We’re seeing a new type of entrepreneur starting companies lately; they are approaching their company culture with almost as much passion as the business idea itself, with the goal of creating the type of organization that they will be most happy being a part of.

Over the past several months, I’ve been working with my colleague and fellow business coach Dale Larson to try to describe this phenomenon. We’ve tested it out with a variety of entrepreneurs, VCs and journalists in meetings and at parties, and heard lots of yes. Here is our first formal presentation of these ideas.

Below is a brief narrative that is more of less what I said in the presentation; we’ll write more about each principle in the weeks to come. The slides are included at the bottom of this post.

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We work with entrepreneurs at every stage of the food chain; from folks who have an idea and are looking for co-founders & money, to companies that are growing, all the way to “entrepreneur’s midlife crisis”, where the company is successful, but the founder is questioning whether they want to stay with the company, or move on and do something new.

(On the next slide, I say “Zach is awesome”; Zach Larson, the Chief Product Officer at Sidereel, the largest independent TV destination on the web (and no relation to Dale Larson)  invited me to attend the conference, and he is indeed awesome, and this was a running joke that started the day before and thus got a big laugh.)

I’m noticing that the entrepreneurs that I’m meeting with, especially the ones who are just founding companies right now, are thinking, believing, and acting in a different way than I’ve seen before. I’ve seen things that are similar, but it seemed worth trying to describe the new paradigm. Here goes:

1. The entrepreneur and the company has a mission beyond making money.

The individual and the company has a goal for themselves beyond just making money. The company may be disruptive, it may be that they’re going to be the best at something, but it’s not that they’re going to just be incrementally better, or do it a little cheaper.  They are out to cause change in the world.

2. The working environment and pace is reasonable and sustainable

The second is that they want to create a working environemt that is reasonable and sustainable. That can mean different things to different groups. For a few, it might mean working 8 days a week, never eating, and never sleeping, but everyone agrees to that. For other groups, they really want to work more or less 9 to 5; they have agreed that they want to have lives outside of work, particularly when they have kids. What is important is that all of the founders agree: this is how we want to do it together.

There is more to this than just working hours; it extends to things like office space & compensation as well.

It’s also about having clearly understood expectations about how we’ll work together. We don’t spring new urgent assignments on each other, or let someone waste time working on the wrong assignment, or thinking that something is good enough when it isn’t. I know when I come to work each day what I need to be doing such that everyone would say I did a good job.

3. Customers love the product & company

Third, they want to create a product or service that their customers really love. They are interested in creating a thriving ecosystem, and they want to extend this love into their vendors, and to other people they deal with. They want to create deep relationships, and for their customers to be delighted.

4. Hire and retain the A-team (no assholes)

The fourth is that are very intent on hiring and retaining the A-team. They may be doing behavioral interviewing to screen for people who fit well with the team. They realize that the founding team is going to create the DNA of the company going forward, so they get really nit-picky about choosing. I have potential co-founders who have been kind of dating for 3-6 months, doing little side projects together to see how well they work together. That’s different than *smash*, let’s just do this thing together, and we’ll worry about how well we work together later. The “no assholes” thing turns out to be really important; when you end up with an asshole on your team, someone who’s really more in it for themselves rather than the whole company, it turns out to be super hard to get rid of them, and really difficult for everyone.

5. An attitude of learning and growth

The fifth is my favorite; the entrepreneurs themselves have an attitude of learning and growth. They are interested as a company in learning from their experiences, be it success or failure. They are likely to have project retrospectives. And they are interested in growth as individuals; so much so that they almost view a startup as a vehicle for their own transformation. They are not quite there all the time, but they think “If this thing happened to me, what do I get to learn from it?”, and “If this thing happened at my company, what are we going to take away from that experience?” It means they have a lot of curiosity, they’re not afraid to talk about failure, and it’s not uncommon for someone on the team to get up in front of the room, and say “That totally didn’t work, even though we thought it was a great idea”. Throughout the organization, everyone is willing to do that, including the CEO.

6. Maintain a steady velocity

Six is that they maintain a steady velocity; they’re inclined to make decisions if it’s a low risk to move forward. They are inclined to be in motion. They are doing something to measure the progress that they’re making, both as a company, and as individuals.

7. People are kind and collaborative

Seven, and this is my second favorite, people are kind and collaborative. There is a sense of “I want to be doing this with you guys!”. If there are differing viewpoints on the team, and in fact if you oppose me, and believe the exact opposite that I do, that makes me more curious to sit down with you, and say “Wow, you’re really smart! You believe the exact opposite thing? I want to talk about that, and I want to learn from it!” Which is different than “If you believe the opposite thing from me, you’re out the door.”

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When you get people who are willing to sign up to *try* to do these things, then it means you have some sort of metric, and when they’re not doing one of those things, as a team they can self-correct by saying “I don’t think it adheres to this principle–what should we do about that?”

The founders actually have a huge impact on the company’s DNA. The easiest way to create company culture is for the founders to agree on what they want, and to hire for that, talk about that, and act on that the whole way through.

The next thing we’re interested in, after testing this out with a bunch of different groups, is to create a proactive toolkit that we can use to measure a company’s culture, like an online survey that you could give to the whole staff, and see how we’re doing on all these seven principles. Do we rate a 10 in terms of “Hiring and keeping the A-team”, or are we down at a 3? Once you can measure things like that (in the same way that you can have an operational dashboard that says you’re about to run out of servers), you can start to take action based on the information you’re getting.

Here are the principles all in one place:

  1. Individual & company have a mission beyond making money
  2. Working environment/pace is reasonable & sustainable
  3. Customers love the product & company
  4. Hire & retain the A-team (no assholes)
  5. An attitude of learning & growth
  6. Maintain a steady velocity
  7. People are kind and collaborative

Now that you’ve seen this, what do you think?

  • Are we missing anything critical?
  • Is there something in here that doesn’t resonate at all?
  • Are there ways this is useful to you as an entrepreneur?

Feel free to discuss in blog comments, or on the Startup Happiness Facebook fan page!

*The conference was small but fabulous Agile/UX (AUX) Retreat in NYC at PivotalLabs organized by Ian McFarlandLane Halley and Anders Ramsay. The group met to talk about user experience design in an Agile software development environment, and one of their strong concerns is that organizations have to encourage a certain level of cross-functional collaboration for these AUX techniques to be wildly successful. Startup Happiness seemed like a good running start in describing the type of company where AUX work would work well and I appreciate the opportunity to present and participate. Here is the lovely group photo from the retreat; lots of amazing folks!

Finally, here are the slides for the presentation:

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