A Tale of Two Startups: What I Learned About Culture

This blog post is based on my Linkedin carousel series called "A Tale of Two Startups". You may access the carousel here.

In the fast-paced world of startups, culture is the backbone that supports sustainable growth, employee satisfaction, and overall success. Having served as COO of two venture-backed SaaS companies with vastly different outcomes, I’ve witnessed how culture can either propel a company toward acquisition or cause it to crumble. One of the startups I worked with was successfully acquired, while the other struggled and eventually failed. Through these experiences, I learned vital lessons about the role of culture in shaping a company’s destiny.

Here’s what I discovered about the importance of team feedback, core values, performance reviews, and fostering connectedness to build a thriving, high-performing culture.

1. Team Feedback: Creating a System for Listening

Acquired Startup:
At the acquired startup, we implemented a structured process for collecting and sharing team feedback every 90 days. This allowed us to not only listen to our employees but also make real-time adjustments based on their insights. The feedback loop improved team morale and contributed directly to our success.

Failed Startup:
The failed startup didn’t have a formal process for gathering feedback. Occasional chats in the hallway were the norm, which led to a disconnect between leadership and the team. Without structured feedback, we were blind to many internal issues until it was too late.

Lesson: A system for consistent team feedback is critical. Asking, “How are you?” in passing isn’t enough. A structured approach ensures that everyone feels heard, which ultimately improves company performance.

2. Core Values: Bring Them to Life

Acquired Startup:
Core values were a cornerstone of daily operations at the acquired startup. We hung them in the office, referenced them in meetings, and used them as a guide for coaching and shaping behavior. The values were more than just words; they were a living part of our culture.

Failed Startup:
At the failed startup, core values existed, but they were stuck in a slide deck and rarely referenced. Because they weren’t actively integrated into the company’s daily operations, they became irrelevant to the employees and leadership alike.

Lesson: Core values should be part of the everyday culture, not just a set of abstract concepts. By consistently weaving them into the company’s operations, you align behavior across the organization and reinforce a shared purpose.

3. Performance Reviews: Building a Culture of Growth

Acquired Startup:
The acquired startup conducted annual 360-degree reviews for every team member and worked to develop their weaker skills or “backhands.” This formal review process allowed employees to understand their strengths and areas for improvement, fueling their personal and professional growth.

Failed Startup:
In the failed startup, feedback was informal and sporadic. There was no structure, no formal reviews, and no clear development plans. As a result, employees lacked direction and didn’t have the opportunity to grow within the company.

Lesson: Employees crave growth and critical feedback. Building structured performance reviews into your culture provides the guidance and development opportunities that keep your team engaged and motivated.

4. Compensation: It’s More Than Just Money

Acquired Startup:
We understood that people are motivated by more than just a paycheck. We addressed non-monetary needs like flexibility, recognition, and career development, ensuring that employees felt valued beyond their salary.

Failed Startup:
The failed startup assumed that financial compensation was enough to keep people satisfied. We didn’t address employees’ broader needs, leading to dissatisfaction and eventual turnover.

Lesson: Compensation isn’t just about money. Recognizing and meeting other needs like growth opportunities, work-life balance, and a positive work environment will keep your team engaged and reduce turnover.

5. Connectedness: Build a Unified Team

Acquired Startup:
Regular team lunches, offsites, and holiday parties were part of our culture at the acquired startup. These activities allowed us to bond beyond the confines of work, fostering a sense of unity and connectedness.

Failed Startup:
Team bonding wasn’t prioritized in the failed startup. Without these opportunities to connect, employees felt isolated and disengaged from the company’s mission and from one another.

Lesson: A sense of connectedness is vital to building a strong team. Regularly scheduled activities that allow employees to bond outside of work are crucial for fostering a collaborative, unified culture.

 6. Proactive Culture: Tend to It Like a Garden

Acquired Startup:
The acquired startup maintained a culture roadmap with a budget dedicated to new initiatives each quarter. This allowed us to actively manage and nurture our company culture, ensuring it evolved with our team’s needs and external challenges.

Failed Startup:
At the failed startup, leadership was too busy with other priorities to actively tend to culture. As a result, our company’s culture deteriorated over time, and the negative effects rippled throughout the organization.

Lesson: Company culture needs to be proactively managed. Just like a garden, it requires constant attention and care to thrive. If you neglect it, you risk losing your best talent and weakening the entire organization.

What Can We Learn?

Culture is one of the most critical factors in a startup’s success or failure. From creating a system for team feedback to embedding core values into daily operations, fostering connectedness, and addressing non-monetary needs, every element of your company’s culture plays a role in shaping its future.

If you want to build a high-performing team and a resilient company, focus on creating a culture that supports growth, collaboration, and transparency. By doing so, you’ll give your startup the best possible chance to thrive.