Distributed Wealth Model

Today I received an email from Joseph, one of our regular Fleck Blog readers, with an interesting question. Here it is:

How do you keep a team motivated when there is no revenue. We are about to establish our Corporate Guidelines and the subject of equity came up. How do you establish who gets what piece of the company at start-up, while the site is being rolled out?

I was just having a discussion today about the same subject and spend some time thinking about it. There is no easy answer and I’m sure different people have different strategies. My strategy is simple: give away a lot, make big steps soon, try to make the circumstances as ideal as possible to grow big fast.

Now before you give away your whole company and then complain to me when this doesn’t turn out well, a few words of caution. I have no problem with making other people rich if they help me get rich faster and easier. I have always felt that way and have never regretted it. But this strategy can fail miserably too. You need to be very sure that the partners you have are the right people for the job and that they will indeed make your company or product grow faster and better.

So if you are sure that your partners are good and are going to make your company a success I would reward them well. Remember that people get motivated most by being appreciated. Respect is a much better motivator than money. So don’t try to negotiate their shares down to the last penny. Show them you respect them, care for their opinion and want to give them a fair share. Explain why the percentage you chose is reasonable and that they are valuable to the company.

I call my model the distributed wealth model: make sure your employees are happy and make a lot of money, your customers are satisfied and your investors get rich and you will do fine yourself too.