Get All Access for $5/mo

There Is No Place for a Cult Mentality in Startups — Here's How to Detect and Avoid This Type of Workplace Many startups seem to foster a cult mentality, often towards the founders. Business cultures like this are frightening, unnecessary, unhealthy and counter-productive.

By Collin Williams Edited by Chelsea Brown

Key Takeaways

  • Many startups display cult-like characteristics, with employees showing blind dedication and excessive admiration for leaders.
  • Techniques such as undisputed loyalty and rejection of external input could signal a toxic, cult-like work environment.

Opinions expressed by Entrepreneur contributors are their own.

There is a doggedly negative stigma attached to cults, but, for years, many startups have fostered strikingly similar cultures and narratives. The parallels are frightening when explored. Look at the following definitions of the term "cult:"

"[G]reat devotion to a person, idea, object, movement, or work" - Merriam Webster's Dictionary

"[A] system of religious veneration and devotion directed toward a particular figure or object…a misplaced or excessive admiration for a particular person or thing." - Oxford Dictionary

"[A] situation in which people admire and care about something or someone very much or too much." - The Britannica Dictionary

Related: How Entrepreneurs Can Avoid a Toxic Work Culture

Are startups really similar to cults?

Startup culture is based on the notion of disruption, risk-taking and, often, an unfettered admiration and belief in the founder(s). I lived this culture at my first startup job and found it both fascinating and terrifying. I'll give you examples:

  • We had a weekly company-wide meeting where the founders would get on stage and whip the entire workforce into a frenzy replete with cheering and chanting. Very rarely was there a cogent message or strategy involved. Instead, these times were often used simply to disparage competitors and to foster some maladjusted team attitude;

  • I commonly heard employees repeatedly refer to the primary founder as a "genius" and "the smartest person I've ever met" even though he was a college dropout who had never done anything in his professional career beyond running this particular startup;

  • I spoke to the Head of Engineering who told me he heard an employee say "If this doesn't become a one-hundred-billion dollar company, I'll kill myself." How many one hundred billion dollar companies are there in the world? Maybe 100 in the United States and, possibly, 100 more in the rest of the world. The chance of becoming a one-hundred-billion-dollar company is infinitesimal. This statement made even less sense when considered against the Total Addressable Market for the business.

Despite the apparent lunacy of some of these actions and statements, I can say there was unequivocal belief in the founders that unquestionably qualified as a "great devotion to person(s) and work," that there was "misplaced or excessive admiration" for particular people, and that employees "admired or cared about something or someone too much."

Yes, shockingly, startups can bear a striking resemblance to cults

We live in a world where the startup mentality has become cultish. There are examples beyond my former employer. The cultures at WeWork and Theranos were legendary in their strangeness and likely led, in part, to their eventual downfalls. But even successful startups are not immune to this cultish behavior. For example, Uber became well known for its misogynistic and discriminatory practices, but when Travis Kalanick held an all-hands meeting saying that he would help the company change, even after colloquially calling the company "Boob-er" in 2014, many of the employees' concerns were assuaged.

Like any other business, startups are, first and foremost, a job. They are not a lifestyle or mindset. While every company should foster a culture they believe in, whether that is through actions, mission statements or core beliefs, etc., you should never lose sight of what a job is, which is a medium for paying bills and sustaining yourself.

Related: 7 Reasons Why Creating the Right Culture Should Be a Leaders Top Priority

What should you do if you feel like you're at a company with this mentality?

Whether you are in management or an individual contributor, here are some actionable steps you can take to prevent yourself from getting in too deep:

  • Always watch out for businesses where questions aren't asked and opinions encouraged. When you are involved in an oligarchy, there is a good chance there is a reason the founders don't want outside input.

  • Watch how your fellow employees act towards the founders. Is there respect and admiration? Or is there adulation and unfettered loyalty? Respect and admiration are often warranted. Adulation and unfettered loyalty lead down a path where there is limited or no accountability.

  • Do company meetings have substance? Or do they seem more like pep rallies? This isn't to say that company spirit is a bad thing, but it shouldn't be the only thing. In my opinion, transparency is paramount in startups. Employees need to know what is going on financially and culturally because it may impact how they perform their jobs. If you have no insight into what is substantively going on at the company, and that is masked with rah-rah fests, something is wrong.

  • Finally, and this is hands down the most important one, trust your gut. If something seems off, it probably is. I remember the interview process at my first startup and this overwhelming feeling that something was wrong. I didn't listen and took the job. I ended up quitting less than a year later and testified as a government witness against the founders (not a joke). Throughout my employment, my gut was telling me something was very wrong. I should've listened initially.

It's not all doom and gloom

That is not to say that you can't enjoy your job, even love it. In a perfect world, that would be the outcome. But enjoyment and/or love should never prevent you from questioning business strategies, raising concerns when something seems wrong and seeking to enforce policies that prevent discrimination or harassment.

Loyalty to founders, executives and your company is laudable. An unwavering belief in their infallibility and blind dedication is lunacy. Startup founders are humans, like anyone else. They have emotions. They make mistakes. They are flawed and imperfect. Don't convince yourself otherwise. And that includes me as a startup founder. I've got more faults than I can count.

Startups are fun, exciting, disruptive places to work. But they are places to work. They aren't religions. If you join a startup and see this kind of culture, run. Despite how the company may portray it as a simple culture, it's not normal. Find a startup where questions are asked, opinions are valued and no one asks you to wear ceremonial robes to team meetings.

Related: What Makes a Great Company Culture (and Why It Matters)

Collin Williams

Entrepreneur Leadership Network® Contributor

Founder and Chairman of New Era ADR

Collin is the Founder and Chairman of New Era ADR. Collin was previously General Counsel at Reverb.com which was acquired by Etsy for $275M. Collin also worked at Oracle, Greenberg Traurig, LLP and Butler Snow, LLP. Collin went to Middlebury College and Tulane University School of Law.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business Solutions

Increase Productivity with This Microsoft 365 Subscription, Now $25 Off

It can make the entrepreneur life a lot easier.

Business News

Apple Pay Later Is Ending. Here's What's Taking Its Place.

The program was available for less than a year.

Leadership

This Artist Answered a Businessman's 'Powerful' Question — Then His Work Became 'the Poster Child for Juneteenth': 'Your Network Really Becomes Your Net Worth'

Reginald Adams was the executive director of a Houston-based art museum for more than a decade before he decided to launch his own public art and design firm.

Leadership

Harvard Business School Professor Says 65% of Startups Fail for One Reason. Here's How to Avoid It.

Team alignment isn't nice to have -- it's critical for running a successful business.

Business News

Here's What Companies Are Open and Closed on Juneteenth 2024

Since it became a holiday in 2021, Juneteenth has been recognized by some major corporations as a paid day off.

Growing a Business

I Hit $100 Million in Annual Revenue by Being More Transparent — Here Are the 3 Strategies That Helped Me Succeed

Three road-tested ways to be more transparent and build relationships that can transform your business — without leaving you feeling nightmarishly over-exposed.