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Speaker 1:
this. This is unleashing leadership, and I'm your host, travis moss, with our season five co-host, dave nurchey, and this podcast is all about takeaways from good books good books like the hard thing about hard things by Ben Horowitz. Each season we take a book, we pull the part, one takeaway at a time. Then Dave and I talk about in our day life how we experience these different takeaways. So we'll talk about, maybe, how we've implemented things, maybe just our observations on them, or if in real time, we're actually working on it, kind of what we're doing and how it's working out. Dave and his day job, his day life, his day job is the chief operating officer for C Planning Group. I'm the chief executive officer. We work as part of an executive team with another gentleman named Bill Hamilton. He's our chief financial officer. Maybe we'll get him for the next season. Dave and we live this stuff every day. We talk about it, we work on it, try to build a better company, build a better future for our clients and our employees, help people become better people, help people overcome challenges that they're having, help people become better professionals. So this is just real stuff that we deal with every day, that we're passionate about. Hopefully it inspires you and if it does, please like, subscribe or share this with somebody else so that we can inspire more people. We'd love to reach as many people as possible.
Speaker 1:
Today's takeaway that we're going to be hitting on is the primary employee motivation should be to create Equity should be secondary. So we're going to talk about equity as a compensation tool, as a reward, but we're also going to talk about the motivation behind it and its place in that, and before we do, we're going to get into who our sponsor is for the day, and it is the One Big Thing podcast, because you are not alone. Learn how to reframe your challenges and overcome the things that are holding you back. And you can get more on that podcast from NQR Media at YouTube. Actually, if you go there, you'll see all the video on this show. You can actually, I guess, just follow the podcast on there too.
Speaker 1:
If you don't want to see our faces, you don't have to. You could just listen to us, or you could just go wherever there's podcasts and look for NQR. It's our parent channel, and from there you have Ditch the Suits, the One Big Thing podcast, cutthroat College Planning and, of course, the Unleashing podcast. So check it out wherever you can. That's some good stuff. In the meantime, dave and I are going to talk more about this big point from Ben Horowitz and the hard thing about hard things, and that is that employee motivation should be to create an equity, should be secondary. So let's first talk about equity as a motivation for our employees, and what do we mean by equity? So, dave, get us started on this.
Speaker 2:
Get us started on this. Well, equity, it literally gives you skin in the game, right. It makes you an owner in the company. It gives you that extra factor of like I'm part of this right. It's more than just your salary, whatever compensation benefits. That benefit actually gives you that ownership right, Literally.
Speaker 2:
So it's a different feeling to be working hard, right and working towards something and knowing that you are part of it. So that's how I look at equity and, like you said, it's a reward. So, especially for maybe smaller companies or startups, things like that, where maybe they're not always going to have the highest salary or they're not going to be able to offer the highest salary, just as a figure, as a number, but the other benefits that are involved, including equity opportunities, that means a lot, especially a growing company, and that could be the wealth builder right, that's how we look at it at Seed is that's a wealth opportunity for somebody beyond your salary that you probably mostly live on, right, A lot of people live on their salaries and there's maybe some extra. But that equity is something different and the sweat that you put into things right and the work you do you're part of that reward in the long run.
Speaker 1:
Yeah, it's unifying, but there is an issue there too, because I think people, especially the small companies they think well, if I reward somebody with equity, whether they buy it or whether I give it to them as part of the compensation, they're automatically going to become business owners and start thinking like I do. That's not how it works. There's worker bees and then there's owners Right, and you can't fault a worker bee for being a worker bee and not thinking like an owner, and you can't fault an owner for thinking like an owner and wanting everybody to be a worker B. But you have to realize that what made you successful to create your business and what drives you to run? That is not what drives everybody else. So, first and foremost, equity is a way to reward and it should be looked at that right. It shouldn't be looked at while I'm trying to inspire them to make sure that they're aware of who should turn the lights out when they leave. That's a different mindset. I think you get that through culture right and developing you know, the culture a certain way From an equity standpoint, because you also don't want employees running around saying why are we spending money on that? We shouldn't be spending money on that right, like I don't want somebody in financial planning.
Speaker 1:
I have two types of people that I work with. I have savers and spenders. People who will not spend money, no matter how much money they have, and people who basically spend every nickel that they have as soon as they get it right. I don't want people who spend every nickel as soon as they get it, as soon as they get it right. I don't want people who spend every nickel as soon as they get it. But I also don't want people who won't let any who won't like listen. We're going to have the when you walk in the office. It's always going to be cold in the winter and hot in the summer because we're not spending the money on it. And I don't see the point of doing things with your colleagues and some of these other things Like in it Right. But to me it's about and this is where our most industries get it Like for some, silicon Valley has got to figure it out. You talk to somebody who works in tech everybody's looking for a startup joint. Talk to somebody who works in restaurant like professional restaurant everybody's looking for a startup. They get it. I get involved in a startup, I get some equity, I make multiples of my money. Yes, maybe it doesn't work out, but chances are. But if I hit a home run, I'm set for life. Right, right, our, our industry, other industries.
Speaker 1:
For some reason it's like, I don't know if it's just more traditional, so it's like greedy Um, or if we just don't look at growth opportunities like some of these other firms. But it and when, when you're a new person getting into business or you're looking for a job or something, I would be looking for growth oriented firms. I want to go work for a firm. If I'm looking at a wealth opportunity, I can choose between I want a higher paycheck and less responsibilities, or I want a firm that's growing like nuts, right, and less responsibilities, or I want a firm that's growing like nuts and if I can get a cut of that firm, I can get far more than what that higher paycheck and that easy cushy job would have been.
Speaker 1:
And so it just depends on what kind of driven, how hungry somebody is and every one of our virtues, that we talk about something that people actually do not talk about, but how driven they are. But if you're driven, you should be looking for a company that's growth oriented, where you can stand out and they can say look, here's equity, because of everything you bring to the table. And this is a multiplier man. If you help us deliver on our growth plan, that $2,000 we gave you, that could be worth a hundred grand in a couple of years. That's the type of mentality that the equity award is going towards, but then the other side of that is is that can't be the primary driver, though.
Speaker 2:
Right, that's where we get to the create part right.
Speaker 1:
Yeah.
Speaker 2:
So the equity itself one. To me it goes hand in hand and, okay, that's the reward that you get. Right, we're going to reward you with equity as you do this, but the only way it actually ends up being a reward, or or a bigger reward, is if you help us create what we're trying to create. So that's, you get the person that understands that and the employee that, like you said, has the hunger and is driven to help create. Then it becomes a, you know, complimentary to each other the equity and the creating something.
Speaker 1:
Or everybody's just going to get pissed off at each other. Because, let's say you're joining a company who's at level 10, right, and let's say each percent is an actual percent on your growth right, and it's compounding. Let's say the goal is to get to level 100. I hire you to get me to level a hundred right, and as part of the compensation, I'm going to give you an opportunity at some equity stuff. So if we go from level 10 to level a hundred, let's pretend that that's. I know I said the percent equals a percent, but let's let's just pretend that that's a 10 times on your money, right? So so you take 10, 2000 or $2,000, and it's going to be worth 10 times that in the future.
Speaker 1:
In order to get there, though, in order to get to level 100, you have to be passionate about coming in, and Ben calls it creativity. But creating, developing, building, growing right, that's creativity, right, and you have to be so committed. Your passion and love has to be in that, not in where's my equity going? And part of the issue and part of the reason with that, is equity doesn't go up in a straight line. It goes up and it comes crashing back down. And it goes up and it comes crashing back down and it goes up and it comes crashing back down and then finally one day it goes up and it pops up and you sell it Right. So how do you get, how do you stomach that? How do you stomach that wild ride? Cause you're so in love with the process, You're so in love with building something and growing something and seeing some people you know reach different heights in their life, that the you know, the equity, the reward for for being there and being a part of that.
Speaker 2:
Yeah, yeah, the, the equity can't create the passion, right Like no, it can't no it's the passion has to be there. The equity is a result to help reward that passion that you already had and like the fire in there to be a creator.
