3 ms·

As a startup founder who doesn't pay himself much, IMO people either care about money or they don't. Depends what you're optimizing for. But if you're obsessed

As a startup founder who doesn't pay himself much, IMO people either care about money or they don't. Depends what you're optimizing for. But if you're obsessed with cash you shouldn't start a company IMO. You're better off working for "FAANG" or whatever the cash obsessed optimizers are calling it these days. I mean obviously if you start a company you want to optimize for it making profit, but the original goal should be, primarily, totally disconnected from money. Any monetary benefits should be a side effect of providing value. In the most ideal world, your equity turns into cash 10-15 years later, but you shouldn't set out with that being your goal. My perspective on this is coming from someone who made easy money on a ridiculous business selling proxies to SEO spammers in college, and I didn't know what to do with the money (I spent it all on worthless shit). I've learned I'm much happier when I'm meeting some minimal survival baseline while trying to build a sustainable organization that produces a useful product.

kajecounterhack 4y ago
To be fair, not everyone who optimizes for cash is "obsessed with cash" or a "cash obsessed optimizer" -- life circumstances like dependent family, the oppression of college debt, etc make stability of a large corporation attractive to some, even if they would take on risk given other circumstances. Example: taking 80k/yr out of college while having to retire 2k/month of college debt, then using the rest to afford bay area rent + commuting expenses + rest of life would have been hard and arguably not a good use of a young person's early career phase. They might opt instead to work at a bigco until their debt was sufficiently retired, then with the safety net of {an established career + no debt + some money in the bank} swinging for the fences at a startup later. You're more likely to get leadership roles at startups when you have a few years under your belt anyway.
- chatmasta 4y ago
  Oh, totally agree - what you optimize for is a personal preference. I don't have a wife nor kids and that significantly affects the constraints of what I'm willing to do. And I've got nothing against anyone who chooses to work for FAANG, this is just my personal outlook: if you're concerned about money, you should take it from the people willing to pay you for your work. But if you've got an investor willing to pay you to develop something, then you better not be thinking about your own personal "total comp," because you've got (a) employees who need to be paid and (b) investors who want to see your company amount to something. As someone who's never had "a real job," I can promise you - my friend at FAANG contemplating quitting to pursue their own ideas - the grass is always greener on the other side.
  - kodah 4y ago
    > if you're concerned about money, you should take it from the people willing to pay you for your work I think this is half-right. When I evaluate startups I'm often expecting FAANG pay, but I don't expect some of the benefits. Generally the hefty expectation is in RSUs, because at a FAANG those are almost a third of what I make. I also don't accept inflated future leaning valuations, I rate them at current value. If I'm taking a gamble on a third of my salary I want to put the risk multiplier on that third, so I'll charge more. Passion can get you so far in startups, but if you're engineer (especially not engineer zero) then you likely won't walk away with much unless you're accurately assessing risk. That said, there's a fair amount of startups that are not worried about having a reputation of early engineers working away with very little. That said, I still have a mortgage and that's what informs my strategy when dealing with startups. If I didn't have a mortgage, I'd probably accept lower RSUs and a higher cash incentive.
givemeethekeys 4y ago
You should pay your employees their market rate. Your risk of going out of business is higher is what warrants the bigger equity. You spend all this time and salary to build a team that works like a well-oiled machine. It would be a shame to lose them to someone who simply pays the market rate. Your team is likely going to be working more than overtime helping you build your dream. You should match what FAANG's paying them, if thats your competition for talent. As they say, you get what you pay for.
- chatmasta 4y ago
  Yeah, I definitely agree. I'd rather pay a premium to get the best employee and take a discount myself, rather than pay someone below market while paying myself some absurd salary. Frankly I don't care what I pay myself as long as I can afford an apartment and groceries, and so far this has worked out well, as I love the employees we have. If I were exfiltrating a bunch of money for my own salary we would have been out of business months ago.
  - SCUSKU 4y ago
    As a spectator to your conversation, I have to say I like and agree with your general philosophy. While I can't quite put a finger on what I like, I think the gist is operating under assumption of how the world, finances, and incentives SHOULD work, as opposed to how they currently work. And also maybe some dose of minimalism(?). Either way, I wish you all the best in building your startup!
solatic 4y ago
> the original goal should be, primarily, totally disconnected from money. Any monetary benefits should be a side effect of providing value. Value is a funny word here. You have a business if you create value for both your users/customers and yourself. You don't have to monetize on day one, but how you create value for yourself needs to be at least a fuzzy part of your vision from inception.

kajecounterhack 4y ago

To be fair, not everyone who optimizes for cash is "obsessed with cash" or a "cash obsessed optimizer" -- life circumstances like dependent family, the oppression of college debt, etc make stability of a large corporation attractive to some, even if they would take on risk given other circumstances. Example: taking 80k/yr out of college while having to retire 2k/month of college debt, then using the rest to afford bay area rent + commuting expenses + rest of life would have been hard and arguably not a good use of a young person's early career phase. They might opt instead to work at a bigco until their debt was sufficiently retired, then with the safety net of {an established career + no debt + some money in the bank} swinging for the fences at a startup later. You're more likely to get leadership roles at startups when you have a few years under your belt anyway.

chatmasta 4y ago
Oh, totally agree - what you optimize for is a personal preference. I don't have a wife nor kids and that significantly affects the constraints of what I'm willing to do. And I've got nothing against anyone who chooses to work for FAANG, this is just my personal outlook: if you're concerned about money, you should take it from the people willing to pay you for your work. But if you've got an investor willing to pay you to develop something, then you better not be thinking about your own personal "total comp," because you've got (a) employees who need to be paid and (b) investors who want to see your company amount to something. As someone who's never had "a real job," I can promise you - my friend at FAANG contemplating quitting to pursue their own ideas - the grass is always greener on the other side.
- kodah 4y ago
  > if you're concerned about money, you should take it from the people willing to pay you for your work I think this is half-right. When I evaluate startups I'm often expecting FAANG pay, but I don't expect some of the benefits. Generally the hefty expectation is in RSUs, because at a FAANG those are almost a third of what I make. I also don't accept inflated future leaning valuations, I rate them at current value. If I'm taking a gamble on a third of my salary I want to put the risk multiplier on that third, so I'll charge more. Passion can get you so far in startups, but if you're engineer (especially not engineer zero) then you likely won't walk away with much unless you're accurately assessing risk. That said, there's a fair amount of startups that are not worried about having a reputation of early engineers working away with very little. That said, I still have a mortgage and that's what informs my strategy when dealing with startups. If I didn't have a mortgage, I'd probably accept lower RSUs and a higher cash incentive.

givemeethekeys 4y ago

You should pay your employees their market rate. Your risk of going out of business is higher is what warrants the bigger equity. You spend all this time and salary to build a team that works like a well-oiled machine. It would be a shame to lose them to someone who simply pays the market rate. Your team is likely going to be working more than overtime helping you build your dream. You should match what FAANG's paying them, if thats your competition for talent. As they say, you get what you pay for.

chatmasta 4y ago
Yeah, I definitely agree. I'd rather pay a premium to get the best employee and take a discount myself, rather than pay someone below market while paying myself some absurd salary. Frankly I don't care what I pay myself as long as I can afford an apartment and groceries, and so far this has worked out well, as I love the employees we have. If I were exfiltrating a bunch of money for my own salary we would have been out of business months ago.
- SCUSKU 4y ago
  As a spectator to your conversation, I have to say I like and agree with your general philosophy. While I can't quite put a finger on what I like, I think the gist is operating under assumption of how the world, finances, and incentives SHOULD work, as opposed to how they currently work. And also maybe some dose of minimalism(?). Either way, I wish you all the best in building your startup!

solatic 4y ago

> the original goal should be, primarily, totally disconnected from money. Any monetary benefits should be a side effect of providing value. Value is a funny word here. You have a business if you create value for both your users/customers and yourself. You don't have to monetize on day one, but how you create value for yourself needs to be at least a fuzzy part of your vision from inception.