Dharmesh Shah argues startups should obsess over culture from day one because people determine success. HubSpot's approach: radical transparency (decisions still have owners), random desk assignments to kill office politics, and one rule: "use good judgment" instead of rulebooks. A few hours spent designing culture early pays off across hundreds of employees.
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Talk to startups, most of them don't spend a lot of time thinking about culture and thinking about people. It's like, we've got 1,000 things to do. We're trying to raise funding, we're trying to build product, we're trying to find co-founders, all those things that are happening in early-stage land. And I'm going to posit to you that despite all those reasons, that not only should you think about culture, you should obsess over it as early in the process as possible. People is the thing that will cause the startup to succeed or fail, and the culture is going to define your overall probability of success. More than most other things that we will do, and so the approach we took in terms of culture resulted in this deck called HubSpot Culture Code. So the first thing we recognized was that all of us and people that work for companies and startups all over had kind of dramatically changed how they live and work. In the left column are the things that people used to care about; that was their thing. In the right column is the way they are now. And most of you will have, especially the younger generation, will nod your heads like, yeah, I can't believe, what's a pension? What is that? It's inconceivable to any of us that we're going to spend an entire career. People did this, by the way, back in the day. They spent their entire professional career in one company. And so our reaction was like, okay, well, it looks like a lot of these companies are essentially frozen in time. They've got this thing that they're doing that makes no sense for the current reality in terms of the people that are working there, people they want to attract. It just doesn't make any sense. This one is crucial. I love this quote. And the idea here is most of the dysfunctions that exist in a startup or a company of any size, most of them happen in dark corners behind closed doors. And if you can shine light into those things that are happening right now, the likelihood of stupidity, just flat-out stupidity, goes down. As a result of that, we made the decision early on in the company to share just about everything with everyone, period. A lot of people don't do— we start off just my co-founder and I, we're in this room with 4 desks. Then we hired the first employee. It's like, okay, well, where should that person sit? So what we did is like we had this hack. It's like, okay, what we'll do is we'll do a random lottery and we'll pick desks. As your turn came up in the lottery, you got to pick whichever of the open desks were left. And then what we did was like, okay, well, every time we hire someone, we're going to go reshuffle desks. And all along the way, people told us, well, that's just crazy. Like, yeah, it worked at 10 people, maybe 50. I don't know how you do it. 200 people, 400 people, and we kept going. And if I think back on it now in terms of like simple hacks, can you imagine the countless hours that has saved just from raw office politics? The other one that's interesting, so we have this kind of hyper-transparent culture of share everything, and this is something we had to add later in the deck because there was much confusion around it. It's like, well, Dharmesh, I thought we were transparent, but then this decision gets made and I don't remember being asked for like a vote. It's like, well, no, transparency means we will tell you how the process works, what's going into it, but someone owns that decision. We do not make decisions by consensus. Someone owns it and we trust them to make the right decision. So transparency is not the same thing as democracy. As we were growing, it's like, okay, well, we have to like do things and have some guidelines around sick time and vacations. And we didn't have that as we were growing. It's like our chief counsel and our CFO said, okay, well, now is the time to start writing down, like get an employee manual together and put all this stuff together. We need guidelines. And we said, we don't want to do that. So we made exactly 3 words as our policy for everything unless otherwise stated, which is use good judgment. That's it. Cultures exist, period, anytime more than one person together. And with a few calories— I'm not suggesting you go off and spend hundreds of hours, but every hour, 5 hours, 10 hours you spend in those early days have dramatic leverage. So might as well build a culture you're going to love and build a company you want to work for and work in.
