The Next Wave of Startup Culture

6 min read • Mar 30, 2021 • Kayla Voigt

If necessity is the mother of invention, 2020 created plenty of necessity.

The COVID-19 pandemic turned the economy upside-down with record-high unemployment, sharp economic contraction, and hundreds of thousands of businesses closing—some for good.

In times like these, Americans do what they always do: start something new. Even in some of the toughest economic times seen since the Great Recession, new business applications boomed, up 43% from 2019.

Business Applications Graph

Source: “How the Economy Is Actually Doing, in 9 Charts,” New York Times.

“One of the few bright spots during the pandemic has been a surge in new business formations, reflecting those laid off taking up self-employment, but more significantly the strength of household balance sheets built up through the crisis putting them in a position to start new businesses,” economics professor Steve Hamilton told the New York Times.

But these new startups don’t look like the startups from the mid-2000s. Gone are the ping pong tables and beer on tap. Today’s startups are all about flexibility.

Work from Anywhere

With COVID-19 closing offices around the country, the majority of Americans now work remotely in some capacity. 66% of startups believe there is no critical business need for returning to the office at all—with 81% planning to adopt some sort of remote work arrangement as part of their post-pandemic strategy. 

Working Remotely Survey results

 

 

 

 

 

 

 

 

 

 

Source: “Exclusive: Survey Finds Startups Drifting Away from Offices, Post COVID-19,” TechCrunch

“The majority of early-stage founders haven’t seen productivity take a hit during this period, but it remains to be seen what happens to creative output, team culture, and training over the longer term,” Brent Hoberman, who initiated the study, told TechCrunch. “The results prove both that early-stage tech founders are adaptable and that entrepreneurship is one of the best-suited professions to remote work.”

Flexible, work-from-anywhere options will define the next era of startup culture, with distributed teams from around the world. Many startups are ditching the office altogether in favor of digital nomadism as a group retreat. These so-called “hacker homes” attempt to recreate the energy from a WeWork or shared office space but have relocated from Silicon Valley to more tropical shores like Tulum, Mexico.

“The digital nomad scene has been bubbling for the past 2 to 3 years,” Rebecca Georgia, head of content at remote retreat company Outsite, told Lonely Planet. With historically popular destinations like Bali, Indonesia, closed for the foreseeable future, digital nomads and startups alike decamped to Mexico. “It’s definitely the lifestyle in Tulum. Many of the people here are heavily invested in health, wellness, and spirituality. There’s a certain magic about the place—it’s easy to stumble across sound baths, meditations, and temazcal ceremonies—and this might all be on a Wednesday after work.”

A Focus on Employee Wellness

Typical startup perks are changing, too. When everyone worked together in an office, catered lunches, holiday parties, on-site gyms, and built-in arcades or bars made sense as competitive benefits. But now? Employees want company benefits that are more practical than fun, especially when it comes to their health.

“Companies realize that people are feeling drained—mentally and physically,” Kevin Yip, COO of employee reward platform Bluebeard, told Wired. “We have a cohort of customers that have created separate programs to give well-being experiences to employees: Pelotons, Mirrors, Chorus meditation sessions, life coaches.”

That’s because fewer open positions and leaner teams have startups thinking about battling burnout and retaining employees rather than trying to entice new workers into the fold. Startups are now just as likely to offer free subscriptions to meditation apps and access to virtual therapy sessions as they are unlimited PTO. A complete wellness program now feels more like a necessity than a nice-to-have.

Work Hard, Play Hard

The “work hard, play hard” mentality still rules startups, though it looks a little different. 

Even before the pandemic, employees rarely used their vacation time. 55% of Americans didn’t use all of their vacation time in 2019, and 54% of workers said they felt guilty about taking time off at all.

But unlimited vacation policies common for startups completely backfired during lockdowns. “A lot of employees are very worried about taking time off,” Andrew Shatté, cofounder and chief knowledge officer of meQuilibrium, told FastCompany. “They might think it could undermine their job security. Or they worry about being disconnected at all. It doesn’t help anyone to be connected all of the time. It doesn’t help engagement or loyalty. Organizations need to set new ground rules and structure so that people aren’t at risk for burnout. Make it clear it’s okay to take PTO.”

Startups are responding by mandating vacation time instead. “We realized back in May that nobody was taking days off,” Ryan Denehy, CEO of IT startup Electric, told Wired. “You might not be able to go to the Bahamas, but we still want you to take days off.” Mandated vacation days, summer Fridays all year long, and designated mental health days are catching on.

Some startups are even helping their employees take vacations. Health tech startup Olive started leasing getaway homes for employees to encourage them to take breaks, while others are instituting company shutdown periods over holidays or long weekends.

Culture Still Matters

Whether your team has 5 people or 500, culture still matters. Building a sense of culture and connection gives employees a sense of empowerment and purpose—especially important in an always-on startup world. 

“Social interaction with your team will be critical. As cofounders, and even employees, you might barely know each other, and now you are working remotely, which removed all the organic ad-hoc social interactions from being in the same office. You will have to make an extra effort,” writes Bernhard Schroeder for Forbes

It may take more effort for a startup to launch during the pandemic, but today’s startups offer more freedom and flexibility—and they’ll continue to innovate.

Kayla Voigt

Kayla Voigt

Always in search of adventure, Kayla hails from Hopkinton, MA, the start of the Boston Marathon. You can find her at the summit of a mountain or digging in to a big bowl of pasta when she's not writing. Say hi on Instagram @klvoigt.