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I have been starting companies since I was 20 years old, about 20 years ago. There have been some seminal aha! moments along this journey.

One of these moments was when I learned about the SouthWest Airlines business culture. Hire for attitude, train for skill. The customer isn’t king,  your employees are. Treat your employees well, and they will take care of the customer. “Always treat your employees exactly as you want them to treat your best customers.” Stephen Covey

Yet another aha! moment occurred at a prior company, where I was a principal, I was deeply stung when senior engineering talent began leaving our company, giving up equity and working elsewhere for less money and fewer benefits. I realized something was terribly wrong with the culture. LEADERSHIT (a poignant typo describing the absence of leadership) was the problem. Poor management = poor culture = crash and burn! After this, I began my love affair and obsession with the best practices of culture.  

In an email exchange I had with a fellow entrepreneur, I discovered an interesting point about culture and why it IS important. Here is what he wrote; “I think the valley, and we as tech entrepreneurs, put too much emphasis on culture. There are lots of successful companies that don’t pay any attention to culture. For example, the equipment rental company down the street, I don’t think the owner of the equipment rental company cares much if his employees are being engaged or not! Yet he has a perfectly viable company.”

I responded to my friend with this; “When I’m talking about culture for a company I’m talking about having founders and early employees aligned with the same vision and values. With the right mission and culture you will attract the ‘right’ people for your organization, whether it be an equipment rental company or a software company. Case in point, John Wooden didn’t recruit at UCLA. He built the organization and culture and the ‘right’ players found their way to him. Kareem and Walton actually recruited UCLA. The wrong fits, if they made it through, were quickly identified by the team members or the organization that Wooden built, not necessarily John Wooden himself.”

This is the only way to scale a company and stay true to the mission. Put a stake in the ground and be disciplined about what you stand for and especially what you don’t stand for. This can be very difficult when you have immediate hiring needs. I’ve settled in the past, for a hire that was just “good enough” and I’ve deeply regretted doing so every time. If you do it enough, you will quickly discover what Guy Kawasaki describes as a “bozo explosion”, or Marc Andreesen’s “Law Of Crappy People”. This is a propagation of unfit employees that trickles down from a few, or even one bad hire.

Great companies hire and fire based on values. Remember Peter Thiel’s Law: “A startup messed up at its foundation cannot be fixed”.  Having kegerators, food and video games all mean nothing if management are a bunch of assholes and the culture is a me-first rat-ship where nobody wants to work. Again, founders and early employees must be in alignment and drink the culture Kool-Aid; this is paramount. Experience has taught me that fringe benefits do not a culture make. Neither does money. Neither does fun.

The good news is, being a good person and creating a great workplace don’t cost money. This is something that startups and small companies HAVE to do to be able to attract and retain talent. We, as entrepreneurs and SMB owners, will never be able to win an arms race with Facebook, Google et al. But we can get the requisite talent if we create our own unique culture that attracts the right people to our cause,  mission and company.

P.S. In 3 minutes, John Doerr describes what to look for when joining a company and differing cultures. –