Perception of fairness in a startup, what is the next move for this situation?


1

I’ve funded a startup with 4 more friends (my fault, but keep reading) and I am taking care of nearly everything.

To put you into perspective, we are setting up something with the same characteristics as Groupon and we are 5 in total, these are our roles:

  • Sales guy that gets companies to promote offers in our website, we earn-per-results so companies don’t loose anything by trying and with the recession they are open to anything, quite an easy job...
  • Sales guy 2
  • Financial guy, takes care of the finance of the company (nearly null)
  • Administration guy talks to lawyers, gets contracts written and other legal paperwork
  • And I am working on:
    • All the graphic design including printed and digital, corporate branding, logo design, website design, inspiration
    • All the website programming (PHP, MySQL, JavaScript, jQuery, HTML, CSS, etc. including theme development, payment process and gateway, a membership/user login system, API interaction with several services, email newsletters, administration panels for sales/companies/accountants, a tiny CRM to track leads, algorythms...) including writing documentation for everything
    • All the web hosting/domain searching, evaluating, purchasing and setting up
    • Online marketing and promotion including Search Engine Optimization, Pay Per Click advertising such as Adwords, email campaigns, brand name protection, setting up every service account customizing and syncing them
    • Usability testings, UX and other advanced aspects of websites
    • All the business advice, organization, planning, managing, business culture, ethics, communication, teamwork... they have none or few professional experience. Also, it is the first time we start a company so we are running on my studies and read experience of other people
    • Most of the editorial and copy writing as well as writing style, consistency and revisions
So I have so much work to do and they have so few that sometimes after working weeks for 14 hours a day while all the other co-founders had barely 1-4 hours of work per week.

Once we launch they (the sales guys) will spend more time working on the startup as they are right now but still I will need to maintain the whole website on my own and implement new features and functionalities including all my assigned departments mentioned above so I’ll still be really busy. And I shouldn’t delegate any departments as they do not have any experience or knowledge.
I am also the one that takes the big risk as they depend on me to work big time before they can start doing their jobs.

Following great advice from Joel in the “concept of fairness” in his great response for Forming a new software startup, how do I allocate ownership fairly? We decided we would have equal shares (5 x 20%) and the idea is that each one of us earns the same salary when we become profitable.

One of the solutions we decided to take to compensate the amount of work each of us had was to outsource some of the workload. But we are self-funded and have very limited budget so each time we outsource a little project it hurts badly and I also have to plan everything myself (even more work) to make it happen as good and accurate as it had to be with ridiculous budgets so it takes a lot of time to do.

The main solutions we’ve found have been, apart from outsourcing: instant money or higher salary or more company shares. But money and shares are two things that seem untouchable in the company culture we have adopted and we are all friends.

Instant money does not work either because they don’t even have a clue on how much would it take to do my work and how much to pay me so it is quite violent to talk about it.

Another solution is the one of more attribution but the cofounders think it makes more sense to leave the sales guys represent the face of the company in public (articles, documents or competitions) so he takes the merits.

Even if we fail I would have enjoyed the ride but I would like to find a solution before blowing everything up. I’ve also worked hundreds of hours on it and it would be really frustrating to throw all that time away.

I greatly appreciate your time and advice on this, even if you link to similar situations that can help.

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asked Sep 23 '11 at 10:54
Blank
Electric
8 points

1 Answer


2

This sounds more like a bunch of friends who are afraid to tell their other friends that they are not needed in the team. I'm sure you realized already how bad idea it was to go 20% each with the administration guy (seriously?) the financial guy (not needed either), not to mention two sales guys before you even have something to sell.

This is why it's not necessarily a good idea to start a company with your friends. They might not have the skills needed. From the outside its totally obvious that this team will not work at all, you have to get rid of the people not needed in a startup. Find out who is the better sales guy, and fire everybody else.

My other thought is that maybe you could work less if you could let go of a few tasks. Entrepreneurs tend to be control freaks, I don't know if it's the case with you, but I usually end up doing everything myself, and sometimes it's mainly my fault. Are you absolutely sure that it was not your subconscious decision to end up with all the marketing, development, design, and biz-dev tasks?

answered Sep 23 '11 at 15:03
Blank
Mihaly Borbely
715 points
  • +1 for pointing towards delegation - I think that is key. If you're developing the tech, leave the non-tech stuff (copy writing, etc.) to someone else. If the others can't do that then get rid of them - you should only have people on the team who can contribute based on what is needed (two sales guys with nothing to sell? a finance guy with no finances?). – John 9 years ago

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