Startup culture: how is it defined and what’s changed?

“Chaotic”, “messy”, and “unorganised” are terms that are often used to describe startup culture. 

But while working or running a startup can be a little turbulent, it can also be an exhilarating, rewarding and profitable experience.

Unlike a traditional organisational culture, startup cultures are considered to be more innovative and collaborative – embracing creative problem-solving, open communication and a flat hierarchy over formal structures. But does this still hold true in 2024?

In this article, we’ll delve into what makes startup culture, what the benefits and risks are, explore some of the most successful startup environments today, and share tips on building a strong culture within your own organisation.

What is a startup culture?

A startup culture is a work environment that’s typically fast-paced, valuing creativity and communication. Startups are typically smaller companies, especially in the early stages of growth, and are perceived as less formal than a corporate environment.

Startup culture is defined by the following characteristics:

• Fast-paced: Work can differ from day to day, and the roles and responsibilities of employees can change rapidly. Decisions are also made quickly, as adaptability to changing market demands and customer needs is essential.
  
• Changing responsibilities: Employees will also be picking up new responsibilities, especially in smaller startups as there are fewer people to do the job. This allows employees to gain new skills, and the flat hierarchical structure also enables them to be part of the decision-making process.
  
• Strong collaboration: Good teamwork is also a core part of startup culture, with cross-functional teams working together with unique expertise and skills to tackle complex challenges.
  
• Agility and flexibility: Startups often need to adapt quickly to changes and new opportunities. This requires a work environment that supports flexibility and quick adjustments, allowing the team to innovate and take on challenges effectively.
  
• Continuous learning and development: Most startups promote a growth or “fail fast” mindset, encouraging employees to continuously learn new skills and improve. This often includes opportunities for professional development and training.
  
• Risk-taking and resilience: Embracing risk-taking is part of the startups ethos. Failure is seen as a learning opportunity for employees, and resilience is crucial to overcoming setbacks and challenges.

Benefits and risks of startup culture

While startup culture is often characterised by its dynamic and innovative environment, it also comes with its own set of challenges and uncertainties.

Pros of startup culture

• Flexible working: Many startups offer flexible working arrangements, including remote work options and flexible hours. This can improve work-life balance and increase job satisfaction for employees.

• Freedom to innovate: Unlike in large companies, where new ideas go through a complicated chain of command, startups encourage out-of-the-box thinking and creative problem-solving. 
• Stock options: Stock options are a popular form of compensation in startups, designed to attract and retain talent by offering employees the potential for ownership and financial gain. 

Cons of startup culture

• Lack of job security: The current failure rate for new startups is at a staggering 90% and startup founders have a success rate of just 18%. This means that working at a startup is often perceived as riskier for potential employees compared to more established companies.
• Limited resources: Startups often operate with constrained budgets and limited resources, which can impact many aspects of the business, including compensation, benefits and access to certain tools and technologies.
• Uneven structure: With flat hierarchies and limited formal structures, employees can become confused about who is overseeing what and who they should report to regarding any specific issues.
  

Examples of successful startup cultures in 2024

What about in today’s turbulent economy – does the stereotype of a scrappy and dynamic startup still work? Here are three companies that have embedded some key principles of startup culture to create successful businesses.

1. Buffer’s default to transparency

Transparency is at the top of the list for Buffer’s core values. This includes establishing a culture of trust, sharing relevant information early in the decision-making process to avoid “big revelations” and striving to make communication as clear as possible.

Buffer’s level of transparency is 360 – it shares its internal information with the public, including its employees’ salaries. The company’s monthly metrics, shareholder updates and product roadmap are also available publicly. 

Buffer also embraces continuous learning through improving consistently. Not as a competition against anyone, but towards personal and professional growth. For example, exemplifying a growth mindset and believing in obtaining skill and talent through practice.

2. GitLab’s collaboration freedom to iterate

Iteration is part of GitLab’s core values. Employees are expected to deliver work with minimum viable change instead of spending time on producing a completed product.

While this can be a challenging practice to adopt, it enables employees to learn from mistakes, get feedback quickly and make the changes needed to create a better outcome faster.

The company’s collaboration value means that employees should work together effectively. This means employees should help each other, even if it’s not directly related to their goals.

3. monday.com’s ownership and impact

One of monday.com’s core values is ownership and impact. The company believes that employees should take full ownership of their work, as this instils personal investment and a deep sense of responsibility.

Its culture is also fast-paced. It believes that the faster employees execute, the faster they’ll learn and improve. The company’s agile approach includes continuous feedback both internally and externally to gain a competitive edge. With rapid execution and iterative development, monday.com enables teams to quickly adapt to new information and market demands.

Tips for building your startup culture

When it comes to starting your business, defining your culture is essential. While a solid strategy is also crucial for success, focusing solely on strategy without considering culture can be detrimental. As the saying goes, “culture eats strategy for breakfast”.

Here are some tips on how to build an effective startup culture for your new enterprise.

1. Establish a clear purpose

Many perceive startup culture purely by its benefits and perks, but those are only part of what builds a strong organisational culture. It isn’t all about pizza parties, ping pong tables or free fruit in the office. Instead, company culture is defined by an organisation’s core values, beliefs and behaviours, so it’s important to define this from the start and build your culture around them.

Even if your startup only has two people currently, there will inevitably be more added to the mix as your company grows. If culture isn’t addressed right away, this poses the risk of resistance or struggling to adapt to your culture change. You could also hire an external culture consultant if you’re struggling to define your own.

2. Don’t copy and paste other cultures

There are many companies out there known for their positive organisational culture. While you can take a leaf out of their book for inspiration, you should also avoid copycat culture. This is when a company tries to adopt the same culture as another. The primary problem with copycat culture is that it risks employee engagement and attracting new talent.

An engaged employee enthusiastically puts the time, effort and energy into their work, and being aligned with the company’s values is part of that. 21% of potential employees also claim that better company culture is the main reason for changing jobs, so an inauthentic culture can pose the risk of higher staff turnover.

3. Avoid “founder’s syndrome”

Sometimes startup leaders can fall victim to “founder’s syndrome”, in which they hold disproportionate power following the initial establishment of their organisation. Leaders with founder’s syndrome feel they should maintain the most authority and often aren’t willing to share responsibilities with their team.

For example, not delegating tasks effectively because they feel no one else can do them right. They also tend to resist new ideas or strategies, which blocks innovation and creates an uncollaborative environment where employee input isn’t acknowledged. This can lead to several negative outcomes, such as stifling growth and scalability, increasing staff turnover, hindering the development of a strong leadership team and creating a toxic work environment.

To avoid this, keep in mind this popular organisational quote: “Good leadership requires you to surround yourself with people of diverse perspectives who can disagree with you without fear of retaliation”.

4. Recognise values, not just achievements

While acknowledging accomplishments such as hitting KPIs and SMART targets or completing projects is important, it is equally crucial to celebrate the underlying values and behaviours that drive those successes.

By emphasising values like teamwork, integrity, innovation and perseverance, you can reinforce the behaviours that contribute to long-term success. This approach ensures that employees understand and internalise the core principles of your organisation, leading to a more cohesive and motivated team. 

5. Foster a safe and enabling work environment

A safe work environment isn’t just about physical safety. Instead, it embodies emotional and psychological well-being, ensuring that employees feel secure and supported.

For example, creating a culture where open communication is encouraged and employees can freely express their ideas, concerns and feedback without fear of retribution. When employees feel valued and protected, they are more likely to contribute their best work, take creative risks and engage with their responsibilities effectively.

6. Focus on learning and growth

Learning is a significant part of startup culture, and startups should implement it in their culture to ensure that employees stay up-to-date with the latest trends, technologies and best practices.

Encouraging a culture of curiosity and ongoing education not only helps employees advance their careers but also drives the company’s innovation and competitive edge. Formal training programmes, mentorship opportunities, and access to industry resources are a few ways to invest in learning and boost employee growth.

7. Emphasise innovation

Prioritising creativity and novel thinking enables startups to drive strong solutions and differentiate themselves from competitors.

Risk-tasking is also a significant factor in startup culture so encouraging employees to experiment and explore different approaches helps create fresh ideas and accelerate product development. Creating an environment where innovation is celebrated includes supporting cross-disciplinary collaboration, providing resources for experimentation and rewarding creative problem-solving. 

8. Embrace failures as part of the journey

Startups are fast-paced, and failure is an inevitable part of the experimentation and growth process. But rather than seeing setbacks as negative outcomes, successful startups see them as valuable learning opportunities.

Fostering an environment where employees feel safe to take risks and learn from their mistakes enables a culture of continuous improvement. This not only helps teams recover and adapt more effectively but also promotes a mindset that values perseverance and creativity.

Conclusion

While its unpredictability and rapid pace may characterise startup culture, it also offers opportunities for innovation, collaboration and professional and personal growth. Embracing a culture of flexibility, learning and resilience allows startups to face challenges effectively and drive forward-thinking solutions.

Startups can also build a strong culture by focusing on core values, fostering a supportive work environment and encouraging a mindset that sees failures as stepping stones. Maintaining these principles will be key to thriving in such a competitive landscape.