Startup compensation
We could pay you a million a month, but I’d need you to have a tangible impact on the business on your first day.
In the long-term, every team member needs to create more value than they take home as compensation. Otherwise a business would not be economically viable.
In the short-term, they don’t. The rest of the team subsidizes a new colleague when they’re getting up to speed during onboarding.
So when does “short-term” end and “long-term” begin?
That depends on the introductory compensation.
The introductory compensation is the responsibility of the person joining the company. An experienced engineer with 2 mortgages, 3 kids and a dog has different expectations to a fresh grad.
But the higher the introductory compensation, the higher the expectations. And thus the shorter “time to enough value created”.
We could pay you a million a month, but I’d need you to have a tangible impact on the business on your first day.
The long-term compensation, on the flip-side, is the responsibility of the company. And it’s in the company’s best interest to aggressively increase comp when appropriate.
Imagine you have a colleague who’s simply killing it: the last thing you want is for them to start thinking about leaving because of a different company offering them more $.
At Better Stack, we revisit the compensation of every team member twice a year. That doesn’t mean we automatically increase everyone’s comp every 6 months. It means the company opens up the conversation about your comp with regards to your performance, the company’s overall performance, and the outside market, so that you don’t have to.
It’s in our best interests to aggressively increase compensation when appropriate. In the past, we increased the comp of our colleagues by 50%+ in three consecutive bi-annual reviews — effectively increasing the comp by more than 3.4x within 18 months. But at the same time, for different colleagues, we left the comp unchanged over the same 2-3 consecutive reviews. Because the comp should be proportional to the real value people create.
Large bigtech corporations typically have no clue about who is actually creating a ton of value and who is not. But a nimble startup with technical leadership can recognize it & reward it.