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Most founders treat culture like a nice-to-have. Something they will get around to once the product is stable, the funding is secured, or the team hits a certain size, and it’s costing them. A 2025 Gallup study found that only 23% of employees worldwide are actively engaged at work. Three out of four people are either going through the motions or actively working against the company. The irony is that most of those companies have values on their website, culture decks, and mission statements. They have all the artifacts of a culture without any of the substance. So what is actually going wrong? In this edition, I am going to break down the four biggest culture mistakes I see founders make repeatedly, and what to do instead if you want to build something that actually lasts.
Culture Is Your Job Starting Day One
I need to say something that should be obvious but apparently is not. Building and maintaining your company’s culture is one of the single most important responsibilities you have as a founder. Full stop. It starts on day one, not when you hit 50 employees, after your Series A, or when you finally get around to hiring an HR person.
I hear founders say things like “we will figure out culture later, right now we need to focus on product” or “we are only twelve people, culture will come naturally.” That is like saying you will figure out the foundation after you build the third floor. Culture is the foundation and everything else sits on top of it.
I once worked with a fintech startup at the 40-employee mark. The founder had a habit of making big decisions in private conversations with two or three people he trusted and then announcing them to the rest of the company as final. He had been doing this since the company was five people and nobody complained because everyone was in the room anyway. But at 40 people, the damage was severe. Employees felt blindsided. Managers felt undermined because their input was never solicited, and the founder had no idea any of this was happening because nobody told him, which itself was a cultural symptom. People had learned that challenging leadership decisions was not something you did at this company.
That pattern did not appear at 40 employees. It was baked in from the first month. The founder just could not see it because growth was masking everything.
It took us about 8 months of intensive work to unwind those patterns. We had to redesign the decision-making process, retrain the leadership team on inclusive communication, and rebuild trust with employees who had mentally checked out. The founder later told me that those 8 months of culture repair cost him more in lost productivity and leadership time than any product delay or missed quarter he had ever experienced.
I have seen companies spend a year or more trying to repair cultural damage that was established in the first twelve months of the company’s existence. These are the kinds of mistakes that kill startups before product-market fit. Undoing a bad culture is ten times harder and ten times more expensive than building a good one from the start.
So if you are an early-stage founder telling yourself that culture can wait, you are already failing at one of your core responsibilities. Culture is forming right now whether you are designing it or not. Every decision you make, every behavior you tolerate, every hire you approve is writing your cultural DNA. The only question is whether you are writing it on purpose or by accident.
Culture Is Not an HR Project
I say this as someone who has spent their entire career in HR: when founders tell me “we hired a great Head of People, they are going to build our culture,” I push back hard. That is a fundamental misunderstanding of what culture is and where it comes from.
Culture is how you make decisions, how you treat people, how you handle conflict, how you deal with failure, what you celebrate, and what you refuse to tolerate. That DNA comes from the top. It comes from the founder and it cascades through every leader in the organization. HR does not create that DNA. HR builds the infrastructure that helps you scale it, and that only works when HR knows how to partner with the founder effectively.
Think about it this way. HR can design the best performance management system in the world. But if your managers refuse to have honest conversations with their team members, that system is useless. HR can build an incredible onboarding program that teaches every new hire your values. But if a new hire’s manager contradicts everything they learned in onboarding through their own behavior, the program fails on week two. HR can flag cultural risks all day long. But if leadership does not act on those flags, nothing changes.
I have lived this firsthand and worked in companies where I built exceptional programs and frameworks as the HR leader, and the leadership team did not follow through. The culture suffered despite my best efforts. I have also seen the complete opposite at companies where HR resources were minimal but the founder and leadership team were so committed to their values that the culture thrived anyway. That tells you all you need to know about where culture actually comes from.
Here is how to think about this: The founder and leadership team sets the cultural standard and upholds that standard within their teams. Every single manager in your company is a culture carrier, and they need to be held accountable for that. HR’s job is to build the systems, processes, and programs that make culture building easier and more accessible across the organization. HR designs the frameworks, creates the feedback mechanisms, builds the onboarding, the performance systems, and the engagement surveys. That work is critical, but the accountability for actually living the culture, for enforcing it, and for making the hard calls when someone violates it sits with the founder and every leader in the organization.
Stop treating culture as an HR initiative. It is a leadership discipline that every person with direct reports is responsible for. Without that accountability, your people strategy is theater.
Be Ruthless About Protecting Your Culture
This is where most founders lose their nerve, and it is where the most damage gets done. You can have clearly defined values. You can have every leader in your organization bought in. You can have beautiful systems and processes. But if you are not willing to fire someone who refuses to operate within your cultural norms, none of it matters. Your culture is only as strong as the worst behavior you are willing to tolerate.
I watched a SaaS founder lose four good employees in sixty days because he refused to fire a VP of Sales who was a serial bully. This VP was hitting his numbers and topped the leaderboard. He closed the company’s two biggest enterprise deals that year, but every person on his team was miserable. He belittled people in meetings, took credit for his team’s work, and created an environment where fear was the primary motivator.
The founder knew about all of this and HR flagged it repeatedly. Multiple people on the team raised concerns. But the founder kept saying “we cannot afford to lose him right now. He is too important to revenue.” So the VP stayed and four talented people walked out the door. Using the conservative estimate that replacing an employee costs 50% of their annual salary, the replacement cost for those four employees exceeded $300,000. The VP’s biggest deal that year was worth $280,000 in annual contract value. The math did not add up. And I have news for you: it never does.
But the financial damage was actually the smaller problem. The bigger problem was the message it sent to the entire company. Every employee watched a known bully get protected because of his revenue numbers. What that tells your workforce is that your values are negotiable, that the rules apply to some people and not others. That if you are a high enough performer, you can treat people however you want. The moment that message gets absorbed, your culture is dead. It does not matter what your values slide deck says.
Here is what actually happens when you keep a culture violator around. The best people on your team, the ones who have options, who are talented enough to work anywhere, they’re the ones who leave first. They are not going to sit around and watch someone get away with behavior that contradicts everything the company says it stands for. So your talent density drops. Then the people who stay start adjusting their behavior. They see that the stated values are not the real values, so they start operating by the actual rules, the unwritten ones. Collaboration decreases. Trust erodes. People start protecting themselves instead of working together. And once that rot sets in, it spreads fast.
On the other hand, I once worked with a healthtech company where the founder fired their CTO, who was a co-founder and brilliant engineer, because he consistently undermined the collaborative culture they were building. The founder told me it was the hardest decision he had ever made. But within 90 days of that firing, engineering collaboration with product and design improved dramatically. Two engineers who had been quietly looking for other jobs stopped their searches. And the company shipped their next major release three weeks ahead of schedule.
That is what happens when you protect your culture decisively. The organization gets healthier almost immediately because you are finally navigating conflict instead of avoiding it.
Design Your Culture to Repel the Wrong People
Here is where I want to challenge a belief that most founders hold without ever questioning it. Most founders want their company to appeal to as many talented people as possible. They write generic values like “we value innovation” and “we believe in teamwork” and “we are passionate about excellence.” These statements describe every company on earth, differentiate you from nobody, and attract everyone, which means they filter no one!
Your culture should not appeal to everyone. Let me say that again because I really want it to land. Your culture should be deliberately designed to repel anyone who is not a good fit.
Think about what your company actually values in practice. How do you actually make decisions? How do you actually handle disagreement? What does accountability actually look like? What pace do you actually operate at? Those answers should be specific, concrete, and honest. And they should make some people say “that sounds amazing, I want to be part of that” and other people say “that is absolutely not for me.” Both reactions are exactly what you want.
I once worked with a logistics startup whose founder was very deliberate about this. Their culture was built around radical transparency and direct feedback. In practice, that meant anyone could challenge anyone in a meeting regardless of title (including the founder). Performance data was shared openly across teams. Your manager would tell you to your face if your work was not meeting expectations, and they expected you to do the same with them.
They put this front and center on their careers page and it was the first thing candidates saw. They included specific examples like: “In our weekly team reviews, every project is evaluated openly and every team member is expected to give and receive direct feedback on what is working and what is not. If that sounds uncomfortable to you, we are probably not the right fit.”
Their application volume dropped by about 30% after they rewrote their careers page. The founder told me some people on his team panicked about that. But their quality of hire went up significantly, time to productivity for new hires dropped because people were not blindsided by the culture when they arrived, and their voluntary turnover in the first year of employment fell from 22% to 9%. That is a massive improvement! Early turnover is one of the most expensive problems a growing startup faces and they cut it by more than half.
Fewer applicants who are genuinely aligned with your culture will always outperform a larger pool of people who showed up because your job posting sounded nice. The companies that understand this are the ones attracting top startup talent and using interview frameworks that actually predict success.
Bringing It All Together
Culture is one of the most important responsibilities you have as a founder, and that responsibility starts on day one. While HR builds the infrastructure to scale it, accountability for upholding it sits with you and every leader in the organization. You need to be willing to fire anyone who refuses to operate within your cultural norms, no matter who they are or what they have achieved. Your culture should be designed to repel the wrong people, not attract everyone.
If you take one thing away from this edition, let it be this: stop trying to build a culture that makes everyone happy. Build a culture that makes the right people thrive and makes the wrong people uncomfortable enough to self-select out. That is how you build something that lasts.
Here are the action items I would prioritize if you are an early-stage startup in rapid scaling mode right now:
- Block time this week to write down how decisions actually get made at your company, how conflict is handled, and what behaviors are rewarded. If you cannot articulate these things clearly, then your culture is running on autopilot.
- Audit your leadership team’s role in culture. Are your managers actively reinforcing your values in how they run their teams, or are they delegating that responsibility to HR? Set the expectation that every manager is a culture carrier and hold them to it.
- Look at your current team and ask yourself honestly: is there anyone operating outside your cultural norms who you have been avoiding dealing with? If so, start the coaching and documentation process today. Every day you wait, you are losing the trust of the people who are doing it right.
- Rewrite your careers page and job postings to describe what it actually feels like to work at your company, including the parts that are hard. If someone who would be a bad fit reads your posting and still thinks it sounds great, your messaging is too vague.
If you are just getting started with building HR at your startup, these action items are a good foundation to build on.
Nahed Khairallah