I spent the morning meeting with a good friend, Sarika Singh, who started her own company a few years back. She developed a bake at home energy snack that's both healthy and cost effective. Oh, and they're delicious. The company is called Matisse & Jacks and has some great products. They're great for everyone, but especially for mom's, who may want to bake at home with their kids but not bake junk food like cookies and cakes. And the cool thing is that they just got placed in Target stores!
The one thing we kept talking about is how difficult it is to motivate people who are helping you with your company. While I've spoken about this before, today I'll talk about different ways in which you can and probably should motivate people.
1) Equity - While this is a great initial step for motivating people, it doesn't last, especially as time progresses. The shelf life is incredibly short and you'll quickly find out how committed and passionate these people really are about your idea. The longer you go without cash, the less valuable equity becomes. So what can you do with equity? You can continue to provide people with bumps in equity for hitting milestones or beating targets. For one employee, I nearly doubled his equity stake because of his incredible devotion to the company. You really can't put a price on that help.
2) Gifts - In lieu of giving people money, I've found that a thoughtful gift once in a while helps out a lot. If you've got developers, they're probably gadget people. A new cell phone, digital camera, or networked hard drive are a few possibilities of things that these guys don't purchase all that often, but that they'd love to have.
3) Cash - Cash is king, isn't it? While giving someone the cash equivalent of their time is difficult at a startup, sometimes a token gift of appreciation helps. Like a couple hundred dollars to complete an additional task or even a hundred bucks here and there just to show your appreciation.
4) Reciprocity - Offer to give them a hand with something they're doing. Use your skills to help them out. If they're helping you on the side, it's inevitable that they're working on other things too. For our developer, I've tried to give them some contract work as I come across it for other companies. I've passed the UI guy a lot of work. And of course, the fellow startup guys I speak to, I'm always happy to help out with testing their products as well.
5) Appreciation - I can't stress this enough. Express your appreciation! This should go without saying. But I can't tell you how few people actually do this. And it's FREE!
It's a bummer to find out that people involved with you aren't as passionate as you are. But its a fact of human nature. Especially if the company isn't their idea. So be prepared. And be good a weeding out people who don't share this passion. If you have the luxury. Sometimes you take what you can get. And that's when you need to be creative with compensation. Now go buy some energy snacks above to help a fellow entrepreneur!
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