“I Work in Startups”
Feels good to say, kind of like Ben Affleck in Boiler Room when he declares his millionaire status to a room of young hopefuls. This wasn’t always the case.
My senior year in college I accepted an offer with the FBI despite pending interviews with Google and Facebook. Two years later, Goldman Sachs gave me an offer. I mention this only to say that my path to startups was completely voluntary, calculated, and came at a sacrifice of leaving and declining some awesome more “traditional” gigs.
The thing is, I am typical. Most people working in startups are there because they desire something different. Something with a big upside. 10X return big. Access to the some of the best creative and business minds. Even the allure is enough to keep us motivated and happy. Here is where things get tricky.
I have come across way too many founders and entrepreneurs complaining about the difficulty in hiring, retaining, and motivating top tech talent. They wonder why junior level employees don’t have that burning passion they have for their own project. Why are they not acting as entrepreneurs themselves? Why is 100% effort being expended when startups thrive on 150%?
I will tell you exactly why and you probably won’t like it. Personal incentives. Plain and simple, if you want the best talent, you HAVE to provide something that corporations don’t. We are the ‘entitled generation’ for a reason. We chose startups over stability for a reason and it doesn’t come down to a casual dress code.
We are looking to voraciously build product, grow in our career track, and be rewarded in exchange for a dauntless effort and unshakable work ethic (passion) that is on par with the vision of the founders. Want 150% from your team? Provide these three simple incentives:
1. Financial Incentives and Rewards
Simple yet often neglected in today’s startup culture. I am going to say what most employees think but don’t say. People largely join startups for the allure of cashing out and or eventually cashing out at another startup. If you are an early-stage startup without funding, give equity. If you are funded, set aside a standard employee stock option pool that is hedged and or adjusted with growth to avoid dilution. If you can’t do either, offer frequent raises with outstanding performance.
Without financial incentives, why would anyone pass up Goldman, Facebook, Google, or other stable top paying firms, many of which also give options or shares if public? Think about it. You can be just as innovative at a large well-paying startup like Airbnb, Uber, or even Google depending on the team, with pay, a brand name, stability, work-life balance, and all the other perks.
Give employees the chance to eat a piece of the golden cake and I guarantee you will attract and retain top talent. Otherwise, what you will get is a 9-5 talent who don’t mind cruising the path of least resistance, collect a paycheck, and leave work to never think of the company again until the next morning or following Monday.
2. Train, Guide, and Foster Intellectual Curiosity
Training, mobility, access to c-levels, and the chance to work on multiple projects across many departments. The hardest workers and best talent will often be aspiring entrepreneurs looking to eventually strike out on their own. They will be passionate about learning and humble at the same time.
Foster this intellectual curiosity. If someone is performing well and providing results, throw another project at them. Challenge them and provide guidance along the way.
Here is another complaint I hear. “I don’t have enough time”. Bullshit. All you need to do is let someone shadow you (i.e. sit quietly behind you as you work) and that is a perfectly good start. I shadowed a top FBI senior analyst for months before handling my own assignments and it was the best learning experience I have had in any workplace. Like to work solo? Fine, conduct a training class once a month and open it up to every department or team in your startup. Easy and effective.
3. Treat Employees as Part of the Founding Team
Mentor and be personable. I will tell you a little secret. A 5-minute spontaneous, or even planned, one on one with a c-level executive or co-founder will ignite more passion within a junior level employee than any company culture event ever could. Startup employees want to feel on the inside of the strategic direction of the company.
Meetings sometimes work, but a simple “Hey John, what do you think of this idea?” from a founder to an employee will create the feeling that the company is shared, the goals are aligned, the vision is one, and the passion is synced. It needs to surpass a direct manager level and come from the top.
Startup employees have entrepreneurial tendencies and feed off of both personal passion and the passion of other people. They work harder and smarter than most and have given up flashy jobs and brand names to join a team.
Just as startup managers’ expectations include a ruthless dedication to the company and killer work ethic, startup employees expect to be part of the inner team, rewarded for their dedication, and most importantly to grow personally and professionally while helping the startup reach its maximum potential.
The sacrifice it takes a make a startup succeed extends to every employee in the firm. It is a family with a shared vision and collective “no-lose” attitude. Look at it as a cost-benefit analysis. What can you offer a top recruit, both financial and non-monetary, that will make up for his or her’s lost opportunity to work at Google, Goldman, or similar. Really think about it. You want to find and keep top talent? Treat them like top talent.