Why Culture is More Important Than Capital
Attitude is the most valuable currency in today’s business environment and it is a key indicator of future success. Never before in history has innovation been so celebrated, encouraged, and ubiquitous. Leaders are everywhere.
A business is the orchestration of people serving a common goal. No surprise there. Establishing the success ecosystem – those who will advise, direct, recommend, and implement your ideas – means carefully choosing people who have experience, integrity, loyalty, and honesty. The first role of a chief executive officer or founder is to establish a corporate culture and communicate core values. More importantly, live by them and practice them. The practice is challenging and we jump on and off the horse depending on family, friends and finances.
In my perspective, too much cash is actually detrimental to the business when it comes to funding vs. revenues. There are enough examples of venture-backed dreams and acquisitions gone wrong. Why? Because capital destroys culture.
Angel funding and venture capital may be the motivation of my fellow entrepreneurs, but many of my well-funded colleagues struggle with the ideation of a product, the development of culture, and the financial integrity of the daily business. Plus an additional layer of mania to satisfy investors. No thank you.
I have two primary passions: operations and recruiting. I don’t have a perfect track record of either, product ideas or people. However, one of my hard-won secrets is that I protect my people, my business, and my values. I try to live with transparency and unfiltered honesty, mixed with humor, metaphors, and associations to ease any sting. Doesn’t always work as I intend.
I typically interview potential employees before introducing them to anyone within my company. This is an uncommon approach for many CEOs and may not seem scalable. However, this behavior allows me to carefully select the type of personalities that will amplify the business and enhance our ability to execute as a team. Chemistry creates culture.
Proudly, I’ve made six pivots in as many years. I’ve retained almost the entire original founding team (when this was written). We have never missed payroll, we have no debt and loyal customers. It has not been perfect and we have struggled, but we stand together and find ways to make things work. People are what make me get up earlier and stay later.
Here is what I have learned and what I do to maintain our core values:
You must make the decision to regularly and publicly show gratitude to every person you encounter. This does not mean purchasing expensive gifts or dinners – it simply means showing genuine thanks. Most people are good-natured and generous until you are not generous and thankful in return. Choose random acts of senseless kindness.
The phrase my staff uses to elevate our gratitude to one other is “I appreciate you”. It’s the protocol now because I made reciprocity a part of our work ethic and company mantra. The more you give, the more you want to give.
Raising capital is a distraction
While it may be necessary for holistic ideas, preparing presentations that describe fantastical liquidity events for investors is a poor use of our mental capital and it attracts the “wrong people”.
Growing a business is about scars, not trophies. You need fighters with charisma, integrity, humility, attention to detail and most important of all, faith. Focus on providing value in what you sell and being genuinely interested in the success of others despite your own.
If you blindly follow the money, you may not like where your culture ends up. Be hungry, not full.
Products are not exceptional, people are
There are dozens – if not hundreds – of people behind every idea. Execution of an idea by your carefully selected team is the magic. Products with true business value are governed by the culture you created; magic creates unstoppable cultures. People first. Choose them well.
Tony Hsieh (RIP), Jeff Bezos, Elon Musk, Larry Page, Mark Benioff, Tim, Howard Schultz – true leadership and personal transformation. They have all gone from zero income to startup, to multi-million/billion-dollar organizations.
Entrepreneurship means accepting anxiety, competition, and despair. Setbacks occur daily and stress accumulates. The psychological price of entrepreneurship is already too high. Playing it safe, taking calculated risks while growing revenue organically, can result in happier and more rewarding business owners. Delivering products or services that generate profit and income without liability and debt is a true paradise.
This is the focus for my life and career, zero to profit. Or not. Culture creates a business and happiness is not always profitable.
We are all a work in progress. Entrepreneurship is not science, it is imperfect and most importantly, it is rarely, exactly repeatable. I’ve never met an entrepreneur that followed their original business plan from beginning to end. Budgets change, expectations are reset and companies often pivot into new markets based on the economy, technological shifts, or simply the need to survive.
Culture is currency and attitude makes it profitable. Teach people to reciprocate, focus on and align with core company values, follow their heart and their gut instinct, and encourage them to be exceptional. The ultimate goal is to have a business grow with and without you.
Cultures survive even when capital does not.
Christopher Justice, May 2013