Make better means

When you enter a large market, there will be incumbents. They may be manufacturers or authors, tech startups or institutions.

We read and write about how to compete with such forces. How new solutions must be 10x better than old ones.

But what about the journey to the solution? The means to a purported 10x end?

Compare Uber and Lyft:

They both do the same thing. They both have identical apps. They both compete on price with the same promotions and features (pool/line).

But they both do it in different ways.

Uber connotes a premium, black car vibe. “Everyone’s private driver.” Lyft says “Everyone can be a driver.” Lyft fist-bumps passengers. Lyft encourages passengers to sit in the front seat.

Yet fist-bumps and seating are a means to the end of traveling A –> B. They are not 10x improvements to the end.

Or are they?

A fist-bump doesn’t cost anything. Neither does a suggestion through a cracked window. And this is what great startups do. They make something out of nothing.

When you enter a market riddled with incumbents, you will probably not launch with a 10x better solution. But you can introduce 10x better means. And you should. It’s free.

Litter

Dolores Park is among the trashiest parks in San Francisco.1

It’s also a fun place to hang out on weekends.

Parks & Rec made signs to address the issue, hashtag #lovedolores:

love-dolo

I made a sign too, and stuck it in the offending area:

trash-dolo

Some tourists noticed our litter box was missing a bag:

litter-fans

Maybe San Franciscans will also notice, and stop throwing trash where it doesn’t belong.

I’m raising money

I’m 25 and working on my fifth company: Camp.

Usually I raise capital from customers, but this time it’s different.

I’m swinging for the fences.

Camp is a new playbook for launching startups, and most startups fail. The odds are against us, so the opportunity is huge.

Will you help?

Just send a line to ryan@sprinkle.ai. I love you.

No Skin, No Future

Go corporate or work at a startup? A millennial’s dilemma.

Advocates of either could argue over lifestyle, culture, or “sense of purpose.”

But let’s be real — the most potent difference between startups and nine-to-fives is money. Corporations pay more, startups pay less. Corporations offer benefits, startups offer stock options. And so it goes.

But why?

Corporations

Political and hierarchical, scaling employing satisfaction is expensive. Wages at corporations are paired with 100s of job titles and uniform mechanisms (performance evaluations) to manufacture promotions systematically.

Startups

Management is often horizontal, providing autonomy and project ownership to early employees. Unable to afford market rates, stock options (ability to buy equity at a discount) help compensate for smaller salaries and reward those who excel in their departments.

So all things being equal, a capable individual has two options:

Option 1 – Go Corporate

  • 100% salaried compensation
  • 0% equity upside

Option 2 – Go Startup

  • 80% salary compensation
  • 20% equity compensation

In a vacuum, these incentive structures are about the same. Nine-to-five employees extract value on-demand and lucky startup folks make their money later. So choose whichever risk profile fits your appetite, right?

Wrong.

Compensation is more complicated than future vs. net present values, because compensation predetermines future progress. So let’s talk about the 20% mystery [equity] compensation.

If you’ve ever volunteered for an econ experiment in college, it might have gone something like this:

  1. Computer screen in front of you says you have $10 in a private account
  2. You’re randomly paired with a group of 4 peers, and everyone is anonymous
  3. Anyone can commit some of their $10 to the group pot, which will then double and be split evenly
  4. Do you put all your money in, knowing everyone will double their money, or keep your $10 to be safe?

The phenomenon of this experiment is that most participants become less trusting throughout the sequence of deposits, ultimately limiting everyone’s earning potential in an attempt to preserve one’s own funds. The coined phrase for this is the Tragedy of The Commons.

Now apply this to the real world.

If you work for 100% salary, the future isn’t interesting. You extract value from now, thus doing the same things in the same way, is the recipe that yields the results you want.

But if you work for equity, that uncertain chunk of your well-being, you’re not only incentivized by the future, you depend on it. Either you create a better mousetrap or you’ll wish you went corporate.

This begs a simple equation:

Quality of our future = (incentive) * (n incentivized workers)

… and this is why startups are powerful.

It has nothing to do with ping-pong or beer or v-necks.

The truth is, startups are organizations that live for the future and don’t mind going through hell to get there. Startups are built by people who put their personal well-being on the line to make life better for everyone else.

So what’s the key to a better future?

Having a vested interest in making it so. There is simply no incentive otherwise.