Peter Thiel: Best Predictor of Startup Success Is Low CEO Pay
techcrunch.com
techcrunch.com
I ask because, "In Startupland, everybody should be working towards the same goal: that big juicy exit," couldn't be further from my mind. I know what that means to me (as does my team) in terms of access to venture funding, but I'm not particularly interested in an "exit". I want to build a service that's beneficial and worth paying for and that is responsive to my customer's needs.
Am I missing something, or do I need to change how I think about what I'm doing?
company => provides services and products
So in that case, you could create a startup that in itself cannot be profitable, but when purchased by a larger company can become wildly profitable for them.
I don't think that's an unusual case.
Bottom line: you aren't going to be able bring in a proven CEO for $100-$125k a year. I don't care whether you're in Cincinnati, Boston, Austin, Silicon Valley - you can't expect someone who has a $15,000/month mortgage (as a proven CEO would likely have) and expect him to work for $8k/mth. "Hmmmm - over the next four years of my life, I can make $600k a year plus bonuses/benefits working for ACME Corp or I can make $100k a year with the chance to take home a $3m-$5m payoff..."
"Hmmmm - over the next four years of my life, I can make $600k a year plus bonuses/benefits working for ACME Corp or I can make $100k a year with the chance to take home a $3m-$5m payoff..."
"Hmmmm - over the next four years of my life, I can make $350k a year plus bonuses/benefits working for ACME Corp or I can make $130k a year with the chance to take home a $10m-$20m payoff..."
BTW - $15k/month mortgage is around $2M borrowed. That's not a big deal in some places (including SV), but it's a huge deal elsewhere.
Steve Jobs Speech: http://in.youtube.com/watch?v=D1R-jKKp3NA
$100-125k is pretty good for funded startup then i.e. as good as corporate salary
A CEO to taking a lower compensation says to me they are taking the company seriously. It's another way they have skin in the game.
If they aren't willing to sacrifice a little for the end game, may mean they are either purely in it for themselves or don't have confidence in the company. Either one is not so good for the company.
http://www.udel.edu/educ/gottfredson/reprints/pubtopics.htm#...
I live in the UK were basic health care is free so perhaps I don't have the experience to comment but healthcare wouldn't be somewhere I would be trying to save a few pennies/cent.
No, you like in the UK, where basic healthcare is paid for by taxpayers. It doesn't become free because the money is taken rather than given.
Come couch surf at my place. I pay for it, but you enjoy it: it's free to you. Here's an ice cream cone. Once again, I paid, but you enjoy it.
To you, it's free.
Now -- use the powers of government to force people to pay taxes to buy you an ice cream cone? It's not free to you any more.
The danger is that you start feeling like I'm going to give you ice cream cones anytime. I can correct you of that assumption pretty quickly. But when the giver is some anonymous blob, starts looking like free money.
You're right. Almost nothing is 'free' by those criteria. Economists like to say that "There ain't no such thing as free lunch."
Having only paid tax for one year of my life so far perhaps it is easier than I had imagined to adopt the notion that other peoples money = free.
Social health insurance is a larger risk pool, and if managed correctly should be a lower cost overall; something which is borne out by the UNHCF numbers.
The essentially random and punitive nature of health care financing in the US means there are plenty of people who are foregoing entrepeneurial activities because the health risk is too high for them to do without the bargaining power of a large employer to restrain the cozily corrupt arrangement that makes health 'insurance' one of the most profitable businesses in the world.
By supporting private health insurance you are essentially supporting a barrier to entry in all industries...
In the US you pay a massive amount towards warfare - I don't think that is a good thing.
Ah. You know, I never really thought about how when I buy food, I am helping big corporations profit from hunger; when I buy books, I am helping big corporations profit from ignorance; when I buy clothes, I help big corporations profit from the wrath of nature. Fortunately, I am more concerned with getting what I want than with worrying that someone might, as a terrible side effect, benefit from my actions.
something as basic as health insurance should be something that is 'free' for everyone regardless of their circumstances.
But it's only 'free' because the necessary resources are taken away from other people. Saying you are entitled to healthcare is saying that no doctor or nurse is entitled to their own time -- it's yours, until you declare yourself satisfied with the health care you've gotten. Similarly, no researcher is entitled to his own ideas, property rights dissolve when the property is something you want but for which you are unwilling to bargain, etc. That is barbaric.
In the US you pay a massive amount towards warfare - I don't think that is a good thing.
Neither do I. Unfortunately, the cheap kinds of war are unpopular.
Medicine however, we need as long as we are sick. Therefore, there's quite an incentive for medical companies to keep us sick so we'll keep using their medicine.
Doesn't that worry you? Don't you see a sort of conflict of interests there between them wanting to cure you, and them wanting to make money?
If they develop a one shot cure that is cheap, and an ongoing vaccine that people need once a year, obviously they'll hide the cheap cure, and get you to sign up for once a year medicine, because it'll make them more money.
If that's true for private enterprises, why is it not true for the government? If a politician can make me reliant on him forever, why won't he do it?
If they develop a one shot cure that is cheap, and an ongoing vaccine that people need once a year, obviously they'll hide the cheap cure, and get you to sign up for once a year medicine, because it'll make them more money.
If there's only one 'them' (as in the government example) that is true. If there are many 'thems', and a new 'them' can be started for fairly little money, one would expect someone who developed such a cure to market it independently. Yes, a multi-million dollar lump sum from curing everything is less than the billions of dollars in revenue generated by health care companies. But 100% of that lump sum is more than this researcher could expect from the companies.
On a startup-related discussion site, it's pretty foolish for you to argue that nobody will ever market the cheaper, better solution, and that we'll always be beholden to the big companies. Nobody here believes that about software -- do you?
Software is just building stuff. It's easy.
If you don't build X, someone else can. But if you hide cure X for an illness, there's nothing to say that anyone else will find that cure at all - ever.
The statistics speak for themselves. Countries with government provided healthcare pay less on healthcare, and have a higher life expectancy.
While paying for medicine from tax money makes it look like more of a free ride, and potentially open to abuse, it seems that having a cartel of medical insurance companies and hospitals all jacking up the fees works out a lot worse for users in the long run.
One of the interesting ideas that many of the state-based health care systems have (Sweden for example) that the US should adopt is small out-clinic centers. The centers tend to have 1-2 doctors on staff and several nurses. People can either call in for a consult or walk in to the center. If they call in, the nurse will provide treatment options over the phone when possible or either ask the patient to come into the center or send a doctor out for a home visit. The centers have been very effective at reducing cost and giving people an alternative to going to the emergency room for things that do not require emergency treatment.
While I tend to believe that private industry can do things more efficiently (cost-wise and man power required) than the government there are some things that really should be available universally, like health care. Removing the need for all of the currently uninsured people from going to the emergency room to receive care would probably save the industry a large amount of money and bring down costs significantly. I don't see private industry stepping forward to find a solution for this issue anytime soon so we'll most likely need the government to step in.
Just curious at what the usual funding agreements end up at.
So if this view is reasonable, I don't think that the CEO's salary is a ceiling.