Stop pretending it’s all a party: The social contract of working at a startup

Stop pretending it’s all a party: The social contract of working at a startup

ON JUNE 25, 2013

Perhaps it’s because I’ve worked my whole career in media and startups. But I’m having a hard time getting super lathered up about Bloomberg’s takedown of what it is like to work at Fab.

Don’t hang your jacket on the back of a chair? Don’t use a certain font in emails?Those are friendly suggestions compared to having to walk into the Conde Nast building everyday. A friend who worked for a Conde Nast publication (and is thin, gorgeous, and always impeccably dressed) said walking into the cafeteria was worse than the most mean girls high school. The anxiety of getting sized up everyday in the elevator was a big reason she sought another job. Key words: Sought another job.Conde Nast gets away with this, because fashion is core to its brand. Hard to argue that Fab doesn’t have the same brand association.

But let’s not stop at Conde Nast. Journalism is typically a profession where you are allowed to be shlubby. Before I worked for myself, I’d typically look decent if I were meeting with a source, but “decent” could include jeans with cute shoes and a blazer. The first time I went to work out of BusinessWeek’s New York offices, I knew I’d need to step it up a little  bit. The East Coast is more formal — I get that. But my “stepped up” dressing up was also reprimanded. I wore some black heels with a small peep toe opening at the tip, and I was reprimanded as if I were wearing flip flops. For what…protecting the BusinessWeek fashion brand?

And while we’re at it….how about Bloomberg? It’s known as a place that pays well and gives lavish spreads of food, because it is such a demanding environment. You accept that going in. Were the same article written to be written about Bloomberg as Bloomberg just wrote about Fab I have no doubt the management there would display the same “haters gonna hate” defensiveness that Fab’s Jason Goldberg displayed on his blog today.

Companies are living organisms. They are persnickety. There are pros and cons of them, things that fly and things that don’t. No two are alike. And whether you like to work there or not depends on you. That’s true for every company, but it’s particularly true for startups.

Startups are like newborns. I can’t expect my toddler to control his rage when he’s not getting his way, but I do expect my husband to. Similarly, companies evolve as they age. With older companies where there’s been a succession of management who serve as custodians of a corporate culture learning from mistakes and adjusting.

Startups are raw outgrowths of founders’ personalities, pure and simple. The best startups are haunted by their founders’ flaws, but those same founders’ unique strengths are why the companies excel. Take the double-edged sword of Steve Jobs’ perfectionism. As VCs who back imperfect founder CEOs will tell you, you take the bad or you don’t get the good.

This isn’t just true when it comes to creating companies. Read this story about Soprano’s creator David Chase. He was reportedly a monster to work with. You could suck it up and work on something amazing that changed television or go elsewhere and just enjoy watching the Sopranos. People chose both.

Companies like Yahoo and Google and Facebook and Fab and Airbnb and Github aren’t just reinventing their industries, they are reinventing what it’s like to work in a major corporation in America. A lot of those changes are good. But don’t expect a company to have the upside of recreating the way things have been done, and then get mad when they aren’t doing things the way everyone else has always done them. You simply can’t have it both ways. Big corporations always yearn to be more “startup like.” But part of what makes them less startup like is the process that’s crept into place over decades to make sure no one ever gets offended or rankled.

For people like me, this is why startups are fun to write about a be in. For others, that’s why startups are a nightmare. Employees need to pick which one they want: A messy mission that could fail or change the world or a predictable, polite place to go from nine to five.

Right or wrong, I laughed when I read this in Goldberg’s blog today:

Claim. An e-mail on Oct. 11 from [co-founder Bradford] Shellhammer, who serves as chief design officer, forbids people from modeling Fab’s products. Employees had been inserting themselves into shots of the company’s wares posted on its website. “If you have time to model, you have time to get fired,” Shellhammer wrote.

Fact. It was a joke. We have about a thousand jokes just like it. “If you have time to xyz, you have time to get fired.” It’s a joke about staying focused and not getting distracted.

I know Shellhammer and could see him saying it as a way of injecting some humor into an email cracking down on employee behavior. But that doesn’t mean it was smart. When you go from a handful of people in a room to hundreds of employees around the globe, don’t expect everyone to get your sense of humor.

Not everything Bloomberg alleges about Fab is funny. And I too have spoken to some departed Fab team members that felt that Goldberg and Shellhammer were difficult to work with. And so they left. No company is for everyone.

The problem with the East Coast media doing stories like these is some of the very real and expected rigors of working at a startup are conflated with reports of people just being jerks. The people writing these stories typically have never worked at — let alone founded — a startup. That means it’s hard to understand that some things simply come with the territory. My team is sick of hearing me say, “That’s life at a startup.” I’m sick of saying it. But none of those desires change the fact that we all work at one and with that comes certain things.

There needs to be a clear social contract when you take a job at a startup. Founders need to be upfront about the bad. You will work longer hours. It will be emotional. You may not get vacations, and even if you do, you may feel pressured not to take them. Your job description is fluid; ditto, org charts. You may not grow along with the company. The goal posts — whether you are in sales or product — are really a suggestion more than a rule. They are subject to change. The company may change what it does over the time you are there.

But one thing won’t change: Who founded the company. Get comfortable with that founder’s personality and ethos before you take a job with them, because it is forever intertwined with the organization, whether the founder is still in charge years later or not. A founder is not merely “a boss.”

In exchange for all of that, you get to help build something. You will likely have more fun than working at other companies. You have the chance to get rich– no matter how slim that chance is. And you have the opportunity to have more responsibility and professional growth than you might on a typical career tract.

That’s pretty much it. You don’t get the latter, without accepting the former.

Startups haven’t helped themselves by glamorizing their companies as great places to work. There is nothing glamorous about building something huge out of nothing in a matter of years. I don’t care how many ice cream machines are scattered around the office or whatever clever motif your conference rooms are designed around.

You can understand why entrepreneurs want to project that working for them is like working for a large company. It takes a lot of people to build a huge, multi-billion dollar company, and many talented people are not risk takers. They need to feel safe. But just like employees can’t have it both ways; founders can’t either.

As evidence of this muddying of expectations, think of how startup compensation has changed over the last 20 years. The entire reason that stock options became standard was because startups were generally cash poor and couldn’t pay as well. Employees traded cash for equity and upside. But most well funded startups — like Fab — are plenty competitive on salaries. Benefits are competitive, too. And the perks generally are far more lavish than larger companies. The better-funded companies in the Valley have beer on tap, personal trainers, massage chairs, in-house baristas, chefs, and more. Some probably sound more like Club Med than work when you go though orientation.

That can set an unrealistic expectation for the hard work of building something. It attacks a different mindset to the company than what a startup may need. I was recently talking to someone at a young company looking to hire a candidate who wanted competitive compensation from his last job and also more equity than the company wanted to give. I made the point that that should really be an either/or, and if the cash-constrained startup were being asked to pay a huge salary, more equity should be off the table. In other words, allow the candidate to pick one: Money now or upside later. This person actually said, “I don’t think the amount of equity offered should have anything to do with the level of compensation.”

WTF??? Equity is compensation! I almost jumped out of my skin. When did equity in startups start to become a right and not part of an overall compensation package?

One of my big learnings as a first-time CEO is a version of what Tony Hsieh does at Zappos. He famously trains people and then offers them thousands of dollars not to take the job. We don’t have the resources for that, but I have started to tell people up front every reason people haven’t worked out here and every reason they might hate the job. I no longer try to sell people on the vision. I want people who get the vision enough that they still want to work here even though I tell them every reason they shouldn’t. I present working here as an acquired taste. It makes hiring slower, but even when it doesn’t work out, people leave on better terms.

There’s an easy two-step process for Fab — or any other startup — to avoid heartache and drama like the one that’s played out in the press this week and previously for companies like Zynga, who’ve been attacked for their culture.

1. Tell people up front what they are getting into. If you lay down the ground rules for what working at Fab is like, people can complain, but others will defend you. It’s inconsistency that people rankle at. Goals posts are always going to be moved — that’s the nature of a fast growing company. But the culture should stand for something. If we hired people promising them we focus on quality over volume and then started demanding link-bait headlines and nine posts per day, they’d have every right to bitch. But no one going to Business Insider has a right to bitch about doing those things. Likewise, if Fab tells you up-front they want staff to look and act a certain way and treat the office a certain way, because it’s core to the brand, don’t accept the job if you have an issue with it. If you accept the job, don’t bitch about it.

2. Don’t be a dick. As I said above, there’s a difference between being intense and the chaotic nature of running a startup and just being a dick. I know many CEOs (I won’t name) who hide behind the intensity of a startup as an excuse to act like jerks. There is no excuse for treating your team like shit…consistently. Tempers will flare at startups. Losing your temper can be an inevitable and effective part of building a company. But there is a way to do it and a way not to do it. And if you’re just a dick it’ll self-correct eventually, because you’ll lose your best people.

Companies grow quickly and CEOs grow with them. In the best of cases, things break and tempers flare. Unlike being the custodian of a large pre-existing brand, this is very personal. It’s unfair to hold startups to a rational best practices standard of a large company. Even a company as large and highly valued as Fab. No matter what the valuation is, the truth remains the company didn’t exist a few years ago. No one builds a company that quickly and keeps everyone happy in the process.

Stories like this will get out. There will always be a Bloomberg to write them. The question is whether other people at Fab read it and nodded along or read it and rolled their eyes and said, “Oh, I know exactly who called up Bloomberg and leaked this, that’s so petty.” And while you and I may never know for sure which of those buckets represents reality, at the end of the day we aren’t the ones who matter. It’s Fab’s team that matters.

As many a VC has said in our PandoMonthly talks — most recently Fred Wilson — the only point when you have to change the CEO is when they lose the confidence of the team. You can be Attila the Hun, and if the troops still follow you into battle, your management style is working.

Even the most egomaniacal founder doesn’t think he or she can do this alone.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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