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Entrepreneur: Thinking Culture

by Miki Saxon

270663_a_good_time_to_start_somethingLast week “Ben” wrote me in response to my answer on Quora.

Hi Miki,

I saw your post (on quora) and was wondering if you can help me out. I’m starting an online business and I’m working with a great developer but is requesting a large potion of future earnings (profit). Let me be honest, he is the heart of the project and it was not easy to find him… (so i’m happy).

We are still at the beginning – so no profits are coming in yet but we can see that the business has potential to really make it.

He is barely charging me for the work he is doing now but i still would like to work on a smart package that will keep him in the game for a long time.

We emailed a bit and then started chatting (he is overseas) and, with Ben’s permission, I want to share our last two conversations, because they illustrate why it is so important to do culture from the start.

The first part of our conversation addressed the importance of finding out exactly what the developer meant by “earnings.” I warned Ben that there are many ways of figuring earnings, which means that the number can be easily manipulated, so it was crucial that they jointly decide on exactly what was meant.

Then I asked about culture, because compensation, especially equity, should reflect and support the values and culture of the company. Here is a shortened version of the conversation.

Miki: Have you thought about the culture you want in the company?

Ben: what do you mean?

Miki: Every company has a culture, “the ay things are done here” and the culture usually reflects the values of the founder. For example, everyone talks about having a ‘fair’ company, but if you don’t craft your policies to reflect/enforce that then it ends up as nothing more than talk.

Ben: ok, im not really sure then how im to “craft” it. i think im kinda lost. im really just trying to pick up this cool idea that i have and i KNOW will work (im sure you have heard that before.) i didnt thin i was going to run into these issues right now

Miki: Does the guy you are working with ‘fit’ you? Does he have the same beliefs about the kind of place he wants to work?

Ben: what do you mean “in the kind of place?”

Miki: mood, attitude, how you are treated. Remember your old bosses? You don’t want to hire someone later who thinks like one of them, do you?

Ben: no! im not just saying this about myself, im very fair! i dont think he knows that about me yet. i think he is a good person and we have a good connection and i like him as a person. he has good values

Miki: Good!

Ben: but i guess we still need to work on trust right now

Miki: Trust is a value. By looking at his values and your values you will start to see what you want in your culture; and you should make a list.

Ben: im starting to understand what yr talking about

Miki: You can also use your culture to screen new hires, because you don’t want to hire people with opposite values

Miki: I’ve known managers who sow distrust, it’s the way they manage, and some who talk fair, but play favorites. The neat part is that you can build your policies, such as compensation, to reflect and support the values you want and then talk about them when interviewing and people who don’t “fit” won’t join

Ben: i get it

Miki: I thought you would. Build your infrastructure from the start and it’s easy.

Ben: but in my case even if i give him a high % its not going to give him power in the company

Miki: Don’t think that way. From what you say he has power, he can leave or threaten to leave. You don’t want to run your company by power, you want a culture that draws employees in and focuses them on the company’s success and you want to have fun at work or why would you work that hard?

Ben: agreed

Miki: The ‘experts’ have finally caught up with workers and are saying that “culture trumps strategy” and “culture is why company’s succeed” etc. There is a saying that people quit bosses, not companies.

Ben: how true

Miki: Even in a company with a great culture a jerk can create a lousy one below himself. Another thing, money won’t hold someone if they are unhappy and those who join you just for money will leave for more money, because they aren’t invested in the company.

Ben: i know! :)

Miki: So part of holding your guy is creating a place he LOVES and to do that you need to know what he loves.

Ben: ok… so i should be talking to him for a second tonight but i will brush him off and meet with him on Sunday because i dont want to do it over the phone

Miki: Don’t brush him off! Tell him you are working on a fair way to handle the equity and one that will affect the future. Tell him enough to know what you are doing (research, thinking, etc.), so you can build trust; the more transparent your are the better. Just take it slow and give you both time to think, offer thoughts and discuss. That helps build trust on both sides.

Ben: sounds better your way

(End of first conversation)

Ben: we could not meet at the end so we v-chatted on skype and talked a little. we both felt that we will get to an understanding and we are wasting time… he started working on the platform and we are going to meet as soon as we can.

Ben: i red the other stuff [links to various posts about culture] you gave me …

Miki: Was it helpful?

Ben: yes!

Miki: I’m glad

Ben: its getting me talking in a diff way

Miki: GOOD! Something to remember is that it’s easier to do it right at the beginning than fix it later

Ben: yes… i kinda feel ok that he has started on it. i really think we will work things out

Miki: Be sure to ask him to make a list of his most important attitudes/values to have at work, stuff like fairness, merit, etc.

Ben: i know, but that sounds like a test and when the guy is about my age its going to come off the wrong way…

Miki: No, not if you have examples to show him and explain that you want to build a good culture and to do that you need to identify the most important values, prioritize them and then create a culture that fosters them with a small amount of policy and process that enforces them. For example: It’s great to say “we treat our people fairly” but if the equity is handed out based on charm or prejudice or whim it’s not fair. So what you ask him is what values does he want to see built into the company culture, what is important to him. You don’t just ask for a list:) You create a conversation so he understands what you are working to do and that you want him to be involved in it. One of the least transparent things that managers do is ask for information without explaining why they want it. Does that make more sense?

Ben: yes, send more links

Any of you, or your friends, who are doing a startup should follow Ben’s lead and work on your culture from the beginning. If you would like the list of links I sent Ben, just let me know, either in comments or drop me an email.

I’ll keep you posted on how this goes.

Be sure to join us tomorrow on If the Shoe Fits for a look at Matt Weeks view of the social contract, an integral part of any culture.

Stock.xchng image credit: arkitekt

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