Ask HN: Should I take a pay cut for a different job in same startup?

https://news.ycombinator.com/item?id=37454724

by grvdrm • 3 years ago

3 10 3 years ago

news.ycombinator.com

First, for context on me: 17 years of experience in insurance industry, working in external-facing, analytical roles. My job prior to my current start-up was equal parts talking, coding, data-munging, product-managing, etc. in order to manage a portfolio of commercial insurance policies for a major insurance policies.

I joined my current start-up (cyber insurance/cyber-security focus) in a pre-sales role, blending much of the functional experience I just mentioned with my insurance knowledge - as my remit was to sell to insurance organizations.

Current Comp Structure: Salary: 220k Bonus: 100k (allocation of overall revenue pot) Equity: 0.2% (25k shares)

In FY23 (just ended) we, unfortunately, sold almost nothing new and thus the bonus # above is as good as non-existent. My boss was fired, and I was asked to reevaluate my choice of role in the company.

I proposed a sales role as way of challenging and learning something new. I don't have pure SaaS software sales experience other than this company.

As part of that change, the CEO is asking me to restructure my pay - to take a salary pay cut, to get upside potential as a piece of every sales deal (e.g. 10%), and more equity - at least doubling what I have, though I suppose I can ask for more.

Rough Proposal: Salary: $140k Bonus: 10% of every deal Equity: 2x/4x what I have (above) CEO's point to me on this: if you do well, pay difference is totally irrelevant

Have other folks come across this situation? Advice? Warning signs? Methods for evaluating?

christophilus• 3 years ago

I’ve never been in sales, but I’ll say two things. Every time I’ve taken a pay cut for some other offsetting benefit, the offset hasn’t been worth it to me, and I’ve ended up unhappy / changing jobs after I realized this. I feel concrete losses much more than I feel hypothetical gains.

If you’re at all like that, then you need to make sure your hypothetical benefits are overwhelmingly positive to offset the impact of the loss in salary.

The other thing I’ll note is that sales people are from a different planet than I am. I don’t think I’d never be able to make that transition. Again, if you’re anything like me in this regard, that will exacerbate the pay cut. Your psychology will be hammering you with a subconscious message: “You’ve increased your financial stress and your day to day stress for what? A chance to win the startup lottery? Isn’t there an easier way to make that money?”

My 2 cents. Probably totally off-base.

grvdrm4• 3 years ago

The other thing I’ll note is that sales people are from a different planet than I am

I'm curious what your view is on the statement? How are they different? I get the concept of what you're saying, just curious about your view of those folks vs. your specific way of working/behaving.

Otherwise, not off base at all! Much of what you said reminds me of recent Hidden Brain episodes that touched in various ways on our tendency to focus and dwell on negative things while discounting positive things. This might be an example of that: The positive? potentially large upside potential. The negative? Pay cut. Easier to dwell on that.

sf4lifer2• 3 years ago

Sales at a startup trying to find product market fit is probably the worst job of all time. You have no marketing/brand/leads and if by some miracle you do land a deal your product probably isn't quite right and there is no customer success to handle the daily demands of an unsatisfied customer. That said, if you want to transition to sales, with 17 years experience (assuming no sales) this is probably your best option. The pay cut is typical, the upside is real, IF you can find product market fit. Sales is not presenting a solution, it's asking questions to find the problem and more importantly finding the person who the problem affects financially the most. It's a lot of fun and a unique skillset. I'd say not closing a single deal last year is a warning sign. I'd evaluate what you would do differently. Be objective and critical about why you will produce different results. Only advice I'd give is what I tell all sales reps, focus on quality daily outbound activity (calls, emails) and everything else will take care of itself.

grvdrm4• 3 years ago

Really great, thanks. Question: do you have advice/resources for pipeline development?

sf4lifer2• 3 years ago

In my experience, there is no silver bullet outreach. Until you have dozens of customers you shouldn't do anything at scale. Best thing (depending on customer) is call, linkedin inmail and/or emails. It typically takes 3-7 touches before someone will buy from you (no more than twice a week). You just need to patient and provide them value. Remember they have no incentive to look at your solution. Just send them personalized messages knowing they are busy and you're not a priority. I recommend using apollo (to get emails), streak gmail plugin (or hubspot if you have it) so you get email read reciepts. At least you know when someone opens your message. Keep trying different value props until something works across multiple users.

GianFabien2• 3 years ago

If FY23 sales were minimal, then what are the chances of sales ramping up?

Furthermore, what is the value of each sale? You'd need to sell over $2m at 10% commission in a year to match your previous potential pkg of $320k.

Sales is hard work. Assuming beginner's luck, you would be lucky to make 50 sales in the first year. That means your SaaS would need to be $3500 / month to reach that target.

Pardon me for being cynical, but I think you are being hoodwinked.

grvdrm4• 3 years ago

Good question re: chance of ramp. Hard to say, of course.

I do think, concretely, that our chance of selling this year is BETTER than last year and that's due largely to being more focused on our core sales channel(s) rather than trying everything imaginable to drum up dollars - like last year.

But I'm not saying that our chance of selling tons and tons of business is obvious. There's just what anecdotally feels like a clearer path forward.

Rocket ship success? Not sure.

Maybe to ask another question back: is the experience worth it for a year if I can otherwise stomach the pay cut? I truthfully didn't join this company thinking that I would make $50M, but instead I really wanted learning/experience in the start-up space.

GianFabien2• 3 years ago

Making the trade of pay cut for experience is a very personal question. Only you can answer that. If you are not on the hedonistic treadmill and value experience and knowledge more than extra trinkets, then maybe.

I once took an engineering role where I was part-time business development, aka sales. I learnt that I don't have sufficiently hustle personality to be successful at sales. But I have also gained a respect for those who are good at sales. That experience has certainly steered me away from entrepreneurial fantasies.

t312227• 3 years ago

hello,

reading just the headline of your post, i instantly thought: no ...

after reading your ... "rational" above

what is your company selling, that you even think about "hell yes, i'll do 2 millions plus in sales in my first year" ... !? [to get about the equivalent of your ~ 200 k "pay cut" :]

sounds like a really good offer ... not.

so: "just no no no no no!!"

just my 0.02€

grvdrm4• 3 years ago

We sell an enterprise collaboration product focused on cyber incident response.

As best as I can tell, there wasn't a product quite like it on the market - so it's something that people are 1) excited about once they realize they need it, or 2) reluctant to buy because they think they don't need it. It's not an obvious iterative improvement on an existing software product but instead a brand new idea (we think)

Ask HN: Should I take a pay cut for a different job in same startup?

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