Employee Retention
blog.samaltman.com
blog.samaltman.com
When I talk to ex-coworkers, the reasons they often cite for leaving are: 1) weren't empowered to achieve their career goals 2) weren't compensated relative to the value they felt they brought 3) worked on too many failed products and 4) burned out.
(I don't disagree with work/life balance in general, but I'm pointing out that your data supports Sam's point that you should give people generous equity for working on a product that's worthwhile, rather than your point that they shouldn't devote themselves 100% to the work.)
My dad works for a government contractor where the profit / margins are fixed, so essentially a "limited" growth company. He's been employed for over 30 years.
Why has he stayed? Because he can work 40 hours a week. His pay is good (EOY bonus is tied to a project success). He holds a position of value (to him not just to the organization). In his career he has seen more product failures than successes, but his successes were large, and he uses the knowledge from each to consult other projects in the organization (eg, he feels valued).
My takeaway is to look at your career in totality - it goes beyond equity and a worthwhile project because in a long career, you'll have many worthwhile projects and many that are not. And for the vast majority of startups, equity is worthless. It also includes interaction with team members and how you want to shape your company's future, and how your company wants to shape yours.
I think on work/life balance, there are populations who care about this, and populations who don't. And this changes over time. When I was younger I was happy to throw my whole life into tough projects. Now that I have a family it's tougher to go "All in" with projects.
In a SV scale-to-the-moon startup, you hire cult members, not employees. You want them to work for minimum wage and equity only.
Sometimes that means hiring people who are naive but can be manipulated in the right directions versus experienced people who have done it all before.
Then, based on past HN articles, you proceed to do your best to scam them out of the equity you gave them.
You don't want to "hire good employees" but you want to "create a great team". If an employee feels like he's part of a team where he can create more value than he could someplace else, it makes sense for him to stay. If he feel s like the team is holding him back, he ought to leave in a heartbeat.
It's said that "employees don't leave a company, they leave managers", and this is definitely true. One bad manager can cause employee retention problems that go on for years.
I don't care about my todo list type projects other than to do a good job and keep my job.
Being honest with potential hires and showing them both the good and the bad about what you have to offer may lose you a few good hires but will surely save you many more bad (short tenure) hires over time. As a recruiter, I hear the bait-and-switch cited by roughly 25-50% of job seekers that are leaving a company after a relatively short 0-3 year stint.
The types of things I'm talking about with bait and switch are related to what projects you will work on (say you will be put on Team X's sexy initiative, then on Day 1 told you that Team Y's maintenance isn't going well and your skills are needed there), what the future holds for the company (over-optimistic about funding promises, sales estimates, delivery dates, etc.), or how you will be able to progress.
Does the management team have a history of promoting from within or will they hire a former co-worker for the role you are in line for? Can you look at tangible past results and numbers as evidence.
It's not very likely to get these types of items in writing, and unless it's legally binding you don't have any remedy in most cases.
Honestly, which company has a mission that motivates employees to stay despite lower pay and negligible equity? Khan Academy has a mission, the rest of SV is nonsense hoping to get lucky.
GitHub has had one of the best jobs retaining people. Zach Holman disclosed some numbers recently[3] on his How GitHub (no longer) Works talk.
[1] video: http://www.justin.tv/startupschool/b/272031754
[2] Writeup http://tom.preston-werner.com/2010/10/18/optimize-for-happin...
We have a fundamental problem in Silicon Valley: there are not enough places for people to live in. This manifests itself in many ways (higher rent, higher salaries, higher turnover, etc) and is probably going to be a hard limit on how big the local tech industry can get. It's a certainty that other significant startup hubs will arise unless something changes.
Transportation is your problem, along with NIMBY regulations (fought-for by limousine liberal hypocrites) that prevent proper growth. Silicon Valley is not Manhattan, with its daytime population density of 170k per square mile. It should not be expensive and congested. It's just badly planned, with a lot of regulatory corruption keeping housing scarcer than it should be.
In LA the thriving tech community is all in west Los Angeles, where Venice is the hip San Francisco (but waaay cheaper) and Santa Monica / West LA has great homes (also much cheaper than say Palo Alto [if you exclude beach front]). And these 2 neighborhoods are 10-15 minute commute, very different than the hour commute between most of the south bay and SF.
My g/f lives in outer Richmond and takes me over 50+ min for a bus to soma. Might as well live in Oakland...
Let's say you have a bus line with 40 stops. I wonder what it'd look like if you ran two lines with 20 stops each: you run same num of busses on same route, each bus just skips every other stop, alternating with the next bus.
Wait times at any given stop don't dramatically decrease in absolute sense. And if each stop takes 30 seconds, could shave 10 min off route.
I live in London, but I'm just generally curious about the SV/SF area.
You live in SF/Berkley as a single person, you move down to the south bay to raise a family in stable suburbia with 'good schools' vs. the dice roll that is SF. That is the pattern. More tech companies and mostly male tech workers wont solve it. Downtown SJ is already a bit dense as it is.
Many of your young, hip engineers will want more room and a family-friendly lifestyle in ten years.
And if you're going to allow extensive work-from-home, how do you keep from diluting the benefits of your Silicon Valley location?
- The public schools are mostly terrible (we'd have to put our kid in private school unless we got into one of the really good school districts).
- House prices are crazy.
- The environment is just . . . bad. I didn't know how much I missed actual weather until moving away (to Seattle, if you must know -- I don't mind the rain much at all).
About the only things I miss from the Bay Area are my friends, the year-round motorcycling, and the hard-core high tech culture (though there is a lot of that here in the Seattle area).
Mobile Hacker? Come work with the team that's reinventing farming
SimplyInsured (YC W13) Is Hiring Hackers - Change Healthcare Forever
Homejoy is hiring hackers to change the home services industry
I guess the only way to get smart people to work 60 Hrs a week for low pay is to convince them they are changing the world somehow.
I believe the phrase is a coded message along the lines of "we're the next Facebook!", an application or service that will radically change the landscape of {insert something here} and turn into a massive public company and insanely huge IPO.
That's what the mission is about. Since you can't guarantee success, you put the carrot at the end of the stick and it starts right here.
For a super successful startup (a la dropbox, stripe, etc.) -- why take only $50 million and leave the rest (possibly hundreds of millions) on the table? Especially with investors chewing their ears out about going for the home run. And, possibly, with an opportunity to cash out partially (a la Groupon, airbnb, etc.)
Maybe I am misreading your post, but not a single one of the YC companies is solving a problem as easily mocked as "pizza delivery" (which, in reality, is really simplifying food acquisition to reallocate those hours to something more productive than waiting in line).
Healthcare and farming are two hugely important sectors. Home services are a major productivity win.
I suppose I'm most skeptical about the claim that they are changing the world somehow. I can't believe that every startup is transforming an industry, or even trying to do so. Imagine some idealistic young hacker gung ho about disrupting farming, completely changing the way people grow food forever. And then on their first day, they realize they're job amounts to maintaining a mediocre iPhone app.
Now I don't doubt an iPhone app could make farmers' lives better. But how much are you gonna change farming? Maybe software can make farming a tad more data-driven or a tad more organized. But the way we grow food won't change because some YC startup wrote an app for it.
Yet clearly, startups want job candidates to believe they will change the world, or else they wouldn't put it in their ads. So what motivation could they have?
1. Like someone else mentioned, perhaps "changing the world" is code for "making lots of money." Could be.
2. My hypothesis: Startups use their "change the world" mission to justify low pay, long hours working conditions. People won't work under those conditions unless they believe they're working for a higher purpose.
3. Maybe delusional founders say "change the world" because they actually think their mobile/web-app/cloud crap will disrupt an industry. Sometimes that happens, but nobody should be foolish enough to think they know what it takes.
And while they are low-margin business and not exciting, if someone were to genuinely find a new and useful take on tshirt printing or pizza delivery odds are the startup would be worthwhile. There are lots of tshirts printed and pizzas delivered.
I'd rather get to a wear a self-righteous smirk to work than make an extra $20k a year to put in my 401k.
Wow, the answer was right there under our noses all along! You guys out there losing employees, it's because you're not successful! Fix that!
I've found the biggest cause of failure of software projects (in general, not just startups) is staffing up too quickly. You really want to know what you're doing and have some idea how you'll get there before you bring other people on board.
I.e., it will be equity that attracts mercenaries looking for a quick exit, and good salaries that will ensure long term loyalty.
* don't constantly push to have your employees stay late
* if you need your employees to travel, while they're away don't pressure them to work more than their usual work day.
* don't disrespect and be a jerk to your employees
* provide reasonable sick and vacation benefits
edit: ok, perhaps not screwing me. but if you know I can make significantly more elsewhere, you shouldn't act shocked when I take the opportunity...
My favourite is 'flexible work hours' that always seems to stack in the company's favour. Work a 12-hour day yesterday? Go home an hour earlier today... if that.
For example, if someone accidentally deleted a production database and there's no backup, they didn't screw up, the team screwed up for not having backups and for encouraging working in production.
Then you have a rolling system where there's enough overlap that when employee #6 leaves, employee #9 or #10 can take up the slack pretty quickly.
I suppose it's not easy to "time" your hires because it's so hard to find the right fit, but if you can hire a reasonably good fit within a 2-3 week recruitment window then you can space them out.
The other advantage is that the earlier employees gradually get more staff to train and delegate the work to, so they will feel actively involved in relieving themselves of the 60-80 hour/week pressure and meanwhile their equity is continuing to build up.
I'm not a start-up founder (yet), so this may be fundamentally flawed thinking. Any comments?
Only problem is that like any Poisson process, your good hires will not be evenly distributed. Sometimes you'll get bursts and sometimes there will be long dry spells.
Consequently people don't seem to quit companies, as long as the company isn't falling apart of course, as much as they quit bosses that don't take care of them. That are negligent - either through incompetence or absence - or abusive with respect to their needs.
If someone's leaving the company, it's often worthwhile to try and find out why - preferably talk to them a long time before they leave the company, so it never gets to that point. Try to find out what's going on in their lives, what their problems are, what they want to do, what they enjoy. Try to make sure you can offer that to them.
Some people want to feel like they're changing the world - that's your story group. Others want to learn to be better programmers. Others want a boss who can be flexible around their lives. Some people want to teach others. Some people just want days off for their kid's plays. Whatever their needs, most people seem to want to feel like they're important; like their opinions and their problems matter to you. Like they're not just another cog in the machine.
Things built on that sort of platform are a form of personal loyalty, that they can't easily get at other companies. They go to another company, they may talk to them about a mission, they'll probably be growing, they'll want to have a good team (whether they do or not's debatable - again, see people don't quit companies as much as managers...). But they won't have that relationship you've built. And their future bosses might be awful, it's a gamble for them - and it's not clear their winnings will be significant, at least provided you're not stiffing them on pay or something like that.
Scepticism isn't the same as unwilling to believe. Usually just honesty, willingness to engage in dialogue, answer questions etc, will do it.
However, I have had experience working with Americans in the UK that sounds similar to what you might have experienced. In my experience, the "selling" of the mission has usually just been excessive enthusiasm on the American side with a hope that it will be contagious. To us, it all appears just a little fake.
Despite being a fake (no one found a actual newspaper reference [0]) it obviously resonated very well. And still resonates.
A person's response to questions like, "What are you most interested in professionally?" and, "How do you see yourself developing career wise?" becomes a blueprint for what to do organizationally to retain them.
Sometimes the simplest approach is the best: Ask, "What do we need to do to retain you?" and then do that thing!
The problem, of course, is that by advertising this information, candidates would basically be saying that they're not getting nurtured in this way by their current employer. It's would be a public notice that they're not that happy at work.
I was trying to avoid any sort of "pitch" in this comment thread, but you've set me up too nicely: My startup, Mighty Spring (https://www.mightyspring.com), makes a passive, anonymous job search platform. Candidates post this exact information: what interests them and their career goals, along with their qualifications, which employers browse and use to decide who to interview. The anonymity makes it possible for candidates to safely reveal this info to employers. Also, that this info is available up-front helps to increase employment market efficiency and expose candidate/employer matches that really are great fits for both sides.
We're currently in private beta, but send out invites regularly. Feel free to email me (addy in profile) if you've got any questions!
Also: "$250k a year for an engineer right [out] of college"
"But very often, the hard technical problems are important to the world (e.g. Google, Palantir, Facebook)."
Let me know when Facebook starts doing something important to the world.
My parents and grandparents see more pics of my kids and feel more connected to their grandkids' random life experiences. That's important (to me and to them).
Jzw's point on narrowing your focus is worth mentioning here: http://www.jwz.org/doc/groupware.html Facebook isn't helping me there, but it's helping others, and that's important to them.
His point on terrible equity allocations is spot-on. If you're giving a dime and a half (0.15%) to your first employee engineer, at a valuation of $5 million, you're not going to get someone good.
If you account for equity at-valuation, bad people become cheaper if you're a startup but good people become more expensive (i.e. you'd have to offer $75k per year of equity to make up for a $40k salary drop).
A good, senior engineer (10-15 years experience) is typically going to get $150k at a large company and drop to $110k at a startup. But it would take at least $75k/year in equity, for a savvy person, for that drop to be worth it. A stock that is correlated to your employer should be worth less to you than one at zero correlation. Moreover, it's an illiquid stock. Furthermore, VCs are buying preferred stock while you have the common kind, and that can easily be a factor of 2 (or 4, or 8+) of difference in fair value.