A Company Isn't Family

What's up, everyone. This is Alex Lieberman, co-founder and Executive Chairman of Morning Brew. Welcome back to Founder’s Journal, my personal audio diary, where I give you the business builder, the tools you need to think better in order to build better, whether that's building a business, a team, or a new product. Today, I am talking about why your company is not your family. Let's hop into it. 

So in May of last year, in the middle of the pandemic, I came across a letter by Toby Lütke, who's the founder of Shopify. And if you don't know, Shopify is a $184 billion e-commerce platform that powers the online shopping experiences for everyone from Netflix to Oatly to Spanx.

Calling your business a family is harmful

In this letter that Toby wrote to every Shopify employee, he talked about what leadership looks like during times of crisis, he talked about Shopify’s position on social and political issues, and finally, he talked about why Shopify wasn't a family. And I think it's this last topic especially that caught people off guard. You know, we live in a time where joy of work is far more of a focus than it was 50 years ago. And I think that's probably because there's more choices around what you can do for your work than ever before. We talk about the importance of work-life balance. We talk about the importance of having a great culture. We talk about benefits and how a benefits package is so important in deciding where you want to work. And I think on the surface, these top priorities that we talk about in the workplace today, they do feel more and more like the joy you experience as part of a family.

But this is exactly why I believe Toby specifically said that this concept of your company being your family or Shopify employees referring to Shopify as Shopifamily, why that's so harmful. He knew he had to nip this idea in the bud. Some of you who are listening to this may think it's too harsh. Shopify isn’t a family; what is Toby talking about? Isn't a company supposed to feel like a family? Is he just another coldblooded founder of a publicly traded company that doesn't care about his people? I want to share a paraphrased version of part of the letter that Toby wrote to his employees. And then I want to share my own personal thoughts on the comparison of company to family. 

So what Toby said was Shopify, like any other for-profit company, is not a family. The very idea is preposterous. Shopify is a team. We literally only want the best people in the world. And the reason why you joined Shopify is because, I hope, all the other people you met during the interview process were really smart, caring, and committed. And while what Toby said might sound controversial at first, I actually don't think it's controversial at all.

And I actually think Toby is spot on. He's totally right. Companies are not families. We're inclined to call them such because we want companies to feel safe and tight-knit for our employees. And if we're employees, we want them to feel safe and tight-knit because we want to feel secure in the job we're doing. But to call a company a family is either disingenuous or you're setting your company up to fail. Let's take a family for a second. Being part of a family is not a choice. You are born into a family. You don't get to choose who your family is. You don't get to choose to leave your family and your family can't choose to leave you.

Business and families have different purposes

The purpose of family is also pretty simple. A family helps socialize you as a child to be able to survive and thrive in society. A family provides you emotional and practical support as you grow. And a family is a construct that ensures that human beings as a race continue to procreate. A company isn’t a family because a family is bad. A company isn't a family because it just serves a totally different purpose. Unlike a family, a company's purpose is to achieve a vision and maximize profits for shareholders. It's as simple as that. And the differences between a family and a company should be obvious yet employees in companies like to refer to their coworkers as a family and founders like to call their team a family.

Heck, we used to say Morning Brew was like a family in the early days. And I've even talked about the family stage of building a business, which was a concept invented by Reid Hoffman, who's the founder of LinkedIn and one of the more successful entrepreneurs and investors of our time. But you see, when we call our company a family, what we're trying to say is we spend a lot of time together, we've gotten really close in work and outside of work, and there's mutual trust among us. And that's great. And that should be true of a company as well. But what happens is we don't think of the negative implications of calling a company a family.

It sets a potentially really dangerous expectation just by using the word and how all of us interpret that word. The most important is by calling your company a family, maintaining a culture of attracting and keeping best-in-class talent becomes that much harder. Because like I said, you can't remove someone from your family. So you're using that analogy to describe your company. Does that mean you can't remove people from your company? Obviously not. If you want to attract the best talent, you need to surround people with other great people or else they'll leave. The only way to do that is to reward excellence and to let average performers go, that's not controversial.It's just a fact if you want to build a great company. 

And it's not because you're mean it's not because you don't have a good culture, but again, a company has different goals than a family. And if you want to run a great company, you just can't treat your team like you treat your family. Just imagine how hard it is to continue to grow a company if you have a culture where you can let poor performers go, it'll never work. 

Families and professionalism don’t mix

There's a secondary trade-off of calling your company, a family as well. It becomes far harder to maintain a constructive professional relationship, especially as a founder or a manager. In tight-knit families, very little is off-limits to talk about whether it's relationships or finances. In families people tend to talk back because they're not worried about the repercussions. And you typically can ask about anything and everything when it relates to a family, but in a company that's just not practical. And I saw this firsthand in the early days of Morning Brew. By creating a familial culture where we did call our business and our company a family, we implicitly gave permission for employees to inquire about everything from what was in our bank account at any given moment to if the group as a whole would be deciding if we were going to hire a new employee. Obviously that's not practical. Now this isn't to say that you shouldn't be transparent as a business, but there is a difference between being transparent and creating confusion for employees who don't know everything going on in the company, and also creating a lack of focus because people no longer have a sense of what their swim lane is and what they're responsible for.

Look, there are obvious reasons that the company-and-family comparison is an easy one to make. You want to create an environment where people feel like they belong, where you have a welcoming culture, and where there are shared values. Those are all important aspects of running a great company and having really happy employees. But all I'm saying is you can have all of those things without calling your company a family, because there are so many unintended consequences when you use that word in the context of business. Now I know that this may be a controversial take. 

So I'd love to hear your thoughts on it. Do you think it's okay to call a company a family? If so, how do you avoid the issue of creating a culture where anyone can talk about anything and bad performers are kept in the business? If you have thoughts, shoot me an email at alex@morningbrew.com or DM me on Twitter @businessbarista. As always. Thank you so much for listening to Founder’s Journal. If you enjoyed the episode, please pound the subscribe button, whether it's on Apple, Spotify, or the podcast player of your choice. It is the number one way to grow a show. And if you already subscribe, make sure to check out Founder’s Journal content on Morning Brew's YouTube channel. Go to YouTube, search Morning Brew, and click on our channel. There, you'll see an entire playlist of Founder’s Journal content from how to deal with imposter syndrome, to why Ethereum matters.

With that: Our show is produced an engineered by Dan Bouza. Our associate producer is Bella Hutchins. Brian Henry is our executive producer. Alan Haburchak is Morning Brew’s director of audio. Holly Van Leuven is our fact checker. And I'm your host, Alex Lieberman. Thanks again for listening. And I'll catch you next episode.