5 Hidden Dangers of Stereotypical “Startup Culture”

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Startups come in all shapes and all sizes, with personalities that are as diverse as the people who run them. However, there’s a certain type of office culture that has pervaded the public perception of startups, and it’s starting to have a major impact on how new entrepreneurs handle their own startup’s respective culture. As stories of breakout successes from Silicon Valley and tech startups on TV shows and movies all seem to align with this perceived culture of lax standards and great personal freedom, more emerging entrepreneurs begin to believe that this is the only way to succeed as a young business.

Realistically, this stereotypical startup culture can be highly effective. Because their hours are flexible, their workers are happier and in many cases, more productive. Because their offices are “fun,” more people want to work there and clients get an intriguing first impression. And because their interoffice politics are casual and open, more personal conversations can help drive the company forward.

However, this type of culture, like any other, has drawbacks to go along with its benefits. Stereotypical startup culture is not appropriate for every new business, as these five hidden dangers illustrate:

1. Hiring based on charisma. In dozens of articles about the importance of office culture, we’re told that your new hires all need to get along together, and that you need to hire based on personality as much as you do on skillset. This is true. Personality and “culture fit” are important considerations — but they’re not the most important considerations. Your hiring decisions need to be based on who is going to make your company successful. Backgrounds, skillsets, and work ethics are far more important than whether or not someone is good at ping pong (though if they’re good at ping pong, that’s an added bonus). Hiring based on charisma alone will fundamentally weaken your team.

2. Spending too much money. “Fun” office cultures usually require toys and flexible environments, such as pool tables or large, open spaces for relaxed collaboration. Many new entrepreneurs believe that these things will help them establish a reputation and make good first impressions to new hires and new clients. Again, this is partially true, but it should not be your priority. This type of institution can set you back thousands of dollars before you even launch a product. Instead of investing in a “fun” office, save money and only invest in what’s important for your initial launch — the fun stuff can come later.

3. Making emotional decisions. Working in a personal, conversational, laid-back atmosphere can reduce your stress and make you feel more like you’re a part of a family than you are a boss of a bunch of employees. This can be valuable in the moment, but it can also open you up to make emotional decisions. You might avoid firing an incompetent worker because he’s your pal, or avoid changing the course of your business because it might introduce too much pressure to the environment.

4. Establishing no clear hierarchy. Along similar lines, it’s easy for this type of startup culture to encourage blurred lines between workers and supervisors. As the founder and CEO, it might be your signature on people’s paychecks, but in daily operations, everyone’s voice is heard equally. Most days, this democratic approach will keep everyone happy, but as soon as there’s a problem with no clear leader to direct the ship, everything will fall to pieces. Democracies are great in theory, but leadership is necessary for when the going gets tough and immediate, hard decisions need to be made.

5. Forgetting the bottom line. Your motivations for starting the business probably go beyond “turning a profit,” but without sufficient revenue, your business won’t be able to succeed. In this way, making a profit (or at least breaking even) is always the bottom line. When you’re managing a fun, relaxed office culture, it’s easy to forget this. Your problems shift from incrementally increasing productivity to incrementally increasing high-fives. You lose focus on what’s really going to drive your business forward. Don’t let it happen.

Compared to the strength and timing of your idea, your available startup capital, and your overall business plan, your startup’s culture is small potatoes. But if you want to succeed and keep your team happy, it deserves your careful attention. Don’t build a company culture that’s a carbon copy of one you’ve seen on TV or one you’ve read about in the news. Instead, build the culture that’s right for your business. Think carefully about what your business needs to be successful, and how you want your brand to be perceived. Your startup is unique, so don’t do it the disservice of using it as a host for someone else’s vision of office culture.

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CEO of EmailAnalytics (emailanalytics.com), a productivity tool that visualizes team email activity, and measures email response time. Check out the free trial!