In venture capital, we often talk about great companies. Those that build transformative products, scale rapidly and achieve commercial success. But what separates great companies from generational ones?
When we reflect on the lasting impact of companies, a common thread emerges: a deeply ingrained, intentional culture. These companies don’t just onboard new employees; they immerse them in a structured system designed to instill their values, mission, and ways of working from day one. These generational companies establish “The Walmart Way” and “The Amazon Way” as more than slogans, but as playbooks that define how these companies operate and scale.
The Role of Leadership in Cultural Foundations
At the core of every generational company is leadership that not only establishes the company’s culture but also lives it every day. Founders set the tone, not by merely articulating values but rather by embodying them. A mission and set of values without dedicated leadership to reinforce them will remain abstract concepts. It is the founders’ responsibility to ensure that these principles are more than words on a page—they must be embedded in decision-making, hiring practices, and daily operations.
Culture as the Structural Foundation
Think of a company’s culture like the foundation of a building. If you construct a single-story structure with weak materials, you might not notice immediate flaws. But if that same foundation is expected to support a skyscraper, every imperfection will be magnified, putting the entire structure at risk. Similarly, the cultural decisions made at a company’s founding will either enable long-term success or cause cracks to appear as the company scales.
For early-stage companies, hiring is not just about acquiring top-tier talent, it’s also about identifying people who align with the company’s cultural DNA. Skills and expertise matter, but equally important is how employees operate, collaborate, and make decisions.
Culture as an Extension of Mission and Values
A company’s culture is intrinsically linked to its mission and values. The mission answers the question: What are we seeking to achieve? The values define how we execute that mission. Together, they create a framework for decision-making, hiring, and long-term strategy.
Early hires should be more than just executors; they should be doers who can translate vision into action. But founders must also think beyond immediate execution. The early magic of success must be captured and translated into scalable, repeatable processes that endure as the company grows. The ability to replicate and scale is what differentiates a short-lived success from a company that becomes an industry-defining institution.
Planning for Scale: Hiring and Leadership
One of the most common mistakes early-stage founders make is hiring for their immediate needs rather than for future scale. It’s not just about filling roles—it’s about setting the stage for a company that can sustain success beyond the first few years. Founders should be deliberate in building leadership teams that can reinforce and evolve the culture as the company grows.
Capital Efficiency and Cultural Investment
Founders of early-stage companies often focus on capital efficiency, experimenting, and scaling thoughtfully with the available resources. While this is essential, capital efficiency should never be used as an excuse to deprioritize investment in company culture.
Sustainable success requires investing ahead of growth in culture, infrastructure, and people. The companies that endure are the ones that recognize that culture-building is not just a box to check, but a continuous process that evolves alongside the business.
The Recipe for Long-Term Success
When we look back at generational companies, their success isn’t just about what they built, but also about how they built it. The methodology (their way of working, decision-making, and leadership) is what enabled them to scale, endure, and redefine industries.
For founders, this means taking culture as seriously as product and vision. It means creating an intentional system that ensures values are not just understood but internalized by every new hire. And it means leading by example and fostering an environment where employees don’t just work for the company but actually believe in it.
