This XSeed blog was written by XSeed Capital Partner, Robert Siegel, and originally appeared on TechCrunch.
I am watching my oldest child explore where she will want to attend university when she completes her final year of high school. This past month my wife and daughter drove through six different states and looked at over a dozen universities and colleges, with the hope that my 17 year-old child will find a place where “she fits in” and will feel excited about the next phase of her life journey.
At this same time, as is the case every spring, I am having numerous conversations with many of my students at Stanford about what their first job will be when they complete their graduate studies in the next month. The issues they wrestle with include not only finding a company that has a chance for growth and commercial success, but also one where they will enjoy the people with whom they work and look forward to going into the office every day.
And for those of my students who are contemplating starting a company, many of the entrepreneurs are spending a great deal of time thinking about the type of people they will want to hire and the culture they will want to design into their new entity.
In each of these situations, I have found that people are searching for more than simply their next job, firm or life experience, but at some level they are also on a quest to find for their tribes.
Webster defines a tribe as: 1) a group of people that includes many families and relatives who have the same language, customs, and beliefs; 2) a large family; 3) a group of people who have the same job or interest.
In my class at Stanford on the Formation of New Ventures we teach a series of cases that follow the arc of the entrepreneurial journey — from coming up with an idea, to raising capital, to failing, and even to getting acquired. What is surprising is that when guests come to class and talk to the students about their work stories, they share extensively about not only the challenges of achieving commercial success (or not), but also more personally, the ups and downs of their experiences and the relationships they cemented or destroyed along the way.
When I think of the technology startups that my venture firm, XSeed Capital, funds and I watch the roller-coaster rides of the teams as they go through both good times and bad, I am reminded that one of their desires is to build a tribe of individuals who share a set of common goals and cultural norms while striving to build a new product, service or technology that no one else has. Each set of entrepreneurs has a goal to be effective in constructing a team that can work well together — through the ups and downs of the product development and startup cycles.
In the technology industry, where it is axiomatic that the most valuable asset of a company is its people, building a strong tribe can have tremendous advantages. Not only can it increase loyalty and reduce turnover — helping with the retention of institutional knowledge and provide cost savings on recruiting — but it can also make teams more effective at solving problems.
When teams have a common language, a known set of operational practices and methodologies, and when they operate under a set of agreed-upon values and rules, they can be extremely effective in solving difficult problems.
However, there can also be a downside to tribalism. The notion of tribal conflict arises when cultures become insular and disconnected from their broader ecosystem. Companies can lose sight of a changing environment and miss transitions to new technology architectures, new ways of doing business, and new requirements of customers.
Companies such as Intel, Microsoft and HP, all of whom had strong cultures that were celebrated in their day, lost their way in the transition to a mobile and cloud-based world, and their existing ways of thinking, communicating and looking at the world surely contributed to these very smart people missing tectonic shifts in their industries.
I would also posit that the challenges the tech community has faced in several neighborhoods in places such as San Francisco can partly be attributed to several tribes losing perspective on other tribes with whom they bump up against outside of normal work settings (perhaps best exemplified by the conflict captured on video between several Dropbox employees and a group of local youth).
The desire of technology companies to build distinct and powerful tribes is one of the most consistent and foundational aspects of Silicon Valley. This very powerful instrument can be an important source of coherence that helps teams work through the challenges of inventing something new, since the journeys of startups and the creation of new technologies tend to be delicate and most often lead to failure.
However, the trick for a leader of a technology company is to figure out how to garner the benefits of building one’s tribe without having this coherence lead to an inability to recognize and adapt to a constantly changing world.