Budgeting for new team members(getrealordie.com)
getrealordie.com
Budgeting for new team members
http://getrealordie.com/?p=77
11 comments
If they're pre-funding, in the middle of an angel round, why are they hiring employees already from general public? First off, why aren't they doing themselves? Is the team technically incompetent (by the virtue of too many biz-dev people)?
It looks like they really need another person on their core team - not just a regular employee. Somebody who's willing to be in the garage with you ( why do you even have an office at this point, by the way? ).
You don't recruit that person by posting on the Internet, you use your social network ( and I don't mean Facebook ) to do that. Do they not have any acquaintances, former coworkers?
This may well not be the case - and in fact, I'd imagine it isn't - but the situation screams "these people don't have a technical clue themselves and don't have anyone in their social network who believes strongly enough in them to take the risk and go into a garage with them".
It looks like they really need another person on their core team - not just a regular employee. Somebody who's willing to be in the garage with you ( why do you even have an office at this point, by the way? ).
You don't recruit that person by posting on the Internet, you use your social network ( and I don't mean Facebook ) to do that. Do they not have any acquaintances, former coworkers?
This may well not be the case - and in fact, I'd imagine it isn't - but the situation screams "these people don't have a technical clue themselves and don't have anyone in their social network who believes strongly enough in them to take the risk and go into a garage with them".
You ever tried to recruit employee #1-3? I have. I have a pretty rich network (including the extended network you get being funded by YC, a VC firm, and a mess of pretty top-tier angels). We all worked our networks pretty hard (and ultimately hired out of 'em) but we also posted the job in a few places (and found some amazing candidates).
Very very few people in your network ultimately have the stones to make the leap into the uncertainly of an early stage startup (even a well-funded one). I imagine it gets MUCH harder in Boca Raton, FL and even harder in these particular economic times.
And, expanding a team does NOT equal technical incompetence. It could mean that they have an ambitious problem they are tackling. Or that they have a line of customers out the door and want to accelerate development.
Seriously-- they fucked up-- but at least they're trying. Cut 'em some slack and stop assuming the worst.
Very very few people in your network ultimately have the stones to make the leap into the uncertainly of an early stage startup (even a well-funded one). I imagine it gets MUCH harder in Boca Raton, FL and even harder in these particular economic times.
And, expanding a team does NOT equal technical incompetence. It could mean that they have an ambitious problem they are tackling. Or that they have a line of customers out the door and want to accelerate development.
Seriously-- they fucked up-- but at least they're trying. Cut 'em some slack and stop assuming the worst.
I said myself at the last paragraph - this may well not be the case. They may be competent, but they're not giving that impression - and stating it the way I see, is at least real feedback they could use.
That's what I'm taking away from it. They put out a job listing for an employee, but are expecting that person to have the attitude of a partner.
They're looking for "employee number zero". First person involved who isn't a founder (isn't in the room when the idea is created), but takes on founder level risk and should expect greater than usual equity and compensation somewhere between that of a founder and an employee.
Something screams poor execution: confused goals (they're talking about "getting real" - a 37 signals type philosophy of building a sustainable small business - but are acting like they're built with the intention of an exit, expecting people to work for equity), getting an office before they can truly afford, lack of the right connections to find the person I've mentioned the first paragraph (without resorting to the Internet equiv of newspaper's classifieds page)
They're also doing enterprise software/SaaS - yet it's not clear that their "biz-dev" guys have any "sales engineering" experience (that's what makes or breaks an enterprise product). Along this angle, what's even more ironic is that they're asking the prospective employees to sell themselves short! What's the guarantee that such an employee won't do the same to their software/service (and yes, an early stage engineer will be involved in the sales/support process)?
Something screams poor execution: confused goals (they're talking about "getting real" - a 37 signals type philosophy of building a sustainable small business - but are acting like they're built with the intention of an exit, expecting people to work for equity), getting an office before they can truly afford, lack of the right connections to find the person I've mentioned the first paragraph (without resorting to the Internet equiv of newspaper's classifieds page)
They're also doing enterprise software/SaaS - yet it's not clear that their "biz-dev" guys have any "sales engineering" experience (that's what makes or breaks an enterprise product). Along this angle, what's even more ironic is that they're asking the prospective employees to sell themselves short! What's the guarantee that such an employee won't do the same to their software/service (and yes, an early stage engineer will be involved in the sales/support process)?
I read through all this and am thankful that I've reached a level of experience and wisdom where life is always tempered a bit.
Youth rocks, but sometimes it rocks hard enough that you can end up hurting yourself in a very real way.
Youth rocks, but sometimes it rocks hard enough that you can end up hurting yourself in a very real way.
Talk about digging a deeper hole.
So now programmers are all overpaid eh? I don't want to open the whole debate again, but I see something really wrong with non tech people starting a company and then expecting to be able to hire a few code monkeys to build the product. The product should come first IMHO - team of hackers working day+night.
So now programmers are all overpaid eh? I don't want to open the whole debate again, but I see something really wrong with non tech people starting a company and then expecting to be able to hire a few code monkeys to build the product. The product should come first IMHO - team of hackers working day+night.
Tying a candidate's desire for more pay with the decline the US economy is...um...creative. And saying "I do not want to know you" to candidates you deem to be greedy is disingenuous, considering that you're starting a company presumably to make money, right?
While I can understand wanting to be frugal, I still don't see how paying rates that most engineers would consider mediocre will attract the top candidate you presumably want as an early hire.
While I can understand wanting to be frugal, I still don't see how paying rates that most engineers would consider mediocre will attract the top candidate you presumably want as an early hire.
Yeah, how many 'greedy' devs could you fund with just the bonuses of one 'greedy' wall street guy? My guess is that the devs are pretty much a drop in the 'greedy' bucket.
Jeeez, guys. Take it easy.
A job is a package-- money, equity, work/life balance, autonomy, authority, etc.
I personally agree that they might be a bit "penny wise, pound foolish" here - you have to spend money to succeed, and saving 10-40k on your first hire might be a really bad idea.
That being said, there are plenty of people out there (somewhere between naive and idealistic) who would happily dive into a startup for much lower cash compensation for the other benefits (whether they are equity or less tangible). There are also plenty of just-graduated wunderkind who might have the chops they are looking for but not the experience to command a monster salary.
And look hard at geography here: http://www.indeed.com/jobs?q=php+javascript+css%0D%0A&l=... (check the salary estimate on the left)
At the end of the day, these guys clearly made some missteps. They should change their tune a bit. But try to treat them like you'd want to be treated when you (publicly) screw up with your venture.
A job is a package-- money, equity, work/life balance, autonomy, authority, etc.
I personally agree that they might be a bit "penny wise, pound foolish" here - you have to spend money to succeed, and saving 10-40k on your first hire might be a really bad idea.
That being said, there are plenty of people out there (somewhere between naive and idealistic) who would happily dive into a startup for much lower cash compensation for the other benefits (whether they are equity or less tangible). There are also plenty of just-graduated wunderkind who might have the chops they are looking for but not the experience to command a monster salary.
And look hard at geography here: http://www.indeed.com/jobs?q=php+javascript+css%0D%0A&l=... (check the salary estimate on the left)
At the end of the day, these guys clearly made some missteps. They should change their tune a bit. But try to treat them like you'd want to be treated when you (publicly) screw up with your venture.
I think that the money is a giant red-herring here, but these guys have unfortunately chosen to validate it by responding to it.
When I evaluate a startup, the two things I care about are the idea and the team. If you're doing something world-changing (or even just "really cool") and I like & respect you, I don't care what the money is. I'll even work for free (well, for decent equity).
If you have a good team but a shitty idea, I'd work there if a.) I'm an employee, getting paid decently, and am likely to learn much or b.) I'm a cofounder, personal friends with you, and you're flexible about shifting the idea. This actually describes both my previous startup and my previous employer.
I only care about money if you have neither a good team nor a good idea - but in this case, I'm just putting in time, and you probably don't want me as an employee. Hell, I probably wouldn't want to be an employee in this situation - life's too short to waste it collecting paychecks.
Raganwald wrote a neat piece a while back about uncovering the "hidden objection" and responding to that, instead of answering the sales prospect's verbal objection. People here are objecting to the money issue because it's obvious.
But it wouldn't even be an issue if it weren't for other problems with the startup. This is lead-management software with 2 bizdev guys on the team. It's totally unsexy. We don't know anything about the technical cofounder and what he's previously accomplished. It's unlikely that there'll be hard technical problems that'll provide a good learning experience.
If there were indications that the rest of the package was kick-ass, nobody would care about the money. But all the discussion so far has been about the money, so that's all we have to go on.
When I evaluate a startup, the two things I care about are the idea and the team. If you're doing something world-changing (or even just "really cool") and I like & respect you, I don't care what the money is. I'll even work for free (well, for decent equity).
If you have a good team but a shitty idea, I'd work there if a.) I'm an employee, getting paid decently, and am likely to learn much or b.) I'm a cofounder, personal friends with you, and you're flexible about shifting the idea. This actually describes both my previous startup and my previous employer.
I only care about money if you have neither a good team nor a good idea - but in this case, I'm just putting in time, and you probably don't want me as an employee. Hell, I probably wouldn't want to be an employee in this situation - life's too short to waste it collecting paychecks.
Raganwald wrote a neat piece a while back about uncovering the "hidden objection" and responding to that, instead of answering the sales prospect's verbal objection. People here are objecting to the money issue because it's obvious.
But it wouldn't even be an issue if it weren't for other problems with the startup. This is lead-management software with 2 bizdev guys on the team. It's totally unsexy. We don't know anything about the technical cofounder and what he's previously accomplished. It's unlikely that there'll be hard technical problems that'll provide a good learning experience.
If there were indications that the rest of the package was kick-ass, nobody would care about the money. But all the discussion so far has been about the money, so that's all we have to go on.
You missed some follow up information. The person who wrote the original post is the only salaried employee (barely above market average) and has no equity or options within the company. They are looking for someone to come on with a less than enticing salary, put their heart and soul into the project and be happy with the praise from the founders along with a smaller-than-should-be paycheck. Especially with the list of skills they want. They're basically asking for a gung-ho all-in hire who will get nothing more than a commemorative photo in a matte frame if the company takes off.
It isn't the money. It's the demands their listing puts on the new hire and the inadequate compensation they offer in return.
It isn't the money. It's the demands their listing puts on the new hire and the inadequate compensation they offer in return.
This is very valuable feedback. I really appreciate it (I'm wondering whether I'm still on everyone's down-mod list).
incidentally, i still think somebody should write an article about what the community thinks is "Fair" compensation.
Skip past the "it depends" dialogue (which granted is important), and describe some border cases:
1. founders are jerks/morons, no faith in idea 2. founders are cool, but morons, no faith in idea 3. founders are cool, smart, misguided idea that might be able to be changed to work 4. founders are good + good idea
in case 1, i suspect most people only work for money in case 4, i suspect some people will be willing to work for equity or money or some combination.
In case 1, the "compensation" including money probably has to be higher to put up with a crappy job.
In case 4, how much $ would it take in a "salary only" situation. In a split, how much equity and salary would you require?
2 and 3 are somewhere in between.
I've always been curious what people think fair compensation is for early stage startups.
Skip past the "it depends" dialogue (which granted is important), and describe some border cases:
1. founders are jerks/morons, no faith in idea 2. founders are cool, but morons, no faith in idea 3. founders are cool, smart, misguided idea that might be able to be changed to work 4. founders are good + good idea
in case 1, i suspect most people only work for money in case 4, i suspect some people will be willing to work for equity or money or some combination.
In case 1, the "compensation" including money probably has to be higher to put up with a crappy job.
In case 4, how much $ would it take in a "salary only" situation. In a split, how much equity and salary would you require?
2 and 3 are somewhere in between.
I've always been curious what people think fair compensation is for early stage startups.
This is such an insightful comment. Applause.
The Raganwald article: http://weblog.raganwald.com/2007/01/what-ive-learned-from-sa...
"This is the first part of “What I’ve Learned From Sales.” In this part, “Don’t Feed the Trolls,” I present my explanation for why people act like “trolls,” raising objection after objection to new ideas, and I suggest how to side-step this behaviour and deal directly with their concerns."
The Raganwald article: http://weblog.raganwald.com/2007/01/what-ive-learned-from-sa...
"This is the first part of “What I’ve Learned From Sales.” In this part, “Don’t Feed the Trolls,” I present my explanation for why people act like “trolls,” raising objection after objection to new ideas, and I suggest how to side-step this behaviour and deal directly with their concerns."
You're asking people to treat this company better than they're treating their prospective employees. They call a developer greedy and self-entitled and when confronted, did the same again (for even a broader group of people).
If they stopped calling people greedy/entitled/trying to blame the U.S. society (vs. themselves) and simply stated "we're early stage, we're looking for a first employee to take on founder level risk with us".
If they stopped calling people greedy/entitled/trying to blame the U.S. society (vs. themselves) and simply stated "we're early stage, we're looking for a first employee to take on founder level risk with us".
For a more direct response/clarification, please see: http://news.ycombinator.com/item?id=362152
Does anyone else read the URL as
Get Real, Ordie
I kept thinking Ordie was a pretty neat name.
Get Real, Ordie
I kept thinking Ordie was a pretty neat name.
No, but with their huge font, I feel like I'm being yelled at. "GET REAL OR I AM GOING TO FUCKING KILL YOU, YOU BASTARD." is how I read it. It was kind of like being punched in the face... and I think a tear may have formed in my eye.
Anyway, this company is pretty amazing. Before today, I had never heard of them. Now I think they are arrogant, out-of touch, egotistical losers. Any publicity is good publicity, I guess.
Anyway, this company is pretty amazing. Before today, I had never heard of them. Now I think they are arrogant, out-of touch, egotistical losers. Any publicity is good publicity, I guess.
I'm always seeing Lordie, which my brain translates backwards to "get a lordie". Odd url, for sure.
Why not use the angel money to extend your runway and then hire only once you have product/market fit and some indication that your revenue model works? You'll have a better bargaining position with both investors and employees then, and won't be wasting an employee's time if you fail.
Am I the only one reading this post like so:
"We don't want to blow through our limited capital, so we're looking for 2 junior developers to create our new game changing web property for us.
And praying that what they lack in technical expertise, they make up for in passion"
Seems the author is trading one extreme (too many, too much, too fast) for another (too little). He needs to find the middle ground. Hire a rockstar, pay him a bit more then scale, give him some equity. Let him lead development but be willing to make some product trade offs.
"We don't want to blow through our limited capital, so we're looking for 2 junior developers to create our new game changing web property for us.
And praying that what they lack in technical expertise, they make up for in passion"
Seems the author is trading one extreme (too many, too much, too fast) for another (too little). He needs to find the middle ground. Hire a rockstar, pay him a bit more then scale, give him some equity. Let him lead development but be willing to make some product trade offs.
Whatever you guys are making, if it kicks ass, nobody will care about this nonsense. You certainly have the attention of the HN community now, so don't waste it. It's time to stop fucking up.
Maybe this whole "overpaying developers" mentality wasn't around when I was freelancing because if I actually had $100 for every time someone wanted me to make them a website for $100 I'd be rich by now.
The correct response to the "bad" cover letter in the first place was "ignore it." That would have saved everybody a lot of time.
The correct response to the "bad" cover letter in the first place was "ignore it." That would have saved everybody a lot of time.
> if I actually had $100 for every time someone wanted me to make them a website for $100 I'd be rich by now.
Guess you should have taken them up on the offer then? Sounds like you'd be rich.
Guess you should have taken them up on the offer then? Sounds like you'd be rich.
You somehow managed to miss the entire point. I'm not sure if I should be impressed or horribly depressed.
It was merely a joke, I completely got your point. You on the other-hand did manage to miss my entire point.
He'd only be rich if he had unlimited hours to work.
Or rather, if he got the $100 for being asked to do something; not delivering the product.
1) 2 biz dev guys, one UI guy, one dev doesn't sound right for an early stage company trying to build something
2) This post makes you look judgmental and emotional - two traits that don't really work well for a leader
3) Your post also shows that you're not listening - you insist that anyone who wants a better rate is greedy, and is the cause for the downfall of the American economy. Drawing this conclusion after the feedback received from Auston's previous post seems inflexible.
4) The team is hiring outside for a technical hire. This could be because a) you don't know any good people or b) good people don't want to work with you. Neither sounds great.