Love Culture Company Analysis Essay

The “love culture” that Lawrence and Scheck created in 2011 had many challenges during the development and implementation of the culture. Some of the main challenges faced included employee selection, employee comparison, and external skepticism. When founding the company, Lawrence did not view employee selection as a challenge, for she predicted employees would gravitate towards this unconventional culture. Although possible in theory, the incredibly strong culture caters to a very specific type of employee. With an emphasis on complete openness and transparency, many candidates viewed this culture as daunting, and many employees would begin to compare themselves to others. This challenge ultimately allowed Chewse to create team players by selecting individuals that focused on the mission and value of the company. 

This leads to the next challenge faced which was employee comparison. Due to the nature of the open culture, employees could compare themselves to others if any group effort decreased. On my previous co-op experience, I knew that I was being equally compensated in comparison to a co-op with the same position at the time, but the level of effort differed greatly. This openness to share salary within the culture greatly deterred me from putting in the amount of effort I had previously exerted when viewing my co-worker's lack of effort, but maintained my levels due to respect for others I was working with. As Chewse led a similar approach, even to the leadership positions, new employees could have been easily deterred in their efforts. 

The greatest challenge that the Chewse team faced was attempting to find a proper audience for their mission. Similar to developing cohesion within a team, it was crucial that Chewse found investors that believed and matched the love culture. As stated in the case, even customers that loved the product were skeptical to invest because of their lack of bloodthirst as a company. In a very competitive industry in a booming geographic location, a “soft” culture was seen as a negative to many, ultimately leading to fewer financial opportunities. Along with a difficulty in finding investors, Chewse had a hard time catering this strong culture to many areas as their attempt in Los Angeles did not display worthy growth.

Effects on Company Growth

Although Chewse’s love culture came with many challenges, company growth was both hindered and accelerated by it in different ways. The company growth was hindered for reasons similar to the company challenges. In addition to the employee selection and comparison, a concept that hindered their geographical growth was the necessity for leadership that accurately matched the organizational mission. By focusing only on San Francisco, the company did not leave room for experimentation when leaving Los Angeles, creating a fear of unknown expansion. Once employees were in the company, the Chewse approach to customization for compensation and equity was limiting in terms of scalability. This practice of discussion between employees creates a strong connection, but the scalability of these practices could have been difficult to maintain with further expansion. Along with hindered employee growth, limited investors and locations hindered financial growth by stripping the company from potential funds. This was proved through a 40% decrease in revenue when the decision to cut Los Angeles was made.  

Even though the love culture displayed issues, the company benefitted from its willingness to tackle issues, alignment of employees with values, and geographic selection for financial growth. The open culture provided by Chewse allows for all individuals to feel comfortable raising issues with others, leading to faster growth in terms of eliminating issues. Similar to my previous experience that highlighted openness, I was able to raise suggestions for potential automation to my managers that would improve their processes. This accepting culture increased my commitment to the company and decreased turnover for many. Another non-financial area of growth was the alignment in the selection and training of employees. By creating a higher level of cohesion, Chewse was able to develop trust and commitment within the company. Lastly, in terms of financial growth, transparent and open leadership led to a quick decision of eliminating Los Angeles, leading to an increase of 50% in margins after raising Series A. 

Expansion: Los Angeles vs. Seattle

When comparing an expansion into Los Angeles or Seattle, Seattle provides a much better alternative for Chewse. While Los Angeles provides a very different alternative that could be explored and tested along with a high annual spend of $1.4 billion, Seattle offers a similar environment to San Francisco, where the company has proven to grow steadily. Seattle, being home to many large corporate branches, could offer a larger potential market for the specific group Chewse seeks. Not only does the market look more desirable, but with Chewse’s previous experience in Los Angeles, there do not seem to be promising returns in this less desirable option. For these reasons, Seattle is a much safer option for Chewse to pursue, but proper leadership will need to be selected in order for Chewse’s vision to continue.