This Company’s Compensation Cycle Takes Five Minutes with Rowan Savage

Speaker A: Foreign. Welcome to the foundation series, your deep dive into startup compensation with industry leaders from across the startup world. Join me Matt McFarlane, a people operations leader turned compensation specialist as we uncover the strategies and practices driving success in tech startups around the world. Hear insights from heads of people, founders and experts as we explore how to build robust compensation frameworks that not only fuel growth and retention, but do so in the dynam startup environment that we

Speaker B: all know and love.

Speaker A: Let's get into it. Today I'm speaking to Rowan Savage, a tech founder and serial entrepreneur who believes in winning by assembling the best talent and alleging them to excel. Now Rowan is the former CTO and co founder of Run in New Zealand and we talk about some of the unique practices he helped implement for building a high performance engineering team. We talk about how he turned recruiting on a TED to attract top 1% talent, implemented four day work weeks and pay transparency, as well as some very unique pay practices that kept turnover at 0%, had a 100% net promoter score and resulted in annual pay reviews taking less than five minutes instead of weeks or months. Let's dive into it. I'd love to start, I think this conversation by just kind of taking that step back and understanding I guess some of your philosophies, like some of your approaches, some of the things that come to mind for you when, when you think about your role as a, uh, like as a CTO and how you think about teams and performance and people and those sorts of things first. And then we can, we can dive into some of the crazy stuff you've done around pay and other other things later. But yeah, let's kick things off there.

Speaker B: Yeah, so I think it's something that's always been interesting to me is like, how do you get the best performance out of people? How do you kind of retain people and keep people in your organization? Uh, you know, from my own perspective, I was involved with unions like early on in Australia, right. So like it's very kind of progressive, like how do we support workers? Um, long before I became a founder. Right. Um, and so that's been in the back of my mind. And one of the things throughout my career was that I never stayed in a job very long. Right. Um, and I felt personally that I was a high performing employee that people probably wanted to retain and yet they weren't able to retain me. Right. And so when I was thinking about my own company, I'm like, well, if I were employing the younger me, uh, the older me, like how would I keep Me in the organization, you know, what is it that made me leave? What was the policies that uh, made it so that I had to choose to leave? Normally it was just equip rather than to go to another job or more pay. Um, and so I wanted to make something. It's like, okay, how do I get a person at my level or better and keep them within the organization? And so right from the beginning when we talked about uh, founding Run and when I was asked to kind of join as a cto, that was on my mind was I knew a bunch of amazing engineers out there and I wanted to know how I can get them as part of my team to build our company and to build our product. And I thought not just about what I need, but I actually reached out to a few of them, like some of the best people I'd ever worked with or wanted to work with. And I was like, hey, like if I'm starting this company, how can we get you to join the company? What's important to you? What should we focus on? And that was kind, the buildup. And so, you know, I have an email actually that I sent to my CEO, um, when he asked me to join and it actually says very little about like technology or anything like that. It's basically laying out all these ideas around how to create a high performing team and how important that is at the startup stage. You know, if you're five people, three people, like those people are really, really important. So you want to make sure they're the right people. So I come from that thing of like, how do I build this really high performing team? That's number one. And then from that hopefully everything else kind of starts working itself out.

Speaker A: Yeah, I love it. Is that something that, so you've still got a copy of that? Is there something that like, I don't know, you've open sourced or anything or would it be something that you'd be, you'd be comfortable either anonymizing and sharing or you know, editing.

Speaker B: And I mean I haven't had the email, uh, still I'm actually looking at, on my, on my screen. But um, you know, it's just a bunch of like things that ideas that we had. Right. And a lot of these ideas, um, were implemented at run. Some were implemented run, some took a long time to implement at run. Uh, and you know, it was just a, ah, it was more of this idea of like, this is how I think about running a company. This is what I care about. Right. This is how I think you create high Performing teams. And I came at it from a perspective where I had never really managed anyone before. So I'd been a technical lead in teams before. Uh, and I'd actually started two companies previous. Uh, but we just had like equal co founders kind of in these companies and never progressed. Right. So I was someone who had no manager experience and never had, uh, to manage people, never hired people other than being part of, you know, an interview panel, never worked in HR or anything like that. Uh, and yet all my ideas related to people and culture. Like that is what I saw as the most important thing coming to this, even as a technical person.

Speaker A: Yeah, I love to hear that. I mean, obviously as a, as a former HR person who, you know, sometimes it felt like you really had to try and build, buy in for a lot of the things that it sounds like you just naturally kind of came to the table with. Um, I'm curious how you found your partnership with like the lead in HR in that sense. And like, where did, what, what did you see their role then in helping kind of bring that vision for this workplace to life?

Speaker B: I think because RUN had someone like myself who was so keen on this and important this. You know, we were, we were almost 50 staff before we hired like, uh, a people person within the organization maybe, maybe 40, um, and many years into it. And so, uh, you know, it was something that we felt we didn't actually need this kind of external person to come in because things were working well. Um, and so I didn't really think about how to get HR involved too much. What I did think about is I didn't want to spend much time on it. Right. Like, I realized that building the product and launching is really important. Um, and so I didn't want to have to worry about, uh, things like negotiating pay all the time or worrying about almost too much or like, uh, what is legislation in certain things. Like, so we just tried to, to optimize for like how do we make it easy and assume that we're going to get a lot more benefit by just making things better than the standard. Right. So let's just go above and beyond by default and then hopefully people are happy. And hopefully we don't have these discussions and found that to be true for a very long time was like just by going above and beyond these discussions that uh, HR managers often have to spend all their time in engine, it just didn't come up. You know, they're maybe the discussion around, uh, Pay It Run, which we're going to later. Like, I just didn't have that discussion. Like, it just never really occurred with any of my stuff over, you know, six years at run, um, and including in the hiring process, it almost never came up. You know, designing things deliberately to be like, okay, we're going to do something really good. We know it's going to be good, we know it's going to incentivize people to join, um, and we know it's going to be better in other places. People just accept that, like, yeah, this is great done, uh, and they're willing to just go with it without having those arguments that might come off otherwise.

Speaker A: The law exists as a backstop for the rights or needs of people. And so when you can be above and beyond that, it's really interesting how much that kind of eliminates a lot of the risks and issues that come with a business and with employing people and those sorts of things. So it makes a lot of sense. And I'm really curious about, you know, you kind of mentioned that early on, um, you know, you had this kind of idea of wanting to hire great people and your process was really like, what, what things need to be true for that to happen. I, uh, come up against this. Not, not against this, but it's such a curious point whenever it comes to the topic of pay, that a lot of companies get worried that this like unrealistic wish list is going to come out or something like that. I'm curious to hear how that process went for you. Like, was it just with pay? Was it with other things? Like maybe, maybe there' an example conversation that you can recall that uh, can give some context.

Speaker B: Yeah, so let's go into that a bit. Um, and I think one thing that comes up when I talk to other, uh, people about this and other founders and stuff is like, okay, you know, this hyper progressive, uh, employee friendly person, you know, like this is what you care about. Um, and you know, our leadership team did this thing called disc, uh, which, you know, I don't know how bullshit it is, but you know, something that kind of measures like how you sit on this thing of like, how much do you care about people, how much do you earn whatnot. Um, and within the leadership team, and at this time, I think we had apmo each team, I was by far the most results orientated. Right? Like I cared about getting results. It wasn't that I was a caring person or anything like that. I focused on like, how do I get results? What is, what is going to do that? Um, and so that's where a lot of this philosophy is. Born. It's not like I want to do, uh, it just to be nice. I think it's a bonus. I like, enjoy that part, but I want to get results out of it. And so when we had this kind of discussion early and when I said to other people, for me personally, I, uh, think that happy and engaged people are highly productive people. Um, and companies focus so much on trying to uh, improve efficiency within the organization. And one of run's main product was about improving efficiency in organizations, right? And you talk about like, how we can be 3% more efficient, 5% more efficient, 10% more efficient. Right. Even with AI, if you're 30%, 50% more efficient. And what I actually believe is that if you can get like highly talented, highly engaged people, you can get, you know, twice the efficiency of an of or twice the productivity of the average person and three or four times the productivity of someone who has low engagement. So if you optimize to making sure people are engaged and happy, like, that gives you so many benefits later on. And it's worth spending the time, energy and money to kind of do this. Right? So right from the beginning at run, uh, New Zealand, where we're based and headquartered, like, we have this policy builder of like, you can build your contract employments. And so we went through and did that and then we took the time to rewrite that entire thing, went through everything point by point and went, you know, looked at things, said, okay, can we do better? You know, example of that is, uh, I'm from Australia, like yourself, Matt, originally, uh, in Australia at 20 days of sick leave by default. In New Zealand, at the time there was five days. And so we're like, well, it works in Australia. Just, just make it 20 days. We'll just make it 20 days in our company. Is that going to hurt us? Well, it doesn't hurt all the Australian companies. It didn't hurt back then. Why don't we just do that thing? Um, you know, we looked at things that kind of, uh, annoy people within the contracts, right? And talked about like, okay, if we're going to, uh, you know, let go of people for performance reasons, let's make sure that it's about performance in there and not just have some other things like, uh, you know, I don't know, we remove the drug testing policy, for example. Right. It's like, if you formally don't care what you're doing outside work, I expect your performance. We have clauses about performance. That's what I'm caring about. I'm not going to Put in all these other things. So we took the time and energy to do it right the first time. You know, we didn't just copy and paste. Um, and that allowed us to build something that we were proud of and happy and happy to show and share and kind of be open about. Um, so I think those conversations around how much more productivity you can get from getting the right people and then we're a startup, the smaller company you uh, are the more important every individual is. Right. So if you have four people in your team and one's underperforming, that is terribly bad your performance of your company. Right. And so right now when you're smaller anyway, you should focus more energy on getting the right people. And if that means more money, like pay more money, uh, you know, personally I prefer to pay twice as much to get a really highly talented and motivated people than get two kind of average people at a lower price. Uh, not just because of the output I get, but because smaller teams perform better. Like that's the less people you have communicating, the less crossover you have. That is a better thing. So spend that time and energy early on as much as you can, uh, to do that. And when you are limited, uh, by money, which many startups are, what else can you do? What can you do that's non monetary, that gives benefits. Right. What about your leave? What about flexible work policies? What about shorter work weeks? Like all these things should be coming to your, your arsenal. Like what can we do to attract and retain these, these talented employees?

Speaker A: Yeah, yeah, I hear you. And so where a lot of the policies that came up, um, I guess developed by virtue of some of these conversations with this consultation with, you know, ultimately this, this Persona of a high performer that you're looking to bring into the business through discussion with them and saying, you know what, what things need to be right for you to be here and be successful. Was it, was it through that kind of channel that you were then able to, to create some of the policies that existed?

Speaker B: Yeah, so that's right. So like um, and some of them didn't come up. Some of them my own personal things. Right. So when you talk about paying people or when you talk about employing someone, the end of the day like pay is kind of the number one thing. Everything else to be trade off. So you can lower pay because of you going to Rocket Lab and you get to make spaceships.

Speaker A: Right.

Speaker B: And you can like trade the. That's really cool. But at the end of the day pay is still like there as number one. And then you can bring it down enough and kind of move it based on all the other benefits you have. Um, and some benefits, you know, working on rockets, like you get amazing people. Uh, you're doing a productivity SaaS company for B2B. No one cares. And you don't have a product yet. Like, it's not that excites people. You can excite them a bit around the startup and everything, but there's lots of startups out there as well. Um, and so we're looking at like, okay, so first of, let's just talk about what do we have to kind of pay someone to get them from where they are and where they are. People who are working at places like, you know, GitHub, you know, they're remotely or they're Atlassian or Canva. Like that's the level of talent we want to be able to bring to us. Uh, we're not looking at like what is other necessary startups employing. We're looking at like what is the top level and what do we need to get to attract them. Um, and you know, one of the things that came up a lot is people just don't know, I don't know what the salary is going to be at this job. It just says a bunch of stuff on there. Right. And I have no idea if I should bother applying. And I worked at Atlassian. Uh, I know I get paid well, so I'm not going to bother applying. And so we're like, okay, if we're going to actually bring our salaries up to anywhere near that level, right. We should just tell people immediately on the front page like, this is the salary that you will get. So suddenly they go, oh, that is, that's something that's interesting. Me, I could work.

Speaker A: You're preventing them from kind of, yeah, self, self selecting out because they go, they just assume by virtue of who you are and your brand that you're not going to be able to afford them. So it just takes it off the table as a, as an eliminating factor.

Speaker B: Yeah, exactly.

Speaker A: Right.

Speaker B: You want to, you want to attract people and Run was started in um, late 2018, but kind of in our growth stage. You know, we're going through the pandemic time when everyone is demanding talent. Right. It's the hardest time to hire and for developers, engineers in the kind of history. Um, and we need to be able to somehow attract them. And we knew, you know, like, I know you're big on transparent pay and if you pay chip or terribly like that's being transfer and pay isn't that helpful, right. I think you're probably still do it because it's going to eliminate the people who wouldn't take the job anyway and save you time. But the better conditions you offer, the better pay you offer, the more you can be around transparency. And there is always these things, oh, we can't match this salary because, you know, that's a big company. And for me it was like, let's just have less people and just like get the people that we want. That feels more important to me than hiring. And you know, I think if we had hired at some of the other startups I know in New Zealand, pay level, we could have had a team that's twice as big. I don't think we were anywhere near as efficient as we were.

Speaker A: Yeah, it's so interesting. I want to, I really want to dial into because I think that there'll be, there'll be people that are conflicted about this. Um, because I think with conventional startup wisdom is that you really need to play up, you know, your mission and your product and the kind of thing you're doing. And your sort of thesis is actually if you're not building rockets or something that's like thoroughly exciting to a broad selection of, uh, the population, you really need to start thinking about how you can dial up in other ways. Tell me a bit more about that and kind of like how you think that changes or should change, I guess the employee value proposition of a company that is making something that I don't want to say boring, but it doesn't really light people's fire so much in the conventional sense. Um, what's kind of a roadmap or a path they should take to try and offset that.

Speaker B: Yeah. So I mean, if you're in Silicon Valley, right, And that's where your company is and that's where you start. You, you have these major success stories of people who got esop, right. And so this is kind of a big motivator, uh, in countries, uh, well, in Silicon Valley, right, Is you can literally talk to other people who've made tens of millions of dollars by being, uh, an early employer to start up. Um, in Australia, you know, there are a couple of those, you know, if you got early employees, ah, at Atlassian, for example, you know, they've done really well, but there's not many examples. And then in New Zealand we have even less examples, right. Even places like zero, because they list on the stock exchange so early, like the early employees who had standard esop, you know, did okay, did fine, but you know, you're not walking around with all these uh, super wealthy people who did really well. Yeah. So the, the idea that like, hey, ESOP is a thing that kind of trades off I, uh, don't think works as well in New Zealand. And that was my kind of, uh, that was my opinion that formed by talking to people. Right. And asking them about that. Um, I put value on esop. I put uh, a lot onto it. But I also know all the horror stories. Right. And that's actually what I heard more of is I reached out to people and they'd be like, yeah, I have this horror story where I paid this huge tax bill, uh, and the whole company collapsed and I lost all my money and it was a terrible thing and I hate ESOP now. Right. Um, so I think we kind of lose that leverage. Ah, uh, a lot. Um, we don't have that same kind of excitement and growth that we get in Silicon Valley. So most people who are looking at startups are ah, often looking at other companies that aren't startups as well. A lot of them don't even know about esop. And so you need to kind of come on terms that match that. I think that generally people like startups and so they will take uh, some sort of pay cut to go there, but it's not necessarily that significant. Um, and so we thought paying conditions was what's going to attract people. And that's what everyone kind of said. Like that's what I care about. They do care a lot. I found people care a lot about like, what is it like to actually work there? Right. Like that is really important. But I'm, um, yet to really find anyone who can judge that from the outside. You know, what is it like to work there? I don't know, I haven't worked there. Unless you happen to have someone who's already employees, a friend there who can really give you insights. Like you're just taking someone on the word and people have been burnt too many times. The amount of times you hear like, oh, it's so flexible and family friendly and all this stuff. And then you go there and it might not. And so you have to, I leave with like, well, what is in your contracts? Like what does it actually say that, that you get, let's start with there. And that makes people incentivize to go, oh, well, maybe I should trust this company. They're doing all this cool stuff. I feel a bit more trust towards them when they say, hey, you get autonomy or you get flexibility.

Speaker A: Yeah, I hear what you're saying, and it's really like, I'm impressed to be honest, with the detail to which you went to, to ensure that that was true of, of the many touch points that an employee would have with the company. So you're right. Like a lot of companies would just go, we just need a contract because we just need to start hiring people. It doesn't really matter what, because it's just something that people look at once, they never look at again for the, you know, two, three, four, five years that they're here. Um, so we don't, we don't consider how that is actually an impression. And as you were saying it actually I still remember early on in my career being so intimidated reading uh, an employment contract because it had a lot of that real harsh legalese, you know, do this, you're fired, do that, you're fired, do this, you're punished. Like you know, real black and white type stuff. And um, and I just remember being like, oh my God, like is this normal? Um, and it can be jarring, I think, especially if by the sounds of it, you know, and you've got like a culture of hey, where you know, we're, we're employee centric and we really care about, you know, you and your success here and things like that to then receive that document. Arguably those sorts of companies are harmed more by not having that attention to detail. Um, so it's incredible that, yeah, that you know, you kind of thought about it, I guess in terms of the employee journey. And it's like, what are the different things that people, or the ways in which people uh, touch your experience of business and how can we make sure that it aligns with this vision we have, uh, for an employee centric, high performing, high talent workplace.

Speaker B: Yeah. Like the, the thing is that most um, most normal employees, like most average employee, like they read it and they just accept it. Right. I personally wasn't like that. I was someone who kind of read through contracts, had the same kind of scared things as you and that's why we removed a bunch of stuff. Um, but if you're looking for kind of your, the top talent that you can hire, right. These people have multiple job offers and stuff. I said no to job offers because of what's in the contract, because I can get another job. Like that's not a problem. Right? You're, you're removing the people who you want the most by kind of making things hard or complex or putting uh, weird cause in the contract and all that type of stuff. So you know, we're really. You want to really focus or we want to really focus on, like, how do we get that kind of top 5% on people? What do we need to do to kind of make them happy? And the easiest way for me to do that was to go reach out to those. Yeah, top 5% of people I knew and be like, hey, okay, what do we kind of need to do to attract you from these other companies to come join us?

Speaker A: Yeah, I hear that. That makes a lot of sense. Okay. I want to, I want to move into a question that I certainly have. I'm assuming a lot of people listening are probably going to have as well, which is that, like, you've. You've got this vision of, uh, you know, of a workplace that attracts and retains high performing talent. How do you know that they're. That they're actually at that level? Like, what's, what's the process through which you went through identifying them through, you know, gauging their, their performance talent? And how did, how did that sort of show up throughout their, Their tenure as well?

Speaker B: Yeah. So, I mean, you go into your, uh, your hiring questions there a lot, right? Like, how do you actually hire the, the right people in your organization? Um, and so the first one is to attract a wide pool of talent, um, and actually attract it not in the number of people you get, but the quality. Right. Of people you get. So, uh, one of the things that, that I did for my job ads is I never post them on the job boards, right. Uh, I posted on my personal LinkedIn. Uh, our staff would post them on their personal LinkedIns. We'd go to Slack channels like, we go to meetups. We'd do things like that. Um, and so we were getting very little, kind of, I would say, like, the noise. Right. Of people applying for your job. Like, the people who were applying were like, in these highly targeted audiences. Um, we managed to get a large amount of people because of what we were able to offer and the issues we were able to have. Um, that, you know, that that was really important. It's like, okay, so let's get the right talent, uh, in place so that we can actually have a selection to figure out who's going to be right. Uh, we, we don't, like. I don't think there's a magic bullet, right? I'm like, how you can make sure that someone is, is a great person or a great fit or has the right skills that you need. Right. Uh, what I would say is we were, like, very deliberate. We were very detailed and we invested a lot of time and energy into our hiring process. Right? We saw it as kind of like for me, the number one priority for me in hiring people in the engineering team was hiring, getting the right people. Because I felt if I got the right people, I can kind of step back and do other things and focus on other parts of the business and allow them to run. So spending a lot of time and energy on that. Right? Um, we talked about how we write job ads. So one of the things I see, uh, actually goes back to your point about like talking about your startup. There's a lot of job apps. Like, here is the startup we are, right for run. And it's like, okay, we do resource management for B2B SaaS company, right? So it's kind of boring, but we want people to know that, right? So normal would start with that. Then they would go into like, these are all the things we want you to have. So like, these are all the skills and everything you have. And lastly, like, here are the conditions. You know, we're a flexible workplace. You know, we pay above average or whatever it is they say I treat it like an ad. So the first thing I was like is like, what would make someone look at my ad? What would it make someone actually read anything? Okay, well, let's talk about the pay run, how to day work week. So next to our four day workbeat, let's talk about all the cool things about working here. Then let's talk about like what the actual team environment is like. So for us, how we ran the engineering team because a lot of engineers liked how we did that, right? So let's actually talk about that. Um, then we talked about all the kind of, um, like, what is the company and stuff. And finally like, what do we actually need with it? So we wanted people to be attracted, be like, oh, this seems interesting. I'll read more, I'll read more. And at the end, like, okay, how much of this criteria kind of do I match? Does this seem like the job to me? Um, so that was like a way that we wrote ads. It got more eyes onto this. Uh, I'm not a, uh, LinkedIn influencer, uh, uh, like yourself, Matt. Uh, but my job ads, I've got a screenshot here. It's like 15,000 views. You know, like, it got mass appeal just for me personally posting, right? Because how it's written, it got, you know, dozens of shares across. It got posted in other people's slack channels. Like it got. Because it was well written, have good conditions, right? And it's the right thing. So, yeah, getting the eyes on it. Um, when you talk about like, what is a process, We've tried a bunch of different processes, hiring engineers, and we had a, had a bunch of setups. We experimented with different technical interviews and stuff. At the end of the day, I really just felt it was FaceTime. It's like, how much have I got to speak with this person, how much I've got to learn about them, how much I got to know about them, me and other staff members who are doing it.

Speaker A: Right.

Speaker B: Like it was a FaceTime and for people to come awakened up being like, wow, I really want to work with Matt. Like, he'd be great when things are hard, when things are stressful. Like, he seems to know what he's talking about, he's friendly. All the things that make me say, hey, this is a person I feel like working with. That is what was most important and avoiding kind of any red flags. It wasn't how well did someone do on a technical test or how well did they answer these questions. We just want to come away with this feeling like, wow, I want to work with this person. They impress me. And the only way I could really do that was spending time with them. And so we had quite a long interview process, like in terms of time. But we always made sure that you were at least one to one with someone. So like, every, say, every minute you spend with us, we would spend on you as well. Uh, and a lot of times sometimes you have group interviews and you have more than that. Right. So there's no, like go do a 10 hour take home test or anything like that. Right. Like, if you're doing something, you're doing it with a person. We're giving you our full attention full time. And that's what we wanted because we wanted to know about you and how you work together and the type of situations. Um, so I would just say giving, like being really deliberate in what you're doing and spending a lot of time, energy is what makes, uh, the best chance of getting the right person, uh, in your team.

Speaker A: Yeah.

Speaker B: All right.

Speaker A: There's a lot of things I'm keen to dive into there. I mean, let's, let's start with that last one there. Because I think being the LinkedIn influencer

Speaker B: that I have, a lot of the,

Speaker A: a lot of the content I see on LinkedIn, the popular content is, you know, short and fast, uh, recruiting processes, as few, you know, interviews as possible. That that kind of tends to be, again, conventional wisdom. And it sounds, you're kind of going actually, you know, for us, what worked best in, and again creating this high performance workplace was we had this process for just getting them, you know, interested and we'll touch on that in a second. But when we actually went through the process of assessing whether or not they, you know, were kind of that had that merit, had that bar raiser, uh, ability, it was, it was dedicated one on one time with our team to get to know them better. Ah. Um, and it sounds like that happened over, over a few sessions. What was, what was the effect of that? I mean obviously you were still able to hire high performance. Um, how did it go on the candidate side? Was there a lot of pushback? Did you see drop offs?

Speaker B: Yeah, great question. So I understand as a candidate who goes through, you want things to be fast, you don't like all these tests. Um, and so I think there is two things that kind of work for us. So one attractive place to work, right? So make yourself an attractive employer and people are willing to spend more time and energy through your process. Right. Um, and so I think they were compared to another job which maybe uh, was more standard, you know. And they're applying to six jobs and all those six jobs, like, yeah, I just want any of those six jobs. It doesn't matter what, right? And we still got like, oh, hopefully this is kind of like a dream job that I want. Right. This is a limited uh, opportunity and I'll spend as much kind of time and energy as I need. So I think that that helps.

Speaker A: So getting them actually invested in being an employee.

Speaker B: They want to join the company, right? So like whatever it is that makes it so you want to join the company. Like a generic, a generic job, a generic kind of like company type of thing, you know. And there's, there's lots of companies out there where it's like I'm just going to go work, um, to just take around Fisherman pike or something, right. I'm going to be software engineer Fisherman. But it wouldn't matter if I was at IBM or if I was at Westinghouse. Ah. Or it's kind of like this similar type of job, right. And so you don't really mind as when you are able to offer unique value propositions, people go, oh, this is, this is the only place I'm going to get something like this. Right. And that comes into all our rest of the policies to make as attractive place. Um, the thing that I find a lot of engineers anyway hated about like long interviews is the fact that you asked them to do something for a long time and you invested nothing. So hey, go take this online test. It's going to take you three hours, right. And they go and do that and then they get some score out of it. Right. And they hated that because they're giving you all this time and you're not giving any of your time. Right. I'll, uh, take this project home and go do the work on it. Right. Um, you know, and someone would go and they'd invest time and their own energy and they might not hear anything back. And so for us, uh, right from day one, right from like the first time I spoke to someone actually in the job ad, we talk about the interview process, right. Uh, we talk about what it's going to be like and we talk about like we're going to spend as much time with you as you spend with us. We value your time and we're proving that by spending our own time and energy on your application. Um, and to prove that, uh, I replied to every single applicant, Right. Personally replied to every single applicant who applied. Right. And that was me spending my own time and energy. Say, hey, I know you probably spent an hour or two applying, I'm going to spend at least five minutes replying and giving you an honest kind of opinion back about why you didn't progress and stage. Um, and so we kind of proved that. And I think that gives a lot of like, people appreciate that and they're much more willing to give you time. Uh, yeah, if you get someone to talk to an AI, they're not, they're probably not going to be very happy about it. Especially if it's a long time.

Speaker A: Yeah, it feels like a very one way relationship, doesn't it? I'd imagine, um, I'd imagine this would be something that is pretty feasible when you know, the size that run was you're kind of, you know, hiring one person at a time, something like that. How do you think something like that would evolve, you know, if you started to become this scaling rocket ship type thing or how do you think you'd be able to preserve some of the humanity in the process, despite potentially trying to hire 100 people?

Speaker B: Yeah. So I think that it's important that you invest the money into that. Right. So like I was able to do that as a founder and uh, you know, we hired up to 50, I think the highest, I think 6 is the most I hired at once. Right. So it's nowhere near like when you're doing a scaling, but it's still, uh, you know, that size and we're getting hundreds of applicants. Right. Uh, so if we're scaling, I would have to hire more people because I'd want them to invest the time and energy to make sure this process works really well. Whether that's uh, my employees, you know, maybe it's like my engineering staff are doing, or maybe it's like we're hiring, uh, you know, people and culture, people who are going to come and spend time doing this. Right. But if you believe that hiring the right people is one of the most important things you can do, um, then you should invest in that early. Because I found that in my experience in other roles. Right. That people and cultures spend a lot of their time on managing performance on employees. Right. Like they've all this, uh, sun cost fallacies of like they're spending all this time and energy and money on, like how do we get them performing better? How do we, uh, performance management off? How do we go and replace this person? How do we go and hire again? If you can front load all that by just spending more time and energy and investment on the hiring process, you should do that. And so that's where I'd look at. I would try and understand, okay, how many people is it practical for Matt to be able to go through this process with? Okay, so therefore, how many people do we need? Right. Um, yeah, that's kind of how I look at it.

Speaker A: Simple, logical, straightforward. Yeah, I hear you. Okay, that makes sense. So I want to then dive into the other side of the things you're talking about, which is the attraction stage of actually getting in front of these high performing talent and being appealing to them. A lot of what you described sounds pretty close to what I'd imagine most, uh, recruiters or talent acquisition people look at and go, yep, that's dream stake. Right. I've got my, my engineers, they're kind of getting involved in their own community. They're, they're sort of promoting, uh, the business, they're promoting these opportunities, things like that. I'd imagine, um, what am I trying to say? You know, I'd imagine a, that there's a lot of effort on the side of the engineering team to, to be in that sort of a position to, you know, to have to go out and sort of promote it. And then it sounds like they're also pretty heavily involved in the hiring process as well. I'm curious to understand a bit more about like how, what their perspective is on it. Do they see it as one of these sort of, you know, I think you hear about the Kind of archetypical engineer. And it's obviously based on all of this assumption, but it's like, you know, headphones on, don't interrupt me. I'm just focused on building this product and things like that. So for them to come out of that environment and then focus on, hey, actually I want to talk about this workplace that I have to people that are in my network because then I get to work with them potentially. But, um, then I've also got to go through the process of having these sorts of conversations with them. How did that play out in the business?

Speaker B: Yeah, so we all, at some point we might get into like, all the stuff we, we did at run right around these gadgets, but we tried to make it a great place to work. Um, and so I want to kind of talk a bit about why we were able to get engineers involved. Why were they recommending to all their friends to come and join? Right. And so let's see if this works. I'm going to quickly, uh, share my screen. We're going to try something new, uh,

Speaker A: on the podcast, something novel for foundation series.

Speaker B: That's it. I have this, uh, New Zealand's employee NPS scores from benchmark from 2022. Um, and down here I have something around, uh, IT and technology companies. Right. What is the average ENPS score for people who don't know that? It's like, uh, employee net promoter score. And it's about how much would you recommend someone work at your organization.

Speaker A: So this is on a scale of negative 100 to positive 100, isn't it?

Speaker B: Yes, that's right. So negative 100 to positive 100. And so the average is zero. So it's like half the people are kind of like, yeah, I'll do it. And half the people are like, no. Um, and so we did a survey at that, uh, same time. Um, and this is our NET Prona score. 100. So every single person in the engineering team said they would recommend someone come and join the engineering team. Uh, if you have a net promoter score of something like that, um, you say this was. And our company size was half our company size was engineering. Right. We had the ability that we were attractive place to work. People wanted their friends to come and join us. Right. They wanted to come and do stuff with us. Uh, and that meant they wanted to be involved in how do we get the right people? How do I keep this place an amazing place to work? Now, you mentioned that, um, every, not every engineer wants to do this, right? Like, hey, cones on code. Totally, uh, So I just asked the volunteers, you know, that's why I said, hey, I need. We're going to do a hiring process. Who wants to get involved in the hiring process? And we never had a lack of volunteers from that, but we did have people who just. I don't particularly want to get involved in that. I trust you guys. I like doing my thing, and that's fine. Um, so we were lucky in that space that we had engineers from Revolt, and I think most of them enjoyed their interview process, and they want to be able to, like, pass that on as, like, hey, I want to make this interview process enjoyable for the next set of people who come in to run.

Speaker A: Yeah, that makes a lot of sense. And I guess you would see that kind of concept of like attracts, like, pop up a lot, which is that, you know, certainly in my experience, I'd imagine similar to yours, which is, like, if you're. If you're a high performer and you care about the. The level and the standard of work that's being done, you don't really want to hire just anyone or bring anyone into the team. Right. So you're probably particularly picky. Um, you mentioned as well that, you know, earlier on, it's kind of hard to make a dent in, uh, people's impression of you as a company just from advertising in the sort of traditional format. So I'd imagine you can kind of circumvent that. I know I certainly read a lot of the. I think it's the Edelman Trust Index. Every year they publish, um, how much people trust certain institutions, trust in, you know, in employers certainly is. Is, uh, is going down, like many institutions. But your ability to circumvent that fundamentally by saying, actually it's our people that are speaking to their connections. They've got these kind of warm, uh, you know, or that they're known within their community or something like that. You can kind of circumvent that, but then you. Not doing that. But you've got this, you know, this job ad, but you've fundamentally really just, like, you've reshuffled the order, right? Like, you've gone, let's focus and prioritize the things they care the most about first, the pay and the conditions, the work environment. These things that, you know, when we Talk about your Plus 100 net promoter score, these are the things that really stand out. And yes, we'll cover the other stuff that, you know, the traditional job ad covers, but it's at the bottom, so they get. They still get to know who we are. And what we do and what we need from them. But fundamentally they're going, oh my God, this sounds like an incredible place to work because you've got incredible people that have helped you shape that, that culture. Um, so I love all of that and, and I think that for me just sums up like yeah, there's, there's so much in there around like what you can do to, to, to run a really robust and, and effective um, recruitment practice. By all means. Now I'm keen to. For the last little bit of our call, I'd be remiss if we didn't start to talk about pay a bit. So we've touched on a little bit. You've talked about the pay transparency stance and the environment that you had in the business. You obviously mentioned the pay transparency was something again through the, the recruiting process that you surfaced, um, as that maybe high performers from Atlassian or Canva or some of these other kind of, you know, top tech talent employers, uh, didn't self select out. What are some of the other ways in which your pay practices were kind of formed through this vision of being a high performance workplace that maybe stood out from the norm.

Speaker B: Cool. Uh, yeah. So happy to go into like the things we did around pay. Um, and one of the things I want to, I kind of want to get into a little bit is that I don't have like a people and culture background. Right. Never worked in that space, never done, never manager. Um, and I don't read uh, you know, these reports that you read. You know, I'm not other than you, I'm not really connected to influences. Um, most of this stuff was just kind of uh, going to kind of first principles like, okay, what is important to me as an individual? Right. How am I going to make it up? It wasn't going necessarily copying uh, different organizations though. There were organizations like uh, Buffer that, that stood out as like a great thing to kind of lean uh, on. But a lot of it was just like, let's just do what we think is great and hopefully other people think that's great and some people won't and that's fine. But as long as we get like some sliver where we're really uh, the right company to work for. We used to say want to be the best company in the world for a very small selection of people and then we want to be able to find those people and attract them to our company. Right. Um, so yeah, pay. What do we do? Ah, so yeah, pay transparency. So we had paid transparency on the job ads but we had it on a website. So you could just go to the website and you could look at the careers page. And all the time it was listed, here are the salaries that we pay in our organization. Um, it wasn't like on Buffer, they have, like, the name, first names of employees. So ours was just like the levels and the roles, and you could see, uh, what someone's going to get paid. And so we did that so that at any time, not just when we're advertising, people can kind of understand what we do as an organization and all the hopefully good things that we bring. Um, and we also did it because I wanted to improve pay in New Zealand, to be honest, as well. Like, I'm from Australia. I know I go and pay a lot less in New Zealand than when I was in Australia. Right. I wanted to bring that up. And so I wanted to have this thing that people go to and go, hey, if I work to run, this is kind of where I would be. So they can have that as a negotiating point. Because at the moment, employers, uh, get a lot of power. They can see a lot of, like, how much should you pay people? How much people are paid? But individuals don't necessarily have that power. So I wanted to bring that up. So one thing, we had it on our website. Um, two, we had an exact amount. So we didn't have a band. We didn't say, like, it's from 130,000 to 160,000. It was just $142,500. Uh, that is how much you get paid when you start at run at a specific level. So we had six levels, uh, in the end at Run, I think, plus the senior executive team. Um, and they were just listed on there as, this is your starting page. And we didn't negotiate ever. And we said down there and said, not a negotiate. This is kind of just what you get. Um, we did automatic pay rises at Run. So we did two types of automatic pay rises every year. They had nothing to do with performance. Um, so one was, uh, we increased the base salaries based on kind of market conditions. Right? So we want to make sure we're always, uh, you know, we never got to top, top. We never beating Atlassian or even the same as Atlassian. But, you know, we were kind of within the ballpark. So we want to make sure we're always kind of that top 15% of employers. And then we did one based on experience. How long have you been with the company? Well, you've got more valuable company because you've been with longer, it's more important to retain you. So we want to just increase pay automatically right there. And that allowed us to separate talking about pay and talking about performance. So I could talk to people about performance and they could be honest with me. And they knew that was not going to affect their pay rise in three months. Um, not only did it not affect their pay rise in three months, but people knew forward planning what they were going to get paid as the experience increase, as well as when they go up levels. So if someone tried to poach us, they'd be like, well, you don't have to match my pay today because I know I'm going to get a guaranteed pay rise at run, you know, in six months. So I want you to match that pay. Oh, and also, I know if I get promoted and run good at promoting people internally, I'm going to be at this pay. So actually, I want you to talk way up here instead of the current level I'm at, which is where most people talk about when they're negotiating, right. They're talking about like, what is my current pay? I'll compare to that and see how much above that I am. So automatic pay rises, like guaranteed pay rises helped and that, um, yeah, having, having kind of everything posted and open, um, one of the things that we did that was very unique and we thought was going to be temporary. It lasted, uh, so far. The whole, whole time, uh, at RUN was we paid every role the same at level. So if you are a senior engineer or a senior customer success or senior marketing, uh, or senior people and culture, you got the same pay. Uh, and that didn't matter about the market conditions or anything like that. Now the reason that started was just because when RUN started we had like just engineers and then we had to hire someone. I think it was marketing was up. We had to hire a marketing person. What are we going to pay them? Oh, just pay them kind of the same as engineers. Right. Um, hopefully we'll be able to attract really, really good marketing people because we'll have such an amazing pay for our marketing. Right. And that's kind of where it started. But as we kept hiring, we kept being like, well, you know, how important is this person? Are they so important that we should hire them instead of another engineer? And if they are as important as hiring another engineer, why don't we just pay them the same as another engineer? Um, and so we managed to do this almost seven years, I think, at run, where we had everyone on the same page and it's still going now, um, but it's always been like saying, does it work? We're not sure. Something's probably going to. It might disappear, but it's worked so far. Uh, and it took like, some of the things that took away is like this idea of like, well, why does this person get paid more? I work harder, you know, what do I deliver? How do you measure that? The engineer's performance is more important than someone else's performance. Right. And we wanted that because we also pay globally the same. It didn't matter where you were in the world. We gave you the same pay. Right. So we're not adjusting based on your location. We're saying, like, the value you bring is what's important. We'll pay you based on the value. Then why are you saying, well, the value that, uh, our people and culture person is less than the value of our engineers. Right. If we didn't see it that way. And so that's something that, yeah, we managed to keep it run. I don't know of any other companies in the world that have done that. I'm, um, not. I don't know if I recommend it, but it worked and made things easy. Like, made it really easy. Yeah.

Speaker A: Gosh, there's someone's there to dive into. So it's still, uh. Even though I know this about. About you and about your experience, it's still like. Yeah, just. It's. You're right, it's novel. I certainly haven't come across many companies that are doing some of the points that you mentioned at the latter part there. So, uh, yeah, I guess, you know, for me, as you mentioned, I'm obviously an ambassador of pay transparency. I think the point that you make around, you know, and I can see where your union roots come out there a little bit with like, you've got these kind of known, quantified, uh, you know, pay path and pay progression points that people just don't have to worry about. They can. They can see what they're on now. They know that everyone sitting next to them who's got a similar level of tenure and, um, is at the similar size of role is getting paid the same. Um, they know what they're going to get in year one and year two, all these sorts of things. M. It just makes a lot of sense. And I would imagine, um, having been someone who's, you know, architected and built some of these systems that are incredibly complex and there's all these moving parts and things like that, just administratively very easy.

Speaker B: Right.

Speaker A: Uh, like, it's. It's you know, when you talk about pay review times, I'd imagine it's a pretty straightforward process for you guys. You just click a button, you go, yep, it's, you know, we've now crossed over the 1st of January or whatever. Now everyone's pays go to this bada bing, bada boom. You know, everyone, you know, what's that process like for you?

Speaker B: Uh, yeah, I mean, we did. We basically didn't have a process where it was like, oh, someone. I had an alert that someone's anniversary is coming up and we send them an email that, hey, here's. I, like, sent a personalized, uh, message that said, like, here's all the things. We want to recognize what you've done and brought to the company and here's your new pay. There was no. We never had like, this negotiation that came into about, like, how you've been doing or anything like that. We had those conversations with someone, how people are performing, but it wasn't part of the pay. The pay was just something that was automatic. Um, and so, you know, you have. You can't just do that without caring about results. You have to be willing to be like, if someone's not performing, we're going to address that. If someone continues not performing, we're going to let them go. Like, that has to be part of the process. Right, but we just don't say, like, the way we're going to incentivize that is like, we're going to negotiate at pay time on what you're getting. Right? Like, we just say, like, you're going to get the same thing. Um, I can say that, like, two things around, like knowing people around you, right? Like, where do you get paid? There was kind of pushback or conversations happened, especially, uh, when I talk to some people and culture, uh, employees at other companies around, like, but what about someone feels they're performing better? Shouldn't they feel like they're getting more rewarded than someone else? That never came up ever at our company, uh, as far as I'm aware, anyway. And certainly on the interim team, no one ever was like, oh, well, I'm doing better than this process. I should get paid more. That just wasn't a conversation. Ever cared about. They cared about, like, wow, I'm working hard with these people. I like working with these people. I know we're all getting paid fairly. Um, and I expect someone to perform at a high level. And, uh, you know, there was a lot of accountability of employees keeping youngster accountable for are they performing at the right level. But everyone's like, yeah, okay, we're all high performing employees and the difference between people is not so significant that it actually matters. Uh, it helps when you just have a great place to work as well. Right. Because people are less likely to leave. They already feel they're getting paid well. Right. Uh, most people don't want to push other people's pay down. Right. They just want to feel like, um, what I say, like you, if you're being paid less, as someone who's doing the same job in your organization, you compare yourself a lot to those other people. Like, am I doing worse? Why am I getting paid less? Was it negotiation? Is it because I'm women? Is it, you know, what is it? Right. Uh, but if you're getting paid the same as everyone else, I think you much more look at like externally, like, okay, externally, how am I getting paid compared to other companies out there? Right. And if you're paying well compared to other companies, they look back, sweet. Hey, you know, I'm getting paid well compared to it and my compatriots are great. That's nice and easy. So it just never. Yeah, it never really came up and it was super easy.

Speaker A: Yeah, it makes a lot of sense the way you talk about it. I'm curious then, like, how, how did performance show up as a process? Did you have performance like practices in place? Like, what did that look like then? That, you know, because obviously you still, you still want to preserve high performance within the organization. How did that, yeah. Manifest from either a cultural or whatever perspective?

Speaker B: When I think about the engineering team and performance. Right. Um, I mean there's a whole bunch of practices that go into what it makes to make a high performance team. Right. You can't just take one thing. Oh yeah. If you do this one thing, it works. Same ah, thing with a, ah, run. Support a workweek, like people. Oh, can we just do that? It's like, no, you have to do a bunch of other stuff to make it work. Um, but in our engineering team, uh, so we gave a really high amount of autonomy and a high accountability. Right, Right. And when I say high, ah, autonomy, I am putting it to, uh, the actual employee to tell me what they're able to accomplish. Right. So we've gone to this place where it's like, hey, we need to deliver this project and we need to deliver it by this time I want to work with you. And you kind of worked me to say, what are you going to be able to deliver in this amount of time? Um, and run was a bit Different. We kind of set times that we were going to deliver things. Rather than, um, a scope, we would be like, okay, this is the time we have to deliver it. You tell me what you're able to deliver in this time. Right. And so the employee got to say like, this is the things that I'm going to be able to do. This is what I'm going to accomplish. And I'd be like, okay, great. I'm holding you to account to accomplish these things you said you were going to do. I'm not telling you to accomplish something impossible. You're the one who told me you could do these. Right? Uh, if it wasn't enough, then maybe we have to add someone to the team, right? Maybe we have to make changes. But I wanted them to be the one who said, yeah, I can deliver this. And what that meant is when I had to kind of when they delivered the project, we could go back and look at it and say, like, how did we do against these things that you said you could deliver? Um, you know, hopefully a lot of time they managed to deliver on that. But when they did and we could start diving into what are the reasons around that? Um, you know, was it something that was in your family? Was it just, it was harder than expected. Was it some lesson that we need to change in the future? Right? What is it? And I would do it in a place where we did like these eight week cycles. So every eight weeks I got to kind of go into these one on ones and take someone into like, okay, how did we perform against? Uh, and it was fine to be underperformance occasionally. Right. Everyone kind of missed hugs and everything. But it was something we were looking for a reoccurring pattern. And when I found, when there was someone reoccurring pattern, we dive deep into it. And the best thing I could do to hold someone up was like, we give you the same conditions, the same pay, the same benefits as everyone else in it. You can look around at the other people who you're working with and see how they're performing and what they're delivering on. And I need you to be at that standard. And I'm willing to help you to be at that standard. Let's work on what's missing. Um, but if you're not at that standard, there's a lot of other, like, there's a lot of other people who want to work at run. Right? Like we expect a hype. We think I'm going to hold, hold you to that. Um, and you're not Disadvantaged compared to anyone else. We were lucky that, uh, in the engineering team it definitely came up. Uh, but most of the time it was like something unrelated to work. It was like a family issue or, you know, people being sick and all that type of stuff. And so actually the result of that was like, hey, take extra leave around that, right? So you can go and be with your family when something's happening, right? Like, yeah, go overseas to be with your father when this is happening. Let's solve it in that way and let's move you into a different situation so you're in a position where we had teams that kind of, um, did bug fixes and stuff. Right over this course of a cycle. Let's go move you into that, right. So you don't have to worry about it. And we'll give you this easier path for now and then bring you back in when you're, when you're at the. Able to deliver at your full, uh, potential.

Speaker A: Yeah, that makes a lot of sense. And, um, I know this is getting granular, but I guess, you know, how often did you find or did you ever get the sense that, um, people were either like, maybe shooting a bit too high or conversely maybe sandbagging a bit? Like, did that ever kind of come up from this process?

Speaker B: Uh, I never felt that that came up, no. Um, I think that for me, you know, I'm a software engineer by background, uh, so that was part of it. I could see what I could deliver. That also was a team, right? So a team would be for us, three people. We deliberately kept them really small. We wanted them to be small and we'd have three people in a team who would deliver a project and rarely had more than that. Right. And those three people together would come up with what they're going to deliver and then they would be holding each other to account to like, hey, we have to deliver. This is what we said we were going to do. And I think that really small, um, like intimate relationship that these teams have mean that they, you know, you're not going to let down your, your co worker and your friend who you have to deliver and you're both going to kind of, you know, get in trouble, so to speak, if you don't hit these list deliverables. Uh, and I think that really elevated the team a lot and it allowed people to come out when there was issues as well. You know, if they're not going to hit those targets, you know, they knew it's not going to affect pay. They knew that we're open and talk about we're willing to put more people on it. You know, they will be more open about like, hey, shit, we're not going to hit these targets, let's go do something. Uh, our ah, four day work week entered into that as well sometimes. Right. So I wanted everyone to do four days. Uh, I was really important that, that was like the standard. But you were coming near the end of your deliverables and you were behind. People put in the extra time and energy because they felt accountable for it. Right. Uh, whether that meant they worked five bits, whether or not they worked necessarily longer to do it. Right. I was making sure they were the one who, like, I feel that I have to deliver this.

Speaker A: I, yeah, again it just speaks to, yeah, when you can get the culture into a place where the norm is for high performance, when there is safety, when there's trust, things like that. And also I get the sense that it was like quite low on control. It wasn't this kind of like top down type of approach. It was again a very consultative, you know, what do we think we're going to accomplish in the coming, uh, you know, eight weeks, things like that. It just seems that it's, it's created the right kind of environment. All right, this is, it's incredible stuff. I know we're coming to sort of the end of our session here. So reflecting back where, you know, from a pay and conditions environment, we've got this like four day work week. We've got, you know, everyone at the same level. No matter what sort of job, family or, you know, whether it's marketing or engineering or whatever, they're paid the same. You know, no matter where in the world they are, they've got a similar sort of pay package. Last question. I want to close out. Well, maybe, maybe there's two more here, but one is, uh, you know, what were the lessons learned? What were the hard lessons that you learned as part of this? Was there one or two things where you just go, yeah, like, you know, we've done these things that are, that are quite contrary to what a lot of organizations do. Here's where the downside was to it. Um, and then we can, yeah, we can, we can close things out with tips.

Speaker B: One of the big things that we, we kind of struggled with was when we hired like senior executives into the organization and they kind of knew about, you know, some of the stuff it's on the website and everything to come into an organization where they've come with somewhere that doesn't have any of this stuff. And then we kind of just expected them, like, hey, this is how we run things in an organization. Um, and it's kind of normal and like, my team is doing it right, and they have a different team. And. And it was kind of problematic, right? Like, my team could request leave on the day they wanted to take leave, you know, as long as a short period. I was like, so we built this whole system, designed it. So we worked asynchronously. So it's not a big deal if you're not here today, uh, because something came up like, that's totally fine. Other teams weren't used to that. They didn't necessarily design that into their system. Right. Their leadership wasn't, like, fully embraced with that. And so it created these differences where, you know, at run the engineering was almost like an idealized version of this because there was a lot of my opinions, uh, and policies that I created and everything. And other teams were kind of like, trying to do their best to do it, but not necessarily, uh, hitting all those same milestones. And there's lots of, you know, reasons, uh, for that. And part of that is me not being strong, uh, enough in my leadership team to be able to help people and coach people into doing this, but also making sure the people we bring in and, uh, have this similar philosophy. Right. So at the employee level, there was very few problems really at all around a lot of this stuff. But at some of the senior leadership level, it became much more controversial. And we had these debates about what's working and what's not. And it was often like, it's working in one team and what not necessarily working at the same in another team. And how do we kind of rectify that? Um, so, yeah, that was a big lesson. If I'm doing it again, I would be really thinking about how do I form this leadership team, how do I do training within the leadership team, how do I coach in leadership team? To be like, this is the reasons why we do it, this is why we get high performance, and this is what our, uh, expectation for our managers is.

Speaker A: Yeah, it's a good lesson, I would imagine. I mean, the first thing I thought about when you mentioned that everyone, no matter their kind of job focus, gets paid the same if they're in the same, um, level is a lot of companies would look at that as unnecessary, overspend. Right? They just go, oh, my gosh, like, the market doesn't pay that much, so why are we paying that much? So therefore we're potentially, uh, clearly there's a lot of Benefits to the contrary. But, um, I would imagine at that level there would be a lot of that kind of discourse around whether this is the right practice for us, especially if you, like every company does you go through hard times or. Yeah, you just start to question some of the fundamentals you put in place.

Speaker B: So, I mean, to expand on that, one of the problems we had to, uh, deliberately try and rectify was like, oh, we can hire someone at a junior rate in our marketing team, because our junior rates as much as a senior person in another company. Right. And we're like, but their experience, you know, their level, they are a senior person. Everything we want them to come in at this senior level. Right. And so that was like a thing that came up that, that we would have to try and like, hey, is this actually junior level? Or are you getting like someone who's senior and you're just kind of like, oh, we can pay. Pay them less. Um, and so you were able to attract that, um, even with the lower, lower pay. But. But interestingly, um, one of the things is that within the engineering team, which technically relative probably to the other teams maybe, uh, other than sales, uh, is kind of like the lowest paid team in terms of, relative to their peers in other companies. Right. 100% retention over seven years. Right. Like it never happened.

Speaker A: Hard to argue with the facts, isn't it?

Speaker B: Other teams didn't have 100% retention. So this idea of like, oh, you have golden handcuffs because you're paying so much better. People left those other teams for other reasons. Right. For whatever those reasons were, it wasn't actually that much of a, ah, of a golden handcuff that people were like, oh, I'm going to stay here no matter what. Um, on that type of golden handcuffs, like, as far as I'm concerned, golden handcuff is only golden handcuff. And people don't want to be there. They like working there. If I engage with it, then actually it's just a great place to, uh, work.

Speaker A: Yeah, it's a performance multiplier, isn't it? Yeah, yeah, I hear you. All right, last question for me, Rowan, is, you know, for a lot of the heads of people, or Maybe there's other CTOs or founders that are kind of listening to this and going, gosh, that sounds like exactly what I'd love to try and emulate in some respect. A lot of the vision aligns with, you know, things I'd like to see happen in my workplace. What's a tip or, you know, or advice or something you give to them if they're, they're starting down this path.

Speaker B: Yeah, I think that it's really important just to focus on, on this stuff from the beginning. Like if you actually believe that uh, your employees are, you know, one of the most important assets or the most important asset at your company and that when you're small, that is an even greater importance. Think about like, what can I do to attract people that's maybe unique or different, right? What's special about me and my company, you know, my founders that make it so that we can go like, hey, you know, sure, we're not paying you the same as Atlassian, but you get a four day work week or you can work anywhere in the world or uh, we give you extra, extra leave or whatever it is, right? Like we run things differently. I think that those allow you to kind of gain so much more momentum at the beginning that you might miss otherwise. And I think that grows. You know, if you're 100 people, 200, you know, I think it's the same pure Microsoft. You know, I think it depends. You know, probably if you talk to a small team at Microsoft, they're like, yeah, it's really important. Every hire we, we make, right? Even though the big Microsoft doesn't matter as much and we see, we see people willing to pay and give these conditions at large companies like Google and stuff like that, we say we can't compete against them, there's a reason they're doing it. They're not doing it because they're, you know, they're idiots and they're just throwing money away. They know that people are worth this amount of money, money to be able to get uh, the best out of them, get the best, um, return on investment on your employees. And so they're willing to pay that. And as startups we often aren't willing to pay that because we're worried about other things. And then we're just missing out on those great talented people that get stuck into these large organizations. So go and try it. Think about from first principles, uh, don't think I don't have a HR background or I don't have a people in culture background or anything. Just think about, well, what do I think is important and realize that, that you as a founder, if you are a founder, very different motivations to an employee. Very, very different motivation employee. Uh, my employees might do a four day work week, doesn't mean I'm not doing crazy hours, but I have this huge intrinsic motivation to the company that doesn't exist. I think oh well they're going to work at my startup and so therefore they're going to like it just as much and be just as excited. Right. Um, at the end of the day, uh, you know, know these things like less working hours, you know, there's this worry about oh well will you lose some percentage of performance? If you really believed that it was all about the hours to put in, then you should hire in a really low pay country and hire a thousand people and get them to work crazy hours at low cost and see what comes out of it. Like everyone knows that isn't the right thing. You don't just pay the lowest amount of person to the to get the most amount of hours and that gets you success. Everyone knows that it's actually the right people and the hours that they've bought they spend spending their time and energy on and how they're performing. And so if you can say we can attract that little bit higher level of talent, say 20% right. In terms of productivity then losing uh, that 20% of time, like you've easy made that back up. Uh, and that's without saying that, you know, sometimes people say you 32 hours, you accomplish same amount. And that's what we found, found at rum. So yeah, try these other things, experiment, uh, kind of see what happens and don't be afraid to be like hey we're, we're a startup, we're innovating in a space and you can innovate in more than just product. You can innovate in P Ultra too.

Speaker A: Yeah, I love it. You're absolutely right. It's not something that is just for the HR team to worry about. It really should be the focus and the responsibility of any executive or any leader in the business. And uh, I love the advice, sage advice around uh, tackling it from first Principle. So Rowan, I really appreciate it. Thank you for jumping on. This was uh, as ever very insightful. So yeah, I appreciate you being here.

Speaker B: Awesome. Thanks Matt M. Thanks for inviting me on.

Speaker A: Thanks for joining us on another edition of the foundation series. Make sure to head over to our website to subscribe to the foundation series for monthly editions featuring future interviews on startup compensation. In each edition we'll explore the different strategies, trends and challenges faced by startups around the world. If you have a burning topic you'd like me to cover or a standout guest that you want to hear from, drop me an email so I can dive deeper into the compensation topics that matter most to you. Join me next time as we continue to uncover the strategies and practices driving success in global tech startups around the world. Thanks for listening.