Generally speaking, there are two approaches to relating to other people in the business world. The first approach is transactional and legalistic: work is primarily an exchange of labor for money, and agreements are made via contracts. Enforcement is provided by organizations, especially the legal system. The second approach relies on trust, verbal agreements, reputation and norms, and looks to the community to provide enforcement when necessary.
In the startup world, the latter approach dominates. It is almost unheard of, for example, to see entrepreneurs or VCs sue each other. The ones who do tend to leave the startup world, either by choice or by having ruined their reputation. It is very rare to see someone in the startup world break a verbal agreement. And, in most cases, employees and employers show loyalty far beyond what is seen in larger companies or what is economically “rational.” (Most startups do spend considerable legal fees on financing, employee, and IP documents, but that is mostly because they know that those are necessary if they decide to sell themselves to a large company where the legalistic approach dominates.)
For this reason, if you are an employee working at a startup where the managers are honest, inclusive and fair, you should disregard everything you’ve learned about proper behavior from people outside of the startup world.
For example, let’s suppose you are a two years out of college and have a job at a startup. You like your job but decide you want to go to graduate school. The big company legalistic types will tell you to secretly send in your applications, and, if you get accepted and decide to attend, give your boss two weeks notice.
What you should instead do is talk to your boss as soon as you are seriously considering graduate school. Give them twelve months notice. Any good startup manager won’t fire you, and in fact will go out of her way to help you get into school and get a good job afterwards. They will appreciate your honesty and the fact that you gave them plenty of time to find a replacement.
(Now don’t get me wrong: if you work for bosses who have a legalistic, transactional mindset, by all means give two weeks notice. I gave 4 months notice once to a boss with that mindset and was duly punished for it. But hopefully if you are at a startup you work with people who have the startup, relationship-centric mindset.)
This way of relating to other people is one of the main things people are talking about when they talk about “startup culture.” It is why so many people coming from other industries have difficulty fitting into startups (especially people coming from Wall Street where the transactional mindset is at its most extreme). I personally find the community approach a much nicer way to operate, and try to only professionally associate myself with people who prefer that approach as well.
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One issue arises when you *think* your bosses are understanding but they end up having the legalistic, transactional mindset.
For example, I got in to school, gave 2.5 months notice, and was promptly put on the sidelines for all future projects. I was punished too. And there are few things worse than going to work and sitting in a cubicle doing nothing.
Your advice makes sense, but in the abstract. Unless you really think you've got the pulse down of your boss and company, I would caution people to give the standard (minimum) notice. I wish it were different, but better safe than sorry.
Solid insight, Chris. I think your distinction is generally applicable to East Coast vs. West Coast as well. As a corporate lawyer for nearly eight years at two major law firms in New York City, I was obviously in the transactional and legalistic world. When I moved out here to California, however, and launched my own firm, I felt like I entered a “relationship-centric” world (and not just at startups). Indeed, there are significantly more deals here built on a “handshake” and one’s “word” — and a lot less concern with respect to the legal documentation. Clearly, there is some risk to such approach, but it requires the lawyers here to focus more on the key issues and not spend so much time on the minor stuff (which is good for the guys paying the legal bills). Many thanks, Scott
I have learned one thing in my career working for startups: if my document stack to sign and fill out includes more than 2 pages of non-government mandated stuff (say a basic NDA/IP assignment), it is almost guaranteed there will be crappy experience with the company. You let lawyers run your company and you forget how to hire for trust.
I am an operations guy, I supposed to execute the vision of the founders. If you need docs to trust me, than you have no idea what ops people are.
Story I wanted to share is about an awesome startup I left in Chicago with founder who really “got it”.
My wife started interviewing for her post-doc (it is what you do after a PhD) with some top institutions around the country and I knew not a single one of them was in Chicago. So 6 months before I actually moved, I told founders about it. All I heard from the guys was: “so you will make sure everything is taken care off and transitions is smooth?”. That was it! I had an awesome going away party. Pretty awesome, since I was employee #20 and by the time I left, we had 120+.
Before I left, one of the founders just asked me to at least let me know, if I was joining a direct competitor and do my best not to divulge “the secret sauce”. After 2+ years working with the guys, I would have never dared to do that to them.
Great story.
Yeah, makes sense. East coast is so dominated by Wall Street where the mindset is the most transactional.
I agree. Ideally your bosses are explicit about their attitude and you see it practiced with other people. I explicitly tell people at Hunch to please give “12 months notice,” and then also cite examples of past employees at prior companies who did that and who we helped go on to do other things (a offer references in case they want to talk to them).
I completely agree! Once in a while you may encounter a “relationship-building” boss in the larger corporate world– and you pretty much know when you have that kind of relationship with someone. Start ups have to be more “community” oriented because of the uncertainty and long hours required. You want your people to do well, be better, and grow – both in and out of the organization. Great distinctions Chris. Thanks for the post.
Scott, as a recent transplant to NY after a bunch of years in startups in the Bay Area and LA. I think the world of a handshake is very much true of the entertainment business in LA, less so of SF. And happily, I say that my experience here in NY is a good one with a startup culture mentality very strong. It was great to find.
I don't agree with the Wall Street point. On Wall Street, most newly minted college grads will leave to go to grad school (or do something else) after two or three years. Employers expect it. The major banks even have infrastructure set up to help them do this since it helps their on-campus recruiting efforts. Now if you are an Associate or above thinking about jumping to a competitor, that is a different story, but I doubt that such scenario would unfold any differently in California.
Chris your introductory description of the startup culture is incredibly appealing to folks like myself. If at all possible I'd like to transition that work vibe into something sustainable. It would be a shame if trust, and one's word and honesty were the price of scaling a business.
Thanks, Chris.
If I find another startup like that in Boston, I will drop all my operations consulting stuff and hop on board. 2 years in Boston and I am yet to see one with that kind of culture and level of trust. I thought I found one in '08, but after 7 months it ended up being a dud.
A good boutique IB is all relationship / trust based as well
Chris-
I agree with your point and experienced it first hand as I decided to leave AND 1 and start my own company. Lots of notice and lots of support. It is interesting that you contrast this with Wall St. because recently Umair Haque suggested Wall Street will need to move in the direction of the start-up culture to survive:
http://blogs.harvardbusiness.org/haque/2009/04/...
I specifically find his description of an “Edge Fund” to be close to what VC's should aspire to and entrepreneurs should look for in all their partnerships (financial and otherwise) as well as internal cultures.
“An edge fund is the opposite of a hedge fund. Where hedge funds are opaque, edge funds are transparent. Where hedge funds are closed, edge funds are open. Where hedge funds are run for near-term gains, edge funds are in it for the long run. Where hedge funds create artificial book value, edge funds create value that accrues to real people and society. Where hedge funds focus on long and short transactions, edge funds focus on relationships.”
[...] From cdixon.org [...]
Chris, I agree completely the startup mentality can lead to a type of interaction that is usually not possible in a larger company. For example, at my first startup, I was promoted twice and had my option grant essentially doubled within the first year based on performance without any formal review–it was a big boost to morale as well as loyalty and that type of thing would not have happened at a larger company, regardless of the mindset.
[...] approach of startups vs. the “legalistic, transactional mindset” in a post titled “Twelve Months Notice”: For example, let’s suppose you are a two years out of college and have a job at a startup. You [...]
How do you build a culture like this? Clearly the transactional, two week notice thing arose for a reason. How do you stop it, even in large companies? The benefit of such a system is that it provides relationships across even large organizations, probably necessary for a good deal of work, and it makes people feel less isolated- so how do you promote this culture?
Chris, I just came across your blog, silly me! I agree 100% with your approach and it is what I have always tried to 'teach' to my teams. Personally, I worked in 2 start ups. The first one had the 'start up' mentality; it grew big and successful. We all learnt and benefited financially and professionally from the culture we created. The second start up thought it was a large company and acted as one. It crashed and burned and we all lost. Probably there are many reasons for the success of one and the failure of the other but I am sure culture was one of the most important determining factors.
I literally just heard that from a banker last night. The Culture changed radically. Not sure if it is for the better or for the worse.
We need communities to feed us and make us strong- they make us connected.
We also need institutions- they last, the systems they use are the ones that make communities strong. They have the memes in them that communities are build on.
If I had a choice, as sad as it would be, it would t be to build a community that is transformative in that it's end goal is to become an institution, large, heavy, and not so fun.
In it though is the rich earth that others can draw upon to be the seeds of something greater and innovative, because I gave them a platform to build it on. I gave them a source culture of how it's done, and how it's understood.
But I'm weird.
[...] based on relationships and there is a real team environment. I love nothing more than seeing this kind of trust spread throughout the company as it is essential to the success of the [...]
As a former banker, it took me a long time to understand the difference you have so eloquently laid out here. Operating from a sense of trust and mutual success is completely foreign to most of the developed business world. I think it's mostly due to the fact that being successful in the startup world requires you to deprioritize low-value b.s.
As a former banker, it took me a long time to understand the difference you have so eloquently laid out here. Operating from a sense of trust and mutual success is completely foreign to most of the developed business world. I think it's mostly due to the fact that being successful in the startup world requires you to deprioritize low-value b.s.
[...] and unattractive. Lerner points to a post by fellow entrepreneur and investor Chris Dixon who writes that the Silicon Valley startup scene has become increasingly based on trust and community as [...]
[...] and unattractive. Lerner points to a post by fellow entrepreneur and investor Chris Dixon who writes that the Silicon Valley startup scene has become increasingly based on trust and community as [...]
[...] Dixon suggested 12 months last October on his blog in a post titled Twelve months notice. Chris writes, “For this reason, if you are an employee working at a startup where the [...]
[...] Chris Dixon, an early-stage investor and founder of the web site Hunch. The first, Dixon explains on his blog, is a transactional/legalistic approach to business that exchanges labor for money in the form of a [...]
[...] Chris Dixon, an early-stage investor and founder of the web site Hunch. The first, Dixon explains on his blog, is a transactional/legalistic approach to business that exchanges labor for money in the form of a [...]
[...] Twelve months notice (cdixon.org) [...]