Start-Ups

How to keep your startup culture after being acquired

Many startups are defined by the workplace culture they create, but an acquisition can threaten that. Here are some tips to help you hold on to the culture that makes your startup special.

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Image: iStockphoto/4774344sean

Startup culture has become synonymous with a vision of a group of twenty-somethings in designer jeans and hoodies, playing ping pong and drinking beer at work. While a unique work environment is increasingly common in smaller companies, it is a product of startup culture rather than something that defines it.

Sure, a fun work environment and great benefits can attract great talent, but a meaningful culture is what makes them stay. Startups are known for investing in their employees and providing a flatter structure to encourage communication.

As startup companies grow, many begin to eye exit options such as an IPO or an acquisition if they have an interested acquiring party. According to Clement Cazalot, founder of DocTrackr which was acquired by Intralinks, an acquisition can threaten the culture that the founders and employees have worked hard to establish.

"Being acquired by a larger organization can quickly alter the culture of the startup: pressure, ownership of their work, and having the capability to see their work having a big impact can all be factors." Cazalot said. "It's important to be aware of this going into the acquisition, and to make sure that company politics and cube culture doesn't kill the innovation spark."

Acquisitions are a scary prospect for those who fully bought in to a particular startup, but they can also provide a much bigger stage for a team to present its product and message. Here are three tips to help you weather the culture shift of an acquisition.

Define your culture

Before you can preserve a culture, you need to know exactly what it is about your business that you are fighting to save. For some, it's all about the team dynamic.

"In my opinion, 'startup culture' is defined by the level of ownership the team members have in their work, as well as the type of open communication that happen between its members," Cazalot said.

In a corporate environment, it's easy for individual employees to fall through the cracks. Encouraging ownership of the brand helps to create a culture where team members feel responsible for the success of the company. Keeping communication lines open shows that you not only value what employees have to say, but you trust them to bring the issues directly to the top.

John Marshall is the senior vice president and general manager for AirWatch by VMware. He said that the mantra at Airwatch, which was acquired by VMware, is "stay hungry, stay humble." Staying humble means that the team doesn't get to rest on past accomplishments and staying hungry means that employees are continually innovating, looking for better solutions for customers.

For others, it's about how to get things done. Braintree's CEO Bill Ready thinks of a startup being "lean, scrappy, and fast," which helped when his company was acquired by PayPal earlier this year. Find a way to define your startup's core values and develop a plan to carry them over into your new role.

Make it valuable

Fostering a startup culture takes work. Not just the work of the executive team, or founders, but the work of everyone at the company. Start by figuring out what your culture adds to the daily lives of your employees. Is your culture superficial, or does it truly affect how you and your team see the work in front of you?

As you transition into a new role at the acquiring company, it will be a journey you take as a team, not as an individual. Employees are just as responsible for perpetuating a specific culture within a startup as the founders are for setting the tone.

When asked how he helped maintain a startup culture during his acquisition by PayPal, Ready said that you have to create a culture that is worth fighting for, and one that members of your team are excited to share with new employees.

"It's more than me — it's the responsibility of each and every employee to keep the culture," Ready said. "As long as we keep innovating and take a look at the bigger picture of what we are trying to achieve, we'll continue to be disruptive and attract talent that will help maintain the startup culture."

Manage the transition

Of course, a solid transition starts with finding a company that is receptive to the culture your startup has built.

"What made VMware the best option for AirWatch was not just that we fit into their end user computing strategy and suite, but that it was also a cultural fit," Marshall said. "Because of this, AirWatch has been able to maintain not just our identity, but also our culture."

Finding an acquiring company where you fit in is great, but in order for your culture to thrive you also have to understand how you fit into that organization. Understanding how roles will change and job titles will shift will help you better prepare your team. The ideal situation, according to Cazalot, is where the acquired startup operates as a separate team within the organization "independent from the core structure of the acquirer."

As a founder or executive, it's up to you to lead your team and help guide the changeover. Clear communication is one of your most valuable tools, and it might be in your best interest to stage an informal get together for both parties.

Cazalot said that best way to ease the transition is "Beer (with the members of the two companies). More seriously, speaking outside of the context of work is the key to create real links between coworkers."

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About Conner Forrest

Conner Forrest is a Senior Editor for TechRepublic. He covers enterprise technology and is interested in the convergence of tech and culture.

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