Angel investing · Developers

20 resources part-time on equity but productivity is low

Saquib Khan Building BIG IDEAS -Hire 20+ resources on Equity - I want to put a dent in the Universe!

November 1st, 2019

Greetings,

I have 20 resources on equity in almost every area except sales & marketing and fundraising expert. I am successfully able to motivate the team but after every few weeks, I felt that the team is not so much productive. Don`t get me wrong they are excited and passionate but not taking venture seriously. Do you think this is because they are working part-time and on 100% equity?


I have recently engaged scrum master - hopefully, that might change the perspective. At the same token - since they are part-time on equity I don't want to overload them with meetings.


Anybody who passed through the same cycle? Any tips? Sage advice?


Best,

Saquib Khan

http://www.muslimbetterhalf.com/

Saquib Khan Building BIG IDEAS -Hire 20+ resources on Equity - I want to put a dent in the Universe!

November 4th, 2019

@David I am paying them reasonable equity.

Saquib Khan Building BIG IDEAS -Hire 20+ resources on Equity - I want to put a dent in the Universe!

November 1st, 2019

@ Amazing podcast


Should I Pay People With Equity?

Paying people with equity is a time-honored tradition in cash-starved startup land. However, have you ever stopped to consider the real cost?

https://www.startups.com/community/startup-therapy/episode/27?_hsenc=p2ANqtz-_2pTfqegFjQI-ScpiVJmXAb6SDJLrgzuyxgDh93DKyg9SfLNXRXpuCVuxA_1kkkl4_wtmMsXtmGtHDvcZXM1OvgSVOow&_hsmi=78851739

David M

Last updated on November 3rd, 2019

Saquib, think exchange of value. You currently are offering no value to your team and that is why they are unmotivated. You get their time, and energy, and resources. What are you giving them? A place to work for free? A startup venture with high risk and no promise of reward? No one cares about great ideas, or even great plans, if you can not show them what value you bring to their careers and lives. You have GOT to learn how to compensate people you seek value from. Too many entrepreneurs doing this scheme of "work for free for me." If you are even having to ask the question of whether you should compensate people for work they do, I would suggest you take a pause and re-evaluate your leadership style. Exchange of value. If you can't pay them cash, pay them with equity, or exit entrepreneurship all together because there is far too much greed and selfishness in the start up process currently.

David M

November 3rd, 2019

As for this podcast, the discussion is in hindsight. It is easy to say 5% will be worth $5M one day AFTER you have formed the company. There are far more people who never got the company started and that 5% is worth ZERO. That is the BIGGER "Rookie" mistake, and I guarantee you it happens just as much if not more than the people who give away too much equity. Also, who in the world is giving 5% equity for website design? No one with a brain. That these pod casters would even use that example, throws up a red flag with the value of insight/experience these podcasters are bringing to the table. Because it sounds pretty inexperienced for them to even bring that into the example of equity discussion. There are other ways to compensate founding employees, but again, if you don't have cash, some form of vesting schedule is definitely a way to motivate them if they are passionate and motivated about building your company. I am going to contradict these pod casters even more when I say, and I say it as boldly as I can. The bigger "rookie" mistake to giving out equity is to egotistically assume your company will be worth $5B one day, and because of that hold on so tightly to every 1% of equity that you choke the startup before it has a chance to even breath. And I see this ALLLLLL ALLLLL ALLLLL the time. I have dealt with it personally. I will go in to a company and offer to bring certain operational strategy and connections to the table for equity %, and the start up CEO says "No." They can't pay me in cash because they have no investment capital, and they think that I will exchange contracts that will make their company worth $10M from nothing...all for a mere 1%. General range of advisors who bring top contacts is around 1-3% for sitting on their board and bringing the value of knowledge, association, and connections. That is not even actively building the company. So again...web design for 5%? No. Bringing in connections and setting up deals that make the company profitable and viable, 5% can be on the low end. Again though, you have to think exchange of value. Exchange fairly and your employees will go to bat for you. Nickel and dime them or pay them nothing, and you will not be respected as a CEO and your employees won't work and fight for your dream/company.

David M

November 7th, 2019

Saquib, the end result of all things is the CEO is responsible. Just like a sports team. The Dallas Cowboys are a painful example of how it starts at the top. The owner, then the coach, the coaching staff, then the players. Perfect case example of how a successful business owner and brilliant marketer let his ego lead to losing the best coach they had in Jimmy Johnson, and hiring yes men since then. And they have been sub par ever since. Yet they are the highest valued team in the NFL. Aside from numerous poor leadership elements of Jones, borderline unethical operations of using city taxpayer dollars to make him much more financially wealthy, kicking home owners out of their house...etc... the Cowboys stink because they have an Owner and then a subpar coach that can not motivate to get the needed results. SO, off my tangent, and back to your issue, there are numerous things you can do. Most important, and in ANY business is COMMUNICATE.


Be open with your employees about your expectations and theirs. You are in an online forum trying to figure out why your employees aren't motivated. That is your first problem. If they don't feel like family, and they don't feel like you care, or are invested in them, they will never be invested in you and your company. Get to know what their hopes and dreams are in their lives and from your company. Work to find out what makes them excited about life and business and work to encourage that. If you do that, which I can almost guarantee you have not based on your post, you will have a good foundation to build upon. But you have to have that first.

Saquib Khan Building BIG IDEAS -Hire 20+ resources on Equity - I want to put a dent in the Universe!

November 8th, 2019

@David I wish you are right today :-) I have met with each individual and heard their concerns and took actions items ( the retrospective meeting / Nameless/rankless feedback) - Good news! our first test is out to 20 folks and they are excited looking at App!


Thanks for reminding the golden tip which I live by every day " Be open with your employees about your expectations and theirs. "


Have an amazing day!


Best,

Saquib Khan

http://www.muslimbetterhalf.com/