HOT or NOT founder thoughts

HOT or NOT  is one of the well known startup success story in Silicon Valley.The founders of this company have scaled it to a level where they are pulling 4 million + a year in revenue.I doubt if even well known Indian startups are making this much money.

 I was reading James Hong’s blog, one of the founders, where share his knowldge and wisdom that may inspire you as an entrepreneur.

Here is his thoughts on hiring and motivationg staff

So you go out and get the smartest guys you can. But because you know these brilliant people are not going to want to stick around (especially because they see how much work they are doing, how much work you are doing, how much money they are making, and how much money you are making..). So you realize that compensation structure becomes a REALLY big issue. Even Andrew has had problems with this issue, despite the fact that he is probably (presumably) able to pay someone millions of dollars per year in cash compensation to do a good job of running his company.And that is the natural, first-instinct way to address the problem. “Well, maybe we can pay them more to make them happy.”

It never works. At least not here in Silicon Valley. Engineers at HOTorNOT last year were making 2-3x normal salaries, yet they were not happy… and we really couldn’t expect them to be. After all, the only people we trusted with our baby were people like us.. and god knows I wouldn’t have stayed here for a high salary. At their age (23), I wanted risk and potential reward, not a steady job. I make a big deal of telling people that when I finished my MBA at 25, I turned down a job that was gonna pay me about $180k in the first year.. despite the fact that I was $50k in debt.. to instead earn no paycheck and give entrepreneurship a go. These are the type of people you trust to continue running your site in “high profit margin” mode. Big company types won’t do.

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