The Long-Term Value of Loyalty

Posted on Apr 27, 2010 | 168 comments


Oh, boy.  Here we go again.  Another post on job hopping.  This will be my final word on the topic.  I promise.  My goal here is to move the debate forward, add my POV but not inflame things any further.  Inflaming was never my goal. Let’s see if I can achieve that.

My WORD of the day is “loyalty.”  It’s one of the angles that people who were angered by my original post the most found so offensive.  I think because I implied too hard that job hoppers were disloyal.  So rather than focus on that angle I’d like to focus on the opposite.  The benefits of being extremely loyal.

My original post was directed at hiring managers.  It said that I didn’t believe it was a good idea to hire job hoppers.  I should have kept it in third person.  I should have chosen less inflammatory words.  I didn’t mean to be so insulting and I didn’t mean for the net to be cast so wide that many people wondered whether I was talking about them when I was speaking of “job hoppers.”  I learned a lot from reading the comments.  Most were constructive – even the ones that were harsh.  I’ve already apologized for my tone so I hope you’ve accepted that.

My view still stands – for many hiring managers a large factor in looking through resumes of somebody who is 30+ and has never worked somewhere for more than 18 months will be the job hopping element.  There is a high probability that the person you’re hiring will leave you within 18 months.  You have at least 6 data points to suggest this.  3 or 4 may be for completely understandable reasons.  Since recruiting is so time consuming and costly it is better to focus on people more likely to stay longer.

For those that disagree – let’s please just agree to disagree.  It’s a subjective topic.  We’ve all had more than enough of our views aired on this one.  Moving on ….

My second post was directed at employees.  I wanted to make it clear that I personally believe it is OK to quit a job in which you’re unhappy.  I believe that it’s OK for young people to learn and try different roles, companies and geographies. If you’ve moved around a bit when you’re early in your career that won’t likely be held against you.   Yes, I know that many employers are bad.  I’ve worked for bad bosses before.  I never implied that startups are all great and job hoppers are all at fault.  I know that there has been downsizing and that has led to some job changes.  Some amount of change is expected.  It’s just that if you’ve had 6 jobs in a row of each 18 months or less the person who is looking to hire you at the next job is naturally going to wonder whether it’s a pattern.  Your job will be to convince them that it’s not a pattern.

So I advised people with a lot of job hopping on their resumes to try and limit the number of them listed.  Getting an interview is the first chance you have to convince the potential employer otherwise.  If you want that advice please click on the link.

I also made in clear that I have NO problem with people who choose to be independent contractors as a career choice.  To the contrary – if you know how to sell your own work, can negotiate good rates, network well, keep consistent work and have a great reputation – it can be very rewarding.  If you’ve done it for a long time then I usually advise hiring managers to hire you as contractors and not full-time employees.

Finally, I made clear that there are ALWAYS exceptions to the rule.  They come in the form of personal references.  No rule is ever absolute no matter how it sounds when one writes a blog.

But one theme really didn’t come through in either of my posts and it’s an important point.  There is a lot of long-term value in loyalty.  And I think this is sometimes missed by those who run to quickly to greener pastures.

The things you learn in tough environments

Most of what I learned about operating startups I learned from the really tough years at my first company from 2001-2003.  That is when no customers wanted to work with Internet startups because we as an industry had burned so many customers.  No employees wanted to join startups – they were all looking for stable jobs.  My company had raised venture capital in April 2001 but we were told that there may never be any more coming.  I was paid less in salary in 2004 than I was paid at the job I quit in 1999 (a job I had held 8+ years).

But in these years I learned how to sell software – necessity is the mother of all invention.  I learned how to better run a product management process.  I learned how to integrate customers into our product development process.  I learned how to better set goals for employees and reward those that performed well.  I learned how to retain employees when stock options were no longer a real currency.  I learned how to get press coverage when we were no longer “hot.”  I learned how to manage costs effectively.  I learned that I had a lot to gain by not being so adversarial with my competitors.

I never built Google.  I’ve acknowledged that many times.  But in our first year of sales (and those were really shitty years to be selling software) we sold $2.1 million, then $5.9m, $7.7m and we ultimately sold when we hit $14 million and had more than $30 million in backlog revenue.  I learned about revenue recognition.  I learned how to establish a technology center in India and how to manage disparate development teams (and this has drive my thoughts also about what does NOT work.).  I learned how to establish sales targets and how to manage a sales pipeline.  I learned how to do a pipeline review with sales people without getting bullshitted to.

Listen, I’m not telling you these experiences are for everybody.  But these are things you could never learn in 18 months.  These are things that my team learned with me by sticking around.  No doubt they have more intimate knowledge of these processes since they actually ran them.  We let everybody “punch above their weight class” in terms of roles & responsibilities.  We all learned.  And eventually many of us also made money.

The relationships you build will be enduring

One of the things that Jason Calacanis talks about in his post on the topic is the value of personal loyalty.  He’s right about this.  The people that I’m closest with in life are: my family, my high-school & college friends and the people that I worked with in my startups.  We were all at each other’s weddings, brit milah / baby namings and unfortunately a funeral.  We were family.  We ARE family.  I would do anything for these people.  I wrote a large check to one of them for a startup with no product and no real plan.  He was there for me when I needed it.  I sent numerous emails for another for a job opportunity and he is now a senior exec at a very prominent startup.  He’s family and he knows it.

We were in the trenches together.  We fought for every customer together.  Hell – we fought against the VC’s together!  And we all worked on the exit together.  Like many of you, I have many friends and close relationships.  But to anybody who has ever been on the startup battlefield with other people who all stuck in it together I think they’ll likely understand where I’m coming from.  Loyalty in times of adversity separates out your true lifetime friends and colleagues.  And to be clear – I was loyal back.  I think leaders who quit in times of adversity and leave the teams to fend for themselves are no better than employees who quit easily and early.  Quitting would have been the easiest thing for me to do.

I’m not saying that means that all people at startups were treated like family.  If somebody at a startup mistreated you then I understand your not sticking around.  And I’ve already stated that I understand sometimes it makes sense to go elsewhere and learn from new companies and new management.  But if the reason your bailing is simply because somebody has offered you a 20% pay increase, I would ask you to consider the following:

Short-term vs. long-term benefits

Yes, you can always earn more by quitting.  I said this all the time to the employees at my companies.  “I know you can earn more by leaving.  I hope that I can convince you to stay every year by making your resume more valuable in the long-term than the immediate bump to go where the grass is greener.”

Think about me as an example.  I didn’t make retirement money when I sold my first company.  But the firm that funded my first startup was loyal to me for having stuck around in what they knew to be pretty tough times and having suffered much dilution.  They seed funded my second company and even let me buy some IP in exchange for debt to get started.  The people that I brought to my second company all worked at my first company.  I was loyal to this group of people and still am.  I then sold my company to Salesforce.com and did finally make the money I had set out to make the first time.  Our whole team earned good money and every single employee is still employed by Salesforce more than 3 years later.

Each of us could have traded in our jobs at any moment for a pay increase at any time.  I think each and every one of us gained more in the long-run by having stuck with things.  We have all gained both financially and in terms of career progression.

So how did I come to work in the world of venture capital?

That VC who saw me stick through hard times at my first company and get an exit at both companies is the firm where I’m now a partner.  We built a long-term relationship.  I knew my partners for 8 years before joining GRP.  When I called them to say I was thinking about starting a new company they asked if I would consider joining them as a partner.  It is nearly impossible to get a job as a general partner in a VC firm – let alone when you’ve never worked in venture capital.  This came through the long-term commitments that I made years prior.

Again, I’m not trying to rub your nose in it if these aren’t the choices you make.  I’m just trying to convey that sometimes long-term gains come from not making short-term moves that seemingly improve your bottom line and career trajectory.  Make sure that you understand the pro’s / con’s for yourself and at least consider whether there might be longer-term implications for sticking around.

Their is huge value of personal networks in determining your long-term career trajectory.  Mix that into your decision-making pot at the time you make the leap.

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  • John

    Mark,

    I agree with you but I feel like you are missing one key, most people work at big companies, in which there is no real loyalty, and there is no real connection. Or they work at smaller firms that are not loyal, your description of the workplace I feel is highly Utopian and maybe geared more towards 1% of companies and jobs out there.

    I would argue most companies care about making themselves rich and not their employees, which is fine, but the average worker bee at XYZ company most likely will not benefit the way you portray your loyalty to your former employees.

    Think about the average Real Estate Property Manager, Salesperson, Nike Employee, Coke Employee, Yahoo, Google….. do you really think after putting in 4 years you are going to have people looking out for your best interest they way you portray you do, I don't think so. Maybe I am jaded by bad experiences but nonetheless that is my view. Perhaps the top echelon of people in the most unique situations gain from loyalty as you write but I do not think in general that is true.

  • http://davidlew.is thedavidlewis

    We agree on resumes. They are your one shot to prove that you can get it right. My “grammer (sic)” was a tongue-in-cheek way of pointing out resume errors, not an attack on your writing. I ignore writing mistakes from anyone who writes as much and as well as you.

    I look forward to your post about corporate loyalty.

  • http://davidlew.is thedavidlewis

    We agree on resumes. They are your one shot to prove that you can get it right. My “grammer (sic)” was a tongue-in-cheek way of pointing out resume errors, not an attack on your writing. I ignore writing mistakes from anyone who writes as much and as well as you.

    I look forward to your post about corporate loyalty.

  • http://davidlew.is thedavidlewis

    I don't mean the occasional lecture. I bet if you taught a seminar about entrepreneurship even one quarter each year, it would sell out. To ease the workload, you could bring in guests each week. Peter Guber did it for years about entertainment. Alan Kaye did it one year and it was one of the best classes I took at Anderson.

    You and Jason have done more for tech entrepreneurship in LA than anyone else. I don't mean as a VC or angel but as mentors. For some reason “mentorship” became a bad word during the Dot-com Boom. It is good to see it coming back. I think that the logical next step for you would be to help the next generation of entrepreneurs while they are studying it. Just a thought (and easy for me to say as it's your time).

    Thanks again for this series.

  • http://davidlew.is thedavidlewis

    I don't mean the occasional lecture. I bet if you taught a seminar about entrepreneurship even one quarter each year, it would sell out. To ease the workload, you could bring in guests each week. Peter Guber did it for years about entertainment. Alan Kaye did it one year and it was one of the best classes I took at Anderson.

    You and Jason have done more for tech entrepreneurship in LA than anyone else. I don't mean as a VC or angel but as mentors. For some reason “mentorship” became a bad word during the Dot-com Boom. It is good to see it coming back. I think that the logical next step for you would be to help the next generation of entrepreneurs while they are studying it. Just a thought (and easy for me to say as it's your time).

    Thanks again for this series.

  • First Guess

    But the end result of “adversity” isn't always WIN. For Mark & team, sticking through adversity made sense because his startup succeeded, thus it's easy to write in retrospect that loyalty is both admirable and a good career decision for the employee. However, that is not the case for most startups that face adversity. The facts show that most startups FAIL, not WIN. Recognizing the tipping point toward FAIL when it happens and leaving is more often the right decision, particularly for an employee rather than a founder.

  • First Guess

    But the end result of “adversity” isn't always WIN. For Mark & team, sticking through adversity made sense because his startup succeeded, thus it's easy to write in retrospect that loyalty is both admirable and a good career decision for the employee. However, that is not the case for most startups that face adversity. The facts show that most startups FAIL, not WIN. Recognizing the tipping point toward FAIL when it happens and leaving is more often the right decision, particularly for an employee rather than a founder.

  • Loyalty

    But the end result of “adversity” isn't always WIN. For Mark & team, sticking through adversity made sense because his startup succeeded, thus it's easy to write in retrospect that loyalty is both admirable and a good career decision for the employee. However, that is not the case for most startups that face adversity. The facts show that most startups FAIL, not WIN. Recognizing the tipping point toward FAIL when it happens and leaving is more often the right decision, particularly for an employee rather than a founder.

  • Loyalty

    But the end result of “adversity” isn't always WIN. For Mark & team, sticking through adversity made sense because his startup succeeded, thus it's easy to write in retrospect that loyalty is both admirable and a good career decision for the employee. However, that is not the case for most startups that face adversity. The facts show that most startups FAIL, not WIN. Recognizing the tipping point toward FAIL when it happens and leaving is more often the right decision, particularly for an employee rather than a founder.

  • http://www.twitter.com/biggiesu Mike Su

    Am surprised at the vitriol being spewed about this topic. No matter how violently someone disagrees with your thesis, is it so hard to imagine that some other hiring manager may possibly share the same opinion? And when faced with a stack of resumes to sift through, is it so hard to imagine that, all things being equal, the guy who generally sticks around will be more desirable than the guy who doesn't? That said, *of course* there are exceptions.

    I think the undercurrent of a lot of the frustration, however, is actually rooted in a perceived lack of corporate loyalty. Prior to the dotcom burst, lay-offs seemed really rare, and both companies and employees tried to create career long relationships. Companies that my parents worked at like 3M, Dupont, tried to create lifers. Things like pension plans existed, and people spent their entire careers in one place. After the dotcom bubble, once companies popped that “lay-off cherry”, it seems like companies suddenly got comfortable with it. Whereas there used to be more discipline in hiring only when there was a long term fit, because layoffs were taboo and painful, companies seemed far more comfortable with hiring if there was a short term need, and if that need goes away, then lay them off. It happens at both startups and big companies. In fact, that's (a small) part of the reason I left Symantec. What's the point of being at a large company if it had more layoffs during my tenure than any of the startups I'd been at? So I feel like in the past 10 years or so, a new company culture has arisen where companies aren't as disciplined at hiring people because it became easy and acceptable to get rid of people. This in turn created a culture where employees feel disposable, and at any given moment they could be replaced. As a result, people no longer feel loyalty to the company. Combine that with the general Gen Y culture, and you get a generation of job hoppers.

    That said, I think the point still is, there's value in sticking around under the right circumstances, and there is negative value in a resume full of short stints (because of perception, not always reality). Just cause a company isn't loyal doesn't mean you should go ahead and hurt your own career. People need to figure out what they want to make out of their career, and align their decisions based on achieving that goal. If a high salary is what you need, then hopping jobs will probably get you there (but you will be capped). If you want to start your own company, or really have a standout career, then the experience and network is what you need, and you don't get that from job hopping.

  • http://www.twitter.com/biggiesu Mike Su

    Am surprised at the vitriol being spewed about this topic. No matter how violently someone disagrees with your thesis, is it so hard to imagine that some other hiring manager may possibly share the same opinion? And when faced with a stack of resumes to sift through, is it so hard to imagine that, all things being equal, the guy who generally sticks around will be more desirable than the guy who doesn't? That said, *of course* there are exceptions.

    I think the undercurrent of a lot of the frustration, however, is actually rooted in a perceived lack of corporate loyalty. Prior to the dotcom burst, lay-offs seemed really rare, and both companies and employees tried to create career long relationships. Companies that my parents worked at like 3M, Dupont, tried to create lifers. Things like pension plans existed, and people spent their entire careers in one place. After the dotcom bubble, once companies popped that “lay-off cherry”, it seems like companies suddenly got comfortable with it. Whereas there used to be more discipline in hiring only when there was a long term fit, because layoffs were taboo and painful, companies seemed far more comfortable with hiring if there was a short term need, and if that need goes away, then lay them off. It happens at both startups and big companies. In fact, that's (a small) part of the reason I left Symantec. What's the point of being at a large company if it had more layoffs during my tenure than any of the startups I'd been at? So I feel like in the past 10 years or so, a new company culture has arisen where companies aren't as disciplined at hiring people because it became easy and acceptable to get rid of people. This in turn created a culture where employees feel disposable, and at any given moment they could be replaced. As a result, people no longer feel loyalty to the company. Combine that with the general Gen Y culture, and you get a generation of job hoppers.

    That said, I think the point still is, there's value in sticking around under the right circumstances, and there is negative value in a resume full of short stints (because of perception, not always reality). Just cause a company isn't loyal doesn't mean you should go ahead and hurt your own career. People need to figure out what they want to make out of their career, and align their decisions based on achieving that goal. If a high salary is what you need, then hopping jobs will probably get you there (but you will be capped). If you want to start your own company, or really have a standout career, then the experience and network is what you need, and you don't get that from job hopping.

  • http://influads.com/ damiansen

    Same feeling just inverted :)

    You haven't tried Portugal, my home country :) Same context roughly though… (lots of people thought it was Spain a few years ago)

    And yes, inviting business contacts -specially when from abroad- into a more personal context like family dinners, weekend in the country/beach house and others instead of a business dinner is the way :-)

    I'll never forget when my grandma once hugged and kissed a business partner i had, talking to him in portuguese as if he spoke the language and as if he was just one more of the family… lol, funny and at the same time so honest, simple and… easy (?)

  • http://influads.com/ damiansen

    Same feeling just inverted :)

    You haven't tried Portugal, my home country :) Same context roughly though… (lots of people thought it was Spain a few years ago)

    And yes, inviting business contacts -specially when from abroad- into a more personal context like family dinners, weekend in the country/beach house and others instead of a business dinner is the way :-)

    I'll never forget when my grandma once hugged and kissed a business partner i had, talking to him in portuguese as if he spoke the language and as if he was just one more of the family… lol, funny and at the same time so honest, simple and… easy (?)

  • davehendricks

    You've spurred a great conversation and i think we've all benefited from it!

  • davehendricks

    You've spurred a great conversation and i think we've all benefited from it!

  • http://www.linkedin.com/in/eyalgoldwerger goldwerger

    In reality, recognizing this “tipping point” is as impossible for an employee to do as it is for an investor to “time the market”. All great companies have had impossible, insurmountable, crises on the way. This is a risky business, and often times the result is not always in your hand, or even in the hands of management. You win some, and you lose some. But, if you believe in the company's market and products, then you stick with it and play it out. This is how investors make money, by taking long term positions in areas they believe in. And how employees succeed, by committing to career paths and companies they believe in. Of course, if the time comes when you no longer believe the company's vision makes sense then, no matter how well or badly it is doing, you should seek a different opportunity.

  • http://www.linkedin.com/in/eyalgoldwerger goldwerger

    In reality, recognizing this “tipping point” is as impossible for an employee to do as it is for an investor to “time the market”. All great companies have had impossible, insurmountable, crises on the way. This is a risky business, and often times the result is not always in your hand, or even in the hands of management. You win some, and you lose some. But, if you believe in the company's market and products, then you stick with it and play it out. This is how investors make money, by taking long term positions in areas they believe in. And how employees succeed, by committing to career paths and companies they believe in. Of course, if the time comes when you no longer believe the company's vision makes sense then, no matter how well or badly it is doing, you should seek a different opportunity.

  • http://bizthoughts.mikelee.org/ Mike Lee

    Thanks for the replies msuster & gmagana!

    Recruiting is an endlessly fascinating topic to me and I'm glad to see so much discussion coming out of this entry. I've been forwarding this entry around and hearing all kinds of interesting debates, much like the comments here. Thanks again for this thoughtful post!

  • http://bizthoughts.mikelee.org/ Mike Lee

    Thanks for the replies msuster & gmagana!

    Recruiting is an endlessly fascinating topic to me and I'm glad to see so much discussion coming out of this entry. I've been forwarding this entry around and hearing all kinds of interesting debates, much like the comments here. Thanks again for this thoughtful post!

  • marilynbyrd

    Mark,

    You aren’t wrong. Job hoppers require much more attention than someone who has a history of staying power.

    As an executive recruiter who interviews people for a living, anyone who has a history of job jumping is going to get a great deal more scrutiny in the interview process. Of course, if their career history is going to pass the red flag test, they should expect this and support it with a great personal narrative and dynamite references.

    Aaron Patzer, the founder and CEO of Mint.com said about hiring that “the why is always more important than the what.” You can identify patterns in a person’s career evolution by asking Why did you choose to take that job? Why did you choose to leave?

    I interviewed a candidate earlier this week who had a choice between the MBA programs at Harvard and Columbia. She chose Columbia because she thought their program would better address what she was missing from her knowledge base. Throughout her career, she made similar choices, always seeking to learn something she didn’t know, reaching for the challenge. That single pattern told me volumes about who she was.

    She was not a job hopper, but I find that patterns in job hoppers are pretty easy to identify and are great indicators of why you should or shouldn’t beware.

  • marilynbyrd

    Mark,

    You aren’t wrong. Job hoppers require much more attention than someone who has a history of staying power.

    As an executive recruiter who interviews people for a living, anyone who has a history of job jumping is going to get a great deal more scrutiny in the interview process. Of course, if their career history is going to pass the red flag test, they should expect this and support it with a great personal narrative and dynamite references.

    Aaron Patzer, the founder and CEO of Mint.com said about hiring that “the why is always more important than the what.” You can identify patterns in a person’s career evolution by asking Why did you choose to take that job? Why did you choose to leave?

    I interviewed a candidate earlier this week who had a choice between the MBA programs at Harvard and Columbia. She chose Columbia because she thought their program would better address what she was missing from her knowledge base. Throughout her career, she made similar choices, always seeking to learn something she didn’t know, reaching for the challenge. That single pattern told me volumes about who she was.

    She was not a job hopper, but I find that patterns in job hoppers are pretty easy to identify and are great indicators of why you should or shouldn’t beware.

  • marilynbyrd

    Mark,

    You aren’t wrong. Job hoppers require much more attention than someone who has a history of staying power.

    As an executive recruiter who interviews people for a living, anyone who has a history of job jumping is going to get a great deal more scrutiny in the interview process. Of course, if their career history is going to pass the red flag test, they should expect this and support it with a great personal narrative and dynamite references.

    Aaron Patzer, the founder and CEO of Mint.com said about hiring that “the why is always more important than the what.” You can identify patterns in a person’s career evolution by asking Why did you choose to take that job? Why did you choose to leave?

    I interviewed a candidate earlier this week who had a choice between the MBA programs at Harvard and Columbia. She chose Columbia because she thought their program would better address what she was missing from her knowledge base. Throughout her career, she made similar choices, always seeking to learn something she didn’t know, reaching for the challenge. That single pattern told me volumes about who she was.

    She was not a job hopper, but I find that patterns in job hoppers are pretty easy to identify and are great indicators of why you should or shouldn’t beware.

  • marilynbyrd

    Mark,

    You aren’t wrong. Job hoppers require much more attention than someone who has a history of staying power.

    As an executive recruiter who interviews people for a living, anyone who has a history of job jumping is going to get a great deal more scrutiny in the interview process. Of course, if their career history is going to pass the red flag test, they should expect this and support it with a great personal narrative and dynamite references.

    Aaron Patzer, the founder and CEO of Mint.com said about hiring that “the why is always more important than the what.” You can identify patterns in a person’s career evolution by asking Why did you choose to take that job? Why did you choose to leave?

    I interviewed a candidate earlier this week who had a choice between the MBA programs at Harvard and Columbia. She chose Columbia because she thought their program would better address what she was missing from her knowledge base. Throughout her career, she made similar choices, always seeking to learn something she didn’t know, reaching for the challenge. That single pattern told me volumes about who she was.

    She was not a job hopper, but I find that patterns in job hoppers are pretty easy to identify and are great indicators of why you should or shouldn’t beware.

  • http://www.victusspiritus.com/ Mark Essel

    Bullseye comment.

    The combination of a long term position and sticking it out is weighted against the risk of not being in the top 3-4 businesses in a market when the dust settles. As founders we get a few chances in a lifetime to make a huge success and there are numerous events outside of our control. Something as simple as seed or angel funding happening a few months too late could be a critical turning point for a startup.

    From a technology standpoint seeing the patterns spiral into popularity is fascinating. What looks like smoke becomes a blazing firestorm astoundingly quickly.

  • http://www.victusspiritus.com/ Mark Essel

    Bullseye comment.

    The combination of a long term position and sticking it out is weighted against the risk of not being in the top 3-4 businesses in a market when the dust settles. As founders we get a few chances in a lifetime to make a huge success and there are numerous events outside of our control. Something as simple as seed or angel funding happening a few months too late could be a critical turning point for a startup.

    From a technology standpoint seeing the patterns spiral into popularity is fascinating. What looks like smoke becomes a blazing firestorm astoundingly quickly.

  • http://blog.earlh.com Earl Hathaway

    Two things, Mark: first, your incentives as an owner, not a worker, are far different, and second, both you and your coworkers and your VCs were all lucky enough to as a group discover other people worth trusting. It's that second point that I think you didn't see in your first two posts. This is a hard thing to find, even harder than evaluating during an interview if someone will be a good employee: how do you figure out, in the 90 minutes you meet someone, if they will screw you if given the opportunity or be generous or be somewhere in the middle? I'd say it's impossible; you can really only make that determination with time and exposure to someone. Part of the reasons I've left a job is finding that the people I worked for were untrustworthy, but I really don't know how I was supposed to find that out before working for them. And yes, I would love to find an awesome boss that I trusted and work my ass off for him or her. Unfortunately, that's a two way street and harder to find than I think you realize.

  • http://blog.earlh.com Earl Hathaway

    Two things, Mark: first, your incentives as an owner, not a worker, are far different, and second, both you and your coworkers and your VCs were all lucky enough to as a group discover other people worth trusting. It's that second point that I think you didn't see in your first two posts. This is a hard thing to find, even harder than evaluating during an interview if someone will be a good employee: how do you figure out, in the 90 minutes you meet someone, if they will screw you if given the opportunity or be generous or be somewhere in the middle? I'd say it's impossible; you can really only make that determination with time and exposure to someone. Part of the reasons I've left a job is finding that the people I worked for were untrustworthy, but I really don't know how I was supposed to find that out before working for them. And yes, I would love to find an awesome boss that I trusted and work my ass off for him or her. Unfortunately, that's a two way street and harder to find than I think you realize.

  • Loyalty

    The post was about employee loyalty, not about whether founders/investors should stick with a business through adversity. Investors and founders generally make the majority of money through equity, employees generally make it through cash. Thus, employees use a totally different equation than founders/investors to measure an opportunity.

  • Loyalty

    The post was about employee loyalty, not about whether founders/investors should stick with a business through adversity. Investors and founders generally make the majority of money through equity, employees generally make it through cash. Thus, employees use a totally different equation than founders/investors to measure an opportunity.

  • http://www.victusspiritus.com/ Mark Essel

    Loyalty goes both ways, as this post by Mark clearly displayed. He discusses his loyalty to his team as a founder and there loyalty to the startup. He goes on to describe loyalty to investors and followon seed funding.

    In particular I was making a reply to Goldwerger.

    I'm misunderstanding your reply, or you need to reread the post.

  • http://www.victusspiritus.com/ Mark Essel

    Loyalty goes both ways, as this post by Mark clearly displayed. He discusses his loyalty to his team as a founder and their loyalty to the startup. He goes on to describe loyalty to investors and follow on seed funding.

    In particular I was making a reply to Goldwerger.

    I'm misunderstanding your reply, or you need to reread the post.

  • http://www.victusspiritus.com/ Mark Essel

    Thanks Em, appreciate your personal thoughts here although I think you may be discounting the value of weak ties. Sometimes, a loose associate, perhaps someone you have never met in person can make a profound difference in your life with a tiny effort. We must balance our core and edges.

  • http://www.victusspiritus.com/ Mark Essel

    Thanks Em, appreciate your personal thoughts here although I think you may be discounting the value of weak ties. Sometimes, a loose associate, perhaps someone you have never met in person can make a profound difference in your life with a tiny effort. We must balance our core and edges.

  • Roman Giverts

    Mark,
    Can you talk a little bit abiut the number of employees at your first company. And of the ones you said went with you to your second company, how many is that? Also, all those that are still at salesforce, how many is that? It seems easy to treat your employees as family when theres 10. But perhaps you can comment on how to treat them like family when there are 30, 50, 100+ employees, which is I think the ranges Mahalo is in. At these sizes, it seems much more difficult, yet strong employees leaving companies this big/small is still a huge loss.

    Also, what were the accelerations for your employees when salesforce bought your company? Just wondering if perhaps it might not all be loyalty, but also vesting on a big pay day. I agree with everything you said about loyalty; I'm so loyal I've gotten my hair cut by the same lady for the past 12 years, even as Ive moved around :) . But I think what you said at the end about the long term consequences is even more important. Both in the network you build, but also understanding the true value of your equity and the development of your skills. I think people focus a little to much today's salary and today's title. If your goal is to make a meaningful 6 figure salaries, that's fine. But if you want to be retired before you're 40, and I think we all do, there's really no other choice but to get a meaningful amount of equity, at an early stage at a company that becomes hugely successful, and stick it out to help grow that company let your equity fully vest.

  • Roman Giverts

    Mark,
    Can you talk a little bit abiut the number of employees at your first company. And of the ones you said went with you to your second company, how many is that? Also, all those that are still at salesforce, how many is that? It seems easy to treat your employees as family when theres 10. But perhaps you can comment on how to treat them like family when there are 30, 50, 100+ employees, which is I think the ranges Mahalo is in. At these sizes, it seems much more difficult, yet strong employees leaving companies this big/small is still a huge loss.

    Also, what were the accelerations for your employees when salesforce bought your company? Just wondering if perhaps it might not all be loyalty, but also vesting on a big pay day. I agree with everything you said about loyalty; I'm so loyal I've gotten my hair cut by the same lady for the past 12 years, even as Ive moved around :) . But I think what you said at the end about the long term consequences is even more important. Both in the network you build, but also understanding the true value of your equity and the development of your skills. I think people focus a little to much today's salary and today's title. If your goal is to make a meaningful 6 figure salaries, that's fine. But if you want to be retired before you're 40, and I think we all do, there's really no other choice but to get a meaningful amount of equity, at an early stage at a company that becomes hugely successful, and stick it out to help grow that company let your equity fully vest.

  • http://techsassy.blogspot.com/ sassyboy

    Philip, I was going to ask for exactly the same thing!

  • inboulder

    I think you're missing the point that your experience is highly atypical, and you're extrapolating myopically from this view. Most corporations are pathologically disloyal, a few are good eggs. To apply any semblance of reasonableness to an 'avoid job hopper' strategy, one needs to determine if the prospective employee move was a 'move' from a disloyal corporation, or a 'hop' from one of the good eggs.

  • inboulder

    I think you're missing the point that your experience is highly atypical, and you're extrapolating myopically from this view. Most corporations are pathologically disloyal, a few are good eggs. To apply any semblance of reasonableness to an 'avoid job hopper' strategy, one needs to determine if the prospective employee move was a 'move' from a disloyal corporation, or a 'hop' from one of the good eggs.

  • thomsinger

    It has been very interesting to read this series of posts. And the comments. It is a reminder to all who blog that absolutes cause people to get upset.

  • thomsinger

    It has been very interesting to read this series of posts. And the comments. It is a reminder to all who blog that absolutes cause people to get upset.

  • kennicholas

    Mark, I was one of those quite caustic in my comments on your first article along these lines. No doubt about that. Your 'clarifying' statemements since then make sense…I'm glad you wrote them…and make you out as far less of a Corporate Shill than it first appeared.

    That said…even here, with this post, your position on 'loyalty' and longevity is nearly pie-in-the-sky idealism, if I may. Companies can drop an employee at the drop of a hat now [and do it all the time], almost making your whole point moot.

    Now, especially in the StartUp/Media/Hi-Tech world, would many or most people prefer to stick it out at all costs? Probably a lot would *IF* they knew that sentiment would be returned. But, especially with the fragile economy now, is it being returned? Is it being felt as such?

    If that answer is 'yes', [and you discern this in your hiring process by questions, etc], and people still 'hop', THEN your point is totally valid, in my mind.

    Either way, right or wrong, you've brought up a crazy hot subject with great dialogue surrounding it, that is leaving very few of us bored right now!

  • kennicholas

    Mark, I was one of those quite caustic in my comments on your first article along these lines. No doubt about that. Your 'clarifying' statemements since then make sense…I'm glad you wrote them…and make you out as far less of a Corporate Shill than it first appeared.

    That said…even here, with this post, your position on 'loyalty' and longevity is nearly pie-in-the-sky idealism, if I may. Companies can drop an employee at the drop of a hat now [and do it all the time], almost making your whole point moot.

    Now, especially in the StartUp/Media/Hi-Tech world, would many or most people prefer to stick it out at all costs? Probably a lot would *IF* they knew that sentiment would be returned. But, especially with the fragile economy now, is it being returned? Is it being felt as such?

    If that answer is 'yes', [and you discern this in your hiring process by questions, etc], and people still 'hop', THEN your point is totally valid, in my mind.

    Either way, right or wrong, you've brought up a crazy hot subject with great dialogue surrounding it, that is leaving very few of us bored right now!

  • http://www.firmex.com/ Joel Lessem

    My business partner once told me that in general “as you get older you seek long-term relationships more than new experiences”. Perhaps as you get older you realize the longer term business relationships are more rewarding than changing jobs every 2 years.

  • http://www.firmex.com/ Joel Lessem

    My business partner once told me that in general “as you get older you seek long-term relationships more than new experiences”. Perhaps as you get older you realize the longer term business relationships are more rewarding than changing jobs every 2 years.

  • http://twitter.com/emerigent/lists/memberships Emeri Gent [Em]

    Thanks Mark (Essel).

    Mark, I have never read any of the theory around weak ties assuming that this was common sense. Today I begun reading “The Strength of Weak Ties” by Mark Granovetter and clearly see that there is far more to the concept of “weak ties” than I had possibly imagined. (I've linked it below for my future reference)

    http://www.scribd.com/doc/24761271/The-Strength

    The other great pick up from today's writing here was finding out about Andrew Warner who produces Mixergy (and of course his main blog), which is via the courtesy of having read more of gmagana's other observations.

    http://twitter.com/mixergy

    I still am deconstructing whatever flew and grew out of my mind this mornings posting, though I guess should in future limit these stream of consciousness to the outer edges of Disqus which no one ever frequents (and believe me there are presently lots of Disqus accounts I have come across that apparently no one visits). I know that isn't what you had in mind when you said balancing core and edges (and that was a great point).

    As ever I shoot first and answer my own questions later but will probably catch you sometime at Victus Spiritus, hopefully I will be that much more of a refined human being by then. I have a growing list of Disqus cerebral airports that I have yet to visit, figured if I can collate over 300 destinations, I just have to visit each site once or twice a year. Easier said than done.

    BTW I have separated by personal Twitter accounts into three formats @EmeriGent @MarkZorro and @Ovurmind – which I personally find helpful as Lists. I like what Mark Suster has put together here, I am also following him on @EmeriGent and that is my alibi why I happened to end up here :-)

    See you at another port of call or at your site on my disqus cyber travels and thanks for the input (Thanks also to Gmagana below for the Seth Godin plug, Godin is good, Jiddu Krishnamurti is an even better…)

    All the Best Mark
    [Em]

  • http://twitter.com/emerigent/lists/memberships Emeri Gent [Em]

    Thanks Mark (Essel).

    Mark, I have never read any of the theory around weak ties assuming that this was common sense. Today I begun reading “The Strength of Weak Ties” by Mark Granovetter and clearly see that there is far more to the concept of “weak ties” than I had possibly imagined. (I've linked it below for my future reference)

    http://www.scribd.com/doc/24761271/The-Strength

    The other great pick up from today's writing here was finding out about Andrew Warner who produces Mixergy (and of course his main blog), which is via the courtesy of having read more of gmagana's other observations.

    http://twitter.com/mixergy

    I still am deconstructing whatever flew and grew out of my mind this mornings posting, though I guess should in future limit these stream of consciousness to the outer edges of Disqus which no one ever frequents (and believe me there are presently lots of Disqus accounts I have come across that apparently no one visits). I know that isn't what you had in mind when you said balancing core and edges (and that was a great point).

    As ever I shoot first and answer my own questions later but will probably catch you sometime at Victus Spiritus, hopefully I will be that much more of a refined human being by then. I have a growing list of Disqus cerebral airports that I have yet to visit, figured if I can collate over 300 destinations, I just have to visit each site once or twice a year. Easier said than done.

    BTW I have separated by personal Twitter accounts into three formats @EmeriGent @MarkZorro and @Ovurmind – which I personally find helpful as Lists. I like what Mark Suster has put together here, I am also following him on @EmeriGent and that is my alibi why I happened to end up here :-)

    See you at another port of call or at your site on my disqus cyber travels and thanks for the input (Thanks also to Gmagana below for the Seth Godin plug, Godin is good, Jiddu Krishnamurti is an even better…)

    All the Best Mark
    [Em]

  • http://www.victusspiritus.com/ Mark Essel

    I hadn't read Mark Granovetter's work, I'll throw it on the growing digital pile of backlogged stuff I want to read. Thanks!

  • http://www.victusspiritus.com/ Mark Essel

    I hadn't read Mark Granovetter's work, I'll throw it on the growing digital pile of backlogged stuff I want to read. Thanks!

  • capcounsel

    I remember how our junior EEs at my 1999-2001 dot.com became “mid-level” within 7 weeks and demanded (and got) big raises because of how valuable they now were on the open market. I remember how only 7 weeks later they were “senior” and again demanded raises because now they were even more valuable on the open market. When we implored them to be patient and let us have a little of the value they had gained by learning on the job at the company before holding us hostage for more money, they laughed.

    Loyalty is something that comes from within. A sense that you actually need to give something is a character trait. Both are (strangely) rather rare. The engineers above were loyal in their minds because they gave us a chance to keep them, I guess….

  • http://www.capitalistcounsel.com Lee Weinberg

    I remember how our junior engineers at my 1999-2001 dot.com became “mid-level” within 7 weeks and demanded (and got) big raises because of how valuable they now were on the open market. I remember how only 7 weeks later they were “senior” and again demanded raises because now they were even more valuable on the open market. When we implored them to be patient and let us have just a little of the value they had gained by being paid to learn on the job at the company before holding us hostage for more money, they laughed.

    Loyalty is something that comes from within. A sense that you actually need to give something is a character trait. Both are (strangely) rather rare. The engineers above were loyal in their minds because they gave us a chance to keep them, I guess….