them as the the veins and arteries of information that enable Commerce and so it was very exciting to see this team develop this vision and Mission and it became very easy for me as an investor to get engaged on it so it's a real world story I encourage you to talk about it uh with them and um there's also a post up on my site on it if you want to read the sort of how this happened okay now I got some feedback last year about how do you balance vision mission and execution uh and it the story or rather the question goes like this most entrepreneurs come to me and they say look this vision mission stuff is really important I get it but most VCS just want to know you know how am I get my first customers and have I got some traction uh and I would say well of course that's important you know you you've got to be able to do both and that's the balancing act that uh we want to try to give you a sense of tonight so I've both written a post on that that is on the site how do you balance these two things and also tonight I've added a whole section on execution and we're going to link the two but what I will say is that the first thing you want to do is develop a road map in other words per that diagram uh I said you know you start with a value proposition of what you do now and then you've got this vision of where you're going to be in you know 5 10 years time or whatever it might be and between those two the road map Bridges the here and now with the where you're going and what you want to try to do is describe your road ahead and in as much detail as you can talk about some of the tangible steps that it will take you to get there so imagine imine it's like a product road map at one level it might also be a hiring road map what are some of the key people you need it might also be for example a market road map you might talk about some of the things that are changing in your Marketplace that might be distribution changes it might be things like regulation changes whatever you can see happening in the future put those out there as part of your road map and then talk about how you think you'll respond to them what is it that you will do to adapt to the evolving Market that you're addressing and in there much detail as you can and by the way I don't mean like pages and pages but in thought and Clarity of communication give your audience whether that's your potential employees or potential funders or potential customers a sense of what this road map will do for you now here's a little secret for you customers don't know they want this but they do when they're dealing with a startup they are not going to buy your first product they're probably going to try it and spit it out they'll probably really end up buying your third product version three nobody talks about this but it's the truth uh particularly in our world in software world for example you very rarely get your first product right you very rarely have all the reliability all the scalability let Al L the features and everything else built into it so this road map is really important even for customers it's often about you sharing with them that you have an understanding of how their business is evolving and that while you listen and learn and figure out how to iterate and pivot you are going to be developing a a road map that they can rely is going to meet their needs and so this is extremely important for all the potential stakeholders in your business so for that purpose I'm going to again bring up salsify and Jason to share how they're thinking about the road map and you know they're not going to instantly have a network that links everybody so Jason come on up and share how you're thinking about your road map yeah so this is a this is a slide that we used internally and we're able to to repurpose it for this which is always always good about slides um it Loosely correlates to a product road map but it was also a go Toom Market Road map uh for us and and just sort of a prioritization of what we're going to be focusing on from a customer messaging over a few years so remember the the the end goal is this network where people can publish And subscribe to content and you got a huge Network and you're really you're really this incredible infrastructure that powers online Commerce but it's going to take a while to get there so we we tried to break it down into steps we wanted to be able to build very easy to sell you know easy to pitch value props so we we broke it up into four simple steps and the steps aren't that critical for all of you guys it's more just as an example of what we did we wanted to make as a first step make creation and management of that content very easy um that was something that basically say how do we how do we make life better than just dealing with Microsoft Excel because we can sell that um two once we have that then we can make sharing of the content easier within an organization and across organization so again we're kind of increasing the value changes the sales model a little bit changes the product we have to build then we wanted to make collaboration easy and actually um grading that content and giving feedback on how it's working and having the the retailer like a Walmart Say Hey I want more information around this area so we wanted to improve that and then finally once we've got all these Brands and these retailers participating reuse of that content becomes really possible so just an example of a rat but another concrete data point of how this matters one I mean we didn't have this quite so concise when we were starting out but in the early days we had like all startups built some early versions of the product and we we threw it out there and we were really fortunate and that we got some inbound interest from folks that were interested one of them was philosophy which is a Cosmetics company that makes you know creams and toners and all kinds of products like that so um they sought and I remember when they came in and they described what they wanted it was pretty much you know pretty much one and two it was not not big but we could barely do part of one I remember thinking that there's no way we're going to get these guys they're going to see a demo and you we're missing all the features they need and and actually having the road map not the product road map but the company road map when we ended up doing the the demonstration and talking to the VP of e-commerce and this overcame so many product objections I mean there was just it created so much credibility with the guy where he was like you know what I I love where they're going it's aligned with where I want to go I'm glad you have that and I'm willing to bet you know not a ton of money but I'm willing to bet a little bit on you guys to to see where you're going to go and that was how we landed one of our first few customers and you know if it was just if we didn't have that that road map again it's not really a product road map it's more just a a vision uh I don't think we ever would have gotten them and and it's helped us to this point so it's just an example of what you can do it's a great example if I can I'm going to keep you up here for a minute because I also I I know that the guys in the room at this stage are probably saying I can't think about that particular brand but the women probably can let's think about a guy example so I know one of the customers we interacted with was B&H so how many of the not to be sexist here but but how many of the people here use cameras or or into photography Gino putting up his hand for doing the videoing so that's good um okay so there's number of you so why don't we talk a little bit about this problem in in that example tell tell me a little bit about what you did for B&H and and for example the potential road map that would have to be solved for them well B&H we they were our first customer so we did whatever they wanted um it was it was it's interesting B&H I think is kind of one of those examples of the first product that you build isn't necessarily um you know kind of what you build longterm um they their their problem was um they were a retailer so they were out there selling these cameras and selling actually they sell a whole bunch of stuff and for them they one of the ways that they compete with an Amazon or Walmart or anybody else on price Beyond uh Beyond just the product selection is the quality of the content and it was really important to them that a photographer would go to them as the authority on a piece of equipment and you could go to b& and you would know that if you went to B&H their merchandisers would tell you that these lenses are compatible with these cameras and you know there was no chance of ever getting anything wrong and um so when when uh when we started working with them the problem was that process of creating the content and in particular kind of cross referencing the content saying that these lenses are compatible with these cameras was completely manual I mean they had eight guys literally doing nothing more than typing in this skew is compatible with this skew because they were using their domain knowledge about cameras turn there was a ton of of data locked up in the product content camera lenses have certain attributes like the mounting type that they have and they're compatible with certain cameras and if you could use that you could suggest a lot of information to the retailer merchandisers that would help them automate that process and so that that was kind of kind of how we helped them um just as an example but but the one that was really nice was when we had an inbound interest and so even though I like cameras more I'm now partial to beauty products excellent so hopefully you've got the sense now of why road maps are important for all your stakeholders um and I think Jason gave a perfect example there with philosophy about how it actually helped them land their first customer when they only had a very simple MVP initially that was at the very beginning of this road map so uh big believer and that's how you bounch the vision and execution is to put the road map in between uh we'll continue to develop examples in cases for you and I'm happy to talk to people afterwards about it but let me take a quick pause here before we go into culture and say any questions on vision and Mission and the importance of it from anybody yeah one at the front the question is when when do you present it to the customer for example road map do you actually talk to with your customer about your road map so uh Jason do you want to jump in I think you gave a sort of a heads up on that yeah it's more for us at least it's much more organic than that I mean our sales process is more of an inside sales type model so we don't have exhausted Enterprise sales uh process so for us it just comes up in the flow of a conversation with a customer it's a very natural conversation most customers or prospects I think are going to ask when they see a demo they're going to ask well where are you going you know and when they ask that question it's not just about where is the product going so you kind of want to be ready for that because it's an opportunity um to to lay the groundwork for for a relationship with that customer so for us it was just very natural um happen we didn't present any slides or anything we just talked to the points and and adjust it to that customer and what I would say in a generalist sense um thank you Jason is that it isn't as Jason says that you want it upfront in your slide deck or it's got to be the first thing see people see on your on your website but it sort of says you've got your act together when somebody does ask the question okay where are you headed and am I going to be aligned with you and do we feel like we're headed in the same direction because guess Point guess what if you both start at one point and you head in a different direction you wouldn't know that unless you were clear about you know your vision and Mission that's that's very interesting answer and and basically a follow-up question then usually with a road map there is a timeline so when the customers ask you okay you're planning to make collaboration is easy and they see you in six months time they say well is it already there I mean how far we should wait so to some extent you you you need you in a way when you're giving away your road map you're actually doing promises which you don't know if you can accomplish I mean how how do you deal with that it's that's a a great followup question I for us at least we don't position in the road map as a traditional product road map we're going to deliver this feature on the state it truly was a company road map and it was more to give them a sense of direction than it was to give them a sense of when they were going to get certain capabilities they just wanted to know most of the prospects just want to know where's the company going you know and as long as it's going in the same direction that they hope solution vendors are going to go in the direction of then they were happy of course there's other follow-on questions that come up about well if there's a particular feature that somebody needs when is that feature going to come out but that that is really a distinct topic usually I find that this conversation happens more with the E economic buyer right with the person who's actually signing the check for the product and doesn't necessarily care about when a particular feature is coming out his team so her team may care about about details like that um but but at least for this very much when we talk about it we position it as the direction of the company not as when when are we going to do certain things because so I think that's perfectly said and I just want to underline that we are talking about a road map that's the company road map as Jason was emphasizing here associated with the vision and Mission that's not to say you should have a product road map that has detailed timeline and everything else and that becomes a place where people do expect you to to obviously deliver on time and so your promises become much more critical this is more directional and it's more about establishing how you might build a relationship and by the way because you engage closely with the customers you may change your road map you you may evolve it you may in fact do exactly what Jason was was hinting at which is that his first customer B&H Photo turned out to be a fantastic customer and actually you know paying a very nice price for the product but when we looked at the road map actually I shouldn't say we when the team looked at the road map they decided for their reasons that that actually wasn't the right road map to pursue with the customer so it can also tell you sometimes what not to do I don't know whether that's a a fair thing to to point out in your you're nodding at the front so for those you can't see we had one other question then I'll I'll keep moving us forward uh so just to reiterate so you would say like the road map is more of like a fleshed out like version of like your values to like present to like your potential clients or customers more so than like a tangible like a stepbystep yeah good good question not so much the values um not not so much what you know the culture and the values but more the the buyers the the perspective customers you you have so little to show when you're a startup I mean I just think back to what we have I think back to what we have now and it's so little to show think back to what we had six months ago and it I'm not I don't even know how we were able to do a five-minute demo um you have so little to show that you have to give them a level of confidence that you've got a vision and that you you're the path you're going on because when you've got so little to show there's a 100 directions you can go they just want to know if where you're going aligns with some of the problems that they want to see solved um to to get to this broader Vision because every there's nobody that we talk to who doesn't agree with the concept of God if you could make product information easier for me to get into my online Commerce I would buy that tomorrow call me in five years when you have it and that unfortunately is not a very productive um conversation as for a startup um so it's really more about the direction and then and then they now have a feeling for you as a partner they may say that one of these things is real important to them and they want to work with you on it in advance and and Pull It Forward so it's more about Direction than values with that said values are incredibly important we G to come on to that so so thanks for the question and we will definitely get to the values piece I'll just put one last example in your mind as to why this is important so many of you know I brought uh um Jeffrey Mor through the author of crossing the chasm who's covered the sort of early phase of startup very well go to market and he underlines very clearly that the early buyers are often Visionaries so just think about that term for a second guess what Visionaries are looking for vision so if you don't have a vision to sell to a Visionary you don't have anything to sell to them and that's traditionally why as Jason's pointing out this becomes a conversation that's so important early in a startup's life you got to have a connection with your potential audience that is Meaningful to them and that's usually a directional question uh a directional statement it's a sense of what can they believe that you're going to do and obviously most of it is promises actually to the point that was made earlier on okay so a great subject we we'll chat about it afterwards for those who want to stay but I'm going to keep us on time and move forward here and I'm going to start the culture section now a quick pause for a second everything I'm going to tell you tonight is up for question everything so you're not going to get any answers for me at all about culture tonight uh so those of you are already um you know halfway to going to sleep you can go to sleep if you're looking for answers this is the wrong session for you by contrast culture is all about what you personally want to draw out and build into your business it's hugely personal so you'll see why as we go through this so let's Jump Right In and say again why is culture important anybody got any sense of how many decisions are made outside of your operating framework as a startup it's hundreds just think about R&D for a second you're probably you know if you even have three or five Engineers they're probably making dozens of decisions every day without the clarity of you know dozens of customers that have you know been working with you for years because you don't have any customers and so you're in many instances working from at best your estimation of what's going to be needed and where the Market's going and so how do you do that you know well we vision and Mission will help um but culture will be important and we'll talk about that it turns out there's another really critical thing too imagine that everybody has a different culture do you think that will help actually bring them together of course not so let's use a really crass analogy how many people are Red Sox fans come on it's Boston for say we're in the World Series it's got to be more than that okay well obviously there are few people who be glued to their TV so we have a few Boston Red Sox fans imagine if you started following the Red Sox and they decided to change their culture to my point about consistency and they decided yeah they're bored with with with baseball we're actually all going to go play basketball I mean like that's a bizarre example right but the reality is the cult following that the red SAU has is Red Sox Nation it's a very critical piece of why the sports franchise is so valuable it's a culture it's literally something that brings the entire Red Sox Nation together around World Series and has us doing crazy things in the streets at night which hopefully will carry on for a little while and we win it uh so it's really a critical potential way that you can harness the energy in the same way that I've talked about you know a sports fan imagine that same energy in your business if you could get everybody that excited about you instead of winning the World Series achieving your vision and Mission and all rallying together with the same passion and intent that you see in the streets of Boston this week that is what culture can do for you it can get everybody pulling with all the intent to achieve the same thing and that is so powerful my own analogy rather than using a sports analogy is as follows if you imagine that everybody has a thread and they could all go take that thread any Direction they wanted it would be very dangerous if they did you just end up with a mess but instead imagine if you were really clear about what the vision and mission of the company is and how you want them to work together and how they could actually all twine those threads together and they could turn that into a rope that everybody could pull on you'd start getting people pulling in the same direction and you'd have something really valuable that's what culture can do for you so now let's talk about does it really work that way well you have to look out and imagine you're going to be one of the Fortune 500 or Fortune 1000 or global 1,000 and what does culture do for you it turns out it has a huge impact I've already mentioned Google but if you go and look at any of the top five companies and I picked out the tech top five and by the way this list has evolved from last year some some companies like zapo that I talked about been acquired or some others have fallen off here but they still basically show the same thing it turns out that since 1998 companies in the Fortune 100 that are considered the best to work for are always overachieved aing other companies in fact by a significant margin by nearly triple they're on average achieving over 10% returns perom whereas the rest of the fortune well sorry the S&P 500 is achieving about 3.3 this stuff translates to the top and bottom line it translates to Value so yes it's a soft subject yes it's a hard one because you can't just write down bits of and and go through checklists and say I've got a culture but this is why it's important in fact if you look at this the 100 best companies to work for consistently outperform the stock market interest indexes by 300% consistently so it's why I really encourage you to pay attention early on because it's something that once you put the roots down for and build consistently it becomes a platform for your success so of course um my favorite kinds of CEOs have real quotes around this and this is one I love which is the MK CEO uh Richard Clark who said culture eats strategy for lunch and there's plenty you can read on this but his point is this that you can have a great strategy and you can have everybody focused on it you could have all the clarity of what it's all about but if nobody's actually going to work together effectively and there's no Harmony in the team to go and execute it it's meaningless it's never going to happen and so this is why culture eat strategy for lunch and so we're going to talk about how important this is um and obviously talk about how do we we put it in place now I had one entrepreneur come up to me the first year I did this and he said I loved your lecture it was really inspirational but what is it again when I was talking about culture and I thought it was a great question you know what the hell is culture it's very hard to Define but I've spent a bunch of time thinking about it and I've decided it's simple culture is your operating system to run your apps on or looking at it another way it's really the platform to empower your people you can't write apps without having an operating system you can't run a company without having a platform of culture to build on it's really that basic okay some of you aren't techies so that's probably not good enough for you but it is that fundamental so let's keep going it's certainly M multifaceted there's no question that one of the things that challenges people about culture is you can't just put your arms around it and say okay you've got one uh there's a famous quote and we um always joke about it which is that one of the big farmer companies it wasn't MC uh but it's it's because MC made the statement said oh yeah I really like what what uh the the MC CEO said I got to get me a culture went to his HR director and said could you get me a culture how do you think that went down it's just unfortunately not like that culture is not something you can go get you can't just buy one of them so what is it well again simplifying it to a broader sense it's how you do business it's not what business you're in it's how you you do business every day it's the way in which you actually as an organization embody things like the way you treat customers the way you work with your team the way you engage with Partners even the way you deal with suppliers because if you treat your suppliers in a certain way uh obviously they'll respond to you in a certain way and if you're constantly cutting them uh back and and and squeezing every margin out of them then the day that your supply chain dries up because you've got huge custom demand I doubt they're going to increase production for you just because you're you're squeezing margin from them I mean these things have real impact so you have to think about from day one what is this the personality you want in your startup and how will you embody that in your organization and your execution so again from a few years of doing this now and running workshops actually all over the world I had my best uh example of this the other day in East Germany where I was running a workshop and there frankly people really don't have the resources that we're lucky enough to have at places like Harvard and MIT here and um so we sat down with basically nothing in the way of infrastructure and I was giving the the workshop you know without the wonderful stage that I have here and people said okay we really have first of all you know an immediate challenge which is we don't have the infrastructure to build our company around you know we can't get to customers the way you do in the us and we're really struggling for example to just get the basics of you know our first value proposition built because we can't find Talent it's just hard so I heard all these can't dos I said okay what do you believe you can do and long story short I found out that most of those companies had started and done what they considered a series a on less than quarter of a million dollars so what we consider a seed they considered a series a so one of that clear convictions was they could do more with less and it was very obvious to me they could in fact uh that was a cultural value that uh some of them were in bodings that they felt like they literally were able to be successful because of their Frugal and very tough situation and that they they' they were going to use that as a basis to be more successful and than to compete I'm not saying that that's going to be the case for everybody here but it was interesting to start with and what we we did was we worked on this framework and this is an example of how I hope you could start to develop your culture and like everything I do I don't want to give you the answer as I said I want to give you a framework and so what I encourage you to do is think about just one thing that you want to build to start off with it is a shared value system so as a team what would be this the set of values that you most believe in is it for example openness and honesty or is it for example empowering the customer or is it as the friends the guys in East Germany said doing more with less whatever those shared values are whatever the beliefs that you have are that are personal to you that you can turn into guiding principles there will be they will be a great starting point for you now the next couple of bullets are very important culture is not something you can just write out and stick up on the wall and say we've got one even if you developed it yourself it's about how you live it how do you lead it how do you model it every day and then how do you turn it into execution and in particular the two things I want you to try to remember are culture only works if you can actually get people to take responsibility for living it every day so for example if you decide that it's incredibly important for you to deliver value every day then you've got to figure out how you live that internally it's unlikely that you're going to want to travel first class for example and and send people around you know staying at expensive hotels because that culture is in congruous with you trying to deliver value to your customers and an example of that I'll bring up later is for those of you here when I did the workshop with Andy jasse of Amazon who runs Amazon cloud services is how that pervaded throughout Amazon and it's a reason why today Amazon is still one of the cheapest places to buy everything because from day one they decided that was a cultural value and they wanted to live it and they made people responsible for it and they literally every day are looking at how people perform against that now there's another important little word here called accountability it turns out lots of people can be responsible for things but only one person can be accountable for it so for the culture in a company the CEO is the one person who's accountable because culture comes from the top but for elements of it or anything that you're executing on it's also important you find whoever's accountable the biggest problem that happens in small companies is generally that everybody feels like they should be doing everything that works for a while but as you grow it becomes incredibly important to get the single person for any function whether it's customer service or whether it's for example you know sales or whether it's more specifically product delivery or whether you define it as quality whatever it might be you've got to have owners for things that's the accountability piece and culture is a piece of how you do that it's a a piece of then what you that that then follows which is when you have people are accountable how do you actually either celebrate success or engage with and deal with failure these are all questions that I encourage you to ask yourself what will you do to encourage success what will you do to for example deal with failure so this is the framework like everything it'll be up on the site so don't worry if you didn't catch it all and I'm going to start to lead you through some examples to bring it to life because it's not that easy it's as I said it's it's soft stuff but it's that makes it hard to do sometimes so what's an example if you get your values right you will hopefully enable people and Empower them you will enable them for example to make decisions because you've said okay we are going to deliver the best value that means that people will start thinking about they're making trade when they're making trade-offs do they spend all their time on producing the highest quality Goods probably not they'll probably figure out how to get the least the least amount of quality to meet the need obviously to deliver the the specific function but at the lowest uh possible price and that will be continuously evolving as they make decisions around whatever it is they're delivering their their products or who they pick as partners and so forth but those things once you've made those decisions can be very empowering it means that people don't have to keep coming back to you and saying or what should we price things at how should we build things who should we pick as as uh you know sales channels Etc because they're in your values you've defined those things as I gave you the example with Amazon Amazon they also might be very personal things they might be things like the way you want to interact with each other as a team and if you say for example we really have a strong belief in honesty yeah I mean that's kind of a basic value but how will you show it will you for example encourage people to be very proactively honest you could say oh yeah that's a great idea but let me tell you what happens in the real world the real world is one of your teams screws up now do you tell them well if you're proactively honest the answer is yes you have to try to find a way to tell them the idea is that obviously you're going to find some way to tell them so that they don't do it again that's the proactive part about it it's not that you're being dishonest if you don't tell them but if it's a value of yours that you really want to help each other and you really believe that the way to be you know moving forward and staying at the lead of the Forefront of something is to be the best at something then screwing up is something that's a learning opportunity and so it doesn't have to be negative it doesn't have to be criticism but it's an opportunity to be very honest and to help somebody in whatever circumstance and if you have the other two values and these are just examples I'm not saying there are ones you would use of respect and integrity and you can do that with respect to people and they always know it's not personal when you critique them that you give them feedback uh and that because you respect individuals and that they have integrity and you have integrity and those are values you believe on you could have any conversation you could have anybody come up to you as the CEO or as the receptionist and say hey guess what we had somebody come through of an interview yesterday they they didn't feel like we were really on our game I wonder whether you as the receptionist could um just make sure that when you greet somebody you've looked on the the uh you know the calendar to see who is he's coming and say hello man it's really nice to meet you and they'll be immediately surprised to say they know your name that's an exact conversation I had with a receptionist by the way uh now the good news is that same receptionist said to me Michael it's really nice that you pointed that out but by the way you didn't clear up the conference room yesterday uh that I had to take them into what a great bit of feedback and you know what I didn't and we're a small company and there weren't three people to do that and it would have been easy for me to clear it up and so guess what we made it a simple thing that we cleared up behind ourselves guess what created in in that created in the way of culture an openness anybody talking to anybody about things that we thought we could do better and that's the kind of cultural simple thing you can do as a startup that might make a difference in fact if you use the example I just gave you lots of those little things add up to Big sense of community and Collective interest in getting great outcomes so I don't know what yours are I told you right up front that this is not a workshop where I'm going to bring you answers you have have to figure out what your values are they have to be authentic to you and authentic enough that you can live them every day you know coming up with somebody's you know value statement that you pulled out from Google and saying okay that's going to be ours because they're really cool isn't going to work if you can't live them every day they've got to be authentic to you all right um at this point we're lucky enough to have a a chance to hear what uh salsifi did to actually develop their values so um Jason I think you're up again yeah I got to be proactively honest and say I hate um I hate this section I remember being here last year and and um Michael went through this and my reaction was that these you should put any values up on the chart and I want all of them right and so I feel like if you limit yourself to a few does that mean that we're not honest and that we're you know we're not authentic and and so I have I struggle with this with the value section um but with that said they it actually was really important a really important part of the culture for us one of the reasons why we started a company was that we wanted to make sure that we were going to be around folks that shared the same values and and um and a lot of times I think these end up getting formed by your past experiences at at other companies and you want to you really want to have um really want to make sure that you don't repeat the the mistakes of the past so I look at these I realize every single one of these is cliche I realize every single one of these is a is yes I want that feature but but in fact these are things that that do Drive how we operate day-to-day we do open and constant communication we you know we don't like every startup out there we don't have offices everybody is you know is looking at one another we're working together we do celebrate small victories in fact we we kind of force ourselves to have small victories if if I feel like product development is going too slow not not too slow like velocity but we're not delivering value in discret enough chunks to get value to a customer let's let's create programs to actually go and encourage that and then we can celebrate those things that goes to the whole measurable achievable goals not just in product but in the way that we operate marketing and sales I mean we we pick the wrong metrics all the time and if we can't actually measure them then we'll change them week to week until we find a couple that work I mean I for a while we were measuring you know activity do we measure calls and then that wasn't working and we ended up measuring demos per week and we finally found something that worked and I think the one that is most important is empowerment again I know it's what everybody wants to say but I do think it it affects the way that we work if if there is a decision that be pushed down to somebody else within the organization then it's got to be pushed down just across the board every place we can do it if there's a if there's a decision we don't have a Chief Architect where you know that every decision has to be vetted if there's something in the product and an individual engineer can make it then do it right we trust that person enough to make those choices they make it wrong it's not the end of the world we'll we'll fix it you know on the on the marketing side half the time I don't know what's going on in marketing because I know Rob is pushing those decisions down to to Emily and Steve and I just think that is probably to me the most important cultural value that we had which was if you can have a decision you can push it down in New York then just do it and don't look back um and I I think that served us well um so those are great examples now I happen to have a bit of an inside track here sir uh maybe Rob might you you might want to answer this you did actually hire somebody uh Emily who was was she an intern originally uh yeah she was uh the first non-engineering hire that we had um she started as an intern and because I was I was watching the progress I mean she was like very struck by your value she was she thought the culture was a big part of why she joined how's that worked out what's happened and how the values did um yeah she's a great example so she's so we're you know we're we're a tech company right um all of us have various engineering backgrounds and Emily is a journalism major from Buu so she's like really the first you know non- engineering hire that that that we had um and she'd been an intern for me at a previous company for for one summer and uh I think you know these days if you're coming out of college um like she was telling me like most of her friends they go to they go to a big company um they're told what to do on a day-to-day basis right they're like all right this is the thing that you've got to do as an intern uh you know write this up get it to me by the end of the week and then you know the boss is checking in on them every every single day and the way that you know we started operating with Emily is like all right Emily you know you have to actually do like all of the visual design for this news newsletter that's going to go out like we want you to do the writing we want you to do the visual design designed we want you to take a stab at you know the whole thing from start to finish and just like when you feel like you've got something that you want to show us like we'll go over it together right and so that's how we operated and um so she did that for newsletters and then she started working with blog posts and then she started doing um now pretty much like anything that needs to be done in the company from like a writing or design or you know website perspective uh and she's just get gets it all done almost with almost no uh no instruction from us so it's worked out it's just incredibly well so she's gone full-time now right oh yeah she's definitely gone full-time I mean it's the the ability to you know creative things is are really hard in general right they take a lot of time um there's a million judgment calls that have to be made and you know writing and communication visually and um otherwise I think is one of the most challenging things in general right I mean we've I don't know how many of you have had experience just trying to get yourself across in a blog or you know putting together really great slides like I me Michael's been working on this for years and it's come together really well but it's it's really really hard to get ideas across right so to have somebody who um you know you you you know I feel like really proud to help having developed this confidence in her but for to have somebody who you can really rely on to generate a lot of the uh words that you're going to be using to represent yourselves in a company and generate a lot of the uh visual um ideas that you're going to be able to represent yourselves in the company and to just you know know that that's taken care of um is just incredible so I mean just just in terms of it's a great operating strategy but it's also a great way to grow people right I mean she's 22 years old and just really indispensable to to a lot of the things that we do right now um so I think I think it really helps grow people when you give them that that space so I asked Rob that question because um sitting as I was observing this stuff it was a fantastic example thank you rob of exactly how culture makes a difference if you can imagine Emily joining and being uh a command and control culture where the CEO made every single decision and the only thing they were going to give was the latitude to go off and develop you know an idea within a very specifically defined uh template I don't think Emily would have stayed and I don't think Emily would have become the success that she's become and if you think I'm joking about how this kind of culture pervades there's a certain CEO of a company that um just did the America's Cup won the America's Cup who still to this day approves every piece of copy that goes out on the ads that's a command and control culture and it's been everybody knows who it is it's been an oracle since Larry founded it it's just the way he runs things it's not wrong it's an extremely successful company it's just very different this is a culture that's deciding right from the get-go that it wants to be very empowered that the cifi team wants to enable people right out of college to go be as creative as they possibly can take as much respons responsibilities they can and they're flourishing so they're very different examples one's not right one's not wrong they're just to the point I'm trying to make decisions you should make early on because you will attract very different people to those two kinds of cultures y I think a lot of this when you boil it all down it's about trust it's about looking at people as stakeholders it's about synergistic forces that you know one plus one is greater than two you know being vested in people being interested and interesting and I think a lot of people throw around the word integrity and you know I come from Behavioral Health which this is a huge Topic in my field you know there has to be some synchronicity with what you say and what you do y and it is really learn it live it love it own it and and you have to you have to model it every day and it's like a living breathing organism that you have to nurture and constantly cultivate and it is very much top down very very well said I couldn't have put it better myself so you know the articulation of what you're you're uh saying is the piece that we're trying to get to here so if every one of you by the way um related to the word trust there that might be a great example of a value that you decide to to create the hard part is operationalizing those things and defining trust for example uh I love the idea of trusting people but there's also a certain point at which you have to say Okay how far can you trust this person if they don't have the experience and knowledge to do the job or if they for example don't have the credentials to do it can you really trust them because you don't want them to fail by default if you're setting them up for failure because you've trusted them for example to go into a government institution and do business and they don't have clearance or the experience of how to do it you're going to set them up for failure but by contrast if you can establish what are the things that they could be successful at and give them full trust in those things then you can set them up for Success so even a simple word like trust needs to be defined and in fact I'm about to use an exact example of that so the team at salsify told me right off the bat that they had been very successful at Inda and as a result of that they didn't want to just hire uh Inda people so they used a word with me which is diversity now what does diversity mean to you anybody want to give me a a clue what what does diversity is mean to anybody in the audience at the back well to me diversity means having a good range of experience and people in the workplace fantastic so range and experience of people anybody else got an idea of what diversity might mean to them go ahead um for me I'd want it to be actually like a range of ideas range of ideas that's a fantastic input anybody else what was that feel free to shout out go ahead I I think um diversity also comes with the stratification of age great age diversity so yeah the age diversity in their thinking methodologies has really presented a lot awesome so it might be Youth and experience which I'm a big believer in combining for example so so we had three completely different ideas all of which I think are excellent but all of which meant diversity the various different people in the room and we had you know africanamerican people and where are you from uh French and English French and English and Kentucky and and young lady here where are you from California California okay so nobody mentioned geography nobody mentioned race or religion uh maybe they were afraid to do it but by the way that's usually what people mean by diversity uh so one of the things I encourage you to do is when you decide that there's a value or an important thing that you want in your organization get really really explicit about it CU I thought there was some really good input here but we totally missed for example some basic things that we might wanted to have now in fact it turns out the team actually meant they didn't want to hire everybody from Inda how are we doing by the way uh we're doing well outside engineering not so well inside engineering so far but I mean I think it's it's one of the reasons why it was so valuable to be explicit about it early on is because we knew it was going to be a hard one because we have such a level of comfort with and we tend to be sort of level of comfort what's easy what's familiar and we knew this was going to be a hard one for us to sort of go out there and force ourselves to bring in those additional opinions but we know how valuable it is and I mean I think it's one of the things that we've spent an inordinate amount of time over the last six months talking to Michael talking to our other uh investors talking amongst ourselves talking with our team and just saying how do we bring in those other perspectives how do we find those people who who bring that diversity that diversity of age that diversity of experience but really I mean what we were looking for in terms of diversity University was just different backgrounds different ideas and sort of a different shared sort of bringing more into the shared experience that we had as an organization fantastic how effective do you think your team is going to be at making breakthroughs and coming up with new ideas and challenging e each other and literally creating new opportunities if you all think the same way can you say more not at all like zero because well I mean there's no creativity I mean you see this in command and control cultures where not only is a task delegated and I've actually even said this to a manager I had I said you get to delegate the task and when it gets done you don't get to delegate the process so if you're delegating product and process there's going to be no Divergence of thought I mean basically you just want Lemmings you know automatons you don't want human beings y I mean and I think that's what you should hire then you should exactly so it might be that you need that for example in a certain function it might be if if you're running a call center and you've got you know hundreds of people and the job is very well defined and you've got to have people who are capable of running you know 9 to5 on just a script okay I get it then you know they may all need to be vanilla but if you absolutely have the challenge that most startups do which is you're trying to scope out an opport opportunity in a brand new market where you're making a breakthrough where nothing like this has ever been done before and there's something fundamental that you're doing that's different you're going to need different perspectives and the more you have the more likely you are to challenge each other to come up with a thing that is going to make an impact and so diversity to me means having the diversity of talent whether it's age experience background no matter what it is that can actually be uniquely able to solve the particular problem you're going after that's just what it means to me does it mean to say it's what for you but it was great when we had this conversation with salsifi cuz I think that's why they're going to be successful they absolutely immediately identified that this is a strength that they can all work together because they've done it before but it's also potentially a weakness and they immediately said let's do something about it that is what I mean by as a startup thinking about your culture early and being smart about how it can make a difference okay next question is yeah this is all getting too hard for me it's too soft I can't figure it out it's difficult to measure there are too many other priorities I've got to do I got to raise money I got to build a product ah what if I just kick this can down the road let's do a government sub um exercise and kick the subsidy down the road we um have looked at this many times I've seen it in many startups and in fact it's sort of the default of what happens well the good news is you can get away with it you'll probably be absolutely fine nobody will really tell you that you're doing anything wrong because it's not a short-term thing it doesn't have any impact in the immediate term except some of the things that we're talking about here that might seem to people who are attentive to it so the good news is you know whatever Good Deeds you do will still be good deeds whatever good practices you have will be good practices but what won't happen is that you won't get best practices developed and you won't get people to institutionalize those and you won't get people to do the things that for example you know uh even in a in a social sense Jeremy was pointing out there which is to say hey guess what we'll have a Social Hour you know a kondik hour uh and so that's the thing that's that's interesting about this it's of an opportunity to take something that's unharnessed uh and harness it and the bad news is if you have bad habits they just perpetuate nobody does anything about them you just don't pay any attention to them until one day they really trip you up and you find out that hey you never explicitly told anybody in your company that you have a need to pay attention to C to uh customers and then in fact you want to put customers first and that you want that to be so extreme that you'll do for what for example whatever it takes so guess what when a customer runs into a problem and it feels like it's sort of outside the jurisdiction of that person they don't escalate it because they feel like it's not their job and the next thing you know you have some unhappy customer that propagates and you've got a problem on your hands so this is my startup secret for tonight it's simple culture will Define you even if you don't Define it and what happens to startups is very quickly they get a reputation and the reputation is basically how you're behaving and if you don't take control of it it's just like your brand it's just like your messaging it's just like your positioning it's just like everything else it will get defined by other people so if you want to have a culture that stands for something declare it early don't wait until it's defined by how the people see you so the follow on from this is pretty obvious but it's super important culture comes from you now I said it comes from the top in a small startup you know might be only three five whatever it is people you are at that point the organization that will create the initial culture and uh I said it's also you know very much from the CEO as you get bigger it's very much from the top but the top isn't literally always one person it's how the originating team Models Behavior and remember I said this is the one thing you want to stay consistent on so how are you going to stay consistent on it if you don't Define it early well obviously you've got to figure out how you really focus on um valuing it sorry modeling it throughout because culture really only gets valued by one thing and that is how much you consistently reinforce it so let me give you an example in one of the first mistakes I made as an entrepreneur very early on I was running International for my business and I would fly around the world and uh deal with customers all over the place and I didn't actually spend any time to figure out how each of those customers wanted to be treated consistently and we ended up with all sorts of problems we ended up with customers who thought that their pricing was unfair because you know we we didn't normalize it regionally we felt like the service was different and then the first thing that happened to us which was really rather scary was that a very big customer came along to us hul Packard as it turns out who were was actually also um who whose products we're using and they said we can't do business with you and I'm like why not because we don't know how to do business with you you do business with us differently in Geneva that you do with us in Colorado and in Boise and um by the way we want to do business with you in Africa too and you just you don't look like one company you look like a whole bunch of different organizations and it was a real like wakeup call to me cuz never even thought about it I was like oh okay well how do we fix that and so it turned out the answer was actually to go around and visit all of hp's Divisions and this is way back this is 30 years ago or so it turns out if you went to HP as I did everywhere from um their offices in San Diego where they built plotters or uh color Fort Collins Colorado where they built computers or Boise with I think they did storage Corvalis they did calculators the one thing that really really stuck with me it was one HP now HP isn't a glorified company today but in Bill H and Dave Packard's day HP was known for its culture and you could tell that wherever you went in the world HP was one culture they had for example some very strong beliefs about management they were the guys who started with this notion of management by walking around so anybody for example who was a manager was expected to be out of their office understanding what was going on and just by watching and observing that and realizing hey they're going to be my customer I realized how important it was to have a culture the end of that story by the way is that they became our largest single customer in the world we became their largest partner for what was cadcam systems in the day and they ended up oeming our product is what became HP draft it's a simple example but it was all to do with culture and it took me a while to figure out that lesson so what I'm trying to say to you here is that this consistency has impact on everything you do and if you can get it right it'll impact your relationships with your customers with your people and with indeed the value that you're building as your business so it's super important and I want to bring an example that's more current to the four most of you probably um actually how many people B choose from Zappos quite a lot what was the best thing about Zappos returns right it was easy nobody cared whether they got loads of shoes zapo figured out how to make that model work meantime there was a company that was going basically out of business into bankruptcy American Apparel why because they had many policies not just around returns that people hated and their bureaucracy internally was well documented well understood and basically they didn't have a culture they didn't have a customer Centric culture they had no culture became very internally focused and it drove them into bankruptcy it was very dysfunctional by contrast zapo was one of the fastest growing companies to go from zero to a billion dollars I mean just think about that for a second what do you think came into play there clearly one defined culture as being customer Centric and how could they do great things that would cost the money like take returns back and another one wasn't even focused on that they were so bureaucratic and so internally focused that they became dysfunctional and went into backr this stuff really makes a difference it's why early on what I encourage you to do is to think about which do you want do you want to end up with a barrier that is dissipating or distracting or dividing or causing you politics and ultimately as I call it damning you or do you want an enabler something that unifies people that clarifies what your values are that that is very clearly empowering to people the way we just heard salsifi talk about it that enables somebody like Emily to flourish uh and that enables people to act without having to constantly come back and check in with you for example that really lives allows people to flow one results in restarts and the other gets great results so I would say culture is often defined by its absence what I call theculture and so my next startup secret for you is that startup uncultured that this room is so full tonight because the first session we gave uh was not well actually it probably was full but that's for a different reason but I still find that this is the hardest subject to get people to pay attention to but it really is uncool think about this as one of the most fundamental things that costs you nothing there's no investment required in terms of dollars to get right that can help you instead of get become one of those restarts to become a really results oriented company okay so let's keep going with the Practical Frameworks how do we develop some of these guid principles I'm going to turn this into bit more of a Q&A session because we've got uh a bit of time to do this so people struggle with this and and the best way to do it is just come up with a bunch of questions get in a room together and ask yourself some of these kinds of questions so I'm just going to pick one of these do you think you want to judge yourself by results or effort does anybody here CED to weigh in on that go ahead uh well I think that U it's very important to have a result because doesn't matter how much effort you put in it you need to figure out how to get to the point uh because sometimes you can work a lot but not towards the goal for example yep and not to get there um So eventually I think that the goal is most important thing that you you know you have y and you need to put it ahead yourself so I think that's a fantastic idea is it right or wrong anybody else care to comment go ahead so I guess it depends depends on who you like who the result or the um effort is towards like if it's an employee who's been putting in a lot of effort I think it's really important to recognize that and um to give them a pat on the back and say you know like maybe these are the things that you can work on and um you know as you incourage you'll get better results um but um if it's working with a client and uh you are not delivering a result right then that client's not going to be happy no matter how much effort you put in so I think it depends on like who this is about but uh effort is definitely something that needs to be um acknowledged and supported and respected because you know like yeah you got to value the person on what they're doing okay so uh we've got another hand up the back there I thought that was really well said and it's caused me to skip ahead to a slide because this conversation's going in a in a good direction yeah I I was just going to Echo what the gentleman said earlier in our organization we celebrate both results and effort so by results we celebrate um small Su successes as I think someone earlier had mentioned and for effort uh we both recognize and reward effort because we think that's really valuable to our to our results so I like all what I'm hearing does anybody else have anything they want to weigh in on um can I just hold on one second while I'm going to I'll bring in up a thought for a second actually um I'll give a framework so we think about it so there is no right or wrong answer here what's good is this discussion if the three of you were in a room and you had to work together I bet You' come up with some really interesting thoughts about what values that you wanted to have in your business um if you were going to be a results oriented culture so I I took your lead I said okay we're going to be company X and we're going to be a results oriented culture what can go wrong with that I'm going to give you a very real example and I'm not going to name the company because it did go wrong um the company put this up as one of their value statements results are everything so what do you think happened as a result of that you're laughing do you want to jump in well it's just negating everything that goes into creating a result but why is that a bad thing if I mean we heard up the front here people effort everything you've been speaking well it ignores culture it ignores culture it ignores culture yeah but I think we've got a pretty informed gentleman up the front here who still feels like results is is important so I don't want to put you at odds well I think well you you want to you want to go with this have we go do you want to say more yeah say more yeah why did you think results it's got to be all about results well I were thinking uh one more time after I finish my talking and because you're rethinking now other ways like failure is very important as well sometimes uh some people just try to cross an ocean um like you know and fail somewhere in the middle but anyway it's like effort and um they put it so I'm thinking actually right now but fantastic um overall results go ahead lots of hands going up here so let's keep the discussion going I think uh I think speaking about results and efforts it's kind of like speaking about someone that's spiritual and someone that's religious right so you can't have one without the other you have to have efforts to yield results and you have to have results to show off your efforts okay so what I hear both you and the lady at the back um saying is that in fact um I think and don't don't let me speak for you is that you believe in and in this discussion you want to reward results and effort is that fair you're nodding your head anybody else we' got another hand going up here um I agree that you to some extent you need to I mean value both if you're just about results you will neglect the person trying so hard and disengage that but if you put everything in eort if you overemphasize effort you might have people hanging around the office just for the sake of it right and I would just personally I would re reward results and um effort if it like improves the organization if if the effort um makes you learn or makes the organization learn so I would value myself I mean I would um evaluate somebody if he or she has good results or he or she brought some learning to the organization through refence okay one more and then we'll we'll get back to this discussion sorry where the front was first um I feel like this kind of I you can liken it almost to like education and teaching children when when like taking a test right if it's result oriented I mean sure they could get the result but they might hate the process and eventually I guess like in a business that might kill the culture well said like you might get somebody through an exam but they hate learning and theyve they they've managed to pass the test but they're never going to actually go onto a career want do it again okay so this is just one question I brought up here and we haven't even got to the bottom of this we are probably even a tenth of the way through it look at the dialogue it's generating and the the dialogue by the way is the important thing and that's what I wanted to get to here is that if you do nothing other than take away one thing from this session it's a bunch of questions to go figure out what's important to you and what are the things that you really value that you want to have as part of your business because if you don't get those together and you don't get synchronicity on those then you'll have your inconsistency among yourselves let alone in the company as how you're going to build it out with all your other stakeholders and so this is just a simple discussion but by the way I have many more however I've jumped forward and I'm going to give you an example of how very real this is uh it turns out that this was the statement that the company made and you know the question was ultimately really results at all costs I mean it it just behave it caused some really weird behaviors in the startup um really weird and um you know I was watching it and fortunately didn't get to invest in it but it was like you could have watched The Comedy of Errors because what happened was they talked about things like you know okay how we went customers we don't care how we do it we're going to break glass we're going to do whatever it is and the CEO by the way was a successful CEO before very successful actually and he's started another business since then which is going to be more successful but what are the costs I mean will you sacrifice profit sure I I get that might be make sense you know you you often start as a startup by having unprofitable customer relations but should you sacrifice for example you know profit for market share maybe yeah maybe you really want to go after market share so that would be a good trade-off what about people what if about if you're burning out your people in this process because you're doing whatever it takes to to win these customers and serve them and it's you're making no money but now your people are getting burned out doing it gets a little tricky okay now is where it starts to get really interesting what about you decided you'd ship a product at the end of the quarter which actually you didn't have because you needed to make the quarter because you needed to pay everybody's salaries etc etc I can see the understanding that you know you needed to get the results but now you're Crossing into ethics never mind legals and that's exactly what happened in this company people felt empowered to do whatever it took to get results and they ended up shipping nothing more than effectively an empty box to a customer in order to try to get some revenue and they promised the customer all sorts of things after the end of the quarter to try to get that made up you can't recover from this stuff once you've made those kinds of decisions and you have that kind of culture you got a problem and this company did not make it and unfortunately it was just a cultural issue they never sat back and decided what they really meant did they really mean results at all costs or were there some real tradeoffs that they were were willing to do so um I would simply say that this is not something that like everything we've just talked about there's an any answer from the real trick is to actually go to uh figuring out uh where it is that you are going to draw the line and what is uh important to you in ter in terms of developing your your guiding principles so I picked up one question that here's a bunch more that all be on the site um the uh one that I'm going to talk a little bit more about later on is this uh sort of challenge of do you put your people first or you put your customer First turns out that's one that comes up a lot in startups uh and most people will say oh no the customer comes first let me give you my own view on it this is another and does me to say you'll agree with this I don't think you can make your customers happy unless you've got your people happy and so in the startup I believe it's incredibly important to figure out how to help your team in whatever Pursuit they're in and ensure that they can be set up for Success because guess what when they get on the phone with the customer and they're really excited to talk to them because they're feeling successful and they're feeling like they've got a great environment that will be infectious and it'll be what will carry the day in many instances with the customer if you've got a lousy work environment you've got people who are unhappy even if you've got happy customers at some point that engine which is your team is going to con out so that's just one one example of something that that I would give but there was a guy who uh many people will know the minute I put the picture up who had a very clear example of a particular trade-off he made in his culture very early on and it was the one we were starting to talk about earlier profit versus value driven his name was Jeff Bezos those of you haven't seen this picture right off the bat Bezos was absolutely clear he wanted to be a value-driven culture and he went and cut a door out and made it his desk to make the point that said this is not a company that wants to waste money what do you think the impact of that was I don't have to tell you you already know where do you go today when you want to get something cheap Amazon that's who started it that's how we started it this is why right away that became the culture how many of you were at the workshop that I did at the end of last year with Andy jasse from Amazon were any of you here a few hands okay so not many that Workshop is up on my site and um the video from it and we talked about how did Amazon web services now a multi-billion Dollar business get started inside Amazon and the answer is that they were literally trying to figure out how did they cut their own costs for developing products and they realized wow if we can do that for ourselves why wouldn't we enable that for other people too and then it'll become even more successful and that's how the Amazon Cloud got started so this culture not only pervaded for their retail business it caused them to end up solving a problem in a really exciting way that generated a whole new multi-billion Dollar business and by the way Amazon in the cloud is today way ahead of everybody else and they're constantly trying to take prices down they're not trying to compete for you know the high margin high value they're constantly trying to bring them down look at their Kindle introduction same thing they're not trying to compete with the iPad they're trying to have the lowest price at near Raaz of thin margins uh in order to get the the market um the value product so this is an example of somebody making a trade off very ear on that has literally driven that company if anybody you talk to at Amazon they know that that is a very clear principle on which they operate everything they do so another question we're talking a lot about soft things here but actually can culture have a physical manifestation let's bring up the cifi team and and have them talk a little bit about this are there ways that culture comes out in the physical world we saw saw the Amazon example with the desk Jeremy give us a sense of of what it's like itself sure I mean I think that you see that I mean just looking at startups in general I mean you see photographs of startups and it was interesting for us sort of having worked in startups or startup like environments and Tech environments for most of our careers you go and look at real estate so we we we started off in a shared office space uh down by sou station at work bar uh we got a very inexpensive uh office in Chinatown for a little while but we at one point we're were sort of ready to we're at 10 people and we were ready to move into an office and most offices you go into are incredibly closed off their law firms or their accounting firms or their um especially in Boston and we walked in and there were almost no spaces that sort of spoke to us as a team and spoke to those values we had early on in terms of how do we have that communication how do we have that constant communication um working and we ended up having to knock a bunch of walls down we ended up having to sort of build these spaces where we could have uh informal conversations formal convers ation um you do need walls you you still need to be able to have private conversations you still need to be able to have uh conversations that you don't want to have in public and those still need to exist but you see things like we've got screens up on walls all over the place some of them are wire still sticking out of them um but it's we want to constantly be showing what we're doing so it's you've got something you produce something celebrate that small win even if it's just I just got this great email let's put it up on the screen let's all look at it um and I think that really visibility everything and it's worked for us I mean I think it's listening to a lot of this I think it's sort of it's very easy to get into this like Jason said earlier I want that and that and that and that and that and that I will encourage you when you think about culture to think about what you're not um and I think it's really important that if if you're defining your culture in such a way that no one's going to self- select out of your culture then you don't really have a culture um there needs to be someone who walks in and goes listen this sounds great it's I like what you guys are doing here it's just not what I'm looking for it's just not for me um and I think that we've seen that I mean we've talked to folks who are are phenomenal Engineers or phenomenal marketing talents who there just wasn't a cultural fit and I think that's a we celebrated that I mean we said that's I thought that was a it was a difficult thing to do because you get into the we're incredibly competitive in all kinds of ways and you want to win that person you want to get that person on board but I think you need to sort of take a step back and say okay in order to preserve this culture going forward this is this is the world we need we can't bring someone on who needs their own office it's just not who we are at least at this stage of the company what a fantastic um vocalization of it thank you and I just wrote this up because I just thought this point stood out for me in particular um what you are not is an important thing to Define in your culture too so I've I've often for those of you read it seen uh how important it is in startups and and written about this that what you don't do is often as defining as what you do do well this really applies in culture too U you know Jeremy just gave an excellent example of if people think you're everything then they're not going to be able to understand that you're anything and so defining what you're not so that you can self- select um if you're a potential high for example is super important it's a great great statement so thank you for that so let's carry on with this clearly uh culture can have a pH physical manifestation in fact it turns out if you look around at startups when you walk into them there's almost invariably a culture that you can instantly spot uh as a VC I spend obviously lots of time visiting lots of companies and within five minutes of walking around a company I can tell you what its culture is um so when I was an entrepreneur I had a bit of fun with this because people always used to say hey you're so passionate about culture you really love people and this is a very key thing to you you know how can we see that and I said well walk into our company but our people got so excited about it we decided to create something called the founders wall and everybody who who signed up um into the company decided that they wanted to make uh an impact in the world and so they want wanted to literally physically sign the wall of the building because they were excited to be there they wanted to put their manifestation of themselves up there uh this sort of took on a life of its own and pretty soon everybody who joined the company wanted to be on what was the founders wall because we was like well you know how many people as a Founders we're going to be a big company so I guess what we're all going to make a difference and so it grew and it grew and it grew and it went around the corner and pretty soon everybody who joined the company went through orientation selected in wanted to sign up to be part of this and by the way this became so culturally important that in the orientations it was like a privilege everybody in the company wanted to come and see that you got through orientation you select it in or out and by the way some people selected out we had a couple of people who went through orientation and went you know what this is more intense for me this is not fit for me and that was cool too this was the point Jeremy made guess what happened when we mve buildings we took the wall it was the first thing that came up in the in the with the team was like like okay we we know we've got to move we're busting at the seams we got to have a new building you know the hq's got to move but we've got to take the wall and literally uh we had to remove our server room and a bunch of other things in order to get the wall out but we took the wall with us and the walls are and we uh you know we eventually got to a place where we could fit all the different walls and all the different people but this stuff makes a difference and trust me anybody who uh works at a company who has these kinds of physical manifestations remembers it and there are ways you can do this so they uh were here with us last year and they um are a good example of a company that's really focused on it in the Boston area it's the fastest growing company in Boston today they're about to be honored again next week and the fastest uh software company growing software company in in the US aqua and they made a big deal about establishing their culture very early on so I'm going to uh play their video for you so you can get a sense of of how they they defined it early working at office it's very fast-paced it's very entrepreneurial it's challenging and it's a lot of fun working in aqua is probably the one of the greatest jobs I've ever had my life Aqua founding changed my life in a in a pretty big way of helping to build one of the you know fastest growing startups in Boston I came to Aqua because I saw uh an opportunity that I hadn't seen since I got into this industry you know the opportunity of getting involved with a platform as um significant in Drupal as open as it was with such a passionate uh developer Community working with the open source project Drupal is great it is it's really the highlight of the job just uh felt like the right place right time amazing opportunity I looked at the vision for Drupal and I said this is the future and and I want to be part of that so we're hiring like crazy and um it's a real challenge the challenge of growing is is making sure that we continue to communicate we continue to find new great people I think the important thing when you're hiring people though is to look not so much for raw experience what does the resume show but instead look at who they are as a person person um I think good people like to work with good people instinctive drive to accomplish something in the world that passion and the smarts to go with it I'm being with people that I like to be with who share th those common interests and that makes it a heck of a lot of fun I'm going to stop it there because I don't want it to become a commercial and there's a piece of that is but you'll see some things in there that you know they very clearly said you know people were signing up because they like the vision they were signing up because they wanted to work with the kind of people that they saw there they were seeing the environment they like that was fast-paced and challenging Etc and by the way it's tough to hire at the pace that we've hired you know to hire 50 people in a quarter for example to to double your your employee count in a year it's just really really hard to do that and maintain your culture so this is something that the team really has to work on and they've worked on it in the last year since we were here and we're going to have them in actually at the hiring session so you'll be able to meet them and what they've done is they've really focused on something that that hopefully we can draw out a little bit of experience from here which is how do you actually turn your your values and principles into something that people can really relate to because if it's too abstract and people can't engage with it it's not going to work it's not going to propagate and this is a company now that's got offices all over Europe it's opening up in Asia and so there are cultures by the way that are very diverse in terms of background and people's engagement with the company obviously from from different perspectives around the world is very different and yet we're clear we want some specific underlying values that do not change so whether we're doing business in China or we're doing bu business in Brazil we want aquous culture to be the same so the team has developed what they call their DNA and this is something that I'm helping um companies try to do more and more is exactly what Jeremy was saying don't come up with 50 values because it's really hard to get 50 things you know to be consistent across the world in all your different organizations as you grow try to come up with a very few that really mean something to you now aquous DNA is a whole fascinating subject when you hear about how the team developed it and by the way it really was the team developing it they've developed mascots for this they've done all sorts of things over the last year I was there when they're they're Gathering about 400 of them from around the world came together and they talked about how they were going to make sure that this DNA happened and I'm just going to pick one so for those of you who don't know what they do they are the commercial company bu the largest open source project in the world called Drupal which is used by many of the lead leading websites to build their websites and so because it's open source one of the things that they they have here is a value that is we give back more so think about open source the whole concept of Open Source is that you give back to the community whenever you develop something you give it back so that was a great value for them because it's natural to what they do and they do that every time they develop something for Drupal they give it back to the community but they decided they wanted to go one step further they didn't want to just give back software they really wanted to be a give back organization they wanted to be recognized for giving back to their community so they've gone often created days where they will go off and like this one the community service day for cradles to crayons they will go off off and contribute to their Community with public service so now that really feels like a value that is not just you know something you put on a wall they do it every day in their software and they do it every uh chance they get in their Community that's a real value people can engage with that they can subcribe to it they can believe in it and people at Aqua feel that way they're passionate about it and so guess what don't come to work at a at Aqua if you don't feel that way and uh next week you'll hear from them and you'll hear how they attract others but I just wanted to pick that out and I wanted to give you it as an example because I think it is about simplifying and it is about coming up with a few things that really matter that you can actually operationalize and that will help you develop your culture so this is the stage where I'm going to actually make the link that was asked of me before which is how do you take culture and operationalize it how do you link it to execution and the phrase I'm going to use is a simple one but hopefully will resonate with you which is it's not about just doing anything it's about doing the right thing and in many instances about doing the right thing as opposed to the easy or obvious thing remember I said to you culture is about how you do business not necessarily what business you're in so how do you do that how do you get people to do the right thing well obviously the more values you give people as touchdowns the easier it's going to be so I want to give you an example to bring this to life how many of you have ever rented a car from Enterprise Rent A Car what was your customer service experience there somebody at the who hasn't answered lady that back there what was your experience with Enterprise well it was um I well I had a pretty good experience because we had a whole lot of mixups with our um rental Y and they went above and beyond to try to fix our issue so for me it was a a good experience the last time I had to run a car so you feel like this that they put up as one of their values that they focus on customer service did you experience that yes you did so would you use them again mhm based on that experience yes great so here's what we we all know right you know that if you're walk into Nordstrom you expect service you you know if you're walk into Macy's you expect value uh whatever it is you pick these Brands you pick these places for a reason and they cause you to take action based on you know what you know they represent well Enterprise actually had a really interesting thing happen it turns out they have a focus on customer service but like most rental car companies they make money if you have return Journeys if you all drove off in their cars and they were brought them back they wouldn't be very successful that's a great idea and it's a great principle but what happens when this goes on you're in New York the Twin Towers get hit and you can't wait to get out of the place in fact you're scrambling to get out of there guess what nobody wants to write a return contract they don't even know where they're going they just want to get out of there and that's exactly what happened on 9/11 and this stuff happens all the time so what do you do if you're an Enterprise you know employee do you say sorry we can't write you a contract we can't give you a car cuz you don't know where you're going and when you're going to bring it back no you say we have a value it's focused on customer service they break the rules and they wrote one-way contracts and you can bet that everybody who rented an Enterprise renter car that day who was allowed to break the rules went back and rented another one why because they had a clear cultural value that they subscribed to but put the customer first and who cares that we're supposed to write two-way contracts this stuff makes a difference and guess what this happens happens things go on all the time in startups that Lit that literally happened to me and I sat all day in the Enterprise waiting room to get a car and finally got one to leave that night but that literally that example lit so what's your sense of loyalty towards Enterprises well it's pretty pretty firm yeah exactly so it's great to have in the room um this stuff really sticks in your mind and so guess what that wasn't on a rule book it wasn't something you could have predicted but a value ended up creating some huge important customer relationships and obviously uh brand loyalty so this is why culture is so important and what I would call call out is the underlying sorry there's a question at the back who made that call to switch gears like that within a couple of hours notice was that a CEO call was no no that's the beauty of it it was made locally this is the point Jason was making about empowering people you know he doesn't want to try to be everywhere all the time sorry I shouldn't jump in you you you jump in I don't want to do much so I'm good CEOs don't want to do much by the way they try to give the best people the ability to do what they know how best to do at the point of place where they will see the circumstances if you're the CEO and you're in California and you don't know this is going on I mean these days everybody knows what's going on but you know you may not you may not know the circumstance you may not know the particular a customer obviously that's a big event um but no the point is it was made by people on the spot because they knew that that was the right thing to do so this is the the uh lesson I drew out of that which is culture is really a touchstone when things go wrong or there's no obvious answer for what to do this should be the thing that gives people direction that helps them prioritize and if you if you've done a good job of your culture just as Enterprise had it makes it easy for people to know what the right thing to do is not necessarily the easy thing to do and that's the exciting thing about culture so we just talked through the results oriented culture and I won't go through that one again uh it turns out there's another piece of execution uh and operationalizing culture that is very fundamental so I'll give you a moment to read the cartoon so I'm a big dilbit fan I see this a lot the the truth is that startups have no excuse for not having great communication if you're a you know group of five or six guys and girls starting a company then there's no reason why you shouldn't just be able to communicate but when you grow really fast it becomes very hard and communication has to be something that you work on and it turns out that in that same example I was talking to you about um the good startups that I see both do formal and informal uh examples of communication we're going to hear from um the salvi guys in a second and some of them for example uh do things like standup scrums for their development teams they do town halls for their uh their teams as a whole but whatever they do there's enough communication that it's two-way that the culture can get reinforced and it can get developed and it can get spread and uh I will talk about this in a in a session uh further down the track when we talk about turning products into companies but there's a fantastic example on my site of a company called solid works that became a multi hundred million dollar today multi-billion dollar value company um with a simple culture uh sorry execution statement called 1 153 so if you're intrigued by how do you reduce your execution down to to four numbers you can find that on my site if you look for solid works but there are lots of ways you can operationalize communication and I'd like to have uh the um cifi team for Rob to come up and tell you how's he doing it and what's an example ex of how you you're thinking about communication yeah so this one for me is uh hugely personal and hugely important and also I think one of the most difficult things that um a lot of people struggle with in in startups um particularly on the tech side where you know a lot of people a little more introverted a little more shy uh on a personal level communication like didn't you know honest and true honest and open and constant communication was not something that like super came natural to me um like I had one marriage that my first marriage was like a failed marriage and it like basically had to had to do with this right and I'm remarried now my uh wife is a psychiatrist and both of her parents are psychiatrist and um that's pretty funny it would be basically like yeah seriously right and I would be definitely The Ugly Duckling there if I hadn't had figured out like what I had done wrong and spent a lot of time like really self-reflecting about what it means to have good and open and constant communication with people in your life that are really around you all the time and uh with a startup company you know I know it's really easy to say when there's people everyone knows what's going on but you know we have 10 people now and we're all moving really hard and we're all moving really fast and we don't always know what even the other nine people in the company are up to all the time uh the company that I I I worked uh for immediately before um founding salsify with these guys uh was called um Cambridge semantics and it had a very different form of communication culture than than the one that uh that we're building right now uh it's not bad it's not a bad culture it's just what they had they they grew out of a research organization and each individual was empowered to sort of come up with their own plan on their own project and their own timeline right and work independently so you almost had like the marketing team over on the left side of the company doing like something with go to market and you had the sales team on the right side of the company um doing like a bunch of individual sales cycle with individual customers telling things to each individual customer and you had engineering broken up into almost one organization per engineer working on different silos of the product and it meant that they could do a enormous number of things all at the same time but you know no one really like everyone was sort of off on their own and everyone was sort of doing their own thing and um there wasn't a lot of cohesion to to to to the to the operational model uh and for me this all of these reasons are like this can be really really hard to do right like you have to be conscious about you know what I'm not just going to have my headphones in all the time right you have to look up and ask questions of the people that are across the desk um if you feel like you're getting of sync with people in your organization like I know we started building our go to market team at the beginning of August and uh we hired a couple guys uh you know one had just gotten out of um business school and another guy who had been a sales guy for lowjack um and was doing a bunch of um uh startup advising uh in in the previous years before coming to work on us and we were just kind of figuring out how how to work as a team and they sort of went off on their own and would go off on their own for like a week or two and we'd you know have periodic check-ins but it just didn't it didn't feel like you know we knew exactly at what level of detail things were succeeding and weren't succeeding what level of messaging was working with the customers or resonating or wasn't working with the the customers um and so I think to to like really win on this stuff you have to take a step back and be able to say you know what um we need to have a discussion about like what's working and what's not working here we need to have a discussion about how often do we really need to sync up what are the things that we're not saying to each other that really need to be said from interacting with a customer's perspective I mean we always talk about you know in circumstances like this you know we're talking to your um fellow employees but also are you listening more to your customers than you are just talking at them right um are you asking more questions than you're giving answers to um are you are you really out there looking to understand how the person across from you is is you know understanding the way that you're speaking and stuff like that so I I think you know this one there's no there's no one answer to how to communicate constantly these are all things that you know we're working on and you know we're we're conscious of but uh it's not something that you just say that you're going to do and then hope that it happens it's something that you always has to constantly revisit and question you know do I really understand are we doing a good enough job are we being as open as possible is there more that we can do so it's hard but it's a really really really important one Ju Just to add to that it it it it's really important to us we make it a value but it does not happen naturally even in a company as small as 10 people we have to force ourselves to be on track explicitly add things to the calendar otherwise it just best intentions it will not happen I can't imagine how hard it's going to be at 100 people when I I already see how hard it is at 10 and I know that we all share the same Val so all I can say is you if it is important to you and if it's important to the people that that you're working with it just does not naturally happen at least it doesn't for us and I'd underline that so you know I've been lucky enough to witness the sort of 10 100 you know a th000 and 10,000 kind of employee growth and what happens there actually it turns out is is a pretty simple thing which is the sort of a a rule of six that I've observed the first six people you know all you need is a water cooler the next multiple of six you know get up to 30 35 40 you actually really need to figure out how to do things like you know monthly town halls or All Hands meetings and then when you grow geographically you know you have to figure out how to replicate that stuff um so it's great to see you guys doing this you know daily stand-ups weekly planning monthly all hands you know everybody having hip whatever your culture is I really believe that you can never make it successful without communication being a fundamental backbone to it so while you're up here let's also talk about what do you celebrate oh as as many things as possible um we have a Kegerator in the office it helps uh but but I mean seriously like building a startup is a SLO right like it's easy to look at something like the one long the the one like really scheduled sales demo we had today was just terrible um there's there's no good things to say about it so you know it there's a there's a lot of things that go wrong there's a lot of exper experiments that you try in the product where it's just like okay we're going to go off on a tangent a little bit and see if something works and it like totally doesn't work right so um you know it's like the saying is Rome is not built in a day so we find that it's super motivating and just makes the environment a lot more fun if the more little things that you can draw attention to that are successful like the better off that you're going to be um so I know Jason and Jeremy both hinted at this uh but every Friday is feature Friday it's a day where you know Engineers can just pick a little thing in the product where they can start building it and finish building it and deliver it all at the end of the day right and so as soon as one of the you sometimes they you know they work on it the night before and they'll have uh features going first thing in the morning but they call the whole company over to to get the demos and everybody gets to see the demos and you know that's great so really that it's as many things as possible and the key part of it is we like to celebrate our employees um and their interests and the things that they're excited about so I mean this is just a slide with our current team that's not us uh and a lot of the a lot of the individual things that make them all special uh but we like to you know we like to draw attention to them even if it's embarrassing and uh let them know that you know we really love them being around and we really love the little things that make them you know who they are and we really love the little things that bring that they bring to the table um on a personal level so really it's any excuse that you can have to call out you know anything at all that's positive um I think is really really important to us and you know makes the whole thing a lot more enjoyable I mean there really is a lot of work that goes into you know every little step of the startup so yeah for the record we do get work done so it's true so thank you very much so we're coming to the end here but I I wanted to just hi like this one piece that's again operational it turns out that if you give people clear responsibility and you make them accountable for things this is a fundamental thing you've got to do to make your culture actually work you've got to create the right recognition and rewards to reinforce your culture and by the way this team gave you an example of something that they were really open about which is when they screw up they say so they actually spend a bunch of time talking about the demo that went wrong or the customer is not working or you know the first custom that we decided not to pursue and that's a huge strength of good cultures is usually they're very focused at least equally focused on what's not working as much as celebrating what is working and so you know whether you decide to make that part of your culture or not I just observe that it's something that makes a big difference now form and substance are a big deal so you know startups often don't have a lot of money to give around but you know what it doesn't take money sometimes to just have a you know whatever it is a Klondike break or you know to recognize somebody's birthday but it can be something as basic as you know as I talked about earlier management taking a day to do community work it doesn't cost you anything sure it costs you some time and energy but those the kinds of things if you you have a culture that you're saying is giving back you can go make a difference and that establishes for people what you really believe in in other words it's about what you actually do rather than what you say and another thing that I think is free and is underutilized is just acknowledgement be a culture for example that says thank you or you know appreciates when somebody's gone above and beyond you don't necessarily have the resources in a startup to go you know award them a whole bunch of money but that's okay people don't necessarily need that the point though is that if culture's going to be successful it has to have some kind of audit to it some balance and check uh check and balance to it and that's what the the recognition reward scheme really should should do so let me start to summarize here by saying the the thing hopefully you're taking away is that culture can make a really big impact and so the earlier you define it and the more authentic it is to you so you can actually live it every day then the the more likely you are to be able to be consistent and therefore to build value from it and I really want to emphasize this this is even when you're pivoting or changing or constantly it your business your culture should not be going through that kind of change uh and if I were to uh bring up these Brands my guess is that whether it's Nordstrom or it's Starbucks or it's virgin you could pretty clearly identify you know the brand and what it stood for and what that culture was we don't have time to go into them today but it's the kind of thing that um I'm happy to do in deeper uh workshops in the future and if you took any of them apart and I'll put some of them on my site by the way what I draw out from some of these Brands you will see that their cultures are absolutely as we've talked about rooted in everything from the way they behave and how they run their business to what they actually act on and how they treat their customers so as I say uh Define it early and um the bottom line here is walk the talk so don't actually try to put too much up there if you're not actually going to do uh have it defined by you yourself because you're going to have to lead by example the founder it's the bottom line here of the business or the founders are very often the basis for culture to get formed and so if it isn't who you are it's not going to work if it is who you are and you can be very authentic about it is sorry you have a question I'm sorry s buring question I have an idea I'm trying to find her co-founders and team members should I go ahead and try to define the culture by myself or is it more like because this to me seems like it's it's really driven by the people you work with should I just form a team based on skills or whatever that works out and then kind to think of what culture we can all resonate with I would say that that there's no again right or wrong answer to this if you believe there are certain things that are really important to you you might make them your personal mission statement your personal Vision your personal culture and be open with them that'll certainly help people form as a team around you because they'll know what's important to you so you can do no harm by starting there but then obviously you're going to have to create what is a founding team and a set of convictions that are shared by you because shared values is really important I mean you know if everybody's distinct that's not going to work but I think it'll help you find people who do share values with you so yeah does that answer your question great so one final example here um many people know this story but if you haven't followed it Southwest Airlines went to the top of the US domestic airline industry and uh the CEO at the time um oh sorry the co-founder K her K was very famous for this quote because lots of people looked at at Southwest strategy and said ah it's easy to copy yet they never managed to beat them and the reason was very simple you could easily rewrite the strategy for Southwest Airlines it's an easy thing to go read the case study but what he'd really done was important he'd built a cultural understanding right throughout the organization of how they were going to be successful and people couldn't copy that because it was ingrained into the organization it was who they hired it was the way they operated every day and so for you I hope what you take away from this is if you do this right you really can use culture to build an enduring consistent valuable company and I hope that gives you a basis to uh come back next week and listen to what we'll talk about with is hiring but thank you very much for your patience