Growth, but at what cost?

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Growth

Tough times at Revolut. Image credit to Monito on Flickr.

Get (sh)it done

How does this Slack message make you feel?

Screenshot with credit to Wired, from their article on the culture and practices of Revolut, a UK-based FinTech startup.

There are a number of aspects to this message that make me feel uneasy.

  • The threatening tone.
  • An expectation to work weekends.
  • The open, public declaration of there being a watch list, and the open, public threat that you might get put on it.
  • A “simple rule”, which is that staff that do not hit their KPIs get fired with no negotiations.
  • The Slack emoji reactions: “push”, “get (sh)it done”, a tank, the Mortal Kombat logo. The implication that this is a war, and that winning the war must happen at all costs.

Now, don’t get me wrong – I love startups, and I love an audacious belief to want to take on the world and win. However, something is going (or has gone) wrong with startup culture.

I don’t believe that we’ve ended up where we are through malicious intent. However, we are all influenced by the practices and celebrated successes of the famous companies that we see publicized in our industry, and those celebrated successes are the “unicorns”, the 10X rebels: hustling hard, being disruptive, vacuuming talent and competitors in a race to become the dominant force in the market.

We read books, we watch podcasts, we follow influential business people on Twitter, and slowly, with time, we move the norm towards an extreme because of the echo chamber that surrounds us. Building technology has been enabled by, but also heavily tainted by, growth-or-die culture.

Can there not be a middle ground?

Growth at all costs

SaaS is obsessed with growth. Valuations of companies are typically driven by their revenue and their year on year growth percentage. VCs push founders and their boards to deliver significant multiples of their initial investment.

2x isn’t enough. 5x is middling to average. 10x is the number that has become a cliché: 10x thinking, 10x scaling and 10x engineers. And sure, that’s all well and good – I’d love 10x growth as much as the next person – but relentless focus on only growth begins to breed the wrong behavior.

Growth should not trump good business practices.

Growth should not come at the cost of employees.

Growth should not negatively impact society and the planet.

For VCs, only a small handful of their many portfolio companies need to exit well for them to successfully grow their investment fund. The rest can fail, and although it is a shame, it isn’t the end of the world, because the banker’s books are balanced.

It is extremely helpful to have a challenging VC pushing a company for more, in the same way that the coach of a sports team pushes the players for more. The players should still aim to achieve within the rules of the game.

Additionally, when the VC view is just one view of a diverse selection (VC: “grow 10x or lose”, CTO: “build incredible technology”, CEO: “hire, grow and support fantastic people”), then the tension in the antagonism of opposing viewpoints can create fantastic companies.

Yet, strangely, the worldview of the banker (“grow aggressively or die!”) is becoming the de facto startup culture, ahead of the passion to build amazing things they once dreamed about, or to create jobs in local areas, or to support the lives of employees and their families whilst doing work that they are passionate about.

Aggressive growth at all costs towards aggressive targets can cause poor behavior that can lead to poor culture. Caring about numbers can trump caring about people, and dangerous short-term views and strategies can chosen against sensible long-term strategies. It can make people cheat. Ethics can begin to be compromised.

Take a look at this leaked take home test for Revolut.

Screenshot, again, from Wired. “200 or more sign-ups would be a very strong indication that you’d go into the next round of interview”.

In a high-stress, growth-driven environment this take home interview task could have been seen as a clever way of singling out motivated candidates and also contributing by crowdsourcing to challenging company KPIs. I doubt there was any explicit malice. However, this task is effectively asking people to work for free, which is illegal in some countries.

Cultural norms and high pressure can blinker good judgement in large groups of people. We see it through history, and we see it in companies that go horribly wrong.

Toil glamour

So who is to blame? I think all of us are.

Growth-or-die culture, hustle culture – whatever you wish to call it – is beginning to leak beyond the office and into the daily lives of a whole generation of workers. We are at the point now where many young founders have only been exposed to one way of doing business: grow at all costs until you exit or self-destruct. They can sometimes apply that same logic to their own lives.

An excellent article by Erin Griffith for The New York Times describes “performative workaholism” culture: how celebration of hustle lifestyle (read: toil glamour) is entering the mainstream as an aspiration and a badge of honor, as a grouping of likeminded individuals who have rebranded the rat race as their purpose.

Within that article, we are treated to this tweet:

We can look at the picture of the carved water cooler cucumber and laugh at how silly it is, and perhaps titter at the thought of Dunelm selling “Get Shit Done” embroidered cushions in place of “Live, Life, Love” for your sofa.

Alternatively, we can consider how even co-working spaces – that we don’t actually work for, hence shouldn’t determine our culture – are promoting burnout and workaholism to people that have not got the years of experience to realize that it isn’t going to end well.

Another noteworthy article by Anne Helen Petersen for Buzzfeed explores how Millennials that are working long hours, paying back large debts, and unable to save for their first homes, are feeling the full force of burnout, to the point that running simple errands (“adulting”) can send them into spirals of overwhelm.

A more recent New York Times article highlights the trend that 30-somethings who are financially stable – typically those without significant debt and own their first home – in expensive areas of the US such as New York, Chicago and Boston, are only able to do so with significant support from their boomer parents, even if they have a highly paid, upwardly mobile job.

Is it any wonder that fast growing startups attract those most willing to hustle unsustainably because they believe that they might just be able to escape the rat race through an acquisition or float? Is it a surprise that the rat race is so inevitable for the younger generation – regardless of the prestige of their job – that the only way to tolerate it is to celebrate it?

Is it any wonder that those with a real opportunity to achieve financial escape velocity might begin to bend the rules to ensure it happens?

I guarantee that Revolut are not an anomaly.

We need to reframe success

I believe that we need to rethink our definitions of success in our industry.

I don’t think that it is healthy to continue building companies around a primary function to produce a hockey stick. We need to stop filling up column inches with talk of unicorns and revenue multiples and dedicate time and publicity to companies that are in it for the long term.

We need to focus on, and celebrate:

  • Those that create innovative technology that is meaningful for their users and the world.
  • Those that choose not to locate in big cities and instead begin to turn around forgotten parts of our countries.
  • Those that allow remote and flexible working to enable people to ride the waves of life without letting their mental or physical health suffer.
  • Those that give staff real opportunities to learn, grow and stay for many years.
  • Those that do impactful work for the community and for charity.

Technology companies have a lot to answer for.

How many of us are Certified B Corporations? How many give meaningful amounts to charity, such as 1% for the Planet? Are we really looking after our staff first, our users second and our investors third, or have we got that the wrong way round?

Our industry generates billions of revenue, but are we doing it in a sustainable way for the health of our companies, our people, society and the planet?

Do we think that our companies are going to be around in 100 years? Are we making the right ethical choices about what we do and how we do it?

We all have a say in this matter. Leaders can set an example from the top. However, if we don’t have the power to change where we work then we can vote with our feet, even if it means being paid less.

If we’re not willing to do that, then why not?

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