The Core Ideology of a Startup

It’s good to be back!

A lot has happened since the last post. Of course it has. It’s been 6 years. Not the least of which is my new gig – that of professor of entrepreneurship. In this role I have had to opportunity to research some of the basic concepts of entrepreneurship and to distill them into bites that can be consumed by college students and seasoned entrepreneurs alike. I’ve always been interested in the intersection of leadership and entrepreneurship. I find it fascinating how the vision of one or two people can coalesce into a tangible organization that solves a problem for a segment of customers. Equally fascinating is the company culture that forms, either deliberately, or as the case most often, on its own. The culture will evolve with the venture and take on the personality of the founders, and eventually, the composite of the members of the organization. My wife teaches high school math and shares often how each of her classes has its own personality and pattern of behavior. If the vision is strong and communicated well, culture can form around it but the personality of leadership has the most influence in the direction culture takes in its formation. In the best case you end up with Zappos, a company that puts company culture at the heart of its existence and its fundamental value proposition. In the worst case, you end up with Uber’s “toxic culture” that attracted a federal investigation, a legal settlement and the ouster of its founding CEO.

In my early days of mentoring entrepreneurs, I remember debating in my mind, when the proper time was to introduce the traditional business concept of Vision/Mission/Values. Large corporations publish these strategic refrains to communicate their message to shareholders, the general public and perhaps to their employees, customers and suppliers; all of whom we attach the word, “stakeholders”. But what of the value of vision/mission values in a startup that may not even have employees or customers or revenue? The elusiveness of the answer to that question led me to believe for many years that perhaps, the startup stage was not the time to burden the founders with the self reflection necessary to develop these statements. These concepts seemed to be appropriate when companies had lots of stakeholders. They seemed to be relevant when organizations were deep and leadership needed to communicate to masses. Until that time, word-of-mouth would be sufficient and culture would permeate naturally. Besides, founders have enough to worry about with customer discovery, funding strategies, value propositions, business models and technology development.

But I was wrong.

Core Ideology

To proceed, perhaps a definition is in order. I agree that the concept of vision/mission/values seems a bit stuffy. It seems that’s what they teach in MBA school and it’s what corporations do, and since corporations have trouble with the entrepreneurial mindset, then we don’t need it. But early on, I was attracted to Jim Collins’ re-framing of the principles in his two books, Built to Last and Good to Great. He gave us the concept of Core Ideology, which is the confluence of core values and purpose (mission and values – check). The BHAG (Big Hairy Audacious Goal) combines inspiring vision with a goal to track progress. I find the concept of Core Ideology to be more imaginative and thought provoking so I have adopted it when I address the opportunity to share.

I realized one day that I was attracted to certain startups because of some “cool” factor my subconscious became aware of. So I will typically check out their website and I started to notice that even in startup mode, there was a prominent portrayal of their core ideology.

Warby Parker‘s culture statement reflects their core ideology by listing the following

  1. Treat customers they way we like to be treated
  2. Create an environment where employees can think big, have fun, and do good.
  3. Get out there
  4. Green is good

Starbucks‘ core ideology is sound and got them through a troubled time a few years ago.

  • Creating a culture of warmth and belonging, where everyone is welcome.
  • Delivering our very best in all we do, holding ourselves accountable for results.
  • Acting with courage, challenging the status quo and finding new ways to grow our company and each other.
  • Being present, connecting with transparency, dignity and respect.

Patagonia’s mission is simple and compelling: We’re in business to save our home planet followed by their core values:

  • Build the best product
  • Cause no unnecessary harm
  • Use business to protect nature
  • Not bound by convention

Why is all this relevant to startups?

Core Ideology wraps up what you believe, the reason you exist, and what you hope to accomplish in a brief, easy to understand creed. And it’s important.

Founders – Even if you’re the lone ranger at this point, it’s worth thinking about why you want to start a company in the first place. If it’s simply to get rich or be king, then I’ve wasted your time. Otherwise, it’s important because sooner or later, you will be asked or have to opportunity in a key moment to elaborate on why society should allocate it’s scarce resources to make you successful.

Stakeholders – You will get nowhere by yourself. Eventually, you will need employees or funders, or advisors, or partners. All of these people will check you out before they commit their time, reputation and resources. Your website will be one of the first places they go. Social media is next. Few will have any interest in fulling your own selfish ambitions so you should be open in sharing why the world would be better if you succeed.

Culture – Your company culture will form around you regardless of whether or not you intend for it to do so. Even though you may be a community of one, you need to communicate your core ideology as the moral compass for the organization.

Accountability – Eventually, you will screw up and you may be called to account for your decisions. That will be a hard day and you may be judged against your core ideology. But regular attention given to your Core Ideology may keep you grounded and pull you back to true north should your path disappear in profound cultural change and crisis. It worked for Starbucks.

For decades, my first conversation in coaching entrepreneurs involved the business model or value proposition, but more and more lately, it’s “why do you want to start a company?” The answers may be part two of this post….