What's a "normal" decline in benefits? | Hacker News Reader

What's a "normal" decline in benefits?

7 pointspseudo-j5 comments

I joined a startup a year ago, getting the "standard" benefits: stocked kitchen, equity, good health care, unlimited vacation time... Obviously these benefits were meant to make up for things like salary shortfalls.<p>Since then, the benefits have declined, two of which I'll speak about because they affect me the most. I'm curious whether this is normal, or whether it's a sign of something worse.<p>Weeks after my hire, we switched from a good health care provider to a much more annoying one (won't get into details). Slowly but surely the kitchen has gone from fully stocked to having a couple of things (was: fresh fruit, cereals, nutrition bars. is: yogurt, milk, OJ and maybe bananas). The good coffee is gone, replaced by your average supermarket coffee.<p>How much of this is normal everyday life over the course of a startup? When I take a step back and review my past year, it definitely feels like the company has taken a big step backwards in this respect. The work is still interesting, and most of the people are great, so I enjoy that, but I start to feel a bit disappointed in the way the company is being run in a day-to-day fashion.<p>Is this even something to bring up to anyone at the company? I don't want to be a malcontent, but at the same time, I start to feel a little less of a bond with the company. I start to lose that feeling of "hey we can't pay you a great salary, but we'll make it up by doing our absolute best in these other areas." I start to feel a bit taken advantage of, actually. It feels like death by a thousand cuts, or the whole "boiling a frog" thing. Is this a normal part of the ebb & flow of a startup? First raise money. Then increase benefits to hire/retain the best people around. Then the money starts to disappear, so the cost cuts start. Then raise more money, rinse/repeat. Or is this something more desperate?

http://steveblank.com/2009/12/21/the-elves-leave-middle-eart...

This is the best article on it. If you want to fish for an earlier version of it, go to the story of reduced choice in soft drinks in the Dilbert Principle.

Cost cutting like this is a sign of either a general focus on margins (moving from early stage to later stage) or outright financial trouble. In either case, a lot depends on your temperament. If you like stable companies (first case) or believe in going down with the ship because of a connection to the founders (latter case) it's worth staying. Then again, if the place is becoming boring, you don't want to be the only free thinker in Mayberry.

I would suggest asking some tough questions to the CEO/founder like this:

- What is the burn rate of the company?

- How much money do we have in the bank?

- What kind of revenue are we getting (you may already know this, but it could be worth asking anyhow)?

- What is the current horizon for fundraising?

All of this adds up to whether the company is tightening its belt in anticipation of lean times. It's happened before to many companies (for startups I've been involved with, it was the end of paid happy hours and the twice-weekly bagels disappearing) and it will happen again.

It's a panic response to a shortening cash runway that often doesn't help extend it very much. Be aware of the situation and prepare yourself for the worst, if necessary. It may be what others suggest here (a salesman suggesting a lower cost alternative) or the CFO trying to clamp down on expenses based on what they see in the next quarter or two.

Control what you can, be prepared for the rest.

The reduction in health care could just be a function of a salesman saying "We can save you money here" without anyone really knowing the service would be inferior until after the switch. The overall decrease is probably as you reference - when the money was more abundant, the fridge was better stocked. This isn't a unique story in that respect.

Are you disappointed in how the company is run from a business point of view, or is this about the coffee and yogurt? I doubt you joined for the food, but that and a change in health care (annoying /= reduction) are all you point to. Did they cut vacation? Salary?

Of course startups try to offer some extras to attract and retain if they pay below market, but most who stay longer term probably aren't as concerned about these things.

Pay attention to what's going on with the leadership of the startup and the direction of the business.

Some cuts to benefits, food stocking, etc should be expected if you're seeing a major shift in direction. They may have to hunker down for a slow period where they don't acquire new revenue or raise new funding as they figure out where they're headed. It makes absolute sense that they would try to preserve some cash during this time and the things you mentioned are a lower impact way of doing so.

If you believe in the leadership behind the company, then stay on and see it through. But if you think they're wandering aimlessly, then prep your CV and get out of there.

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