4 ms·

Founders should pay themselves whatever optimizes the long-term outcome for the company, since it is mainly through the company succeeding that they will make m

by pg 17y ago

Founders should pay themselves whatever optimizes the long-term outcome for the company, since it is mainly through the company succeeding that they will make money. You need a certain amount to live on to be able to work well. But early on, when the company has no money, it is probably not a good idea to pay yourselves more than that minimum. Later you can pay yourselves more. But whatever you pay yourself, you're always doing it at the expense of the stock you hold. This is obvious before the company is profitable, because the only way to get money to pay salaries is by selling stock. But it is just as true after a company is profitable too. Any dollar you take out is a dollar the company can't spend on expansion. I notice one person advocated paying oneself a salary from the beginning, because it "forces you to work harder." In my experience, the kind of people who make good founders are able to make themselves work hard without such tricks.

rokhayakebe 17y ago
I'll second that. Founders should pay themselves slightly above the minimum they need to get by. Piece of mind translates into the quality of your work (be it coding, selling or marketing). There are probably a few things that can negatively affect a company more than a founder who can't stop thinking about how he will make his rent/credit card payment.
- deleted 17y ago
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sachinag 17y ago
I've found that "working harder" is more accurate than saying "working more productively". It's been my experience that many people get very excited about, say, rebuilding backends for incremental performance reasons (because they're good at it) rather than doing sales or marketing work (which isn't particularly fun). Of course, you can have the world's most perfect backend, but if you don't have users, you're in a tree/forest situation. It's the same 80 hours a week either way - but it's a more productive 80 hours if the founders are honest about what matters at this moment and what doesn't. People enjoy working on the stuff they're good at. A lot of times success comes from working on the stuff that you're not good at. Rebuilding a backend sure can "feel" productive, but it often isn't the right decision for that moment. That's why I prefer to think of it as working "harder" - it's a useful shorthand for "don't neglect the stuff that sucks to work on". A need for revenue, based on a little higher cash burn, can often make the correct resource allocation decision more obvious.
- wheels 17y ago
  I think for me a higher burn rate isn't motivating; it's operating without a safety net and worrying about seeing your baby hit the ground. The money that I've invested in my own company isn't what I'm worried about losing -- it's the > 1 year of my life that I've put into it. Ultimately, my life, to me, is a much higher value currency than the US dollar.
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- patio11 17y ago
  It's the same 80 hours a week either way I do insane workweeks because I'm a Japanese salaryman and people would talk if I didn't. What the heck is your excuse. ;) Seriously, every time I hear stories about it, I get the feeling people are trying to be Real Manly Men doing their Rough Startup Labor (say them in the Monster Truck voice), finding things to spend 80 hours a week on. Which, since you can't sustain productivity for 80 hours a week, ends up getting frittered away on negative productivity (introducing more bugs than you fix) or just spinning your wheels doing things that don't matter (backend). (The "you" here is a collective "you".) You may think you personally sustain productivity for 80 hours a week. I think you are too much a Real Manly Man to have ever collected data to substantiate that. How did I do? (We track it at work, which is finally starting to impact the culture here. And we have a bunch of Real Manly Men looking at the chart showing the brick freaking wall in the units-of-engineering-labor created versus time graph and saying "Well, sure, it might LOOK like we're not being productive... but that is just because some people need to man up and work harder.")
  - sachinag 17y ago
    This is why we use the phrase "all y'all" to mean the second person plural. It's actually really useful. :) I used to work in banking and VC. 80 hours was easy. More work in banking, more travel (which sucks just as much) in VC. I don't get gaming developers complaining about crunch, but I'm always thankful on Labor Day that labor gave us the five-day, 40 hour workweek as a standard for when (if?) I get married and have a family.

by pg 17y ago

rokhayakebe 17y ago

I'll second that. Founders should pay themselves slightly above the minimum they need to get by. Piece of mind translates into the quality of your work (be it coding, selling or marketing). There are probably a few things that can negatively affect a company more than a founder who can't stop thinking about how he will make his rent/credit card payment.

deleted 17y ago
[deleted]

sachinag 17y ago

I've found that "working harder" is more accurate than saying "working more productively". It's been my experience that many people get very excited about, say, rebuilding backends for incremental performance reasons (because they're good at it) rather than doing sales or marketing work (which isn't particularly fun). Of course, you can have the world's most perfect backend, but if you don't have users, you're in a tree/forest situation. It's the same 80 hours a week either way - but it's a more productive 80 hours if the founders are honest about what matters at this moment and what doesn't. People enjoy working on the stuff they're good at. A lot of times success comes from working on the stuff that you're not good at. Rebuilding a backend sure can "feel" productive, but it often isn't the right decision for that moment. That's why I prefer to think of it as working "harder" - it's a useful shorthand for "don't neglect the stuff that sucks to work on". A need for revenue, based on a little higher cash burn, can often make the correct resource allocation decision more obvious.

wheels 17y ago
I think for me a higher burn rate isn't motivating; it's operating without a safety net and worrying about seeing your baby hit the ground. The money that I've invested in my own company isn't what I'm worried about losing -- it's the > 1 year of my life that I've put into it. Ultimately, my life, to me, is a much higher value currency than the US dollar.
- deleted 17y ago
  [deleted]
patio11 17y ago
It's the same 80 hours a week either way I do insane workweeks because I'm a Japanese salaryman and people would talk if I didn't. What the heck is your excuse. ;) Seriously, every time I hear stories about it, I get the feeling people are trying to be Real Manly Men doing their Rough Startup Labor (say them in the Monster Truck voice), finding things to spend 80 hours a week on. Which, since you can't sustain productivity for 80 hours a week, ends up getting frittered away on negative productivity (introducing more bugs than you fix) or just spinning your wheels doing things that don't matter (backend). (The "you" here is a collective "you".) You may think you personally sustain productivity for 80 hours a week. I think you are too much a Real Manly Man to have ever collected data to substantiate that. How did I do? (We track it at work, which is finally starting to impact the culture here. And we have a bunch of Real Manly Men looking at the chart showing the brick freaking wall in the units-of-engineering-labor created versus time graph and saying "Well, sure, it might LOOK like we're not being productive... but that is just because some people need to man up and work harder.")
- sachinag 17y ago
  This is why we use the phrase "all y'all" to mean the second person plural. It's actually really useful. :) I used to work in banking and VC. 80 hours was easy. More work in banking, more travel (which sucks just as much) in VC. I don't get gaming developers complaining about crunch, but I'm always thankful on Labor Day that labor gave us the five-day, 40 hour workweek as a standard for when (if?) I get married and have a family.