The Culture Carryover in Tech Startups
Tech startup culture is often perceived as innovative and distinct from that of established companies. However, research suggests that founders tend to replicate the culture of their previous employers in their new ventures.
Eric Yuan, founder of Zoom, was dissatisfied with the culture at Cisco Systems, where he worked as vice president of engineering. He found the company to be resistant to new ideas and slow to change. When Yuan proposed developing a mobile-friendly video platform, his suggestion was rejected. Frustrated, he left Cisco in 2011 to found Zoom, which became incredibly successful during the COVID-19 pandemic.
Yuan’s story is not unique. Many tech startup founders have previous experience in large tech companies like Google or Meta. Our research found that over 50% of US tech startup founders have worked in other companies before starting their own. The culture of these large organizations can be difficult to shake off when entrepreneurs start their own ventures.
We identified 30 different cultural elements in companies, including cultures of work-life balance, teamwork, authority, innovation, and customer orientation. By analyzing reviews on Glassdoor using natural language processing, we compared the cultures of ‘parent’ companies (where founders previously worked), ‘spawn’ startups (founded by former employees), and ‘twin’ companies (similar in size, product, and age to the spawn startups).
Our findings indicate that founders tend to transfer the culture of their previous workplace to their new startup. This transfer is more likely under three conditions:
- Length of Employment: Founders who spent more years at their previous company are more likely to transfer its culture.
- Cultural Congruency: Companies with internally consistent cultures are more likely to have their culture transferred.
- Cultural Typicality: The more atypical a company’s culture is, the more likely it is to be transferred to a startup.
These findings challenge the common perception that startups are inherently innovative and distinct from established companies. Job seekers looking for unique cultures may be surprised to find that startup environments often resemble those of larger tech companies. For founders, recognizing this tendency can be a wake-up call to intentionally shape their startup’s culture.
Our research suggests that the distinction between the culture of tech giants and startups is not as clear-cut as often assumed. By understanding how culture is transferred, founders can make more informed decisions about the kind of culture they want to create in their startups.
