Why a ‘Startup Culture’ Is Not Sustainable

Working in a true startup environment is an intense and demanding experience. Businesses in their early stages require a tremendous amount of effort and focus at the jump off point. It takes a very specific type of person to be successful in this environment. Furthermore, the first five or ten employees at an ambitious startup need to be true A players. These first-wave employees are people who buy into the vision of the company; they are highly capable and willing to put in the work. They’re talented, but, in my experience, they also operate with a kind of a chip on their shoulder- something to prove. There is an incredible focus and willpower. It’s almost as if the initial group at a company uses brute force to set the wheels in motion.

It’s no surprise that we often refer to a business “getting off the ground.” Think about a plane taking off the runway. Because of the vessel’s sheer size and mass, you have to build lots of speed and energy to get it in the air. However, once the plane is “off the ground,” it requires less energy than that initial push. The pilot can go on “cruise control.”

Like a plane, a business isn’t going to need that same kind of furious activity, focus, and effort after it “gets off the ground” and gets out of the preliminary stages. The role of the entrepreneur is to assess where the company is in its progression and to apply the right amount of energy to keep it on the correct trajectory. Of course, the entrepreneur must also assess goals; the more aggressive the goals are, the more demanding the environment will be.

In the startups I have seen, it is not uncommon for the founders to truly be working 70-90 hours per week of real work in the early stages. However, as this business matures, you would expect the people coming in after a few years to be more “normal.” When I say “normal,” that’s not a pejorative or condescending term; the majority of people in the world want to have an average work load and a healthy work-life balance. There’s absolutely nothing wrong with that. In fact, the entrepreneurs and first wave employees may also want to throttle back to a more normal life at some point. The truth is that you can only go full-tilt so long before you start dealing with burnout and disillusionment.

So when is the right time to start dialing back the intensity at your organization? In my experience, lessened intensity should be in direct proportion to cash flow and the goals of the company. If a business is cash flow positive, there is inherently less pressure on an organization; they’re not forced to drive as hard. Yet, if the goals of the company remain aggressive, the culture will still be demanding.

A high growth company between one and six years old might expect to double in sales each year for the first 5-6 years. During this time, the organization leans on first wave employees to get the plane in the air. After six years or so, the management of a high growth organization becomes much more complex and nuanced. At this point in the company’s life cycle, an entrepreneur cannot expect that every new player is going to work startup hours, but he or she has to expect above average effort and talent if the founders want the company to grow rapidly (which, after the first five years, might be between 25-45% a year). Depending on cash flow and other factors, the company may not be able to afford to fully dial back the intensity.

It’s very difficult to quantify work expectations for these mid-stage organizations (between six and ten years of operation), because they depend on so many factors. This is less science than it is art.

For example, companies with a flagship product in a huge market might have less pressure on performance, particularly if the product represents something unique and something that customers need. As a specific example, SAS, a large, privately held technology company located in Cary, NC, has a product platform with an exceptionally high renewal rate. The renewal rate alone would put less pressure on the company’s culture and its people. Unfortunately, most companies, even high growth ones, don’t have these kinds of metrics or luck.

What an entrepreneur might do is to divide the company into quadrants based upon the expectations of the company and its employees. With each quadrant, you might place different amounts of emphasis and strain. Who can take the extra pressure? Who can’t? Where can we afford to take our foot of the pedal? Where do we need to keep the intensity on full tilt? This requires thought and a surgical approach to the company.

But regardless of the system that is put in place, one of the biggest mistakes entrepreneurs can make is trying keep the exact same level of intensity throughout the entire life cycle of their businesses. What gets a company from $0 to $1 million is much different than what gets it from $1 million to $10 million. Leave the “startup culture” jargon in your recruiting materials if you like (it seems to be a popular buzz word these days). But, don’t fall into the trap of self-deception that you’ll be able to duplicate the same level of intensity through your growth years. Be flexible and adaptable.

The plane is in the air; you need finesse, not brute force, to get it to its destination.