- The importance of building and scaling a good company culture is emphasized by successful founders of companies like Dropbox and Airbnb.
- The concept of culture can be nebulous, but it is important to think about it at an early stage and break it down into manageable action items.
- Claire McDonald, founder of TruLink, and Jennifer Kim, former employee at Lever, are introduced as experts in building culture and diversity and inclusion (D&I) initiatives.
- Culture has gained more attention recently due to its impact on long-term economic performance, employment growth, and revenue growth.
- Culture is often misunderstood and can be difficult to manage and measure, but it is still important.
- TruLink has invested in building an inclusive culture from the beginning and sees the benefits of small daily investments in culture.
- The benefits of intentionally focusing on culture early on include creating a pleasant and respectful work environment, attracting and retaining top talent, and having a competitive advantage in recruiting.
- Culture is a powerful tool for hiring and retaining the best employees and connecting them to the team and mission.

- An inclusive culture is important for creating a great work environment and retaining valuable employees.
- Culture should not be seen as a luxury and should be prioritized from the beginning.
- Even with constant focus on culture, mistakes will still be made, but it is important to learn from them.
- Starting with small actions, such as checking biases and avoiding blame, can make a big difference in creating an inclusive culture.
- Giving credit where it is due and amplifying ideas from underrepresented groups is important.
- It is crucial to value and celebrate all teams equally, rather than prioritizing certain teams over others.

- The company focuses on providing cross-functional exposure to its employees through various initiatives such as growth marketing and financial advising sessions, ride-alongs with the support team, and coffee/lunch meetings with different teams.
- New hires are made to watch real sales calls during their onboarding to understand the challenges and complexities of the job.
- The company has a strict "no jerks" policy in hiring, assessing candidates for humility and respect through feedback, interactions with different teams, and discussions on diversity and inclusion.
- The company values feedback and encourages open conversations by conducting diversity and inclusion trainings, modeling respectful communication, and investing in emotional intelligence.
- The company has implemented communication tools such as nonviolent communications and the Colors assessment to improve understanding and tolerance among employees with different communication styles and preferences.

- The speaker emphasizes the importance of understanding oneself and being tolerant of others' differences.
- They mention the significance of founders and executives being open about their mistakes, as it helps create a culture that includes all kinds of people.
- The speaker shares a mistake they made at YC by not providing a mother's room at their Female Founders Conference, highlighting the need for diverse perspectives and experiences on a team.
- They discuss the challenge of playing multiple roles at a startup and the importance of providing clear expectations and communication.
- Writing things down and investing in onboarding are suggested as ways to avoid confusion and ensure explicit guidance.
- The speaker recommends resources such as Facebook's Managing Bias training, Kapor Capital's Founders Commitment, and First Round Review for learning about culture and inclusion.
- Project Include is also mentioned as a valuable resource for building the right foundation for a company's culture.
- The speaker addresses the issue of interruptions in meetings and suggests ways to reduce them to avoid perpetuating power dynamics.
- Understanding diversity and inclusion is important for team leaders, as it provides valuable information and signals for improvement that benefit the entire company.
- The speaker encourages founders and team builders to start thinking intentionally about culture and diversity from day one, and emphasizes the importance of learning to become better culture leaders.

- The conversation around becoming a better culture leader is not being talked about enough.
- Taking care of oneself is crucial for being a great culture leader.
- DNI and culture should be everyone's business, especially leaders.
- Encourage others to care about culture by sharing resources and starting conversations.
- Figure out why you care about inclusion and culture.
- Empower members of your team to be leaders in building an inclusive culture.
- Founders need to empower others and give them autonomy to take on leadership roles.
- Lever became known for embracing D&I because the founders were authentic and empowered others.

- Building and scaling a good company culture is important for long-term success.
- Experts in building culture and diversity and inclusion initiatives are introduced.
- Culture has gained attention for its impact on economic performance and growth.
- TruLink has invested in an inclusive culture and sees the benefits.
- Focusing on culture early on attracts top talent and gives a competitive advantage.
- Culture is a powerful tool for hiring, retaining employees, and connecting them to the mission.
- Small actions can make a big difference in creating an inclusive culture.
- Valuing and celebrating all teams equally is crucial.
- The company provides cross-functional exposure and onboarding experiences.
- The "no jerks" policy and open communication are important in building culture.
- Understanding oneself and being tolerant of others' differences is emphasized.
- Learning from mistakes and providing clear expectations are important.
- Resources and tools are recommended for learning about culture and inclusion.
- Interrupting power dynamics in meetings is addressed.
- Intentionally thinking about culture and diversity from day one is encouraged.
- Taking care of oneself is crucial for being a great culture leader.
- D&I and culture should be everyone's business.
- Empowering team members and giving them autonomy is important.
- Lever embraced D&I authentically and empowered others.

Claire McDonnell - https://twitter.com/clairethere - is cofounder and COO of True Link Financial (YC S13) - https://www.truelinkfinancial.com/. True Link is a financial services firm that offers money management, investment, and insurance products, primarily for retirees.

Jennifer Kim - https://twitter.com/jenistyping - is currently advising startups. Prior to that she was the Head of Employee Experience and Development at Lever - https://www.lever.co. Lever makes recruiting software and they were part of the Summer 2012 batch.

Kat Manalac - https://twitter.com/KatManalac - is a partner here at YC.

Okay, so we'll just like dive into this and I'll start by saying, you know, I've heard many successful founders, founders of later stage companies like Dropbox, Airbnb, say that 1 of the most important things that they spend their time on as founders and as CEOs is building and scaling good company culture.

So culture is this really nebulous concept and so I wanted to discuss why it makes sense to think about it at an early stage and how to break this nebulous concept into more manageable kind of action items that early stage founders can put into place.

So last year I had about 50 conversations with founders of early stage companies and the people at those companies who were building culture and D&I initiatives.

And so I wanted to introduce everyone here on the podcast to 2 of the people that I thought were the most thoughtful and had done some incredible work in this space.

She's the founder of TruLink and TruLink makes software.

It's tech enabled financial services for older adults.

And 1 impressive thing is that they have a woman or person of color who is leading each of the teams there.

And TruLink has made some incredible progress.

Their customer base has grown about 20x over the last 3 years.

And I spent about an hour and an hour and a half talking to Claire's team recently, and it was really clear to me that Claire and her co-founder, Kai, were doing some very intentional thinking about culture and D&I at TruLink.

And so Jennifer was 1 of the very first employees at Lever, a company that builds recruiting software.

And they're at close to about 50-50 male-female split in terms of the employees, which isn't easy, is not an easy feat in Silicon Valley.

And so She is sort of 1 of my mentors in a lot of this.

She's authored a lot of incredible resources for startups and founders who are interested in learning about D&I and culture and how to implement them in really early stage startups.

So why do you think there's so much attention around culture nowadays?

In the press, among founders, you know, in blog posts, people are talking more and more about culture than ever.

And I've always thought it's been an important thing.

In 1992, for example, there was a study by HBS and the Cotter Institute that detailed the corporate cultures of 200 companies.

And they showed how good culture affects everything from long-term economic performance, employment growth, revenue growth, and companies that focus on culture outperformed by a huge amount.

So why is this now being talked about more commonly?

Yeah, I mean, culture can be kind of tricky to talk about, right?

You ask fish about water and the response is, what's water?

So culture is very much how things are run.

It's the lens for everything your team works through.

What's hard about culture sometimes is that we

Often we're talking about what's really visible and tangible, or what's really kind of extreme negatives.

On the tangible front, the common misconception is that, oh, we have a great culture because of this ping pong table, or happy hours, which is great.

But it's actually a very, very small part of it.

Your culture is all about how you hire, what kind of conversations, what's the energy of the room, how do you make decisions, who gets promoted.

It's not always so visible, So it can be a little bit tricky to talk about, and therefore hard to manage, and sometimes even hard to measure.

But that doesn't mean it's not important.

And then on the second end, if you're watching the news these days, there's a lot of attention on Uber.

Oh my gosh, how many articles have we all read about Uber?

And that's a kind of a negative example, but, you know, there are so many great companies out there really kind of quietly toiling away, working on culture, being really intentional.

But it wouldn't be a very click-worthy headline.

Employees are generally civil to each other and pretty happy with what they have in terms of culture.

So It's really easy to get intimidated and like, oh gosh, what are we supposed to do?

There's so much, we don't want to be the next Uber.

But it's just like any other skill, right?

If you're a founder, if you're growing a team, even if you started as a, say, an engineer or hacker, you're probably having to get good at sales and marketing and culture and being a culture leader is 1 of them.

So we started back in late 2012, early 2013.

So how has the conversation, even internally at TruLink, changed about culture and D&I?

Is it something you thought of since the very beginning?

Or has it sort of increased as you've grown?

from the very beginning, and especially about building an inclusive culture.

But it seems like we think about it almost more every single day because we see the payoffs of having invested in it every single day.

And I think the lesson we've learned over this time, over the last 5 years now, since we started back in 2013, late 2012, is that the way you build your culture is by small investments every single day.

And that rather than being a distraction from the business of running your company and from the sort of constant existential threat that you're under as a startup, investing in your culture actually insulates you against that threat, right?

So being part of a team that trusts each other, where everyone believes they're being treated fairly and they're all in it together, that's actually how you survive, not how you distract yourself from survival.

I sort of wanted to piggyback off what you were just saying about what are some of the benefits of intentionally focusing on your culture early on?

the things that you've both seen from your work?

Well for me, the privilege of being a founder or an early employee is that you actually get to create a new little world, a new community, a new environment.

And so the benefit of creating that world in a way that doesn't necessarily replicate the dysfunction of the world outside the office doors is that you get to be a part of it.

So I actually like going to work every day.

I think most members of our team feel respected and valued, or we certainly try to make it that way.

And that's really great and really pleasant, actually.

That was 1 of the things that struck me from talking to your team.

Every person I talked to had, could repeat to me what the mission of the company was and what their role was in making that happen.

And the thing that kept coming up over and over again was respect.

They said that they focus on hiring people that respect each other, respect the elderly.

They, you know, they, respect was something that came up multiple times in my conversations with everyone.

And so I thought that was a really interesting thing.

It's like, respect was like the major theme of the conversation.

For us related to that at Lever, we've seen huge benefits in terms of both recruiting and retention.

So recruiting for example, we had 1 QA engineer who was hired because her friend was also interviewing for that role and he was actually underqualified, he was great, but just a little bit underqualified, was turned down.

But he loved going through the process so much and he kind of fell in love with a little bit of the lover's culture.

So when he got turned down, he actually told his friend, hey, you should apply.

And she had more experience and she was fantastic.

So I think it's really going to be a competitive advantage, right?

Like imagine every person that comes across, you know, applying with their resume or you ever interview them.

What a powerful recruiting force that can be.

On the retention side, for a long time at Lever, we had such low attrition rates because people feel connected to the work and the people and feel proud of where they work, like Claire just said.

I think our salespeople and engineers are all great.

I mean, they're getting weekly recruiter reach outs, promising them, but we'll give you so much more equity, and here's how much more we can pay you.

There's always going to be companies trying to poach away your best employees.

But again, they stay because they want to, because they feel connected to the culture.

1 engineer who's been there 3 years, his name is Zia, he told me once, technical problems, the really cool ones, will come and go.

There will always be a new cool thing to work on.

But he stays because really finding that right team and environment, like, that's truly the rare thing in Silicon Valley.

I think that's absolutely correct, is that in hiring the best people and retaining them, I think culture is the biggest kind of, you know, tool that you have in the toolkit for that.

Because there are so many companies, recruiting is so hard.

I mean, you've both been on that side of things and to have people be connected to the team and to the mission, I think is a great piece of it.

That's sort of the business case for an inclusive culture, right?

In addition to an inclusive culture making a company a great place to be every day, fundamentally, especially at early stages, you have to create an environment where all your employees and your most valuable employees that have your institutional knowledge want to keep coming back to work every day, want to ignore the emails from recruiters, and want to choose your company again every day.

And an inclusive culture where people are treated fairly, I think, is really the only way to make that happen.

Yeah, I feel like for a long time, culture was kind of seen as a luxury.

We need to focus on growth first, and we'll kind of worry about that later when we're much bigger or when it's not my problem anymore.

And because there is now so much attention on this, even externally, I think it's popping up in founders' minds much sooner than maybe it once was, perhaps.

So these are really great examples of when you're doing culture right.

These are some of the things that you do well.

But as you were saying, at the beginning of a startup's life, every day is a fight for survival.

So what happens if you don't think about it until later?

Well, I think here's the thing to keep in mind.

Even if you do think about it all the time, as I think 1 of our team members told you, some members of our team think about it obsessively, you still make mistakes all the time, right?

So we think about this, we invest in this, and we're really far from perfect.

So as I'm thinking about all we've accomplished, also running through my mind are all the mistakes and screw ups that we've made, right?

And how, you know, I feel like the thing we're proud of is how much we care and how we're making progress every day, but nobody's perfect.

So if you're not investing and trying to not make mistakes, you're probably making even more of them.

Yeah, that's a really good point because, you know, especially for folks who haven't thought a whole lot about culture or diversity and inclusion initiatives, they might think like, well, like, you know, that's not my background.

But it is such a critical part in that it's not as hard as you think to get started.

If you're looking at, for example, Airbnb, like, oh my gosh, look at all the culture initiatives they have.

Like, well, they're so much bigger than you and they've been going at it for a long time.

So I think really lowering the stakes and kind of seeing it as a muscle to develop and practice.

And it really helps to do it from the beginning so that you build good habits as an organization.

I think the key to remember is that, yeah, no 1 is perfect.

I don't know if anyone's born an amazing culture leader.

I think As long as you are authentic with your intentions and you're open and you really bring in conversations and approach it as a team activity, no 1 person's in charge of culture, you can really do a lot together.

So let's kind of dig into, let's get even more specific and start digging a little bit into tactics.

Because as we're talking about how do we make this a muscle that we can sort of exercise and make stronger.

So from day 1, what are some of the things that you recommend founders do even when it's just 2 people in a room?

So for me, the Achilles heel of an inclusive culture is unchecked biases.

So it's letting all the cognitive biases in our head run rampant without checking them ourselves or creating ways for our colleagues to check them.

So we've introduced a variety of small things that help us check ourselves and check each other that I think make a huge difference in culture and are actually really easy to do.

A big theme for checking biases for us is credit and blame.

So there's a lot of research that shows that women and people of color get less credit for their accomplishments and get blamed more or sort of, the things they screw up are remembered more.

1 thing is, this is how I remember it, it's not what we actually call it, but I think of it as no blame button.

In GitHub, you can click a button that basically shows you where the offending code is that caused a problem, which is actually an extremely useful feature.

So no hate on the blame button, but we try not to have a cultural blame button, right?

So when there's a mistake or a screw up, what we collectively try to do, and anybody who's available tries to do is solve the problem, not focus on blaming someone for it.

Then only once we've solved the problem and put things in place to make sure the same thing doesn't happen again, do we reflect about how that happened and collectively working to make sure that doesn't happen again.

Otherwise, I think you can sort of fall into patterns of scapegoating and blaming people and holding things against people really easily.

And if you have that as a part of your culture, it's almost inevitable that some people are going to be targeted more than others.

Yeah, that's really great because, yeah, like you said, there's all these patterns.

Plus, the more it happens, less people will be to take risks, right, because they just want to be blamed.

So it sounds like you're really setting up an environment where people can try things out and you don't have to have it all figured out, but you're more likely to get big wins out of that too.

And the other side of no blame button is actually making sure people get credit and amplifying credit where it's due.

So this was a story that, there was a story that came out of the Obama White House that reminded me of kind of how we've approached this at TruLink, imperfectly, but we try, which was, and correct me if I get the details wrong, in the first year of the Obama administration, some of the women who worked there noticed that they and other women weren't getting credit for their ideas in meetings.

So they started using a great strategy, amplification, which is when Kat says something in a meeting, instead of saying, that's a great idea, I say, Kat's idea 2X is a great idea, just to make sure that everyone hears that it was Kat who said it.

We also try to make basically acknowledgements and shouting out to people for the good work that they do, an important part of our culture in an ongoing way.

It's the most popular section of all company meetings where you have a big, wide open period of time where people are basically telling people about the good work that other people have done.

And I think this is especially important across teams, right, so people on the engineering team are hearing about the specific accomplishments of members of the marketing team, the support team, and vice versa.

1 thing that I wanted to ask you specifically was when I talked to your team, there was a sense that everyone felt really appreciated.

So they said, you know, we're building an environment where the ops team is as respected and celebrated as the engineering team.

And when you talk to a lot of companies, especially in Silicon Valley, there's a sense that software engineering is the golden egg.

Everyone is excited about the engineers and ops kind of gets left behind.

How do you create a culture where all people feel as celebrated?

Well, it's definitely an uphill battle in Silicon Valley.

So this particular issue is sort of a bee in my bonnet and a bee in my co-founder Kai's bonnet as well.

And let me tell you why and tell me if this sort of theory makes sense to you all.

So I think that prizing certain teams at companies, so it used to be sales teams, now it's engineering teams, is, I think prizing certain teams is actually a coded way of prizing certain races and genders.

So I think we all know that in most companies, the majority of engineering team are men, for example.

And mad props to you if that's not the case in your company and you can just stop listening.

But, so when you actually treat that class of employees differently than you treat everyone else, And I'm not talking about kind of keeping up with market compensation, I'm talking about the way you talk to people, the perks people get, and the way leadership focuses on 1 team versus the other.

When you treat teams differently in that way, I think what you're actually doing is perpetuating society-wide biases about race, gender, ethnicity, and things like that.

So I think unless you've achieved perfect diversity and your engineering team is a mirror of our society, a balance of gender and race and ethnicity and age across teams that mirror each other and that mirror society at large.

If you are prizing your engineering team over everyone else, you are perpetuating biases and discriminating against folks.

So breaking that down a little bit, how do you make sure that the ops team, other teams don't feel

So here's the tricky part is part of this is that we authentically believe that they are not less important.

So we have 99% customer satisfaction ratings from our support team.

We have the highest net promoter score I've ever seen in financial services.

That's not because of the engineering team and our amazing products.

That's because of all the teams at the company and all the people and the wonderful, talented people who lead those teams and who we've retained for multiple years because we value them.

And I think actually It's worth founders looking in the mirror and asking themselves, do I believe this?

Do I see how they contribute to the company?

And then once you answer that question for yourself, it becomes easier to, in team meetings, to talk about that, to acknowledge the different roles of different team members.

We also do sort of trainings and sessions at our team retreats to help people understand the contributions of other teams.

So at our last retreat, we did a growth marketing 101 and a financial advising 101 so people could really understand tactically what those teams do and how technical and complex and challenging it is.

We also do what we call ride-alongs with our support team.

So engineers and other team members actually sit with the support team and listen to them engaging with folks.

And after 2 hours of sitting with a member of our support team, you cannot help but be awed and respected by what they do.

Another thing we do is when people join the company we make sure they have coffees and lunches with people from all different teams of the company, so that people really get to know each other and have human relationships and respect each other as humans in addition to their roles at the company.

We do some similar things too with both onboarding and ongoing.

So that cross-functional exposure can be so important.

So for example, people used to come in to Lever as new hires saying, oh, you know, I've heard such great things about the product.

So as part of our onboarding, we actually have every new hire, every onboarding class watch what a real sales call looks like and then do a Q&A with a sales rep because that notion gets thrown out the window.

You hear how stressful it can be, the questions that get thrown at you, the frustration sometimes that the sales rep has to really navigate through but still come top of the game and really push that deal forward.

And then the Q&A is fascinating because every time it's like, wow, my blood was boiling listening to that call.

How do you handle that kind of question and that?" And over time, it really builds a respect for the other function, right?

So this room of, not to pick on engineers, but like, I'm an engineer so I'm better, there's just no room for it because you understand how hard those jobs are and how, it's a good self-reflection exercise for like, man, if I were in that role I would probably suck at that job.

And really realizing all of us here for a reason.

We have a role to play to make the entire business successful.

Also, that reminds me of another 1 of our approaches to this challenge, which is our no jerks policy.

So in hiring we have a very firm no jerks policy and every time we violated that it's been a really big mistake.

So 1, we put it on our job description, so we hope that helps screen people out.

But also, we're basically looking for humility and respect in the hiring process.

We focus on times people have gotten feedback, asking them to tell us about that and how they responded to that and how they changed their behavior.

We have people interact with members of a lot of different teams on different levels and we evaluate how they treat everyone basically, that's a really big 1.

And then we also discuss diversity and inclusion in our culture.

We talk about our value of humility and respecting different functions, things like that.

So from across those things it actually becomes pretty clear pretty quickly and I think that's a big factor in why our team is composed of actually all the wonderful people that it is.

Adding on to you know yeah hiring for it, the no jerks policy, really the watching how candidates interact with different levels of people can be so key.

Our receptionists are told if for any reason, anyone, any candidate makes you feel disrespected or there are any comments, like let us know right away.

So it was either me or let the recruiter know because the person who was a little bit rude to the receptionist, you know, but comes across as super suave and confident with everybody else, That might be a flag.

Of course, it's not going to be the automatic veto power, but it's just 1 data point of many you are collecting in the hiring process.

Another example I have of this is we were hiring for a PM, product manager, and there was this person with the perfect resume, all the right schools and companies, and they just were so confident that everybody was, you know, in love with this candidate and it looked like a pretty, you know, full speed ahead for his hiring.

And when we were doing 1 of the hiring debriefs, 1 of our most junior members of the product team kind of hesitantly raised his hand and said, hey, like, I don't really know how to say this, but I had some weird interactions with him.

So it turned out during that conversation, So there were 3 people in the room, and the most junior member felt like this candidate wasn't ever addressing him, so would not make eye contact, would kind of talk over him, only answer questions and ask questions of the more senior PM that was in the room.

So he was saying, and he felt so bad bringing it up because he wasn't sure it was appropriate.

But once he said it, it kind of made us realize, actually he is a little bit, comes across as arrogant.

So really that distinction of someone who interviews really well versus when someone kind of gives indicators of who they are kind of like as a coworker, it can be like such a huge wake up call.

Because once we're looking at that candidate with that lens, we started kind of remembering like, oh yeah, there was that 1 little weird moment or he did say this and this email kind of run me the wrong way, but we'd kind of gotten dazzled by their resume, which happens all the time.

So I think assembling interview panels across multiple levels can be really, really helpful.

We do something really similar and actually a really helpful tool for us in making our interview panels even more effective and really pulling out feedback from people has been Lever And using the feedback forms on Lever, actually before we even get together as a group to discuss things, so that everyone feels like they have, no one's influenced by other people's view and everyone's sort of forced in a disciplined way to talk about the pros and cons of a candidate.

And Lever's been really helpful for us in surfacing some of that.

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Claire McDonnell and Jennifer Kim on Building an Inclusive Company Culture