Table of contents

Of Hiring Salaries in Startups

What Should It Be Like?

September 13, 2015

At the very beginning, all the founders take huge risks about both the products and the team. If they are willing to take the risks, they must utimately trust each other to some extent, and thus they must have already been close friends. (But there are also other restrictions about close friends. See this Quora question.)

(requires building-startups trust high)
(property:trust co-founders high)
(property:trust close-friends high)
(contain close-friends co-founders)

When the startup starts hiring, it usually hires someone that is not a close friend of all the founders (otherwise we would invite him or her to be another founder). It is usually hard for a developer (or designer/other positions) to utimately trust a group of people who the developer haven’t known before, thus from the developer’s point of view, it is irrational to invest big commitment to a startup that either a) doesn’t have a promising future or b) does not pay a reasonable salary. Thus we either need to pay high salary or persuade the developer about the promising future in order to make the developer accept the offer of the startup. At the same time, if a startup shows promising future, it is usually able to pay high salaries.

(hire x a) (employee x) (startup a)
(founders a ys)
(property:trust b ys high) (co-founder b a)
(not (property:trust a ys high))
(not (close-friend x ys))

It ultimately comes to the problem of trust – from a employee’s point of view, even if I think the products of the startup is amazing, why don’t he or she create his or her version of it but join that particular startup? And it is the startup’s duty to help build up the trust and help them reduce the risk.

And if the above thinking process is valid, we see that “salary” really plays an important part here: a) it reduces the risk of the employee because it is not so easy for a person to trust a startup, and b) it shows the startup has a promising future.