The best Southern startups value company culture, organic growth, and work-life balance over fast exits and gaudy IPOs--and that's exactly why they succeed, argues David Cummings, CEO of the Atlanta-based marketing software firm Pardot.
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Southern tech founders don’t necessarily wake up every day looking at the balance sheet, but that doesn’t mean they aren’t attracted to growth. Far from the cutthroat world of Silicon Valley, companies like MailChimp, Scoutmob, and my company Pardot represent a Southern type of startup based on organic development, company culture, and stability. This “yeoman’s culture” values independence and work-life balance over get-rich-quick growth. Consider MailChimp, an email newsletter service, which expanded its subscriber base to 1.4 million without much in the way of VC money or fancy marketing campaigns, as reported on CNBC. It’s a classic Southern story: People here are famous for taking their time--they know they’re going to arrive at their destination, but it’s important to enjoy the ride.
Below is my take on how Southern tech companies are putting these values into practice--and reaping the benefits.
It’s the culture.
Most aspects of a startup are unpredictable. Company culture is the exception; it’s one of the few things that the entrepreneur can actually control.
It all starts with the hiring process. When a candidate walks in the door, a hiring manager in the South first digs into the individual’s personality. Will she fit in with our culture? Does she have the right attitude to get along with us? Next, the hiring manager examines the skill sets, education, and experience. This may be the opposite approach of tech companies on either coast, where pedigrees, connections, and previous employers matter a lot.
When a hot engineer from Stanford or MIT saunters in the door, Southern companies look the other way if they don’t detect a good match.Many executives pay lip service to ”culture fit” when a hot engineer from Stanford or MIT saunters in the door, but Southern companies look the other way if they don’t detect a good match. Southern companies recognize the value of creating an atmosphere that is enjoyable for both customers and employees, and makes people want to come back.
This focus on culture may seem extreme for some in the tech community, where innovation and time-to-market are what matters to the board. But for our company, and others in my circle of networking friends, it means that employees stick around longer. People work as a team. And that often can mean better products, longer lasting customer relationships, and companies that don’t flame out fast.
Southern comfort.
Many Southern startups operate on the same principle: “Be nice.” It might sound trite, but as Atlanta executive Charles Quinn says, “What is different in the South is our focus on family.” Quinn, a colleague of mine and the founder of software development shop Highgroove Studios, says that companies have two paths: They can run in an efficient manner or in a personal and friendly manner. “People in the South will go for the latter.”
If you watched the final episode of American Idol this spring, you may recall that the winner, Philip Phillips from Leesburg, Georgia, didn’t make it through his post-win song. About halfway through the song he stepped away from the microphone, hung his head down, and walked right off the stage into the arms of his family. At that moment, it wasn’t about the glory, nor the screaming fans, but about reconnecting with his core. That’s sort of what I’m talking about here: it’s a grounding that is common down here in the South.
Southern companies make an effort to operate like a family, and that starts with taking good care of employees. These days, above-average health insurance benefits, including non-traditional services such as massages or personal trainers, go a long way for retention and productivity. We spend about $7,500 yearly per employee on benefits. This may sound like a lavish startup investment, but considering the high cost of finding, hiring, and training new employees, it’s a small price to pay.
Yet there’s a lot more to having a compassionate culture than paid benefits. Highgroove Studios holds weekly “Things That Suck” meetings where employees can vent frustrations to management. The company also regularly measures “developer happiness.” Employees want to know that their frustrations are actually being heard, and when viable, fixed quickly. Southern startups know that taking care of employees physically and emotionally can pay off big-time in terms of loyalty and hard work.
Highgroove Studios holds weekly “Things That Suck” meetings where employees vent frustrations to management.On the topic of collegial relations, Southerners don’t yell at each other in meetings. At least that’s what Atlanta serial entrepreneur Johnson Cook says: “Southerners tend to avoid conflict in general. They wait until meetings end to privately call or sit down with the person they disagreed with and have a quiet conversation to explore both sides.” This communication style is in contrast to high-tech employees in the Northeast, where verbal scuffling is welcome around the conference table, says Cook, whose previous venture had offices in Boston and Atlanta.
Here’s something else that companies in the South do differently: they value “normal” work hours. Before you gag on your coffee, consider that many people in my company, and in companies of friends, leave the office around 5 p.m. or 5:30 p.m. Employees don’t have to sneak out--there’s no guilt trip. Senior executives down here certainly put in the long hours as needed. But we don’t make a habit of working through dinner.
Lovin’ the customer.
Most entrepreneurs spend extra time and energy placating the board and investors, and spinning out new product updates and features to beat the competition. Southern tech companies operate with a different mindset. More important than incorporating the latest advanced features is making the customer king.
Exceptional customer service breeds exceptional customer loyalty. Who doesn’t need repeat customers?In the South, companies believe that maintaining tight relationships with customers brings a better understanding of what users want, which can then direct product development. Furthermore, exceptional customer service also breeds exceptional customer loyalty. Who doesn’t need repeat customers today?
True, the Southern approach to entrepreneurship is not typical of U.S. tech companies. Declining venture funding, emphasizing customer service over all other aspects of business, and making every decision with company culture in mind means that Southern companies may not wow the market with fast exits or gaudy IPOs. Hotshot investors don’t always agree with our methods. They probably think that we’re soft. Yet in the South, it’s not about getting to the end goal as fast as possible -- it’s about getting there and remembering the ride.
[Image: Flickr user Josullivan]
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