Culture & Startups

Last week I was kindly invited by Ross Bailey to participate in a panel at the Appear Here offices, featuring Mark Evans of Balderton, Russell Buckley of Ballpark Ventures and myself. Despite feeling outsmarted by two of the best in the business, the common denominator between us three was that we had all invested in Ross and Appear Here at different times and stages.

Me reading an extract from the original Appear Here investment note dated Dec ’12.

The idea of the session was to expose the entire Appear Here team to some of the strategic thinking that goes on between management and investors, which rarely makes it through all the ranks of a company, and at best gets ‘massaged’ down. It was also an opportunity for the team to ask us investors some difficult questions.

Ross showing off his white teeth to the team, while Mark tells it how it is.

Interestingly, and unexpectedly for me, we ended up talking mostly about company culture. Ross has always been religious about it since the very early days of Appear Here, I know that because I got involved with Appear Here when it was just him and a few slides, so I have had the privilege to see the baby grow from its very early days: from his obsession with style, design, look & feel, to messaging, choice of words and, later on as growth kicked in, hiring, office layout, parties etc. Today the Appear Here culture transpires consistently across every single touch point with every stakeholder, from the website to the office to the employees.

Nice touch, the morning after the Appear Here summer party.

Nice touch, the morning after the Appear Here summer party.

It’s very hard to define what culture actually means for a company, it’s often not immediately tangible, it’s the result of multiple different things all contributing to it over time, and it’s often very hard, if not impossible, to quantify the monetary impact of having (or not having) one. There also is no widely accepted way of going about building one. What’s clear though is that some of the most successful companies out there happen to have a great company culture, unique and native to them, which has followed them consistently throughout the years. People tend to think these companies have a great culture because they have been successful, but it’s in fact often the very opposite: they have been successful because they have over-invested in building a culture from the early days, which helped them attract and retain the very best people.

Team dinners at Appear Here offices.

Team dinners at Appear Here offices.

It’s very clear from talking to people the other night, that everyone at Appear Here is absolutely delighted to work there, and they all seem to be working incredibly hard and passionately for that reason.

We also talked about a high profile startup, with scale and hundreds of employees by now, who is having a very hard time with culture at the moment. Its founder never really thought culture was a critical factor to its success, and as a result it was never treated as a priority over hard work, growth, processes and KPIs. Now that they have reached scale, they realised they have a problem and that its employees are complaining about the company culture (or the absence of it), and some (many) are leaving. They tried to react by injecting culture, almost artificially, but it does not seem to be working. Culture is not something you can turn on on tap, it’s something that matures with time. There are no shortcuts to it.

Appear Here never had a significant amount of funding until they raised their Series A from Balderton in November 2014, and yet they managed to create a strong culture from the early days, being scrappy, creative and resourceful.

As investor I often get dragged into over-analysing unit economics of a business, addressable market sizes, competitive landscape etc when culture, or the founders’ ability to create a culture that attracts and retains talent, is often the most determining success factor, certainly in the long term. The skill of spotting entrepreneurs that have that innate ability before it’s obvious cannot be learnt at school or from books, it only comes with years and years of experience. I’m still learning…

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