Rome 285 Pomodoro's "Sfera Con Sfera."
Rome 285 Pomodoro's "Sfera Con Sfera." (source: Ed Uthman on Flickr)

We need more human-friendly companies.

Startup Kool-Aid

America is obsessed with startups. Like really, really obsessed with startups. We love a good rags-to-unicorn story. Following the greatest recession of our time, the startup has once again been held up as a model of progress and innovation that will restore America's global position. And as the media glorifies the risk in hopes of return, every millennial graduate dreams of joining the next Facebook or Google.

While I fundamentally believe in, build, and invest in startups, there is something wrong with the flavor of Kool-Aid we are all drinking.

Most growth companies aim to become large, profitable, world-changing businesses. Yet their internal policies are not congruent with this aim. Instead, we drink the Kool-Aid that working 16-hour days is both necessary and bad-ass. We drink the Kool-Aid that foosball tables and endless candy bins are the best means to attract and retain talent. We drink the Kool-Aid that there are no women candidates for the job. We drink the Kool-Aid that we will all be so rich that we will never have to work again.

We drink the Kool-Aid that startups don't need to follow the rules of "good business."

But it doesn't have to be this way.

The design of a company

Phin Barnes, a Partner at First Round, once told me, "Entrepreneurs are the designers of companies. Great startup CEOs recognize very early that their job is not to build a product, but to build a company—defined by mission, values, and culture."

When it came time to design my own company, my previous experiences in toxic, bro-culture startups directly informed what I did not want. So, I embarked on building a sustainable, woman-friendly business. This proved to be an easy task; in the thick of the he-cession, women flocked to our job postings as men chose to hold out for a more established company.

Three years into Luminary Labs, I became a mother. Suddenly it occurred to me that being woman-friendly is not enough—we needed to be a family-friendly company. As my bump grew, I learned that woman-friendly and family-friendly are not the same thing. The sheer number of women who asked if my son was an "oops" basically said it all. ("How is she going to run a business AND have a baby?" they whispered.) I came to the conclusion that a room full of sisters is not necessarily any better than a room full of bros.

As the company grew, we embraced a family-friendly culture by sharing how CEOs can take family leave, creating a structure that allows for parents to attend the parade of pre-school tours, and even hired someone who was six months pregnant. We also shared with staff the perennial parental lesson of how to be supremely efficient within an 8-hour workday. We had done it! We were the family-friendly company that was growing and profitable.

It's really quite incredible how quickly the rug can be pulled out from under you.

Just a few months later, a team member suffered a personal health crisis. It was a sad moment for all, and as the founder, I was at a loss on what to do—the situation was outside of normal protocol. Hours of Googling yielded no practical advice other than "call your lawyer." The next morning I looked at our head of operations and our head of client services and said that we needed to do the most human thing possible. Everything I believed—and still believe—about championing women, and families, paled in comparison to simply being a human company.

From that point on, every decision we made needed to meet the human company bar.

While we are a small, nimble team, our workday ends at 6 p.m. We discourage working after hours or on the weekends. When we do have peak periods that require above and beyond hours, a comp day is offered. If you are sick, we ask that you stay home—with your laptop closed. When someone has a family emergency, we all rally to pick up the slack. When staff inquired about a 401k plan, we ran the numbers and found that not only could we afford it, but that we could afford to match. We choose to attract and retain talent with the simple proposition that we are extraordinarily efficient so that you can live your life.

When candidates and external parties were incredulous, we asked, "are we alone?"

As it turns out, we are not.

Over the course of the past 12 months, multiple corporations have radically rethought how they do business by establishing livable wages, developing creative equity plans, offering paid parental leave policies, and even pulling out of an entire state in protest of discrimination. In addition to sending a strong signal that people come first, these organizations are also making an economic argument to investors that employee-favorable policies pay dividends in reduced turnover and improved business outcome.

As we shared these articles between friends, throughout the office, and across social networks, another nagging thought would not leave our heads: "But what about early-stage startups?"

 

Your product alone is not going to change the world. Your long-term, sustainable company will change the world, if you design it well.

 

Conventional wisdom suggests that successful startups are special. Conventional wisdom suggests that they must move as fast as possible, and at all costs. Conventional wisdom suggests that expenditures that do not directly support product development are wasteful. Conventional wisdom suggests that startups do not have the resources to offer full health care coverage. Conventional wisdom suggests that paid family leave and startups are not compatible. Conventional wisdom suggests that you should power through being sick. Conventional wisdom suggests that the best way to attract the best talent is to spend VC dollars on free beer on tap and a ping pong table. Conventional wisdom suggests that human company policies are great— if you are a "lifestyle" company.

Conventional wisdom is wrong.

I hate to break it to you, but your product alone is not going to change the world. Your long-term, sustainable company will change the world, if you design it well.

The Human Company Playbook

Most founders learn lessons the hard way. As your company matures, you find yourself answering really hard questions.

What happens the first time someone needs to go on short-term disability?

What happens the first time a client cuts the budget in half?

What happens the first time someone is pregnant?

What happens when no one actually takes vacation on your unlimited vacation plan?

What happens the first time you are audited?

What happens when you realize that you finally need an employee handbook?

So, you draft policies informed by your accountants and lawyers, who, by this time, have been upgraded at least once.

But you are ultimately very alone in these decisions.

Simply put, there is no playbook for the growth company that seeks to build a business that is both human and sustainable. But what if there were publicly available examples of employee-favorable policies that are rapidly shaping 21st century business models?

Earlier this year, we convened a broad cross-section of founders, thinkers, and doers to do just that. Over the course the evening, we discussed the forces behind this sea change, generated examples of new and creative business imperatives, and together, started writing a guide for the more human company. Following the event, we curated examples from a diverse set of growth companies such as Plated, Birchbox, Pinterest, and General Assembly, to form version 1.0 of The Human Company Playbook.

I want to make it abundantly clear: the human company is not about warm fuzzies. It's about a new business imperative that that makes for stronger, more sustainable businesses. It's about the development of a diverse talent pool for the startup ecosystem. It's about a smarter, more efficient way to do business. It's about the choices you, the founder, make as well as the choices your VC makes when s/he invests in you. Foosball or health care coverage? It's just a decision. But a decision that will dictate who wants to work for you, your company, and your industry—in the long run.

While no single policy or company is perfect, the intent of this initial compilation is to provide practical examples to prove that high growth and human-friendly are not mutually exclusive.

The Human Company Playbook, Version 1.0 from Luminary Labs

 

Article image: Rome 285 Pomodoro's "Sfera Con Sfera." (source: Ed Uthman on Flickr).