What Can Start-ups Survive?

Not Poor Leadership and Resulting Corporate Culture

Start-up companies can survive misaligned product-market fits. They can survive MVPs that require tweaking, refinement, and further development. They can realign their tech stack and still be successful. Heck, there or so many more things that startups can fail at and still succeed!!! But what startup companies CANNOT survive is a leader who drives a corporate culture that is antithetical to what is needed to build high functioning and successful teams and companies. In my 30+ years of consulting, angel, and venture investing, a poor leader who refuses to step up, step out, or is unable to be removed 100% correlates to company failure/closure. Inevitably, it is a leader’s arrogance, hubris, and insecurity that drive the company’s cultural construct, as opposed to humility, self-confidence, empathy, all through a servant-leader lense.

So how does an investor or employee evaluate a leader’s and corporation’s culture prior to investment or accepting an offer of employment? An excellent article in Forbes Magazine by Caroline Castrillon offers a few insights into assessing a corporation’s culture. While advocating for the use of some social media sites (LinkedIn as an example), looking at financial performance, and interviewing current and former employees, I feel two areas within the article that stand out are:

  • Ask the hard/intelligent questions: Make sure the company is being as transparent as possible!

    • How has the company adjusted during challenging economic times?

    • Are there concerns about layoffs or hiring freezes in the future?

    • What are the key milestones (OKRs) the company needs to meet in the next year?

    • Where does the leader see the company in five years?

    • What stock options or equity incentive plans does the company have?

  • Look at the President/CEO, specifically when a start-up, asking questions like:

    • Are they honest, straightforward, and genuine?

    • What is their leadership style, and how do they operate under pressure?

    • Have they had other successful exits?

    • If a new start-up/first time CEO, what is their list of mentors and advisers?

    • Can they, as a leader, manage short-term goals without compromising long-term strategy?

    • What turnover in senior leadership has occurred over the last few years? 

Overall, by doing a little bit of work, corporate culture can be gleaned from the information gained, allowing you to avoid a potentially deleterious career move or doomed investment.