Image 2021 05 18 T13 46 34

Blog

The 5 biggest perils of tech start up culture

James Kenealey startups

Image 2021 05 18 T13 46 34

​There are a lot of stereotypes that people think of when someone mentions a ‘tech start-up’.

Many of these stereotypes can be very positive. Company culture is one of the driving factors for recruiting the right tech candidates and making sure yours is attractive to the kinds of people you want to employ is crucial.

Often, tech start up culture shapes up in a certain way often because tech-focused individuals (increasingly dominated by millennials and Gen Z-ers) tend to thrive best under certain conditions. This can be a combination of factors, from a more relaxed atmosphere to flatter management structures.

However, it’s important to remember that there are hidden perils associated with tech start up culture that can be detrimental to performance and ultimately success. We highlight five key issues that can be faced – and how to remedy them:

Overspending

If your tech start up has recently received it's first round of funding or is in its very earliest days, the temptation can be to spend lots of money on ‘company culture’ related paraphernalia. A great open plan office space with plenty of leisure activities, breakout areas with games machines and indoor sports can be great (not to mention really enticing to potential hires) but spending a lot of money early doors can be very troublesome, particularly if your product hasn’t launched yet.

Concentrate on what is important at the start – getting your product finished and launched. Without sufficient revenue, your business can’t succeed. Concentrating on the wrong thing early on can distract from this and make employees lose focus. Get the product out there and commercially successful. The vintage arcade machines can follow.

A culture that’s too relaxed

Flexible company culture can be great. Without the rigidity of a more formal corporate organisation, teams can thrive and be as creative as they want, setting their own working conditions and even hours. Often in a looser culture, employees buy into the start up as if it were their own, taking personal ownership of the successes and dedicating just as much (often much more) time than they would in a standard 9am – 5pm.

However, the potential drawbacks of this are clear. Allowing informality and flexibility to go too far can lead to a loss of productivity and drive. Striking a balance is key, because a company culture lacking in basic rules can quickly descend into a very expensive house party.

Who’s the boss?

According to research, millennials are changing the power structures of the workplace. The whitepaper ‘Millennials at Work’ by PricewaterhouseCoopers states that:

“Millennials tend to be uncomfortable with rigid corporate structures and turned off by information silos. They expect rapid progression, a varied and interesting career and constant feedback. In other words, millennials want a management style and corporate culture that is markedly different from anything that has gone before.”

Rather than a traditional hierarchy, the ‘holocracy’ of a flat management structure allows for a function-based organisation, with a focus on the product rather than chains of command. Given the prevalence of millennials within tech start ups, this is often the structure they ultimately adopt, as a group of individuals who collaborate towards an end goal.

One issue that can arise from this is that as soon as there is a problem that requires decision, it is unclear who is meant to be steering the ship and making said decision. This can lead to everything falling apart very quickly. Leadership is necessary for when immediate decisions needs to be made, so make sure, however flat your structure, that you have someone ultimately holding the reins.

Emotional decision making

We understand – your tech start up is your baby. The culture can feel a lot more like family than a lot of corporate businesses, and a laid-back atmosphere can be valuable and productive. That said, a family feel can make it a lot more tricky to make difficult decisions, particularly if it comes to having to let an employee go who isn't performing.

As difficult as it may be, the success of the business must come first, particularly in the early days when revenue isn’t guaranteed. If a colleague isn’t pulling their weight, it’s important to put the emotional element aside and make the best decision for the business. Set expectations, boundaries and KPI’s to make sure everyone is on the same page and limit the emotional decision making.

Overtime, the whole time

A tech start up can be a busy and stressful place. There is a lot of pressure, particularly in the early months as the team race to develop the product. With a more casual culture potentially allowing people to be more flexible with their working hours, it’s important to make sure that members of the team aren’t working overtime, all the time.

Making the office a desirable place to be is great, but it’s important that people maintain a work-life balance. Make sure people are working realistic hours, even during busy times. It can be tempting for employees themselves to put the extra hours in, and that’s fine in moderation. Tech start up employees are known for their drive and investment in making the business work – it’s just important that this doesn’t spill over in unhealthy working practices.

Finally, it’s important to remember that the stereotypical tech start up culture attitude is not for every business. Grow organically, find out what works and monitor it. If it’s done correctly the results can be an incredibly happy, productive team that will innovate at a rapid pace. Just be careful to avoid the common pitfalls.

Find out how Morson can be your partner to the possible and help scale your business through our Recruitment Process Outsourcing brand, RPOne.