I went to an informal Seattle startup CEO dinner a while back and it was an awesome opportunity to talk candidly about the problems that early stage products face. Someone remarked to me afterwards that a lot of people in that room had already “made it” (financially speaking). That’s one of the cool things about being a startup founder. There were plenty of folks in the room who put on their pants one leg at a time. There were some other folks who sip Pinot Noir while they have two pant-assistants dress them. But (with a few runaway exceptions) many of them were facing the same challenges.
I had a lot of takeaways from the dinner, but the biggest came from two comments by CEOs in two unrelated conversations (these are paraphrased with a bit of hyperbole tossed in).
Comment #1: “My biggest concern is that we’re on a long road. And it’s going to be a tough slog. We’re going to be dragging our asses uphill for years with a still uncertain future. With that to look forward to, how can I hold on to my best-and-brightest stars when they could take an offer from [insert megacorp] and double their salary overnight? Or they could hop onto another startup that isn’t at the ‘slog’ stage yet?”
Comment #2: “Sure, the downturn has effected our startup. But we’re all working together on stuff that we want to work on and we’re working with people that we really want to work with. If we end up making less money, it really doesn’t matter much.”
The huge challenge is that we are constantly telling ourselves, our teams, and our customers that great stuff is in on the horizon. But the reality is, bad shit is coming. There are going to be huge and gutwrenching bumps in the road and times where the company feels like it’s going to auger in. The thing that can pull a team through these rough spots is belief in SOMETHING.
Something amazing happens, I think, if you can cross the chasm from people getting paid to work for you company and people getting paid SO THEY CAN work at your company (I think that concept came from Tandy way back when– can anyone confirm?). As founders, I think it’s easy to dismiss this possibility. “That might work for people who ooze charisma,” we say, “but it won’t work for me.” Or: “You can only pull off that kind of passion if you have a world-changing product with a runaway growth rate– not for something so mundane as what we’re working on.” Bullshit. Look at companies that actually inspire the founders, employees, and customers– there’s WAY more variety than you might suspect.
So here’s a stab at how startup founders can get creative and (hopefully) inspire.
- a dragonslaying startup (killing inefficient incumbants, like Redfin is trying to do)
- “business religion” startup (like Zappos, FogCreek software or 37signals– where the products isn’t something the team gets THAT excited about building, but the “business religion” and/or lifestyle of working there is magical)
- The “we’re going to change the world” startup. Steve Jobs once said to John Scully (then CEO of PepsiCo), “Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?”
- “we’re going to get filthy rich” startup (this feels scary to me– seems like people will jump once there’s a bump in the road… and there is almost always a bump in the road).
- A “family” startup. My first company had this– just about everyone in the company was really close to everyone else. We had regular gaming night, fun social events (that everyone WANTED to come to), etc. Loyalty can definitely help folks through the aforementioned “bad shit”. This is the biggest reason why solo founders quit more often. It’s always easier to quit when the only person you’re letting down is yourself.
- Succeed, loudly and publicly. Nothing inspires more than setting tangible business goals (that everyone buys into) and actually knocking them out of the park. Want to see a role model here? Check out Balsamiq’s Blog.
The math of working at a startup rarely works out– people get paid less to do more. You have merely adequate benefits and lousy job security. With VERY few exceptions, the journey to liquidity is long and is by no means a sure thing. So you have to offer piles of intangibles that make your best people say, “Yeah, I could get paid another $50k across the street– but it wouldn’t be worth it.”
Did I miss any motivations? Why do you work at a startup when you could be making way more money elsewhere? Or, if you work at BigCo, what would it take for you to take a 30% pay cut?