How to run a startup, Steve Newcomb-style: Naked Thursdays

San Francisco and Silicon Valley have their share of quirky corporate cultures. It’s part of the place’s DNA to constantly experiment with organizational structure in search of that perfect blend of directed action and creative flexibility. Perennial entrepreneur Steve Newcomb would know a thing or two about it after launching five companies, one of which was Powerset, which sold to Microsoft last year for $100 million.

His latest endeavor is Virgance, an idea factory for sustainability-related projects like One Block Off the Grid, which uses collective buying power to bring down solar installation costs. What’s unusual about Virgance is its dual mission of being a profitable entity (like any other company) and delivering tangible social good, which lends itself to a unique company structure.

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“What’s hard about a social entrepreneurship start-up is that you have to be ethical in all your business practices,” he said.

Newcomb shared a few of them last night at the Hub Bay Area, a newly launched co-working space for social entrepreneurship.

1. Naked Thursdays: Every Thursday, all 42 Virgance employees gather on a lawn near their South Park, San Francisco offices in a weekly meeting open to the public. Any employee or random passerby can ask Newcomb a question and he swears he’ll answer it honestly. Common examples: “When was the last time you cried?” or “How much money is in your bank account?” But once they get past the novelty of Newcomb’s candor, they can ask serious questions about the direction and impact of the business.

2. One month, try-before-you-buy period: All prospective employees have to work for Virgance for a month for free before they can get hired. Once that period’s over, every single one of Virgance’s current employees have to approve the new hire. A single veto can kill a candidacy. He explains it this way, “A-level people bring other A-level people, while B people will bring C people.” Newcomb recognizes he probably deters some potential employees this way, but on the other hand, it ensures that every full-time employee is passionate about the company. (He added that he might pay during the trial period to attract very senior people or as the company grows, but he definitely wouldn’t budge on the “trial” nature of it.) He’s also not hesitant to fire employees if their performance is subpar.

3. Transparent salaries, equity stakes: Everyone knows how much everyone else makes in the company.

4. Open office space: Virgance’s office (which is Twitter’s old office) has one door.

5. Blended value: As mentioned before, Virgance’s projects have to have social impact and be profitable. Newcomb evaluates them on five levels: Is the impact measurable? How many people can it involve? Does it incentivize people positively rather than negatively (carrot over the stick)? Does it have a common technical infrastructure that can be shared with other projects? Does it have a sustainable profit model?

He had a few pieces of advice for entrepreneurs. Be honest. Be passionate.

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And above all, “Get shit done. There’s no time for unicorns or rainbows.”