Thanks to These 3 Values, This Startup Has Shockingly Low Turnover After ditching Silicon Valley for Phoenix, the founders of the ecommerce startup Tuft & Needle were able to invest more in their employees, resulting in low turnover.
By Jonathan Small •
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For the second year, Entrepreneur partnered with CultureIQ to find the best office cultures in America. For more companies, tips and profiles, check out the rest of 2017's Top Company Cultures package.
For the past two years, mattress startup Tuft & Needle, has held its company retreat on the banks of Lake Powell in Arizona, where employees camp and hike for four solitary nights. There are no PowerPoint presentations, no training seminars or trust falls, no set schedule or planned activities to speak of – except for the all-important dinner.
To some this may seem like a tremendous waste of company resources. Company COO Evan Maridou disagrees.
"Without any planning, incredible opportunities for trust-building occur," he explains. Dinner crews are assigned at random every night. "You're cooking for 100 people. There are various roles that each person has to fill. And at the end of the night, the team celebrates when 100 people are smiling ear-to-ear because of the meal they just ate."
It's activities like these that make Tuft & Needle a unique and special place to work -- and helped it nab the No. 1 spot It also on our Top Company Cultures list in the large-sized company category.
The company started back in 2012, when co-founder JT Marino was shopping for a mattress with his wife. He found the whole experience expensive, time consuming and bereft of even marginally acceptable customer service. Marino saw a problem that needed fixing.
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Leaving his grueling and unsatisfying engineering job in Silicon Valley, he partnered with Daehee Park and created T&N, an ecommerce mattress manufacturer that prides itself on trust, craftsmanship and reasonable prices.
Maridou credits the focus on culture as a major part of T&N's success. "Since the beginning, we've always prioritized maintaining a strong foundational culture over company growth," he says. "We took our time recruiting and interviewing, even when there appeared to be burning needs to fill the role," adding, "we are big believers in hiring first for values, then for skill.
The three most important values he looks for are "kindness, humility and intellectual honesty," which are the polar opposite of the values Marino had encountered buying his mattress. "At T&N, no one ever says, "I told you so.' This ripples out to the way our brand presents itself to our customers," says Maridou.
He describes the company as being "culturally flat," meaning everyone has a voice at the table, or bed. To encourage this, he did 50 one-on-one meetings in two months last year, which helped him identify reoccurring issues among the staff. "It was painful, but one of the most valuable things I've done in my time at the company," he says. "It also sent a message to everyone in the company that, as a leader, I valued their opinion."
T&N's open office space is conducive to this. No one has their own office (including the founders), there are no name plates and every single space -- conference rooms, war rooms, couches and long tables -- are shared and communal.
"You never know who is going to sit down next to you," says Maridou. "That creates opportunities that might not exist otherwise if we told specific teams to sit in specific areas."
A software developer may sit next to a customer service and learn about an annoying, repetitive glitch in the system and offer to fix it in five minutes, for instance. Maridou says that countless changes—from the CX workflow to redesigning screens—have been initiated just from these informal meetings.
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"The trick is that each actor in that situation has half the context. How painful is this (value) and how easy is this to fix (cost). Sitting together, they discover a high ROI project," he says.
While the founders started T&N in Silicon Valley, they eventually moved to Phoenix --one of the best decisions the company has ever made, says Maridou. The cost of living there is substantially less than most big cities, which means a higher quality of life for the employees. And the low rent costs "give the company the freedom to spend in innovative ways," like nice perks for the employees. These include free medical insurance (nothing is deducted from their paycheck), a company paid Health Savings Account, and a minimum 25-day vacation policy, which employees are required to take.
"Employees who are recharged will do better work," says Maridou. "We don't see time off as a cost. We see it was a necessity to preserve the culture."
This year the company is rolling out more enrichment activities, such as hikes before work, yoga, meditation, dance classes and sports teams. One of the most popular current activities is Monday tea time. Everyone stops work at 3 pm to sip tea and eat snacks with not only their fellow employees, but the local community as well. "It helps get the week off on the right foot," says Maridou. It also can make for some interesting conversations. Recently, the mayor of Phoenix stopped by for some Twinings Tea.
As T&N continues to scale, Maridou believes the strong cultural foundation will hold it together. "The very nature of startups is that there is a lot of change. The very nature of change is that we as humans are resistant to it," he says, philosophically. "Communication and context makes change easier. It's important to take the time and explain the change that your team is experiencing. Context does a lot to help reduce concerns your employees are facing."
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This practice seems to be working. T&N's turnover in the first four years is less than 5 percent.
