Tim Brady was co-founder of Imagine K12, an edtech accelerator that merged with YC in 2016. Prior to that, Tim was Yahoo's first employee in 1995 and wrote the business plan that attracted Yahoo's first venture capital. Tim spent eight years as Yahoo's Chief Product Officer. He holds a BS in electrical engineering from Stanford and an MBA from Harvard.View the profile
About the talk
YC Partner Tim Brady covers the importance of building a strong and coherent culture early and shares six things that you can do now to help you create a solid foundation for your startup.
Good morning at my name is Tim Brady. I am a partner here at YC group partner, which means I work with the company's during the patch close. Wait, I have started three things prior at one of which was Yahoo back in 1994. So a lot of what I'm going to talk about today stems from from that experience to is Kevin said I want to talk about building culture how to think about it at this stage of your company and and why it's important now culture can be pretty Broadway to find. So let me be super clear on what I'm talking about relief to me culture is just
Behavior. And Company culture and it is that implicit set of behaviors inside of your company. They should inform your employees on how to behave I guess when done right they should inform the employees inside of your company how to behave when it hasn't been explicitly laid out for them. Any good news, if you do it, right if you get a right the right culture the right behaviors will support a good business and hopefully a great business in over the course of your company over the history or
company. It will support that in a lot of kind of intangible ways that are hard even to describe but that's why it's important. That's how you should think about it at this stage. Don't overcomplicate it right? That's really it. So you're probably asking yourselves right at the be at this stage of the company like you have so many things on your plate. You're so busy. It almost seems like a luxury to be thinking about culture right? And that's kind of you're not wrong to be asking that question. And the reason is is
that when your company gets going like these are three phases that you'll be going through as you build your company. All of you really are at this top stage that I called the idea stage right talking to customers iterating the product experimenting iterating the product hopefully raise some money at some point to allow you to continue to do that and at some point in the future, you're going to reach product-market fit, right? If you think back on the product-market fit talk that Michael gave a couple weeks ago and when you do that, hopefully you
raise a whole lot more money and begin scaling the company. Now scaling the company almost always requires hiring a lot of people, right and the people that you have inside of the company prior to hiring a lot of people are really your cultural DNA. Those are the people that are going to be involved in hiring and training that next wave of people. So it's super important that you get it right you get that swai subtitle this kind of the first 20 employees that you get an in. There's no magic to the number 20. It's really that set of
employees that are in place when you begin scaling the company Cuz again those folks are going to be highly involved in hiring and training this next wave. So if you get it, right if it was first set of employees or this embody kind of bee culture in the values that you want inside your company. You have a much higher likelihood of building a strong and coherent culture. The reverse is also true, right if you make mistakes, if you get the wrong types of people inside the company early on they're going to be involved in hiring and training and
those mistakes are going to get propagated. It'll be much harder later on to build the kind of correct horse and try to build a coherent company, right? So that's why it's important to be thinking about now. I know you have a lot on your plate in starting this company, but what you need to do doesn't take a whole lot of time for the most part. It's just some conversations with your co-founder. And so I came up with a list of six things that you can do now to help you or to help the likelihood of you building a strong and coherent culture. First one be
proud of the problem you're solving. Kind of seems silly to say but you need to write if you don't have the problem yourself. You need to identify with the people that do have the problem and you need to be really proud of the fact that you're solving it for them right because building as I'm sure you're going to if you've heard already and you continue to hear building in a building a company's hard, it's a long process and there will be some really difficult times. And if you're not proud of what you're doing, it's really hard to maintain
the level of energy and enthusiasm. You need to sustain the company. Sometimes where we see Founders go wrong as they choose an idea with their ego. I choose an idea because it sounds good to tell their friends at a party. Right and when times get tough, you know, it's really hard to maintain that level of energy and the rate for the reason energy and enthusiasm is important not just for sustaining a company, but everyone around you will see how you feel about the company ran to a large degree that will set the
tone for your culture. A couple of batches back. We had a a y c a lung, and tell his story he went through the Y C program a few years back. He applied with four other guys with the idea of helping retailers liquidate their excess inventory. That was the idea they started with and they did all the right things talk to customers iterated experimented and he raised some money and you got to to search for product Market fit knee continue to to search for product Market fit.
Ultimately, they ended up cancer had a good business for a for a little while, but they also ultimately ended up in the business of makeup for teenage girls. They didn't identify with the problem and when times got tough, I just didn't want to be there right they didn't identify with their customers and eat any told the story of where the employees around him actually came up to him and said, hey, it's like it doesn't look like you're enjoying what you're doing and ultimately they ended up shutting down the company. Next when you do find the
right problem to solve one that you're proud of create a long-term Vision that others will follow. It's much easier to create a great culture if people who identify with the problem, you're solving know, you're solving it the raise their hand and say Hey, I want to be part of what you're doing. We call it kind of but you can call it a Northstar for the company. And say it in a way that will inspire people. It should give purpose to the work you're doing it shouldn't describe the work but it should talk about the purpose of that work. Let me give you a
couple of examples to illustrate what I mean Tesla to accelerate the world's transition to sustainable energy. Pretty inspiring right no mention of an electric vehicle. You know, if you said I were building the world's best electrical vehicle that's good. You inspire a handful of Engineers who who implicitly understand kind of the technical challenges that come with that but if you're going to be a big company, you need to attract kind of a broad array people this does that Another example Microsoft's original a computer on
every desk and every home it's kind of laughable now, but in the early 80s, like this was crazy talk right computers were only for businesses and hobbyists. But this Vision in laid out by Bill Gates and Paul Gallen attracted the right type of people to their company write the hobbyist that had the capability to help them build the type of company. They need to Bill built saw this in a more excited about it attracted and allowed them to kind of build the type of culture that they needed at Microsoft. Last one when you're all familiar with organize the world's information and make it
universally accessible and useful. Again, no mention of the product doesn't say we're building a kickass search engine. All right. So once you're able to come up with some inspiring vision to attract the right people to your company, the next thing you should do is have a conversation with your co-founder about the types of values and behaviors. You want to cultivate inside of your company. Ultimately the purpose of this at this stage in your company is to use as a filter for the hiring process. Right,
it should be a short list and at this stage it's fine that it's informal. If you're lucky enough to to move on and grow like the ultimate leaves maybe this list becomes a more polished corporate values list. This is probably the speed of that but it it's at this stage. It doesn't need to be polished right? You don't need to publish a blog post on it. It just a short list less than five things and this will help you during the hiring process to make sure that you're you're letting the right type of people inside the company, right? This is in addition to that skill list that you'll
need your job to job description the skills that person needs this is, you know above and beyond that. Show me take you through a couple of examples and I apologize. These are actually more corporate value list or a little more polished yours won't need to be this polished Spotify Innovative collaborative sincere passionate and playful. Right, you can see pretty pretty clearly how you can use that settle this that this list to begin screening potential employees. Atlassian right? This is a little different the way they
make the list like it doesn't have to be just adjectives like the Spotify when was open company. No bulshit filled with heart and balance don't fuk with the customer play as a team and be the change you seek right? I said it a little different you can see how this came from a conversation between co-founders, right? I don't want to work in an environment. That's highly political no bulshit right that translates into You know what kind of a hiring filters like if someone seems political and anyway, let's not let him in the company him or her in the company. To come
up with this list right again or short list. What type of company Do you want to build what type of behaviors will support the business your building and then create that list, but don't let it just be a piece of paper write don't put it in the drawer and wait for the marketing department to polish it a few years later. You have to model that behavior. For better for worse, the early employees will look to you for the cultural cues, right? You can't say, you know do as I say not as I do right you have to walk the walk they will take their cues from you. For
when thinking about this list to the extent you can make sure it's externally focused. It's much better to build a culture that's focused on the customer than it is on how you treat one another inside the company. Look your shortlist can have both but the more important ones are creating a bit like having an externally focused over the long haul that will serve you much much better and let me give me an example of of what I mean by this. So move fast and break things you for this right Facebook. This is what I
consider an internally focused thing if you were a project manager or an engineer at Facebook trying to decide what to do next. This doesn't offer you a whole lot of guidance. I think back to Canada definition I gave of company culture, right it informs employees how to behave when it hasn't been explicitly laid out. If you're deciding what next product to build this doesn't help at all just tells you to move fast right shouldn't be a surprise. When you look at this that some of the Privacy violations that they've been charged with
have occurred of Facebook, right? I don't think for a second anyone at Facebook set out to violate anyone's privacy with their cultures shirts certainly didn't help them didn't give them the guide rails on where to stop right? Contrast that with kind of Google's early motto, don't be evil. Not particularly prescriptive necessarily but it's outwardly focused. Right it lets the employees and the world now like Hey, we're at we're Force for good. And when you think about kind of that policy that Google has with its Engineers, they're allowed to work 20% of their
time on these independent projects pretty pretty impressive that you haven't heard of any of those go astray pretty amazing given given the date of their sitting on again outwardly focused, right? It gives some guide rails to the employees and on how to behave. Next have a conversation about diversity. And I'm not just talking about ethnic and gender diversity here. I'm talking about a diversity of opinions. Can you create a culture where people with diametrically opposed opinions strongly held can coexist?
Can you Foster conversations that are allowed within people walk away and are okay? How important is that to your business and there's plenty of research out there that suggests that companies that are able to Foster this type of environment have a diverse environment. That isn't always agreeable tend to be more creative. They tend to be better problem solvers. And the reason I put this up there is it's it's really hard because most of the advice when you get going when you're hiring the first set of employees is to paycheck tap tap your Rolodex
talk to friends talk to former colleagues write those people, you know, whether or not they're good Engineers, you know, whether or not they embody the values that you're trying to put into your company are known quantities and at that stage, it's a good thing but they're also probably a lot like you right and you can find pretty quickly that you've built a pretty homogeneous environment in trying to hire to quickly. So have this conversation how important is it to you to your company to have diversity because if you think you're going to wake up at a hundred and
ploys and then start a Diversity Program, you're fooling yourself. Way too hard too late by then. So have that conversation stuff? I don't have the right answers and what that looks like, but haven't it's important. So once you've done all that had those conversations. Put a hiring plan in place. Right? Don't just let it happen from the very first employee. Make sure you're following a process. There's tons of stuff online about hiring process and Beyond the scope of of this talk, but consider all those conversations you had with your
co-founder the type of values you trying to Instill in the company in the type of diversity you want and make sure that's part of the process from day one right and make sure you assess whether it's working especially the early employees right after you hire your first couple of people make sure you get back together with your co-founder a month or two after and discuss whether or wether did what it should have like did it filter the right way. Do you have the right type of people in your company at this point? And if it didn't it didn't work well improvement plan on involving it. Right you want
it tested by the time you get to the point where you have to scale fast, right? You want a process that you know works by then? Set it right again not too early. You have a ton on your plate. And you know again what I would have given you hopefully are just a few simple things that aren't too time-consuming just conversations. You can have kind of thought experiments with your co-founder that can help kind of build a solid foundation for building a culture later on. Thanks everyone.
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