One thing we tell almost every founder we back: build a cult.
It sounds like a provocation, and it half is—but I mostly mean it literally. The culture comes first. It's what enables the winning, not the reward for it. Winning just accelerates what the culture already started.
I was reminded of this at the 10th annual (I think?) Gilt reunion this week. The fact that 60 of the company's top execs still get together more than a decade after Saks acquired it tells you that the culture outlived the company. The talent at Gilt was extraordinary, and I think Kevin Ryan's greatest contribution wasn't a strategy or a product; it was assembling that team and building a high-performance culture around it. It wasn't for everyone (and it wasn't supposed to be). But the people it was for thrived, built a real business in a brutal industry, and have gone on to found and lead companies of their own. It's still a group we're all proud to belong to.
So what do I actually mean by a cult? I don't think it's rigidly formulaic, but the ingredients I keep seeing are:
Everyone believes in the mission. Mercenaries need not apply. The people who join are buying into something, not just optimizing a comp package.
An enemy. The strongest cultures define themselves against something—Apple against IBM, Tesla against the combustion engine, the whole incumbent way of doing things. Us-versus-them is half of what binds people together. At Gilt, we were battling a sea of fast moving competitors domestically and globally. At Gympass, it was a war against sitting.
A talent bar that's insanely high—and defended. It's hard to get in: tough interview cycles and real work that shows how badly someone wants to be there. The cost of entry isn't a bug; people who pay a high price to get in rationalize it into somewhat irrational devotion. And the bar has to be held: those who don't clear it don't stick around, regardless of whose choice that was.
A founder who can sell the vision. Clear in their thinking, demanding in their expectations, and able to turn recruits, employees, investors, and customers into advocates.
There are other examples of this everywhere—Amazon's bar raisers, Netflix's talent deck, Zappos paying new hires to quit (only the believers stay). Every company has to define its own cult.
Cults are… culty. They don’t please everyone; others may have more of a reason to dislike you. They also can’t lose sight of ethics and morals: Theranos and WeWork didn’t build enduring businesses because of inherent loyalty tests, blind eyes, and fraud. That strong leader needs to be a strong listener, too. The cult is loyal to the business and the mission, not the leader; the leader has to earn that role constantly.
Every company has to define its own cult. But designing and executing on that cult creation is more causative than correlative to success in my experience.
