But, the main stage is gonna be with Brian.

When he comes up and

talks about how he built the airbnb culture.

So you're here you,

I've been following the presentations.

And so, now you know how to get started.

You've built a team.

You start to sort of build your product.

It's off the ground, it's growing.

People love it, you figured out how to do that.

You figured out how to create a very special one of

a kind company with monopoly powers that's big,

and the market that you're chasing after

is slightly bigger than the paper air plane business so

you're good, right?

So, now what?

So, we're here to submit that actually culture is

the thing that's gonna be very, very important for

you to be able to scale the business.

As well as your team.

And hopefully,

after this talk you'll be able to know what,

what is culture?

Why does it matter?

How to sort of create your core values and think about

elements that sort of fit together for a core values

in the culture that create a high performance team.

And get some best practices for the culture.

So, what is culture?

Anybody have a, wanna take a guess at what,

how one should define this?

>> A set of values >> Yeah, that's good.

Did you look that up on the,

because you had a computer and Internet connection.

Did you just look it up?

So these are some definitions, that,

you'll find, in, in Webster's dictionary.

And.

But that, that.

We're at Stanford.

This is kind of a trick question, it's a CS class.

Questions are never straightforward.

The real question is, what is company culture gonna be?

You know, culture that we can

generally talk about society.

About groups.

About places or things.

Here we're talking about company culture.

And so how do one define company culture?

We can take the previous definition and

modify it a little bit.

And so every, this is a hint of how we may want to

define company culture.

Everyday blank and blank of each member of

the team in pursuit of our company blank.

And some people have filled these in with different

sort of things.

A, the first blank could be assumptions,

beliefs, values.

My favorite is core values.

The second blank for the B blank.

People have said behaviors.

My favorite, sort of,

answer to that is real action, how do you act?

And in pursuit of goals, that's kind of weak.

in, in, in pursuit of big and

hairy audacious goals, that's a little stronger.

But a better definition is in pursuit of the mission.

So.

Now that, sort of, we have that definition,

what do we do with it and why does it matter?

This is a quote from Gandhi,

your beliefs become your thoughts.

Your thoughts become your words.

Your words become your actions.

And your actions become your habits.

And your habits become your values.

Your values become your destiny.

If you don't have a good culture in the company,

you can't pursue your destiny.

Why it matters is it, it becomes the first principles

that you sort of go back to when you make decisions.

It becomes a way to align people on values that

matter to the company.

It provides a certain level of

stability to fall back on and it provides a level of

trust that people can sort of trust each other with.

It also give you a list of

things that you should be able to.

Figure out what to do and what not to do and what

the more important thing about that is what not to do

And then finally the other thing that is important is

it allows you to retain the right employees.

There are people in this world that are not gonna be

a fit for your company but if you have good strong

culture and good strong core values you'll know who you

wanna retain and who you do not wanna retain.

And if you took the,

take the first words the first letter of those it

happens to help you move faster.

Another reason.

You're thinking that's like all mushy stuff.

This is actually more scientific stuff.

So here are indices for,

from 1997 to 2003 of stock market index of companies.

And the S&P 500 and the Russell 3000 and

then for the Fortune 100 best companies to work for.

They survey all these companies out there and

they've picked out companies that they

believe are the best companies to work for.

And, the returns, the stock market returns of

those companies happens to be 11.8%, 11.08%,

which is almost twice that of the other two indices.

And so, there's real power in companies that treat

their employees well, where there is a lot of trust,

where there is a lot of strong culture.

So, how do you sort of create a, a set of values,

and, and sort of define the culture et cetera.

I get asked that a lot.

You got to start with the leader of the company,

the founder.

And, so ask yourself, what are the personal values that

are most important to you?

What are those things that are most important to

the business?

Who are the types of people you like working with and

what are their values?

And, through that,

you sort of distill together what a set of values are.

And think about all the people that you've

never liked working with, what values they have.

Think about the opposite of that, and maybe those should

be considered values for, for your company.

And, finally, remember this,

the values have to support your mission.

And, if it doesn't support your mission,

you're missing something.

And, and then the last,

final chapter, they have to be credible and

they have to be uniquely tied to your mission.

So, at Zappos, in terms of uniquely applied to

the mission, we're focused on creating a culture that

was gonna provide great customer service.

So the first core value we had was to deliver.

While through service.

We're very specific that we want to

deliver great customer service.

And it was gonna be a wild experience.

And then, below that,

we want to sort of add a paragraph supporting that.

Talking about exactly what we mean by that.

We want it to support them, deliver while through

service, and support people, such as our employees,

our customers, and our brand partners, and our investors.

In terms of the opposite thing, we generally didn't

like working with arrogant people.

So, one of our core values that's that was,

was to be humble.

So those are two examples where we sort of

create a core values in a way that sort of, sort of,

became credible and uniquely tied to our mission.

So, you go through this process,

you come up with a few core values.

These might be some of them.

Whether it's honestly,

integrity, service, teamwork and they might be a list of,

you might start with three.

You might end up with a list of ten.

You might list, list of 30.

It's a good start.

And when Zappos went through this process we started with

like, we asked all the employees at the time,

what core values they wanna identify with,

we came up with 37.

We initially, we sort of whittled it down to

about ten.

And it took a year to do this.

That's a long time and you might wanna ask why.

Well, if you just come up with the word honesty,

I mean give me a break everybody wants

the culture to be honest.

Now you.

Nobody is going to say I want to be lied to everyday.

service.

What do you mean by service?

There's gotta be a lot more depth in this than that.

And nobody, everybody talks about teamwork.

But there's a difference in level of

team work that you see in a intramural sports team as

versus a baseball team.

And so how do you sort of dive deeper into team work.

What are the things that don't work on for a team?

A lot of it has to do with communications.

A lot of it has to

do with things that people have studied.

And you might want to go deeper into that.

At Zappos we thought about well there

are a lot of smart people in this room.

When they're fighting with each and

trying to figure out whose right and whose not.

It's probably not the best use of time.

And we want everybody to sort of riff off each other

and help each other make any idea better.

The result is that the company gets a better idea,

not that any individual person is right.

So we wanted to instill this idea that

it's company first,

then your department, then your team, then yourself.

And how do you do that?

Gonna go a, ano, a level a little deeper than that.

There's another,

there's a great sort of sort of element of

high performing teams that I really like which is this

pyramid that was created by Patrick Lencioni and

he wrote this book The Five Dysfunctions of a Team and

the reason this is interesting is he

talks about the breakdowns of a teams.

First of all if you don't.

A lot of teams break down because they don't have

any trust.

Then, even if you had trust, why do you need trust?

Well, then if you have trust you can actually have

debates and conflict and get to the right answer.

If you don't have conflict and debate, people are just,

it's the blind leading the blind.

How do you know you actually got to

the right answer before you sort of commit to something?

So, people are not actually willing to commit.

They're afraid of committing.

And so let's say you get to the next level and

you are actually able to commit.

Well what, what goes wrong then?

It's usually because people are not held accountable to

things that they committed to?

And if people are not held accountable to the things

that they've committed to, then they can't get results.

And I would submit to you,

if you think about the company as a black box,

and results, whether it's financial,

whether you produce a great product,

or anything like that as the output.

One of the major inputs is the culture of the company.

So some other best practices we're gonna actually talk

about during Q and A because I think this is gonna blend

into the conversation is that you want to incorporate

your mission to values we've talked about that.

Performance, you gotta think harder,

deeper, longer about your values than