Last week I got a call from Patrick an ex-student I hadn’t heard from for 8 years. He was now the CEO of a company and wanted to talk about what he admitted was a “first world” problem. Over breakfast he got me up to date on his life since school (two non-CEO roles in startups), but he wanted to talk about his third startup – the one he and two co-founders had started.
“We’re at 70 people, and we’ll do $40 million in revenue this year and should get to cash flow breakeven this quarter.” It sounded like he was living the dream. I was trying to figure out why we were meeting. But then he told me all about the tough decisions, pivots and firing his best friend he had to do to get to where he was. He had been through heck and back.
“I made it t...
As a company of nearly 200 employees — almost all of which are allowed to work from home — we know this struggle well.
Over the past few years we've developed a significant work from home policy at Startups.com and have learned a ton from our experience.
Unreliable employees will totally goof off — they will absolutely abuse the luxury.
In our first few months converting to work-from (only one day a week) we quickly learned that some employees totally took advantage of the freedom, in some cases just considering it a day off.
Sadly that meant we had to part company with some folks, but in retrospect, it only advanced a decision that would have taken us much longer to make had we not needed to evalua...
We all know what it means to give equity away. But what does it take to get it back?
There are a few different methods we can use to begin clawing back some of our hard-lost equity, but all of them require quite a bit of effort — and aren't nearly as easy as giving it away!
When we look at future funding rounds, if things are going well, we may be able to negotiate some additional stock awards based on the next financing.
This is only an option if the company is doing well and we can point to a significant track record that we've demonstrated to get it there. It doesn't happen a lot, but it does happen.
Oh, and if we don't negotiate hard for it, no one is ever going to suggest it for u...
The first article in this 3-part series (How to Design a Killer Sales Compensation Model) introduced the concept of behavioural theory and how it affects sales compensation design. This second article discusses how compensation packages suit different stages of company and product evolution.
The main challenge with designing a sales compensation program is the primary sales role constantly evolves as the company grows and the market matures. The following diagram, courtesy of The Alexander Group, explains the four phases of growth and how this impacts the business.
In the Startup phase, brand awareness is low, and companies strive for a foothold in the market. The salesperson must have an entrepreneurial drive ...
Sales leaders tend to have a strong opinion on the value and use of incentives. Their views are based on firsthand experiences and beliefs, and are often unconscious. As a result, their approach to sales compensation design can be biased toward past experiences, dismissing a broad range of options and philosophies available to drive the desired behaviour.
For example, most organizations believe salespeople possess a binary motivation to maximise their earning potential. However, other companies are purpose-driven and reward their sales teams based on group performance. We frequently hear how the millennial is “purpose-driven”, but the key to any incentive plan is to define the word “purpose”.
I recently asked a millennial sales leader if h...
Founders can make or break startups. That’s no secret. The founding team is the cornerstone of any new venture, and their ethics, motivations, and philosophies tend to become firmly ingrained into their company’s culture and strategy. Like a fractal, a startup is an aggregate mirror of its founders’ priorities, whether that be Airbnb’s obsession with design or Theranos’ obsession with fraud.
All the more reason for good founders to be properly compensated, with incentives that align their goals with those of their investors and employees.
Unfortunately, it’s harder than it sounds. Every startup is different, and every founder has a different relationship with every investor, so there is no real one-size-fits-all approach. There are good st...