Company Ownership or Upside?

Clint Argyle, a friend of mine who is also a very successful entrepreneur shared a while back how he handles that awkward and inevitable moment when a key employee comes to him and asks for ownership in the company. Invariably, these employees feel like they have put a lot into making the company successful, and they want to have a piece of it.

Clint tells them, “You do not want ownership. What you want is ‘upside.’” They look at him funny and ask what he means. He asks, “If our company has it rough next month, are you willing to go off salary?” The employee invariably says, “No, I want to get paid for my work.” He then asks, “Are you willing to mortgage your house if we need help to cover the rent on the building? If things go bad, are you going to help do the layoffs? Are you willing to only be paid on the good months so that we can make sure our employees are taken care of?” The employee usually responds, “No!” Then Clint explains, “What you really want is upside. You don’t want ownership.”

Ownership involves ultimate responsibility. This responsibility is there through thick and thin. And as Clint went on to point out, there’s a vast difference between upside and ownership. Most people want rewards, not responsibilities. That’s why companies set plans up that give upside bonuses as they achieve success. Profit-sharing plans and goal-oriented rewards are great upside plans. However, those who are willing to sign the personal guarantees and put the money in up front are the ones who should be the ones that own the business.

Ownership or Upside?

  • You must have an honest (and documented) conversation with all potential partners about ownership vs. upside. Who is willing to risk what? How will the tough decisions be resolved?
  • Do not put yourself in a position to be responsible for one hundred percent of the downside and a smaller percent of the upside. Partners share upside and downside equally.

This post is a part of the book Bootstrap Business: A Step-by-Step Business Survival Guide. You can get the book at http://bootstrapbusiness.org/book.php

Create Fun And A Little Weirdness – Core Values of a Billion Dollar Online Shoe Company

One of the things that makes Zappos different from a lot of other companies is that they value being fun and being a little weird. They don’t want to become one of those big companies that feels corporate and boring. They want to be able to laugh at ourselves. We look for both fun and humor in their daily work.

This means that many things they do might be a little unconventional — or else it wouldn’t be a little weird. They are not looking for crazy or extreme weirdness though. They want just a touch of weirdness to make life more interesting and fun for everyone. They want the company to have a unique and memorable personality.

The company culture is what makes them successful, and in their culture, they celebrate and embrace diversity and each person’s individuality. They want people to express their personality in their work. To outsiders, that might come across as inconsistent or weird. But the consistency is in their belief that they function best when we can be themselves. They want the weirdness in each of their employees to be expressed in our interactions with each other and in their work.

One of the side effects of encouraging weirdness is that it encourages people to think outside the box and be more innovative. When you combine a little weirdness with making sure everyone is also having fun at work, it ends up being a win-win for everyone: Employees are more engaged in the work that they do, and the company as a whole becomes more innovative.

2011 Camp Yuba Triathlon

Camp Yuba Tri
Sprint Triathlon
September 10, 2011 in Levan, UT

NO FN LN DIVISION OVERALL DIVPL SEXPL SWIM RATE T1 BIKE RATE T2 RUN RATE TIME
84 Chad Bennett M3034 28 4/12 19/101 14:39 1:50 1:29 42:15:00 17.8 0:45 25:59:00 8:22 1:25:04
83 Tammy Bennett F2529 37 5/7 11/55 18:19 2:18 2:15 41:29:00 18.1 1:30 23:42 7:38 1:27:13
183 David McDonald M5054 52 5/12 37/101 17:44 2:13 1:50 41:46:00 18 0:49 27:49:00 8:57 1:29:57

Chad Bennett
bib number: 84
gender: M
overall place: 28 out of 156
division place: 4 out of 12
gender place: 19 out of 101
time: 1:25:04
pace: 0:
swim: 14:39
t1: 1:29
bike: 42:15
t2: 0:45
run: 25:59

Tammy Bennett
bib number: 83
gender: F
overall place: 37 out of 156
division place: 5 out of 7
gender place: 11 out of 55
time: 1:27:13
pace: 0:
swim: 18:19
t1: 2:15
bike: 41:29
t2: 1:30
run: 23:42

David McDonald
bib number: 183
gender: M
overall place: 52 out of 156
division place: 5 out of 12
gender place: 37 out of 101
time: 1:29:57
pace: 0:
swim: 17:44
t1: 1:50
bike: 41:46
t2: 0:49
run: 27:49