Hoodies, mafias and cults in “0 to 1” by Peter Thiel (Part I)
Understanding the role of startup culture in creating monopolies
Hey there, this is Uri (@rboriol). Welcome to Artefacts, where I share questions, learnings and stories on building company culture.
Business books often mention culture in passing, but rarely in any depth. To gain a comprehensive perspective on culture, we often need to piece together concepts, anecdotes, and examples from various books. I’ll be collecting some in this substack.
The first book we’ll talk about is: “0 to 1” by Peter Thiel. It’s one of the most famous startup books and it touches on many different aspects of company building. What he has to say about company culture is quite interesting and thought provoking.
Thiel’s perspective on culture
Like many successful entrepreneurs, Thiel goes on a rant about the confusion of perks and culture. We've hopefully moved past that debate by now, but just to be clear: ping pong tables and free snacks in the office are not the same thing as company culture. Those things are perks. Some of the most profitable tech companies ever to exist (i.e. Google) created these perks as an artefact of their abundance culture (one day we’ll deep dive into why they did that).
But copying artefacts without understanding their purpose will not convey the intended meaning. Artefacts are created with purpose. Just copying their appearance is kind of dumb. The why behind the artefact is way more important than the artefact itself. I’d even go further and say that an artefact without the purpose is actually detrimental to any culture. Just like having plastic surgery to look like a famous athlete does not guarantee their skills, copying artefacts without understanding their purpose will not create a strong company culture.
Thiel points this out in his book:
“What’s wrong with this picture? [Referring to the typical fancy offices with free lunch] It includes some of the absurd perks Silicon Valley has made famous but none of the substance - and without the substance, perks don’t work”
And then he goes on to define what culture is:
“Company culture doesn’t exist apart from the company itself: no company has a culture; every company is a culture. A startup is a team of people on a mission, and a good culture is just what that looks like on the inside.”
I find that definition a breath of fresh air, to be honest. The difference between “being” a culture and “having” a culture is subtle but significant. It makes it way easier to spot the tricksters that sell something they are not. For example, the phrase "We are a high-performance culture" implies truth, while "We have a high-performance culture" leaves room for deception. You can’t lie to yourself about what you are, it’s quite binary. But you can lie or be ambiguous about what you have.
Talking about being a culture focuses on the substance of the artefacts. Talking about having a culture focuses on the appearance of the artefacts.
On creating a Mafia
Thiel is the co-founder of PayPal, Palantir and Founders Fund. I’m sure you’ve heard about him and about the PayPal Mafia (former employees of PayPal that went on to fund hugely successful startups). But before that, he had climbed the ladder of a law firm, which gave him a front-row seat to the dynamics of an extremely competitive and transactional environment.
For PayPal, he wanted to avoid that kind of culture. And in doing so, he assembled a team of outstanding individuals. So, how did he do it? In short: by hiring people who would enjoy having each other as peers.
“I wanted PayPal to be tightly knit instead of transactional. I thought stronger relationships would make us not just happier and better at work but also more successful in our careers even beyond PayPal. So we set out to hire people who would actually enjoy working together. They had to be talented, but even more than that they had to be excited about working specifically with us”.
What’s under Silicon Valley Hoodies
Some people make jokes about this, but I’ve always thought the startup hoodies and t-shirts are actually extremely useful for culture building. I get why people would think it’s merely signalling: a hoodie with your startup logo on it can be a great example of having a culture, not being a culture. It could be the appearance without the substance.
I have never been able to explain why I don't think this applies to the majority of startups I know. Peter Thiel nailed it for me:
Everyone at your company should be different in the same way - a tribe of like-minded people fiercely devoted to the company’s mission.
What makes a startup employee instantly distinguishable from outsiders is the branded T-shirt or hoodie that makes him look the same as his coworkers.
Tech workers can seem all the same to you. In the end, they all wear hoodies. But the logos on those hoodies are different. They are different because they belong to different companies or tribes. And that’s all that matters to them.
The thought that struck me the most
At the end of his chapter about culture, Thiel caught me off-guard when he explored a controversial question: are startups like cults?
With a professional background in building a strong startup culture, I had shied away from this question. I feared the answer might not be binary, and if it was, it would point to an inherent problem. But reading Thiel encouraged me to lose that fear and examine the nature of an effective startup culture.
That said, the ramblings were too long to share in this post; the next Artefacts post will cover them.
That’s it for today. Thanks again for reading Artefacts.
If you have any comment, feedback or suggestion please don’t hesitate to send it to me via Twitter or at rboriol@gmail.com.
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I’ll be back with more posts soon.
Uri