Lattice Engines, a small San Mateo startup, where she makes “near the top” of the company’s $80,000 to $130,000 range for an entry level product manager, plus equity.
Notice that the young woman is not a techie, so her salary isn’t pay for (supposedly) hard to find programming skills.
Granted I’m no longer in the front lines of hiring, but I’m still going to stick my neck out and say that no new grad is worth that kind of money—not even programmers.
Why?
Because there is so much more to working than what was learned in class. Stuff like
you may not know as much as you think, let alone everything;
experience matters;
understanding that while screwing up your own work is bad it can wreck the project and damage not just your team, but even the company;
not only being present, but also productive five days a week, 12 months a year;
being engaged every day all day—no cramming just before evaluations;
no spring or winter break or summer vacation (it’s a different rhythm); and
many other mundane things
In other words, it’s a different world, with different rules and different measures.
Further, new research is showing that entitlement kills innovation and for a new grad to believe they are worth a six figure salary plus equity compensation package is definitely entitlement.
I’m not saying that they aren’t assets or that they won’t contribute significantly, just that it wouldn’t hurt if they proved themselves first.
Can you imagine the impact on their productivity and creativity if their annual raise is meager, let alone justifying that salary if they change jobs?
There is a world of difference in the skills of someone with one year of experience, let alone five or more.
The problem is that by the time that truth is learned they are no longer entry level.
The following email came in over the weekend (edited and shortened for clarity).
Hi Miki, About seven months ago my company (name deleted) started providing most of the perks you see written about, including teaching how to be an entrepreneur. We thought that our efforts paid off when we were about to hire some amazing people. Fast forward to the beginning of July when two of my top developers quit because the entrepreneur class was canceled due to the launch schedule of a new product. To top that off, Friday my architect gave notice, explaining that he had found an angel investor and it was a guy he had met at one of our classes! What the hell is going on?
I’ve received seven similar emails and four phone calls over the last few months; they’ve come from executives and managers in development, sales and marketing at all levels in new startups, growth companies and larger, public corporations.
They all say they have gone to extraordinary lengths to attract people, but many of those hired left in 15 months or less.
They all complain that talent is scarce and that many of the people they do manage to attract have no loyalty or interest in anything except their own career.
The managers say they hear variations of the same stories over and over at events they attend, over lunch or when grabbing a beer after work.
My response to each is tailored to their personal situation and much gentler than what I’m going to write now.
You know the old saying that you get what you pay for? That is just as true when it comes to hiring as it is when shopping.
People who join for money or stock or perks will leave for more money or stock or perks.
They have no loyalty because they are not invested emotionally—there is no reason to be. Many candidates get the feeling they are doing the company a favor by joining, based on the lengths to which companies are going to recruit and hire them, and if they leave, they leave. No big deal.
The next part of our discussions focused on where to find and how to hire people who would be invested in the company. Obviously, no silver bullets, but the basics of solutions that each could tailor to their own needs.
Please join me tomorrow when I share that information with you.
A Friday series exploring Startups and the people who make them go. Read allIf the Shoe Fits posts here
You may run a startup, but that doesn’t negate the value of a new study (includes link to the full study) by Unum and Monster.com that says culture is more important than compensation.
Number one on candidates’ list was a company “that truly cares about the well-being of its employees.”
The next three are
1. A challenging and fulfilling position, which 84 percent of respondents identified as very important.
For the person attracted to the startup world this is a given, but it requires good interviewing skills to ensure that the attraction is real and not a product of media-driven startup fever.
2. Job security, rated very important by 82 percent.
Many denizens of the startup world will scoff and stop reading at the words “job security,” but there is such a thing in startups. Startup job security is a function of a clear vision backed by knowledge of the target market; good business planning as opposed to shooting from the hip; strong financial controls from the beginning; good hiring practices, instead of “try it and dump if you don’t like it.”
3. An attractive benefits package, which 74 percent of those surveyed rated very important.
Benefits are different strokes for different folks; for those in the startup world ‘benefits’ translates most frequently to equity, but that doesn’t eliminate the value and need for health insurance; people engage more fully when they aren’t worried about their families.
And salary seems to still be in fifth place just as it was 30 years ago.
An attractive benefits package and an ethical, transparent culture were more likely to be viewed as very important in attracting and retaining staff than were a high starting salary and job security.
Being a company that cares about the well-being of its staff was twice as likely to be viewed as very important in attracting and retaining staff as providing a high base salary.
Like it of not, benefits of any kind are concrete proof of caring and how those benefits are distributed is a reflection of an ethical, transparent culture—or not.
Option Sanity™ is integral to an ethical, transparent culture.
Come visit Option Sanity for an easy-to-understand, simple-to-implement stock process. It’s so easy a CEO can do it.
Warning.
Do not attempt to use Option Sanity™ without a strong commitment to business planning, financial controls, honesty, ethics, and “doing the right thing.” Use only as directed.
Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.
Today is my birthday and I’m not working (I wrote this on Sunday).
From the time I was old enough to understand that my birthday was the day of MY birth, my special holiday, I refused to go to school on April 26.
No matter where I worked I’ve always taken my birthday off.
I never lied about it and even mentioned it during my interviews. I said I was happy to work weekends, Christmas, other holidays, but not on my birthday.
Surprisingly, they all agreed.
So it’s not surprising that when I started RampUp Solutions part of the culture was no one worked on their birthday; nor did they have to ‘make up’ the time off.
Over the years many executives have explained to me why giving people their birthdays off was a bad idea; here are their arguments and why they are wrong.
Too expensive – not when viewed as a recruiting, productivity and retention tool. It was surprising how many people viewed having their birthday off as a deal-breaker when interviewing.
Disrupts work flow – 95% of work can be scheduled to avoid a birthday and employees are the first to recognize the other 5%.
Other employees would be jealous – these execs and mangers just didn’t get it. They saw this as a perk for “stars” or “professional staff,” as opposed to everybody, totally missing the point.
Think about it, it’s one of those little things with enormous ROI.
And while you’re thinking, please have a piece of cake and drink a birthday toast to me.
Happy Birthday to ME
(No, there are not enough candles, in case you are wondering:)
It’s funny, most bloggers release products, immediately write about them on their blogs and then all of their blogger friends write about them. It’s logical to do so, even reasonable.
So why haven’t I done it? Actually, I announced it in August, but there was no reaction or comments you, my readers, or any of the bloggers I contacted (but more on them in another post).
Going forward, I thought it would be fun to share some of the challenges, problems and results of our marketing effort, since it turns on subjects about which I frequently write.
In case you don’t remember, Option Sanity is a totally new, values-based way to allocate stock options, with a focus on fairness. It levels the playing field and even makes investors happy.
To give you a much better understanding of how it works, here is the video tour. There is additional information on the website and for those who are really curious, you can play with the full app demo and post your thoughts, opinions or questions here or on the review page.
Yesterday I shared my love of crossing stuff off lists because of the sense of accomplishment it brings, but that kind of stuff is small potatoes; it lifts me up and helps me move forward, but it isn’t a substitute for hitting the goals that move my life.
I just hit the biggest one on my list and want to share it with you.
For the last several years we’ve been working to turn a consulting approach for allocating incentive stock in private companies based on the company’s values and culture into a web-based subscription service (SaaS)—and it’s finally a reality!
Not only that, but because I hate the way traditional Help works, I conceived a brand new, user friendly type of Help that our programmers implemented brilliantly—you’ll love it.
It’s a soft launch, but Option Sanity™ has its second beta client (I’m looking for three more) and is looking good.
But it feels strange; for so long the focus and the goal has been to produce the software and the website. That meant working with the programmers, tons of writing and editing, working with the guy who originated the math and mechanics of Option Sanity™ and who was primary tester and developing my own skills as a user.
Now that it’s done I keep waiting for a massive feeling of accomplishment and although it’s there it’s dwarfed by what needs to be done now—marketing, identifying and closing multiple sales channels, supporting new users, developing a FAQ based on their questions, creating a user community—the list seems endless.
With all that starting me in the face I thought I’d ask for some help.
It would be terrific if you would to www.optionsanity.com, read about the product and click Take the Tour. Unfortunately the tour isn’t done, but on that page you’ll find a link to the full app demo.
Check it out and then leave your comments on the review page. Forward the information to anyone you think would be interested
I know it will take a few minutes, but I would be eternally grateful.
I’ve worked with startups for many years, first as a headhunter and later as a coach. My company is in the process of launching Option Sanity™, an incentive stock allocation system based on founder/company values.
People join startups for many reasons and one is the possibility of substantial financial rewards; they take a sizable risk that only pays off if the company is acquired or goes public.
But what of the gigantic payouts public companies are giving execs who took no real risk and whose actions aren’t actualy responsible for the stock price.
Stock granted when the market is down, as it is in any recession, goes up no matter what management does or does not do. Yes, management skill can drive it higher, but, as the old saying goes, a rising market lifts all boats and that is whether the skipper has a clue or not.
This recession is no different; in fact the payouts are going to dwarf anything seen previously. They may not equal the obscene bonuses paid by Wall Street, but they are pretty obscene in their own right.
An Associated Press analysis of companies in the Standard & Poor’s 500 index shows that 85 percent of the stock options given to CEOs last year are now worth more than they were on the day they were granted. For some the value jumped by a factor of 10 or more. An Associated Press analysis of companies in the Standard & Poor’s 500 index shows that 85 percent of the stock options given to CEOs last year are now worth more than they were on the day they were granted. For some the value jumped by a factor of 10 or more.
I’ve never met workers who thought they should earn what their bosses earned, but they do what they hear in the news to make sense when measured against the company’s success.
I doubt anyone inside or outside of Apple has ever questioned Steve Jobs’ value when they hear about his compensation.
Carol Bartz received $47.2 million in 2009, 90% from stock options that went up primarily because the market did.
I wonder how motivated Yahoo employees are knowing that.
Trends come and go. In its Innovation special Business Week takes a look at leading trends in the business community. Last year was all about execution, but that was then… (While you’re there be sure to check out the Special Reports.)
This year’s emphasis on strategic thinking suggests that, like an individual recovering from a personal upheaval, businesses today are taking stock: reviewing their options, rethinking their strategies, considering new opportunities and innovations.
Another trend is the questioning of CEO compensation, once strictly the province of the board of directors and a few consultants, today it’s everyman’s topic of conversation. Do you think today’s CEO compensation, not just on Wall Street, but in general, is fair and appropriate? Do the incentives work? Do they focus too much on risk taking or do they encourage excessive caution? Read this interview for some excellent insights.
Speaking of fortunes, what do the elder statesmen of Wall Street, guys like George Soros, Nicholas F. Brady, John S. Reed, William H. Donaldson and John C. Bogle have in common with you and me? Surprise, surprise, they all believe that Wall Street needs to be reigned in.
They grew quite wealthy in finance, typically making their fortunes in the ’70s and ’80s when banks and securities firms were considerably more regulated. And now, parting company with the current chieftains, they want more rules.
Another rich guy is John Thain, a trend of his own. Fired from his CEO aerie he has landed on his golden feet at CIT. The man who didn’t see anything wrong with spending $1.2 million renovating his office in 2008 is now responsible for the company that provides financing for SMB, as well as being the third-largest railcar-leasing and aircraft-financing firm in the U.S. In his hands rests much of our future—at least he’s not planning to redecorate.
“This is a company that’s over 100 years old and its core business is lending to small- and medium-sized companies,” Thain said yesterday in an interview. “If we’re going to get the U.S. economy to continue to grow, if we’re going to create jobs, then we need to have this kind of a company do well.”
Our final trend comes from Forbes, famous for the way it slices and dices lists of wealthy people. Its newest look offers yet another one—billionaires under age 40.
Of the current eight, four are from China, three are from the U.S. and one is from Japan.
Investment bankers in the US have begun using equity derivatives to convert restricted shares paid as bonuses into cash, side-stepping new guidelines on remuneration which were designed to prevent bankers cashing out for at least three years, according to a headhunter.
Popular wisdom wants us to believe that leaders ‘do the right thing’, but when it comes to those on Wall Street it’s strictly the right thing for themselves.
Northern California startup land is once again the Golden State for new grads—especially those with a strong sense of entitlement.
The following email came in over the weekend (edited and shortened for clarity).
You may run a startup, but that doesn’t negate the value of a 
Today is my birthday and I’m not working (I wrote this on Sunday).
I doubt there are any Wall Street bankers who don’t consider themselves leaders and they exist in a world where innovation never stops.
Subscribe to MAPping Company Success 