Cult Creation
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blognewcomb.squarespace.com
"At that time we knew that a talented engineer in a tough to get tech was worth about $1.5 million per head. Thus, I knew with relative assurance that since we were going to hire at least 70 people with our Series A money, that our worst case scenario was about a $100 million exit.
If anyone is paying attention, you are now saying, wait a minute! Didn't Powerset sell for $100 million to MSFT? .... Yup, we nailed our worse case scenario!"
P.A. Semi had 150 engineers, and Apple paid $278 million for the company. That's about $1.85MM per head. Seems to match the Powerset story pretty well!
First, the author says,
"Over the years, I've been accused by the press of many things, but one of my favorites is the articles that claim that I create cults or even religious orders in my companies."
Then, he goes on to say,
"...by 'cult' what I mean is a group of super high quality people who trust each other and have similar ways of thinking, learning, reacting, problem-solving and working together. Further, this team needs to bond together under a leader they trust and respect."
Well, no dictionary I can find defines cult in that way and the press were probably not using it in that manner either. In other words, he isn't addressing his favourite of the "many" accusations leveled at him. Instead, he is skirting the debate--if there is one at all--and repurposing it in order to aggrandize himself.
Sort of like saying "I believe in miracles...if, by 'miracles', you mean completely expected outcomes that everyone thought would be the most likely result."
This may have been pointed out elsewhere, but it seems to have something in common with the if-by-whisky style of argument.
All that's missing is the "if by 'cult' what I mean is a slavish adherence to laws and dictates laid down without recourse to reasoned argument.., then I disagree."
God yes. This should just be basic employer-employee decency. Don't fuck around with people's lives just because you might save a buck. ESPECIALLY when you're getting much more from them (Which is just how employment goes).
Now, people might disagree on what level you happen to be at technically... but still it seems like you are saving an incredible amount of time and effort by moving the decision to simply "how good are they" and then making the money decision after that solves a whole lot of problems.
Steve McConnell (or more accurately, I suppose, Construx) with the Professional Development Ladder (http://construx.com/Page.aspx?nid=244) was an early advocate for this idea, and Spolsky has discussed it a couple of times as well.
Cash has limited motivational power, but it's akin to the physiological layer on the hierarchy of needs. If you're getting a shitty salary it's harder to give a damn about the success of the product or company.
That being said, also brilliant is the idea mentioned to let people exchange one or more tiers of compensation for stock if they so chose.
It basically enshrines the idea of employees not being treated fairly. If you can't discuss your pay, you can't know you're getting gypped.
1. Speaking from experience and with expertise as opposed to random analytical arguments that may or may not be true.
2. Holds back very little, tons of useful and concrete advice.
3. Not common sense, lots of insight that leaves you thinking "wow, yeah."
This is the kind of article that makes HN a great place.
Um... given all the advice to never work for equity only, can anyone here actually claim to have pulled this off?
As far as I can tell, this statement is about employees and doesn't cover co-founders.
Most of what he described is just best practice/common wisdom, although well presented -- the A-A, B-C thing especially, perks like monitors, etc.
The "unique" points he raised, which I agree with, are salary/budget transparency within the organization, not trying to pay engineers as little as possible (but instead having fair compensation ranges without negotiation required), and minimizing commutes.
We're on the opposite side of the spectrum as a company in that we're not well known, we're not well connected, we don't have outside capital, and we're not creating the next generation of search. We do, however, have similar goals of finding and retaining the best people, building an enduring and rewarding culture, and continuously exploring better ways to do things. We actually blogged today about what we've learned as a startup in trying to find the best people who are also the right cultural fit.
http://www.braintreepaymentsolutions.com/inside-braintree/re...
This advice is 100% golden and it works.
Favorite advice: Maintain your high hiring bar. This ends up being difficult in the face of big competition and looming deadlines. Hold out and your team and product will be much better for it.
I worked at a big corporate which had a culture of individual bonuses and it was a shambles. All employees ended up being 'above average' and the bonus pool was shared out on a 'project managers pet' basis which sunk any business improvement techniques or any 'pay now, save later' which are the meat and drink of cost improvement.
http://en.m.wikipedia.org/wiki/File:The_Cult-Electric_(album...