I am an experienced Startup CEO. Ask Me Anything.
reddit.comQ: Why do startups need so much money? A: Salaries (imagine paying 2k x month x person)
Doesn't $24k/yr seem far too low to get quality talent?
You're not trying to attract talent at this stage - you and your co-founders are it, and you're there for something bigger than the initial paycheck.
You are mainly focussed on getting a working initial version whilst trying to keep your head above water, and 2k a month goes a long way to keep the bills under control (depending on your lifestyle of course, but aiming for ramen-profitable means keeping your bills low)
I realize that the employees won't normally be as talented as the founders, but I question whether any non-braindead people will work for $24k/yr. That's getting dangerously close to minimum wage.
I could write a lot about hiring people for below market rates. you can get extremely smart people for that wage; the problem is you can't get people who are both smart and experienced or both smart and educated. At those rates, you are spending significant time training.
That said, if you choose well and you train well, the tradeoffs sometimes can work out quite well for you. People working their first 'real job' are often as dedicated as the founders; they know that if you make it big, even if they don't have equity, their career is made, either with you or with others who have heard of your success.
Yeah, that feels like a strange middle ground between "founder" and "employee"... You would never get enough equity to make the tradeoff a good deal. I'd be surprised if situations like this happen very often.
As a commenter notes below: he's probably talking about €. In the Netherlands, average wages are around 30K a year. Minimum wage is 17K. A young, skilled programmer that is eager to work at a startup might take 2K a month. That's his average starting salary anyway.
>you and your co-founders are it
He's saying there are no employees at this stage. Just the founders.
i am pretty sure he talks about € not $
That's still only about $30K
Yeap, he's based out in Finland.
Lazywebs googling shows Finland doesn't have a universal minimum wage, but that in 2008 salaries for the lowest paid jobs averaged €1600/mo.
So €2000/mo is not too far from what you'd expect "minimum wage" to be, equity notwithstanding.
http://www.finlandforthought.net/2008/07/14/no-minimum-salar...
It's worth mentioning that Finland is quite egalitarian, so the difference between the "minimum wage" and a "decent wage" and a "very nice wage" are pretty small. e2k is quite close to what can be earned as a programmer or engineer at entry level at Big Co., so if a startup pays that it's not too bad.
Also, these are not directly comparable to US salaries, because you get a lot of things almost for free, which you'd have to pay for in US: education, healthcare, transportation, sauna every day, etc.
> Also, these are not directly comparable to US salaries, because you get a lot of things almost for free, which you'd have to pay for in US: education, healthcare, transportation, sauna every day, etc.
Someone is paying for those things, so they're not free.
In terms of tax dollars per capita, the US is in the middle/top of the EU. However, it looks like we get less for our tax dollars than EU folk do. It's unclear how more US tax revenue would change that.
On the other hand, the US is significantly above the EU in terms of income and GDP per capita.
why are you all so shy about hiring telecommuters?
Who are you really? Some detail about you and your achievements won't hurt.
His resume, from the article: http://fi.linkedin.com/in/raminedarabiha