Why are ‘geeky’ companies winning? It’s about culture, not tech.

In 2009, Andrew McAfee watched a meeting go very wrong, very fast. Or so he thought.

The meeting was at Cambridge tech company HubSpot, and McAfee, a research scientist at the MIT Sloan School of Management, had been brought in to do some employee training. He and Brian Halligan, HubSpot’s cofounder, both presented. And then things took a strange turn.

“This baby-faced, brand-new hire was the first person to speak,” McAfee recalls. “And he stood up and began by saying, ‘There are a couple things I don’t like.’ And he went on from there.”

McAfee knew this guy had stepped in it. Later, he told Halligan how weird it was that a young employee had contradicted the boss in front of other people. And Halligan looked at McAfee and said: “What kind of company do you think I’m trying to build here?”

Nearly 15 years later, McAfee — who has spent decades advising corporations and executives — believes that meeting at HubSpot was transformative in a way he didn’t understand at the time. The company was part of a new wave of what McAfee calls “geeky” companies, which he believes have outcompeted traditional corporate America — in large part by eschewing bureaucracy, red tape, and boot-licking.

“Standard practice is when the very senior person asks for feedback, what they get is applause,” McAfee says. Their ideas are brilliant, inspired, genius. Even if most people know they’re not always so hot.

In a new book, “The Geek Way,” McAfee argues that since about 2000, this new breed of company has proven that its approach is far superior to that of more old-school companies. And he says those who cling to the old ways will soon be eclipsed by cultures that allow people to say what they really think, value data-driven decisions over cults of personality, iterate quickly, and give their employees more autonomy and responsibility.

Halligan describes it as “a whole new way of working,” a way that embraces the scientific method and dismantles old hierarchies. “I never thought I had all the answers, never mind the right answers,” he says.

Many of us would think of “the geek way” as characteristic of tech companies like Amazon and Google. After all, many of the founders who pioneered this approach started tech companies. But McAfee argues it’s a mistake to think that geeky companies can only win in tech. They can — and have — made huge strides in areas like car manufacturing, entertainment, space exploration, and retail.

Their approach, he believes, works because it “gives us more opportunities to learn. That’s critically important. It also constrains some of the tendencies we have that get organizations into trouble,” like overconfidence and status-seeking, which are universal.

Halligan also pushes back against the idea that tech is the central differentiator between old-school cultures and geeky ones. “[Venture capitalist] Marc Andreessen said that software is eating the world a long time ago. I think he’s right. But I think [McAfee’s] thesis is that it’s actually not the software, it’s the culture that’s eating the world.”

Consider Netflix. In the late 1990s, Reed Hastings and Marc Randolph realized they could effectively send DVDs through the mail, so viewers didn’t have to drive to their local Blockbuster. In many ways, Netflix started as a retail company. Now, it produces content and competes with Hollywood.

Signage outside the Netflix office building on Sunset Boulevard in Los Angeles.Bing Guan/Bloomberg

But Netflix wanted to rethink how corporations worked. In 2009, Hastings and his chief talent officer, Patty McCord, came up with a “Culture Deck” slideshow, which was viewed by millions. In the presentation, Hastings and McCord described what makes a good Netflix employee. “You treat people with respect independent of their status or disagreement with you,” they wrote. “You say what you think, even if it is controversial.”

They urged employees to put aside their egos to find optimal solutions. And counterintuitively, they noted that “[o]ur model is to increase employee freedom as we grow, rather than limit it, to continue to attract and nourish innovative people, so we have a better chance of sustained success.” (Then-chief operating officer of Facebook, Sheryl Sandberg, said it “may well be the most important document to ever come out of the Valley.”)

It sounds like common sense, but it still runs counter to the way most companies operate. In 2017, when Harvard Business Review gathered feedback from 7,000 readers, only 1 percent felt their companies had a “relative absence of bureaucracy.” The vast majority believed they were swamped by bureaucracy; respondents said it took up too much time, slowed down the organization, and sapped power from employees.

Richa Patel, who spent five years at Morgan Stanley, mostly as a quantitative strategist — and more recently interned at Amazon as a product manager — observed two cultures that were quite different. At Morgan Stanley, “it was more about a senior person’s ideas,” she notes. “It was one person’s ideas flowing down.” By contrast, at Amazon, “you could go talk to people three or four levels above you. And there was no stigma against doing that . . . There was definitely a lot more disagreeing with superiors.”

McAfee says humans naturally defer to more powerful people, so hierarchies can easily reform even if you try to dismantle them. When he was chief executive of Amazon, Jeff Bezos once said, “My main job today: I work hard at helping to maintain the culture.”

At HubSpot, which has become one of the largest tech companies in Massachusetts, Halligan found that it could be difficult to deviate from the norm. “People kept asking me for an [organization] chart,” he recalls. “I was like: I’m not putting together an org chart. No. And for a while I toyed with getting rid of titles, and people freaked out.”

Boston software company HubSpot's annual "Inbound" conference at the Boston Convention and Exhibition Center in September 2022.Lane Turner/Globe Staff

Ultimately, the company did create an org chart. But Halligan, who stepped down as chief executive in 2021, says you have to keep pushing for the culture you want.

“If you’ve got a Silicon Valley company coming after you,” Halligan says, “like Netflix came after Hollywood and Tesla came after Detroit, I would worry.”

So, is it hard to run a geeky company in Boston? McAfee notes that we’ve got significant “outposts of geekdom” here. But Halligan thinks it’s a challenge being so far away from the Bay Area. At HubSpot, he says, “We always considered ourselves physically based in Boston but kind of karmically based in Silicon Valley.”

None of this means that geeky companies are intrinsically virtuous, McAfee says. Or that their products should be venerated. But their approach to business is worth emulating, he says. That way, at least, “you’ll stand a chance of competing when the geeks come to town.”

Follow Kara Miller @karaemiller.