Keeping Your Startup Team Motivated
By: Charles Lacalle
Tags: Entrepreneurship, Startup

Keeping Your Startup Team Motivated

Strategies for Startup Founders from the Dreamit Community

One of the most important roles for a founder is keeping employees engaged. Study after study shows that engaged workforces outperform their competition. But every company is different and there is no one-size-fits-all approach to optimize for engagement. As a founder, you’ll have to craft a bespoke approach, but here are some methods that have proved to work for our portfolio companies AND for other startups.

#1 — Communicate Your Mission from the Get-Go

From the first moment you interact with a potential employee, you should be communicating your mission. “Culture starts in hiring,” states Kofi Kankam, founder of college admissions startup Admit.me. Kankam uses his own personal story in the hiring process and has built a team for his startup with people who appreciate the value of college. Many of his hires are first generation college students and some are first generation Americans. “We speak a lot about how we are changing people’s lives. We help people get into school and to change their life trajectory.” To show the tangible results of their mission, Kankam prints out pictures of the students they work with and hangs them in their office. You can also do things like showing your employees emails from the people who you help or have your customers come in to office.

“Your mission gives you a framework for making decisions.” — Kofi Kankam

This type of mission gives meaning to work which in turn gives employees a sense of ownership in the company. Many founders mistakenly believe that crafting a strong mission statement is enough, but the mission statement is just the first step of communicating your mission. You should constantly be reminding employees of the massive transformative purpose (MTP) of your startup, or the big problem or issue you are solving that will have a positive impact on society. This sense of purpose is apparent even to outsiders among the most successful organizations (think about the SpaceX, TED, Tesla). To figure out the MTP for your own startup, you have to ask 1.) Who is your startup impacting? 2.) What problem are you trying to solve?

For Simon Lorenz of healthcare messaging startup Klara, this MTP means building the central communication system for healthcare. Simon writes at the end of every offer letter that he knows the person might be able to earn a higher salary at another company, but he describes the impact of the problem that the company is solving for patients to convince them to join his team. “This is fundamental for any startup,” states Lorenz. He also emphasizes the need to remind employees about the mission all the time. “If you don’t talk about it constantly, then it’s not there,” said Lorenz.

#2 — Emphasize Teamwork

When employees feel like they are part of a team, they feel like they are doing something greater than themselves. This feeling will not only power them through rough patches during the day but will give employees endurance to get through rough patches that startups inevitably face in their early years.

Startup founders have begun to change the way employees are compensated to incentivize for collective rather than individual outcomes. (If you want to see an example of the opposite tactic, i.e. what not to do, see what happened at Sears when the company created a hyper competitive individualized incentive program.)

To increase teamwork, you first need to build trust. Group activities are one way to build trust. Increased transparency about what everyone is doing is another way. If you’re startup employees less than 15 people, you should be so tight-knit and aware of what your coworkers are doing that you’d be able to pick up the slack if something happened to any one of them. One startup coined the term “bus factor” to describe the importance of team members being able to quickly pick up slack if one employee leaves unexpectedly (or, as the name suggests, gets hit by a bus).

“When the members of a startup team are a closely knit group with shared ambitions, they have an innate respect for each other and are not keen on letting each other down. This helps in increasing the accountability of everyone’s work because peer pressure factors into the equation and motivates everyone to work harder for the team’s success. Even on days you don’t feel particularly driven to work, your concern for the team overpowers the lack of motivation and you focus on doing your work industriously.”

See our recent story on creating community within your startup for further examples on team building.

#3 — Offer Sufficient and Transparent Compensation

Compensation is inseparable from recruiting and thus in indispensable motivating factor for team members. In an early stage startup, founders might spend as much as 40–50% of their time searching and convincing the right people to join the team. Inadequate compensation can be a major demotivating factor, but a lack of transparency around compensation can be even worse. You should have conversations once or twice a year around the topic of compensation.

“There is nothing wrong with commission-based compensation, but if you’re only getting started, sales may be slow for a while. Make sure that you are filling in the gaps; otherwise, your team members may leave to pursue better (read: higher paying) opportunities with more established companies. Provide a sign-on bonus for the first 30 days, for example, or offer a weekly base salary to everyone who meets certain goals for their sales attempts.”

See this Guide to Compensation at startups for more information on creating a fair, transparent system.

#4 — Meet with Your Team Often

If your startup team feels as if they’ve been tossed out into the ocean to sink or swim, they’ll quickly lose the motivation they need to help you build your company. For this reason, it’s important that you meet with them often — perhaps even daily at first — to discuss some of the challenges the startup faces. When you actively reassure and motivate people, and when you address their concerns legitimately, they’ll keep fighting for your success.

When you are meeting with your team, don’t be late for meetings and don’t reschedule. It implies to employees that you don’t care that much about them.

When you’re meeting with your startup team, make sure that you’re keeping them in the loop about the current state of affairs and the future of your company. If you’re doing very well, share that with them. If things have started to take a bit of a nosedive, share that with them, as well. The goal is to show them the impact that they’re having on the company and give them a chance to have a say in things that are happening.

If you do choose to share problems with your team (which you should do), wait until you have a roadmap to work through those problems.

#5 — Be Transparent and Show Empathy

As you scale, you have to be more transparent. If you can’t make payroll, you do NOT want employees to figure this out on their own. If your employee knows when you are being challenged, they may feel some uncertainty, but in the good times it will feel a lot better. If they are aware of your problems, they might come up with solutions that you did not think of before.

If you are on the road or apart from your team, you should consider using video to communicate with the team regularly. Email is not always personal.

When you speak with them, you must show empathy. In the height of the financial crisis, Dreamit CEO Avi Savar still worked as founder and CEO of Big Fuel. At the height of the crisis, the company experienced a cash crunch. “We had contingency plan upon contingency plan. Finally, we told the entire staff we did not want to let anyone go but we knew we had to make some cuts.” Instead of hiding the cash crunch, he proposed a 20% pay cut across all employees to get through the trying time, rather than laying off employees. He and his cofounder took a $1 a year salary. The team sacrificed collectively and did not complain, and his employees showed up in his office later and thanked him.

#6 — Give Feedback (Positive and Negative)

There is no one tool that will solve the problem of feedback. You have to figure out your own methodology. One important thing is meeting with everyone one on one and making sure you are asking them a few questions on a regular basis. Your intent as a manager should be to take away the obstacles in front of them.

When giving feedback remember to discuss things that are fact-based, talk about how it had an effect on others, and give a recommendation on how they can improve that behavior going forward. Then offer your assistance going forward.

The praise is public, the critique is private. — Kofi Kankam

Further Reading:

On Emphasizing Teamwork

Energizing Your Coworkers

Importance of Mission

Full Dreamit Podcast on Motivating Your Startup Team

Giving Good Feedback at Startups in Forbes