A Product Market Fit Show | Startup Podcast for Founders
00:52:29 · Cosmin Nicolaescu
[00:52:29] S0: So in general, I would say we've seen both pay raise and pay cuts. I would say most are pay cuts given where we've hired from, but they're typically insignificant. So everybody makes the same amount of money, but we're pretty generous in that amount to a certain point. And so the thinking that we had there was if we're going to hire senior people, generally they will have higher cost, higher expectation, higher market opportunities. We definitely believe that at this stage of the company, the reason why you're here from a financial perspective should be the equity, not the cash. Otherwise, don't join an early stage company. It's not worth it. If you don't think that early stage company will 10 x, 50 x, a 100 x, whatever, like something very, very substantial, you should not be at an early stage company. Go work at a big company. You'll have a much better quality of life relative to income. At the same time, there are costs associated to that. And so we don't believe that you should make like huge sacrifices, and if you do, like, you're not gonna be able to hire people that have kids, that have a house, that mortgage certain things. And most people that that we have in our company are in kind of that mix. The other thing I tell people is the value of your equity today is zero. It doesn't matter what our valuation is, either we go to zero or we grow significantly more, what the value is today doesn't really matter. So I don't do the math in terms of what the dollar value is, I do the math in what's your ownership. Like, what is the ownership in your company? And we give everybody like quite substantial ownership in the company because again, if we're not hiring a lot of people, we can afford to be much more generous with the people that we do hire from a cap table perspective without being overly dilutive to everybody else. So all these things kind of trickle in and and and kind of can compound one way or the other. And I basically every person that we hire, I walk with them like, here's the ownership that you'll have in this company, what do you believe this company will be at, here's where I believe it will be at, within a reasonable time frame, so like four to five years, not like fifty years from now, like within this stock grant, where do we believe each of us, what are we modeling on our side, Here's with your numbers, it looks like.
00:54:28 · Cosmin Nicolaescu, Pablo Srugo
Here's with my numbers, what it looks like. Here's the average if there's a delta, etcetera, etcetera. And getting them a sense of where this could be. And that's what should excite people, and that's what people should work for versus high cash guarantee, no risk. And we've had people that said, I need more cash, and respectfully, I tell them that, like, then you shouldn't be an early stage company. Like, you don't need to be at a 20 person startup. There's nothing wrong with saying, I I can't take this risk, or I can't afford to take this risk, then go look at a bigger company that will have very different equity packages and different cash packages. I think it's a very good filtering function, which I think we found right at equilibrium between not super low where we can hire people. We've been very successful at basically converting folks that'd be successful in our work trial, and filtering out people that probably are not fit for the super early stage kind of second. [00:55:17] S1: Yeah. And it it, you know, it gives you an edge, this idea that you're hiring fewer because especially on the stock grants, like, it's hard for somebody that's going through the more normal hiring path. Like, let's say another skilling startup that raised $50,000,000 to be able to match those equity grants just by the sheer number that they're gonna have 50 people, a 100 people, instead of 21.
00:55:17 · Pablo Srugo, Cosmin Nicolaescu
[00:55:17] S1: Yeah. And it it, you know, it gives you an edge, this idea that you're hiring fewer because especially on the stock grants, like, it's hard for somebody that's going through the more normal hiring path. Like, let's say another skilling startup that raised $50,000,000 to be able to match those equity grants just by the sheer number that they're gonna have 50 people, a 100 people, instead of 21. [00:55:34] S0: Because either you're gonna say, we give every all these companies give the same grants, and if you do that, you're just gonna dilute a lot more. So it's one thing to say, I'm giving someone 1% of the company, but it's a different thing if I go, what is that 1% in four to five years? [00:55:49] S1: That's [00:55:49] S0: right. Like like, dilution is something that, like, can can hit people quite heavily. And so that's why I do think you can be much more generous if if you have fewer people. [00:55:58] S1: Perfect. So listen. Let's stop it there. I think it's been a great episode. Maybe just as a last question, what would be like a number one piece of advice that you'd give or you tend to give maybe early stage founders that are in this kind of product market fit phase?
00:55:58 · Pablo Srugo, Cosmin Nicolaescu
[00:55:58] S1: Perfect. So listen. Let's stop it there. I think it's been a great episode. Maybe just as a last question, what would be like a number one piece of advice that you'd give or you tend to give maybe early stage founders that are in this kind of product market fit phase? [00:56:10] S0: I would say the most successful founders that I've seen and the thing that I tried to emulate from Patrick and John and other founders that I've met throughout my life is long term conviction. Things compound over time. I think in it's very easy to be dealing with the problems of today because as an early stage founder, pre product market fit, right after product market fit, like you don't have that escape velocity, which we don't. You are obsessed about like, will I exist in the next week, the next month? Like that's the kind of time frame that you think through. And I think that is right to focus on that. But the things that move the needle in the long run are the things that compound over time. And so having very high conviction over a small number of things and letting those things compound is what I think makes makes very big businesses succeed over time and thrive, as long as you kind of get those things right. I do think one of my favorite operating principles is for Amazon, which is like good leaders often are right. I think there's something very, very, very meaningful there. Like you you have to be right, and if you're not, then you probably shouldn't be a founder. [00:57:13] S1: Well, Kas, thanks so much for spending the time with us, It's been great.
00:57:13 · Pablo Srugo, Cosmin Nicolaescu
[00:57:13] S1: Well, Kas, thanks so much for spending the time with us, It's been great. [00:57:16] S0: Thanks for having me, man. [00:57:17] S1: Wow. What an episode. You're probably in awe. You're in absolute shock. You're like, that helped me so much. So guess what? Now it's your turn to help someone else. Share the episode in the WhatsApp group you have with founders. Share it on that Slack channel. Send it to your founder friends and help them out. Trust me, they will love you for it.