What Makes A Culture “Bad” Isn’t Just That You Don’t Like It

I won’t invest in a startup that doesn’t care about its culture. Because a culture is going to form regardless so you might as well be deliberate about it. And it’s with your first hires that your intended culture will be solidified, evolved, mutated, or challenged. So be thoughtful about the characteristics you seek out; the motivations of those individuals; the processes and practices you put into place at the startup; and the behaviors and outcomes you reward. But in talking about culture with founders, I’m very deliberate when I characterize what I believe is a “good” culture vs a “bad” one. And I think we as an industry are very sloppy when we say “oh, Company X has a bad culture” because more often we really mean it’s just one that doesn’t appeal to us and isn’t objectively bad.

“Good” cultures are clear, consistent, scalable, actionable, well-matched to the company’s business model, and legal. By this definition, there are lots of “good” cultures that aren’t attractive to me as a team member. Amazon, from the outside, is a company culture that has always been extremely intriguing to me but where I’ve never felt a gravitational pull. Coinbase, which has been quite aggressive in defining what’s expected of you, isn’t my cup of tea, but I can still appreciate the clarity they are providing for potential employees. Similarly, the ‘holacracy’ style that has been explored by some startups sounds like a nightmare. But that mere personal attraction or repulsion doesn’t make them good or bad.

Some of the most controversial cultures in our industry are kneejerk labeled bad, in my estimation because they aren’t broadly appealing (on the surface) to a majority of tech workers. But so long as they meet the criteria in the paragraph above I’d call them polarizing, not bad.

Bad should be reserved for:

•           Inconsistency in how values are implemented into management practices, hiring strategies, reward and recognition
•           Lack of self-awareness, which prevents potential employees from understanding what that company values, and prevents current team members from improving or codifying practices
•           Incentivizing or permitting illegal or unethical behaviors on behalf of the company
•           In conflict with one’s business strategy and objectives

Are there certain types of cultural traits which tend to increase the probability of ‘bad’ things occurring? Sure, I’m open to the idea that the more aggressive, less respectful, binary-outcome cultures can attract people willing to break rules to win and managers who are incentivized to look the other way, but that’s a risk factor, not a fundamental quality of these systems.

Whether I’m on an org chart or cap table, I’ve historically found that culture is the most difficult part of a company to refactor once matured. Code can be rewritten. Products can be built, modified, sunset. Investors can be bought out. But culture is like super cement that’s oozed into every nook and cranny, often beyond the reach of a jackhammer. This importance is why the categorizing, assessing, and discussion of culture has to be very specific. So that we can understand the difference between effective vs ineffective, good vs bad, and ‘for me’ vs ‘not for me.’