3 ms·

Are you targeting $75k for sales people as the income level where happiness peaks?

tyre 11y ago
Great question. This post focuses on what commission structure optimizes for customer happiness. We need to recognize that, especially in startups, early products aren't a perfect fit for everyone in our target market. That's okay, we just need to align incentives so that our sales team closes customers where the product can provide a Fuck Yes Experience. In terms of general employee salary correlating to happiness, coincidentally I studied the philosophy and psychology of happiness so I'd be happy to shed more light here. I think you're referencing the study by Daniel Kahneman. Roughly $75k is the point at which additional income has severe diminishing returns, but it doesn't necessarily peak (you just see a tiny effect.) That number is not as specific as it sounds. $75k was about what it takes to not have to worry about money. You can't drink champagne at every meal, but you have enough to live comfortably and sprinkle unnecessary purchases, travel, and vacation without additional stress. It also doesn't control for cost of living. $75k in San Francisco isn't worth the same, in terms of quality of life, as $75 in Lafayette Louisiana. Furthermore, within a given company, the absolute dollar amount matters far less than the comparative dollar amount. This[1] study demonstrates that people would rather be paid less money overall as long as they make more than their coworkers at a similar level. To combat this and to avoid horizontal discrimination, everyone at Seneca Systems who does the same job gets paid the same amount.[2] [1]: http://www.econ.ucsb.edu/~charness/tenure_papers/happiness.pdf http://www.econ.ucsb.edu/~charness/tenure_papers/happiness.p... [2]: https://github.com/SenecaSystems/employee_handbook/blob/master/compensation/salary.markdown https://github.com/SenecaSystems/employee_handbook/blob/mast...
- chipgap98 11y ago
  Yeah I understood the message of the post was about lining up customers experience and commission, but the $75k number stood out to me. Wasn't sure if the title was getting at both ideas. I like the idea of the FYE and putting a system in place where salespeople are encouraged only to onboard customers that are going to love Romulus right away. I've always loved that Brian Chesky quote. And I've done a good amount of reading on the philosophy of happiness recently as well. I agree that the $75k is the not an exact figure. Another big point is that rough figure only accounts emotional well-being[1]. Its all depends on how you measure your happiness. I haven't ready the UCSB study before, I'll have to take a look at that. [1] http://www.vox.com/2015/6/20/8815813/orange-is-the-new-black-piper-chapman-happiness-study http://www.vox.com/2015/6/20/8815813/orange-is-the-new-black...

tyre 11y ago

Great question. This post focuses on what commission structure optimizes for customer happiness. We need to recognize that, especially in startups, early products aren't a perfect fit for everyone in our target market. That's okay, we just need to align incentives so that our sales team closes customers where the product can provide a Fuck Yes Experience. In terms of general employee salary correlating to happiness, coincidentally I studied the philosophy and psychology of happiness so I'd be happy to shed more light here. I think you're referencing the study by Daniel Kahneman. Roughly $75k is the point at which additional income has severe diminishing returns, but it doesn't necessarily peak (you just see a tiny effect.) That number is not as specific as it sounds. $75k was about what it takes to not have to worry about money. You can't drink champagne at every meal, but you have enough to live comfortably and sprinkle unnecessary purchases, travel, and vacation without additional stress. It also doesn't control for cost of living. $75k in San Francisco isn't worth the same, in terms of quality of life, as $75 in Lafayette Louisiana. Furthermore, within a given company, the absolute dollar amount matters far less than the comparative dollar amount. This[1] study demonstrates that people would rather be paid less money overall as long as they make more than their coworkers at a similar level. To combat this and to avoid horizontal discrimination, everyone at Seneca Systems who does the same job gets paid the same amount.[2] [1]: http://www.econ.ucsb.edu/~charness/tenure_papers/happiness.pdf http://www.econ.ucsb.edu/~charness/tenure_papers/happiness.p... [2]: https://github.com/SenecaSystems/employee_handbook/blob/master/compensation/salary.markdown https://github.com/SenecaSystems/employee_handbook/blob/mast...

chipgap98 11y ago
Yeah I understood the message of the post was about lining up customers experience and commission, but the $75k number stood out to me. Wasn't sure if the title was getting at both ideas. I like the idea of the FYE and putting a system in place where salespeople are encouraged only to onboard customers that are going to love Romulus right away. I've always loved that Brian Chesky quote. And I've done a good amount of reading on the philosophy of happiness recently as well. I agree that the $75k is the not an exact figure. Another big point is that rough figure only accounts emotional well-being[1]. Its all depends on how you measure your happiness. I haven't ready the UCSB study before, I'll have to take a look at that. [1] http://www.vox.com/2015/6/20/8815813/orange-is-the-new-black-piper-chapman-happiness-study http://www.vox.com/2015/6/20/8815813/orange-is-the-new-black...