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Interview with Sam Altman from the High Growth Handbook
- Endama 8y agoFor example, I do think figuring out compensation structures is really important and something the CEO should spend time on. And it’s something that most CEOs don’t. This. I've been a part of three startups and in all three, the CEO didn't take compensation seriously. In today's economy, you can't sit on your hands and assume that 3-5% annual pay raises and the promise of future stock payouts will keep talent in-house, year over year, when the big guys are pushing the pay bar higher and higher. For example, in my last job, 3 years of startup caused my annual pay as an iOS dev in the Bay to drop ~30k below the average for someone of my tenure. I loved the company, but I couldn't justify the loss in income, especially with housing prices being what they are. CEOs should consider compensation as critical to their company health.
- kayoone 8y agoMaybe true for the bay area, in most of the world 3-5% annual raise and stock options are not bad though.
- ta1234567890 8y agoThis. It's pretty annoying that whenever there are posts about salary on HN, a lot of people from SF/BayArea start complaining about how their already super inflated salaries are not inflated enough and should be higher because the top 3 largest tech companies in the world pay higher salaries. If you are one of those people, then please stop complaining and just go get a job with the compensation you supposedly deserve at one of the companies that can afford it.
- akhilcacharya 8y agoWho are the top3?
- zootam 8y agoThese are the top companies that offer industry leading compensation: Facebook, Google, Apple, Amazon, Microsoft
- akhilcacharya 8y agoThose are 5, I’m curious as to what OP thinks the top3 is.
- detaro 8y agoOn the other hand, plenty of startups and their investors insist on being in the Bay area, so I can't really fault employees there that they compare them to the local market. As someone with no desire (and no easy route) to live there, I find this centralization annoying, but startups fueling it IMHO aren't in much of a place to complain.
- draw_down 8y agoCome on. It’s silly to pretend SF/SV is just one place among many others with respect to our industry. It is the place.
- Alex3917 8y agoStartup compensation for developers makes zero sense, because market rates can easily jump 50 - 100% per year of experience. This means that at some points of the year a developer might be earning market rate, but other times they are vastly under-compensated and very vulnerable to getting poached. There should be a way that startups can just automatically give people a raise every two weeks, so that way they make the same amount of money over the course of a year but their compensation is always equidistant from a projected fair market rate. Then for the employees you'd just need to give them a tool so they could see how much money is going to hit their bank accounts every two weeks.
- mandelbrotwurst 8y agoWhat's stopping anyone from doing that now?
- sonnyblarney 8y agoPay raises that rise faster than inflation are unsustainable, rather, you're pointing at a specific asymmetry between the BigCos and startups in the Bay, which is definitely causing strain. Outside the Valley and specific centres, this isn't quite so much an issue. Inside, it's an intractable problem ... Though your point might be valid from the Dev's perspective, consider the other side for a moment and you see how tough it is - i.e. to have the expectations of ever increasing normalized outflows. So we need to look at this kind of objectively (i.e. not from just Exec/Dev perspective) to figure out how to deal with the situation.
- andrestan 8y agoThey're only unsustainable if the employee's productivity is stagnant. If one year of experience increases an employee's productivity then you can more than happily increase their pay by greater than inflation.
- patrickg_zill 8y ago"Pay raises that rise faster than inflation are unsustainable" What? How does your statement hold up if a startup is starting to make a lot of money and revenue is increasing by 20 to 50% a year?
- CaveTech 8y agoBecause that growth is not sustainable in the majority of cases. Sure, there are exceptions, but I bet you're not going to be eagerly handing the org money back once growth flattens out.
- sonnyblarney 8y agoIn very rare cases do startups have that kind of growth and in many of them their unit costs are bad and they are making less and less money. In the few cases wherein sales are growing, AND they are more profitable, AND it wouldn't make more sense to put the money elsewhere - then yes - fat wage increases are possible, for a short period. In almost no companies is this reasonably sustainable.
- 8y ago
- simonebrunozzi 8y agoI loved reading this just now. I'm CEO of a small young startup (3 co-founders, 3 employees, 1 more coming), and today I spent ~1 hour to think about compensation really, really deeply, before engaging in a conversation with a future hire. I know we're small, but I absolutely agree that compensation is super important from the very beginning. Like company values. It's like a seed. A big tree will come out of it, one day. How you plant the seed, and what seed it is, is super important.
- mathattack 8y agoComp decisions have legs. Every comp decision you make today impacts everyone you hire for that position tomorrow.
- EGreg 8y agoTwo years ago, we wrote about a more decentralized compensation model that may be interesting to some startups and open source projects here. It aligns everyone’s incentives and promotes freedom and results-oriented culture: https://qbix.com/blog/2016/11/17/properly-valuing-contributions/ https://qbix.com/blog/2016/11/17/properly-valuing-contributi...
- happythought 8y agoThis is how you disincentivize security.
- danvoell 8y agoCongrats on the book launch Elad! What in your eyes is the most insightful part of the book for understanding High Growth?
- eladgil 8y agoThanks a ton! I think two sections might be most generically interesting or useful: 1. The interviews. There are 14 interviews with Sam Altman, Marc Andreessen, Patrick Collison, Joelle Emerson, Erin Fors, Reid Hoffman, Claire Hughes Johnson, Aaron Levie, Mariam Naficy, Keith Rabois, Naval Ravikant, Ruchi Sanghvi, Shannon Stubo Brayton, Hemant Taneja. In some cases, their advice is at odds with my own. So I think the richness of perspectives and experiences are valuable. 2. The sections on executives, recruiting, people, onboarding, re-orgs, etc. Startups are a team sport, and getting the right team together and helping them be effective is really the key (assuming you already have product/market fit). A big part of that is also the role of the CEO, and the CEO managing their own psychology, not burning out, etc.
- quizbiz 8y agoAre you willing to share snippets on HN?
- eladgil 8y agoSure! I will drop some in the next week. Focused on launch today. Any priorities?
- IMAYousaf 8y agoHello Elad. Thank you very much for being so open to sharing. Do you have any snippets or content about traction? To me, that seems to be the most difficult part about team-building and startups in general. I have a lot of brilliant friends with whom I have an easy time bouncing ideas around with. Every couple months, an idea will be fleshed out enough to justify starting to work on it, but it's the groundwork that translates to long term growth that I have the most difficulty with, assuming that the problem is worth solving, the product is "good", and the product-market fit is there. Of the people you interviewed, did someone provide any insight into that?
- barbegal 8y agoWhat does "High Growth" mean? Based on the kindle preview this is a book containing startup advice which includes how to scale up your business in terms of hiring and acquisitions but not in terms of growing revenue and profits. In a way this advice optimises large portions of Silicon Valley where large companies in terms of employees and venture capital funding produce very little profit. A case in point being Stripe itself. Stripe employees can't tell you how to grow into a profitable company because they haven't achieved that yet. But they can tell you how to grow your HR department and how to acquire other companies because Stripe has done that.
- tlb 8y agoCompanies like Stripe can become profitable in a simple way: by cutting R&D. And they'd stay profitable for a while, before fading into obsolescence. For most tech companies, the right long-term strategy is to spend heavily on R&D and growth, using up all profits and some investor money to do so. The exception is established companies in a declining industry, where the right answer is to cut R&D and growth to nothing and try to extract as much profit as possible in the remaining years.
- eladgil 8y ago"High Growth" in this case means companies that are scaling revenue, team, and complexity of business. Companies included here are meant to be "post product/market fit". In other words, they are selling something their customers really want, have fast growing revenue, and are either unit-economic positive or have a path to it. While come technology companies (or retail, or other companies) are profitable from day 1, many instead chose to invest in growth early on to go for market share and win the market. They then hike prices, cross-sell product, or drop costs at scale and then spin off a ton of cash. In Silicon Valley these companies are usually funded by VCs. In other industries, they may have different types of loans or in some cases private equity, VC, or friends and family money. In either case, the companies will share common issues - How do I add executives in functions I have never dealt with? E.g. a CFO or GC? How does my role as CEO evolve as the team grows and I am no longer needed to do the things I used to do when we were 5 people? Etc. This book definitely has a Silicon Valley Tech bias, as that is what I know best. Anecdotally, I have been told by people in non-tech industries who saw an early copy that some of the "people-centric" chapters are more broadly relevant. But rapidly scaling technology companies will definitely benefit the most from it. In terms of growing revenue and profits, I think a number of books focus on that. E.g. how to build a sales org, or compensate them, or different channel strategies. Those are really valuable topics but I felt they were better covered than some of the topics I focus on. Thanks for taking a look! :)
- crsv 8y agoThe relevance of some of this advice seems like it best serves an VC track company dealing with SV ecosystem pros and cons - especially commentary around investor behavior and availability. Some of the points around distractions, planning, and tactics do apply outside the bay, but in general the term "High Growth" feels like "early high valuation large cash infused startup", which while interesting, isn't terribly relevant to an extremely large portion of the entrepreneurial ecosystem. Given that - does anyone have any recommendations for reading in this space that are a bit less "valley flavored"?
- eladgil 8y agoThanks for the feedback and for taking a look. Outside of financing and M&A, most of the topics in the book are core to most fast growing companies - Silicon Valley or not. They key is whether the company needs to grow rapidly, or is a rapidly growing division of a company. "Grow rapidly" means "scaling revenue (and if the right time for the company, profits), and growing headcount and organizational complexity". If it is a 12 person org that is not going to grow, only a smaller subset of topics apply. Key topics include things like hiring and managing an executive team, your role as CEO, organizational topics (re-orgs, choosing what executive owns what etc.), marketing and PR, product management, managing your board, building a recruiting pipeline and recruiting organization. Many of these are reasonably universal topics. To your point, what I know best is silicon valley technology companies, and the book reflects that experience (versus that of an industrial company). Thanks again for taking a look!
- robax 8y agoAny chance this will get back in stock on Amazon? I don't feel like signing up with Kobo but I would purchase this book. Also a softcover version would be awesome!
- eladgil 8y agoSorry for the issue - Stripe's printer is shipping books to Amazon ongoing. You can still order via Amazon - as of now it will just take a few extra days to ship. So not a huge delay if you are willing to wait.
- a_d 8y agoI consider sama to be an extraordinary investor and thinker (I know this is the most consensus thing one could say on HN). The personal bets on Boom, Helion Energy, Cruise and many others are really phenomenal (even the re-bet on Reddit) -- not just for being early/contrarian for their time, but also necessary for the world for these companies to succeed. The highlights of this interview imo are the following pieces of advice: 1) get a coach sooner than later 2) always keep revisiting what is urgent vs important and keep prioritizing; if in 'war-mode' then users, team, revenue above all else; ignore things that don't amount to much (potential candidates: investor updates, press, conferences etc -- they are not more valuable than users) 3) don't get too far away from the product (some things cannot be delegated early on) 4) "boards hate surprises...and boards hate feeling like you’re trying to hide bad news". Be open. Ask for help. Really great points. I feel that the point about the role of the CEO in a downturn is under-explored in this interview (felt rushed). This is rich territory (and relevant). The discussion about specific examples of things that don't merit CEO time veers into 'made-up territory' quickly and doesn't feel relevant -- e.g. some "[CEOs] then stop going to the executive team meeting (that’s a very bad idea)" -- I don't see as many companies as these two, but no CEO stops going to an executive team meeting (infact, bad CEOs go to too many of those! as they enjoy 'playing CEO' :)). If a CEO stops going to an executive team meeting, that is quite counter-intuitive and interesting in many respects in of itself (e.g. there is a fire; CEO doesn't want to be CEO etc) :-) I feel Elad should have pressed more as an interviewer rather than rushing to the next point. Overall, always good to hear sama's views -- he is an incredibly important investor of our age (my prediction). And Elad thanks for working on this book. For a few $$ everyone can get this wisdom -- you did a great service for entrepreneurs. Congrats on the launch.
- eladgil 8y agoThanks for the feedback! To your point Sam had great points as always. The book does get into some of the other issues you mention in other sections. There are only a few pages about "managing in a downturn" (which is literally the name of a section later in the book). I think when we finally end this long bull market run we have been in, there will be lots of pain (and lots of articles and blogs about what to do now that the sky is falling). Thanks again for taking a look!
- mattferderer 8y agoAny chance this turns into an Audio book? I'm sure there are plenty of others who find it hard to find time to sit down & read a book. When I do, I tend to read the kind that don't work as audio books or just aren't available. Also, there is something nice about being outside & walking while listening to a book.
- liquid153 8y agoI love generic advice :)
- ta1234567890 8y agoSam Altman has definitely done great as the head of YC, but how many high growth startups has he successfully started, run, grown and sold? Can we please get advice from people who're actually currently doing that instead?
- saxelsen 8y agoIs there any chance this book will become available on Amazon.co.uk? It's cost about double the price for Europeans to buy it from Amazon.com due to high shipping costs and import taxes and fees.
- rahimnathwani 8y agoThe Kindle edition is available on .co.uk for 11.21 GBP including tax: https://www.amazon.co.uk/High-Growth-Handbook-Elad-Gil-ebook/dp/B07DRPGGQ7/ https://www.amazon.co.uk/High-Growth-Handbook-Elad-Gil-ebook...