Salaries and Dividends, Pay scales and Evaluations; we struggled with finding a way to pay ourselves fairly as a two-partner technology start-up. Read more...
When we first started Big Bang, one of the things we struggled with was how to compensate ourselves for the work that we were doing. Our situation was further complicated by our differing skill sets. As our friends and peers know, Cam is a developer and I'm, well, you know, I do what I do.
In the true spirit of Big Bang, we just started trying different ideas until we found one that fit. First we tried looking at the work we actually did (web dev vs project management etc), and tried to pay ourselves based on what we could hire ourselves out for. A Dev gets hired out at about $100/hr, and a PM about half that. This was a difficult solution and it made both of us feel shitty; nobody wants to be in a 50-50 partnership where one guy's eating at Swan everyday and other guy's living off microwaved beef-patties from Hasty Market.
The next thing we tried a needs-based system, where we looked at our respective rent cost, then added a fixed and equal amount of "spending money." Needless to say, that didn't work out for us. First of all, we have significant philosophical differences regarding personal spending habits. Secondly, it didn't account for the fact that we had way more development work then management work. I hate to think that Cam is busting his balls to deploy our client's new website while I'm drinking tall-boys and writing rap songs (although I fervently believe my rapping abilities differentiate Big Bang from the competition).
The last idea we tried, the one that we've stuck with for a while now, is semi-socialist and slightly masochistic. I prefer calling ourselves cantankerous communist technologists. We decided that regardless of what kind of work each one of us does, we will be compensated equally. And in return, regardless of how much development vs PM hours we have per project, we will work equal hours. Furthermore, our salaries will be as small as possible in order to build up our vast war chest which will enable us to initiate numerous large-scale internet projects.
You could think about it as, "From each according to her ability, to each according to his needs." But that doesn't get the full idea across. Here's a better analogy; In most professional orchestras, the triangle player makes as much money as the first violinist. You might pay more for a special visiting musician, but for the most part pay is even across the board. Because even if the triangle player plays a fraction of the amount of notes that the violinist, the triangle player must be as good as the first violinist, and work just as hard. In fact, the triangle player can afford to make fewer errors than the violinist, because she will be judged on playing less than ten notes, instead of hundreds.
We decided that I should be matching Cameron's effort: hour for hour. When Cameron is working overtime on extra client work, I'm at my desk writing out functional specs, writing blog posts, scanning receipts, making a rap song, or a music video, or hitting the streets - putting up flyers across the downtown core. It's more about being productive than just doing work. As long as I create, output, produce or eject something from inside my head and place it into reality, someone will take notice, and that will help us in the long run.
Here are the core lessons from today's ejection:
- We work equal hours for equal pay.
- We accomplish heroic tasks for minimal compensation.
- Profits will be used to initiate projects.
Are we silly for thinking this way? We'd like to know what you think.