> Importantly, we have no interest in trying to sucker someone into working with us if money is their primary motivation.

Are you a charity doing good work with orphans? Or are you a business trying to make as much money for the investors as possible? If the latter is true, why wouldn't someone work for you with "money as the primary motivator" ?

(This is not Rhetorical, I actually know nothing about your business. But I do see this argument a lot from companies that are 100% for profit and do nothing to better the world)

Neither. We're a purposeful, for-profit, founder-owned[1] company. Just because we are for-profit doesn't mean profit is our only motivation. It's a false dichotomy to suggest that because you want to make money that must be your only driver.

Our view of business is that, much like humans, it can achieve and balance multiple objectives. You want to make money: does that mean you want only that to the exclusion of or above other objectives like finding love, raising children, being a good person, etc? I assume not. We want to make money: does that mean we want only that to the exclusion of or above other objectives like having fulfilling work, working in an open organisation, being respectful of others, etc? No.

[1] Though opening up the shares to employees within the next couple of months... it's taken a while to put the right system in place. Options wouldn't work because we have no intention of ever selling the business.

Edit: Given your clarified question, I will also add that what we do is to help other tech businesses to raise government funding so they can develop cool tech. Many of them have raised money from investors - I don't think that necessarily means that their only purpose is money (though it's certainly true of some). See argument above.

So why would I accept less money from you than my market rate, so that you, the founder, can make more money? At the end of the day there is 1 pie, why should I donate part of my pie to you?

Because the job is more interesting than the alternatives? Because there is room for major career growth? Because the work/life balance is better? There are tons of reasons it would be preferable to take a lower-paying job. Salary is by far not the only consideration (and for some, not even the most important one).

You would accept if:

- You're not broke

- You think the work would be more interesting/fulfilling than places that pay more.

Of course, I'm sure there's a tipping point where you don't care how interesting the work is. But in my mind you'd use the above criteria if someone is offering you $95k/yr when you're currently pulling $110k/yr.

I don't see why paying people less would lead to an improvement in love, family, being a good person, respect, transparency, etc -- unless you're saying that due to pay difference vs market, you'll also expect less work out of them.

And money is rarely the actual motivator. Often times, money is the mediator to the things that really motivate people, such as purchasing daycare and enrichment activities, splurging on medical care plans, financial security, etc.

> I don't see why paying people less would lead to an improvement in love, family, being a good person, respect, transparency, etc -- unless you're saying that due to pay difference vs market, you'll also expect less work out of them.

There's definitely no necessary causal link here. We aim to pay enough that they won't leave because it's too little but not so much that they will stay just because of the salary is too high. It's a pretty hard balance to achieve... not sure if we have. We used to phrase it as "pay people fairly" but then "fairness" is so relative as a concept that it is essentially useless.

Having transparent pay does have a clear link with creating a good working environment, in our experience, however - and transparent pay doesn't mix well with having salaries basically based on people's negotiation skills (rather than a more open system like I've described), in backroom deals.

> And money is rarely the actual motivator. Often times, money is the mediator to the things that really motivate people, such as purchasing daycare and enrichment activities, splurging on medical care plans, financial security, etc.

I wish that were always true... my observation is that some people are in fact motivated by the money, and the status that comes with being paid more than others, more than by the things they can actually do with the money. I find it puzzling, but so it is...

> You say I'm worth $X. I go get a job offer for $Y. If $Y > $X, you were mistaken.

Here's the disconnect. In this scenario, I'm not saying, "you're worth X". I'm saying, "I'm willing to pay someone $x to do this job." If someone else is willing to pay you more for the same job (all else being equal), I'd advise you to take the other job.

If I can't find anyone qualified to take the job for $x within a reasonable period of time, then I'm below market and should adjust.

The beauty of that analysis is that it ties to current employee compensation as well. If my offers are below-market, then I have a much larger people problem: either my current team members are below market skills (bad) or are at risk of being poached (also bad).

As a candidate, I might look at that and value the culture it represents: transparency, fairness, likely diversity, people-centric...

The "we like people who care about more than money" (the passion gambit) can be a a giant warning sign. And is at the root of the "why would I accept less money from you than my market rate, so that you, the founder, can make more money" concern.

But it assumes that the owner, is in fact, making more profit "off your back". This might be false. The owner might instead care about investing back into people and the working environment: an indirect "perk", if you will.

Everything's a trade-off. No one is forcing you, as a candidate, to act against your best interests. There are just different kinds of interests.

Exactly. We know and recognise that pay scales are arbitrary. We are trying to get it right by neither underpaying nor overpaying. We are also trying to get it right by enabling a mature conversation on the topic, so instead of feeling undervalued and quitting after finding a better job, people within GrantTree can simply start some sort of process to get their pay adjusted to what they believe is a fair market value for their work. Alternatively, they might find out, through the process, that their work is not valued as much by others as they value it. This, if they are humble enough, is a signal that either they should be working on something else, or clarify to the rest of the company what the impact of their work is. Either way, this is an open process accessible to all, instead of something behind closed doors only available to those who are ballsy enough to ask for a pay raise.

It's far from perfect, and it's often difficult and demanding of people (particularly those who are on the various pay task forces that assemble and disband to make changes or evaluate people), but it's working alright so far for us. It's also a huge learning opportunity for everyone involved.

> But it assumes that the owner, is in fact, making more profit "off your back". This might be false. The owner might instead care about investing back into people and the working environment: an indirect "perk", if you will.

There is no good idea humanity has ever had that cannot be twisted into a trap to fool people... unfortunately every good thought ends up being used by someone somewhere to screw someone else over. I like to think we (my cofounder and I) are on the good side of that assumption, but it's important for us to remember that if we shift to the wrong side of it then the whole system becomes polluted by this desire - or rather, this fear of not having enough.

I can't find the study, but a South American government(I forgot which country) had the same fears. They wanted better employees and they were afraid if they paid them too much they would get people primarily interested in the money and not the job. But they decided to try it anyway, and lo and behold they were surprised to find the higher played employees were not only better employees but also more motivated intrinsically by the job. I would be curious to find any evidence to the contrary.

I try to be very suspicious when my views about how the world works line up with some way that I'm benefited monetarily. For instance it's very hard for me to have a clear and accurate opinion of oursourcing and h1-b's.

Practical example: my current employer pays me the same in base salary as my previous employer paid me in base salary + duty + overtime. Oh, and they do it without ever telling me I ough to work more.

For me this translates to happily walking the extra mile. It also means my wife is ok with me working a bit extra here and there because I love my job. And it means a whole less paperwork and talk about overtime or not.

I would float to you the idea that what you're reacting to is not necessarily the higher wage but the fact your new employer seems to trust you more and perhaps even care about you more.

Very possibly yes.

But it sure helps when telling my wife I should work a couple of extra hours.

> not so much that they will stay just because of the salary is too high.

I can imagine a case in which a sufficiently high salary could lead to someone staying in a position for which they have no passion.

Still, like you say, it's a delicate balance, and on either side you of not getting good work out of your people. On the low end, you just wouldn't be able to secure high-value candidates. On the high end, you might keep people who have no interest in their roles.

I do think the latter case is less likely, though.

If you are "for-profit, founder-owned" do you likewise plan to have a cap on how much you, the Founder, can make both in salary and equity/dividends/exit event like your employees?

I think the sentiment you are seeing here (not necessarily taking a side, just playing devils advocate) is that it might seem a little hypocritical to portray a culture where compensation caps (and ones that seem a little below market rate judging by other comments) are expected when there is no limit to the upside you as the founder might see down the line or from a potential exit down the road. Startups are inherently risky for employees, and while Founders certainly shouldered more of the risk, employees are typically rewarded with equity worth the risk, market rate salaries, or some combination. To not compensate employees in such a way seems like it might be taking advantage of a mindset when you the Founder might not be held to the same standards.

Again, if addressing this very issue is part of the opening up of the shares to employees you reference, awesome. This is a very hard problem to tackle and one where it must be damn near impossible to get everyone on board, so I commend you for making the attempt. I'm making lots of assumptions that I hope are simply not the case. Just wanted to clarify and push a bit more on why there seems to be a consistent theme to these comments.

Ok I accept that answer at face value.

Now, is the inverse also true? If I take a job with you- can I work 4 day work weeks and stick strictly to the 8 hour workday?

Money is not your only motivator so I don't see why this would be a problem for your employees.

We have two people who are on 4-day weeks. It depends on your role(s)... Some are less compatible with part time work.

They get same, equal salary then to the 5-day 40 hour people? Otherwise it would look like you're just profiteering as your main motivator.

Interesting. Why do you think that would be "profiteering as your main motivator" to have as a general principle that as you scale your work you also scale your salary? I'm not sure how that follows. It also seems to be the general principle in all the companies I'm aware of that support part time work, but perhaps there's something I'm missing. I'm all ears.

>Why do you think that would be "profiteering as your main motivator" to have as a general principle that as you scale your work you also scale your salary? I'm not sure how that follows.

I'm in 100% agreement with you. So you do pay less to those who work 4 days a week. That's fine and it makes sense. Just confirming.

Then I don't even need to ask: you're also saying that for every hour over 8 hours staff is paid overtime? That would be consistent with paying 4-day a week folks less. And would be the nail in the coffin that profiteering isn't your main motivator.

No, we don't pay overtime. There hasn't been a recent decision about that, so it's more a historical artefact at this point, but my rationale for not paying overtime (apart from the fact that it's uncommon to get overtime pay as a full time employee in the UK) is that I don't think overtime should be encouraged in any way. For the same reason we don't allow people to sell their (30 days) yearly paid holiday allowance back to the company - the days are there to take them, not to trade them for a bit of extra pay.

If I'm understanding your argument right, I think you're saying that because we try to evaluate how much people should be paid in a rational way that includes some assumptions around time being correlated to amount of work, that means we are "profiteering". I'm not sure that's worth dignifying with an answer, but here goes:

GrantTree is a business. We need to make a profit in order to continue to exist, to grow, to be an exciting place to work, to have the resources to invest in our people, to be able to develop new products, and so on. We also need to compete against other businesses in the same market, some of whom are quite aggressive. If we get the balance between people's contributions and their compensations wrong, we'll be uncompetitive and won't survive. It's that simple and has nothing to do with profiteering.

I commend the decision to not encourage overtime, and in the UK that probably doesn't take much pleading for you to achieve. I've lived and worked in France and worked closely with most nations around the world including the UK.

Ultimately from your description it sounds like the increased non-profiteering wages would not come out of company profits. Thus in the end it's just like all the other businesses then. No need for all the flowery language about how there's other priorities than making money. If you had to ditch everyone and go to Malaysia to "be competitive" then you'd do it.

> Are you a charity doing good work with orphans? Or are you

> a business trying to make as much money for the investors

> as possible? If the latter is true, why

> wouldn't someone work for you with "money as the primary motivator" ?

It is possible to offer a fair return on investment without having to take every possible step (ethical or otherwise) to maximize profitability.

Some would argue that developing a purposeful organisation (whose purpose is not just to make money) actually also produces better returns, but I think the jury's still out on that. There are some striking examples but they might be cases of survivor bias.

Because getting to the point of being a successful business is a really long road, and going down it with someone whose primary motivation is to make money for themselves is going to make that trip way less fulfilling.

I assume everyone starting or working for a for-profit business is primarily (though not solely) motivated to make money for themselves. Otherwise, they wouldn't be starting or working at a for-profit business.

That assumption doesn't bear out in practice, in my experience. There are plenty of people who believe that for-profit businesses can also achieve great, positive purposes in the world, and want to be a part of it.

Cases in point: Tesla and SpaceX. They aren't charities. They are very purposeful.

Tesla and SpaceX are both massive exceptions to the rule, not examples of the norm.

You are not Tesla or SpaceX.

And in fact if you want to write code that goes to space, you have 4 or 5 options top in the US? Vs many other business models (webapps for music) there may be 50 or 100.

> Cases in point: Tesla and SpaceX. They aren't charities. They are very purposeful.

Those are just two companies, ran by the same guy. I think finding even a couple dozen more examples would be very difficult.

Have a look at the companies listed halfway down the page on http://danieltenner.com/open-cultures/ . Not all qualify as purposeful orgs, but quite a few do. Reinventing Organisations, mentioned on this page too, is a book that studies a dozen examples of purposeful, open culture organisations, if you're interested in learning more about this.

Charity vs. for-profit is a false dichotomy. A charity is a specific form of non-profit. In addition, there is the (relatively new) benefit corporation which, while technically for-profit, has explicit non-financial goals.

That said, nothing about being motivated by money means you can't have a purpose as well. That's why I was careful to draw a distinction between "solely" and "primarily". Making money while also improving the world is just enlightened self-interest.

Funnily enough, Elon has a reputation for paying below market.

Money is the primary motivation to work. Would you be upset at an employee for working on their own project or for a different company during business hours? If you would not allow this then money is your primary motivation. You are giving money to the employee for ONE reason, you are buying their time to produce something of value for your company. Saying you aren't interested in people who are primarily motivated by money in a job comes across as disrespectful of the time of the employee.

As someone who once took a 50% pay cut to do do something I wanted to do (work in Japan) and another 25% pay cut many years later to work on a project I really wanted to work on I don't know if I can agree that money is the primary motivation to work. Maybe for you? Maybe even for most people? Although I don't think I know a single person who is working for money. If that's all they wanted they'd be doing jobs that pay more.

> Money is the primary motivation to work

For the overwhelming majority of people, the decisions about work are a balance of competing interests.

I could go out and get a part time job working on weekends, and make more (overall) money, but I don't because the money I make in 5 days is enough, and I place some value on my free time.

But the reverse it true, I could probably convince my employer to let me work 4 days a week for a 20% pay cut (or 0 days a week for a 100% pay cut), but that would drop my pay below the level I want/need in order to support my family and be able to do things on the weekends.

I could quit my current job and go back to working in finance for more money than I make now. I don't want to. I've done that, and I prefer the work I'm doing now, even if I'm paid 20% less.

I could quit my current job and go work for a charity and make 50% less than I do now. I don't want to take that sort of pay cut.

It's because of these balances that we have some well educated, highly employable people making a (relative) pittance as school teachers. And why some people spend their evenings doing open source "work" instead of taking on a second job.

Very few professionals in western countries have money as the single primary motivation to work. Once you can afford to pay your bills and maintain a comfortable lifestyle, you become quite willing to trade off the extra money to increase your overall enjoyment of life, whether that means more leisure time, or more interesting work, etc.

It is quite reasonable for for-profit companies to aim to provide a compelling work environment through factors other than pure financial reward.

It's also quite reasonable for workers to select job opportunities based entirely on the financial reward (though I think that's actually relatively rare).

That company and that worker are probably not a good fit for each other.

Seriously, if you can't afford a great employee, that's fine. But don't try to belittle someone because of your company's incompetence to pay. And don't stand on a morale high ground. It is disgusting.

> To answer a likely reflex-response to this: that doesn't mean we think people should be working for free, or that we judge people who want to earn more money. It's totally fine to want to make more money. Different people have different expectations and requirements at different stages of their life though.

No belittling intended.

Sounds reasonable.Was this added after I replied?

Nope. But don't beat yourself up over it! Missing a piece of a comment happens all the time. Hopefully you see there was no offence intended to people who have different views on this. I think it's totally fine that different people think differently about these topics, and I don't consider my view superior in a general sense. It just works better for me.

>we have no interest in trying to sucker someone into working with us if money is their primary motivation.

If money is not your primary motivator, why can't you pay more?

A company still has to have money in order to operate. I would assume that even without money being the primary focus, they have to be careful about paying out too much or they will be out of business.

Indeed. We are in a highly competitive market, and have a number of interesting projects going on to disrupt that market that won't pay off immediately. If we don't manage our costs reasonably well we won't stay in business.

Money is like rocket fuel. If you're accumulating it for its own sake, rather than to get somewhere, I'd say you're doing it wrong - but that's just my opinion...

If you are not paying top of market wages, one or more of the following has to be true:

1. You don't believe top developers are intrinsically 'worth' the amount that FB/Goog/Amzn/ and many other SV companies pay, that it's not a net win for the company to have top talent.

2. You think that you don't need top developers, that really you're just going to be fine recruiting a bunch of B players, and it's some other 'thing' (business? Sales? Marketing? an 'idea'?) that will make you better than competition.

3. You are incapable of harnessing top development talent to produce adequate ROI that would justify top salaries.

Money is not my primary motivator, I love my job. I wouldn't leave just for more money. However, salaries in a certain ballpark are a strong signaler to how much a company values software engineers.

I think it's insulting to see developers significantly underpaid and have you attempt to justify it the way you do. If money is not your primary motivator, wouldn't you be OK taking a bit less salary and having that distributed out to other team members?

Note: I'm not the parent poster.

> 1. You don't believe top developers are intrinsically 'worth' the amount that FB/Goog/Amzn/ and many other SV companies pay, that it's not a net win for the company to have top talent.

You're conflating two things here.

I don't think that "top developers are intrinsically 'worth' the amount that [[..]] SV companies pay" (emphasis mine).

There is nothing intrinsic about a developer's value. A developer's value to their company is some proportion (<100%) of the value they add to the company.

Their value to FB is unrelated to their value to XYZ Corp.

> it's not a net win for the company to have top talent

That does not follow from a view on the intrinsic value of developers. I know that it is a net win to have top talent, but:

a) They might not be "worth" (to me) what FB etc will pay them.

b)I might not think that I have to compete on salary to get top talent. I may have a method of convincing talent to work here based on non-financial incentives.

>)I might not think that I have to compete on salary to get top talent. I may have a method of convincing talent to work here based on non-financial incentives.

Great point and I sort of side stepped that. It's not one not talked about enough. I didn't get a sense of that from the poster I replied to, but perhaps there is a compelling story there.

Most of our hires are not developers. We're not building cutting edge tech. We have some internal tools but I don't believe they require "top developers" by whatever metrics Facebook might use. That said, I think the few developers we have are exceptionally good - versatile, multi-skilled, quick learners, broad experience, the ability to conceive, manage and run a whole software project without very little help... and whatever they decide to develop, they do develop. As a developer myself, tech cofounder of my two previous startups, I rate them as excellent developers and would be happy to work with them on any project. One of them, with no academic credentials, is the smartest person I know.

Re: your second point, I don't believe in the concept of "B players". See http://danieltenner.com/2014/09/11/there-are-no-b-players/

I am sad that you see this as insulting. I'm not justifying anything. These developers (like others in the company) have largely chosen their own salaries. One of them is in the top pay bracket in the company. They also chose my salary, btw.

Where does it say GrantTree pays significantly less than market rate?

The individual employee can say that too.

I'm in a highly competitive housing market, and my children are in a highly competitive educational market. A number of interesting projects that won't pay off immediately.

Since when is an individual expected to just defer to a greater good in an employment arrangement? Which is most likely "at-will"?

I'm certain the shareholders and executives aren't making such self-defeating sacrifices.

> Since when is an individual expected to just defer to a greater good in an employment arrangement? Which is most likely "at-will"?

1) You should never "defer to the greater good". I would not advise it. If this environment doesn't offer something of value to you definitely do not apply or join such an environment.

2) I completely agree that this approach is incompatible with the ultra-violent approaches to "at will employment" of the US and much of Europe. I find the process by which most people are fired in american companies abhorrent. I don't want to go into too much detail about what our current process is to deal with situations where there is a performance problem, but basically it involves engaging with the person and providing them with a lot of support to help them figure out what the problem is, and how they can fix it, and offering them a number of decision points about what they can do to fix it. Obviously, from a distrustful viewpoint this might seem even worse than a clean firing - and rightly so. This kind of stuff absolutely doesn't work in a distrustful, fear-driven environment.

> I'm certain the shareholders and executives aren't making such self-defeating sacrifices.

On what basis are you certain of this? Do you know something that I (cofounder) don't? I suspect that in the long term this approach will result in a more successful, longer lasting company that I feel even more proud of being a part of, so I don't think it's self-defeating in the long term - I disagree with doing anything self-defeating, I think no one appreciates it and it rarely results in anything good. But I don't know for sure that it will actually result in a better company. In the meantime, my cofounder and I could certainly have taken far more money out of the business and have not done so, so your assertion is incorrect in the short term (5 years) at least.

Nice! This comment is spot on!

What percentage of the revenue derived from an employee's labor would he receive, in an ideal world? The correct answer to this is probably something between 30 and 70 percent, depending on a variety of factors. The real-world answer to this is "however little we can possibly share, because we want to hoard it all for ourselves", and personally I find that to be a distasteful reality (I find most investors' justifications for their wealth very hollow, they usually all boil back down to "well, I started with more money than them"). Employees have way undersold themselves; I think objectively, most professional employees would probably still be quite profitable to the company if their salaries were quadrupled. And to answer a likely-reflex response to this, yes, I have run companies with employees before.

Considering that founders are making themselves fabulously wealthy on the backs of their employees, I think we'd all appreciate a little bit more respect than you're showing when you poo-poo employees who want something more closely approximating 1/4 of the share they actually deserve.

I'm not fabulously wealthy, nor do I expect to get so from GrantTree. Yes, I am fairly well off at this point, able to buy (jointly with my wife) a small 2-bed flat in an ex-council flat in London - that's after spending 5.5 years starting a business that has raised over £35m of government funding for 600 UK startups and employs 27 people. If you think that's fabulous wealth, you have a different definition of it than I have. Yes, the business is technically worth a pile of cash (we're about to do a valuation for the purpose of issuing shares to employees so I don't know yet exactly how much), but we're not planning to sell the business so that can only be realised through long-term survival and success of the company.

The team has themselves set a target for wages to 40% of revenues, in line with your suggestion. I would have set it higher (and in fact right now our wage bill is closer to 60%) but that was not my decision to make. The 40-60% is of course not evenly distributed, though I would also quite like the thought of that, but the team themselves decide how to allocate it, so I guess they're doing the best they can.

I find the reality you perceive distasteful too - and I agree that it is widespread and it is sad that that is so.

"If your main concern is getting paid as much as possible then we're probably not the right place for you to work anyway"

That kind of phrasing is generally code for, "We pay crap wages and expect you to live at work."

Generally, perhaps - not in our case. We pay what we (meaning, the staff, who decide their own pay) believe to be a good wage, and we have excellent work-life balance - we have a number of new parents who have commented that GrantTree has been a very supportive culture for them in the first 6-12 months (which are pretty hard apparently). And we have remote work, flexible working hours, etc.

> we have a number of new parents who have commented that GrantTree has been a very supportive culture for them in the first 6-12 months

"I was 20 minutes late because I had to take my newborn to the hospital and they only gave me a written warning!"

>And we have remote work

"On the fifth wednesday of every month I can work from home!"

>flexible working hours

"I worked from 9am to 10pm yesterday so I get to come in at 10am to 10pm today!"

GrantTree might be one of the few outliers here and if so I congratulate you, but this is typically what employers mean when they say those sort of things.

> "I was 20 minutes late because I had to take my newborn to the hospital and they only gave me a written warning!"

Or: since my child was born I've been able to be home by 5pm every day without any problems.

> "On the fifth wednesday of every month I can work from home!"

Or: one of our people is currently taking part in Remote Year. He's just spent the last few months in South America. http://remoteyear.com

> "I worked from 9am to 10pm yesterday so I get to come in at 10am to 10pm today!"

Or: we don't track working hours at all, and people often choose to work from home or do whatever makes sense given their circumstances. They work because they want to get their work done, not because someone's hovering over them with a finger ready to point at them.

> GrantTree might be one of the few outliers here and if so I congratulate you, but this is typically what employers mean when they say those sort of things.

Yes, it is quite sad that every good thought gets copied and corrupted. I can't do much about that.

Nice. Spoken like either 1. A trust fund kiddie with privileges to work for pleasure 2. An older person who purchased their family home before they started costing 3M$

Try again: 3. a couple of migrants from Romania and Poland with no starting wealth, living in a flat that we couldn't even afford to pay for (but my cofounder on the previous business, which bombed, basically let me stay in his flat on the promise that I'd pay when I had the cash) back when we started GrantTree. Add onto that that my parents fled Romania in 1980 with nothing and I was stateless until about age 12.

There are many, many people starting from far worse conditions, though, I'm not complaining. I had a stable childhood, a good education and I have great friends and parents and an amazing wife and cofounder. That's worth way more than any trust fund or inflated property.