What you get back when you build culture.

The worst day of my startup life has been telling 45 people they were about to be out of a job. I was standing at the front of the room with two friends, Mac Lackey and Ross Saldarini, and felt like we had betrayed everyone in the room. One of the best days in my startup life was the next day — but I’ll get to that in a moment. 

It was the tail end of the go go 90s, and we were running a company called internetsoccer.com. Because this was before the crash, there was precious little awareness amongst the team of exactly how tenuous startups could be. I mean sure, Quokka had died spectacularly recently, but they had been blowing money like crazy while we had been conservative. Besides, we had our next round of financing sewn up with a term sheet for $15m. 

Or so we thought. The day before it had become clear that, despite any promises made, the deal was dead due to “market conditions.” And that meant we had only a month or so left of cashflow. If we wanted everyone to have a couple paychecks notice instead of being chucked out on their ass, we had to tell them now.

There was a debate about whether telling everyone was a good idea. After all we might be able to find a last minute funder, or sell the company, and we risked everyone abandoning us. But in the end we knew we had to be honest. 

And so there I was, standing at the front of that room with my palms sweating profusely. I was in my early 20s, having never having fired anyone, so I did the only thing I could and was frankly straightforward. It was a tough day not just because of the effect on those people’s lives, but because I felt like we had actually succeeded in building a real culture, a family. We ate together, coded together, played soccer in the hallways at odd hours, and yelled at each other regularly but with the utmost respect. This felt like the moment that culture was going to die.

So the next morning I came in at my usual time, with no idea what to expect. With the prospect of it all ending in 30 days would anyone even bother to show up? 

Everyone did. On time. Then worked their buts off to make sure we were still putting out product we were proud of. And frankly that dedication filled all of us with energy, and we re-doubled our efforts to keep the business alive. With some heroic dealings we actually were able to find a buyer for the business with just days of cashflow left. The $15m sale was maybe less than our wildest dreams, but it was a great return for an angel funded company and more importantly than that, the culture lived on. 

Two things that happened this week reminded me of that episode of my life. 

The first was Ted Rheingold’s post on company culture. It resonated when he said, “I had always thought the reason to build a great company culture and supportive workplace was so a company could excel when things were going well (which is the case).  What I learned though, is that when it really counts is when your back is against the wall – you’ll get paid back in spades because no else will be there.”

The second was that I met with a company last week that has had a similar situation happen to them. They thought they had a VC deal lined up, signed term sheet and all, only to have it fall through. It has left them them with an awesome unlaunched product and only a couple months of burn left. 

But meeting them at their office, what I saw was not panic or dejection. It was 25 people crammed into a tiny room happy to still be working on a product they believe in. A group that knew what they were facing, and just wanted as many days as possible working with each other. I have no idea how this particular story will end, but I know they are building something that’s worth it, and that wasn’t just what I saw on those monitors. 

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  1. ajaykulkarni reblogged this from nabeel and added:
    Great post by nabeel about why company culture is so effing
  2. launchyourstartup reblogged this from nabeel
  3. nabeel posted this