How do you keep your employees in this market if you're lowering salaries across the board?
Jedi mind tricks.
The Fatal Pinch
101–110 of 208 posts
Re: The Fatal Pinch
#102Is becoming ramen-profitable before you raise your first round a possible solution to this problem?
So you can happily get to ramen profitable as a founding team, but when you raise your first round you are expected to grow the team size quite a bit, and the capable professionals you are hiring will not work for ramen (and should not be expected to).
Ask somebody in the Valley who sees more of them, but N months after a Series A, I'd expect to see at least 8 people on the team and probably closer to 20. That implies a salary bill in the, hmm, $100k to $200k range. Every two weeks, due like clockwork. Obviously, if you've already hit ~$500k a month in revenue, you're golden (as long as you freeze hiring), but most similarly situated companies haven't hit that yet.
Re: The Fatal Pinch
#103Earlier quoted context omitted.
Will investors let companies do this? Is it going to be OK if you only grow 100% per year because you are living within your means or aiming to become profitable as soon as possible?
If you have a SaaS business, growing 100% Y/Y is just fine until you hit $100m ARR. -David
Maybe after you pass $10mm ARR. :)
Re: The Fatal Pinch
#104Can someone tell pg that he should stop putting hard
every forty characters?
every forty characters?
One of the fundamental aspects of the web is that presentation is done by the client, not the publisher. Please let me reflow the text as I see fit.
Re: The Fatal Pinch
#105Earlier quoted context omitted.
No, that's not what the money is for. The money compensates inventory, scheduling, and delivery risk. It does not compensate developers for working on mundane projects. If the developer in question gets a W2 paycheck, odds are they're not seeing anything like 4x what the in-house people are seeing. And, while I do buy that all three of these developer archetypes exist in the real world, I do not buy that they are the…
It does not compensate developers for working on mundane projects. It does. That's not the sole reason why consultants make more, but that's a factor. If you're a full-time employee, you expect your health insurance, HR, work supplies, 401k, office space, finding of work, and your career growth and promotion planning to be taken care of, and you're likely to leave if you're not getting it. If you're a consultant, you…
That's true of sole practitioners. Most consulting engineers aren't that. They're employees of firms that bill them out.
Re: The Fatal Pinch
#106Earlier quoted context omitted.
It certainly doesn't make the strategy any sounder, but why are highly intellegent founders who have far more to lose than any investor getting caught in this pinch? This seems to be the missing question from Paul's post. Edit. Changed how to who :)
Founders aren't entitled to investor money. Investors are looking for a particular curve. The slow burn, 7-figure exit that founders want is almost useless to VCs. The model requires that the winners pay for the losers. The VC has a finite number of at-bats every year, and each one needs to potentially be an out-of-the-park home run. A company that deliberately bunts is costing the VC an opportunity to recoup their l…
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Re: The Fatal Pinch
#107Is becoming ramen-profitable before you raise your first round a possible solution to this problem?
So you can happily get to ramen profitable as a founding team, but when you raise your first round you are expected to grow the team size quite a bit, and the capable professionals you are hiring will not work for ramen (and should not be expected to). Ask somebody in the Valley who sees more of them, but N months after a Series A, I'd expect to see at least 8 people on the team and probably closer to 20. That implie…
The benchmark for a company raising its Series A is now $50k MRR. (This used to be closer to $100k.) You'd expect to be at $100–150k MRR six months after the Series A, assuming a 15–20% monthly growth rate.
If you're already at $500k MRR, you're in Series B territory.
Re: The Fatal Pinch
#108Earlier quoted context omitted.
So you can happily get to ramen profitable as a founding team, but when you raise your first round you are expected to grow the team size quite a bit, and the capable professionals you are hiring will not work for ramen (and should not be expected to). Ask somebody in the Valley who sees more of them, but N months after a Series A, I'd expect to see at least 8 people on the team and probably closer to 20. That implie…
The benchmark for a company raising its Series A is now $50k MRR. (This used to be closer to $100k.) You'd expect to be at $100–150k MRR six months after the Series A, assuming a 15–20% monthly growth rate. If you're already at $500k MRR, you're in Series B territory.
Egads.
Re: The Fatal Pinch
#109Of course, all across the US, crossroads, villages,
and towns up to the largest cities, millions of US
entrepreneurs, often sole proprietors, have to make
money enough to pay suppliers, the rent, taxes,
insurance, the bookkeeper, the accountant, the
lawyer, employees, and take money enough home to
support the family, the cable bill, the wireless
bill, for dear wife, a late model SUV for her work
as family taxi, the groceries, the home furnishings,
and the lawn service, for junior, running shoes, a
bicycle, a computer, and school clothes, for dear
perfect, precious daughter, violin strings, a new
iPhone 6, new school clothes, new dress up clothes,
white furniture for her bedroom, a new prom dress,
and save for college, retirement, etc.
So, millions of sole proprietors do that.
So, maybe it's not too much to ask of venture funded entrepreneurs to do similar 'budgeting'.
Still, it can be easy for such entrepreneurs to be fooled by venture firm Web sites that emphasize that they have been in the shoes of entrepreneurs and know what they are going through, are committed to their entrepreneurs, through good times and bad, through thick and thin, etc.
Still, the the importance of planning is old: In early aviation too many smoking holes taught the possibilities of head winds, bad weather, and mechanical problems and, thus, the importance of flight planning reserve fuel, alternate destinations, at least two of radios, each of the fire wall instruments, etc.
Re: The Fatal Pinch
#110Earlier quoted context omitted.
Actually, it's more like this. There are good programmers in the enterprise (meaning, say, investment banks or large corporations or governments) but they generally fall, ambition-wise, into one of three categories: (1) those who want to become managers or software architects (or, in finance, quants and traders) and will define and oversee work but delegate the dirty bits. This would be fixable (they could oversee a…
This is spot on. The last sentence is a very important point in enterprise IT shops: Lack of self-confidence in line managers is a big disincentive to hiring smarter developers. They worry that the smart developer (who often shows up with a bit of an attitude) will overshadow the manager and our point out their weaknesses.
"...They worry that the smart developer (who often shows up with a bit of an attitude) will overshadow the manager and our point out their weaknesses."
lol...well you just described my last contract.