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How to create a team and how much pay them

Topics relating to managing people and relationships

Riccardo12

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Hello,
I always worked my digital company (blog) on my own and every time I needed something done I was paying an expert for it.
Now I feel the need to scale and have people working for me as a team.
I would like to understand better how can I make them to feel they can grow with me starting maybe from a lower wage to a higher wage. Also because I need to explain them how things have to be done.
I do a practical example: I am looking for people to write original content for my blog starting from scientific papers, I would like to have new content almost daily to increase SEO so how much should I pay them? Like 10 articles 300$?
Maybe my question is stupid but for someone that always has been alone in the business and just short partnership in the past, this first step to have a team is a bit scary and I would like that team members feel happy and motivated.
Thanks for all your suggestions!
 
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Pink Sheep

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Its the same as hiring an expert, but you ask them to work for you full-time in stead.
Many freelancers will be excited for an opportunity like that, even if its just for a while.

I think if you want well researched and quality articles you should pay hourly, or do per article if you just want SEO results.
 

csalvato

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What's your budget for salaries? How much can you actually pay for your entire team, at most?
 

DoTheWork

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You could offer them a small stake in the company, maybe. Even if it's 5% + "promised" increased pay in the future. That'll encourage them to work for the good of the company, rather than rushing through their 10 articles to get the highest possible hourly rate.
 
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Miketing

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It sounds like you're looking for people you can train up and help grow.

You've been running this company yourself for a while now, so you must have some knowledge and skills that you can teach others.

Think about how that would provide value to someone newer in the field. If you are offering some kind of mentoring, then many beginner writers would be happy to work for you at lower rates.

It's going to take more of your time to train people up, but it may work out better for you in the long run. You can guide your team to work exactly how you want them to, and you can likely keep them at lower rates than if you were to just hire an expert.
 

DragoonDB

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You could offer them a small stake in the company, maybe. Even if it's 5% + "promised" increased pay in the future. That'll encourage them to work for the good of the company, rather than rushing through their 10 articles to get the highest possible hourly rate.
I'm responding to this, but also the other instances I've seen this raised here and elsewhere over the past week or so. Is equity truly a silver bullet?

If I was being offered equity:
(1) I'd want to know about as much information as someone looking to buy the company - and that's a hell of a lot of research for 5%, or whatever other number you'd offer. Revenue, expenses and net. Is the business healthy, now and in the future?
(2) Do I have faith the owner is competent? How much work as an owner are they doing relative to the amount I need to work to get my 5%?
(3) What does the future look like? Is there any chance this gets sold and I get paid?
(4) That's a quick three, with a lot of other questions sitting out there. Ultimately, is this worth it - or is it more of a headache than just getting paid by the hour or by the job?

If I was offering the equity, I need to be able to answer a lot of questions (see above). Is this worth it for me? And if someone takes the ownership without asking a lot of questions, I'd wager they aren't the type of person I want owning any stake. You also need to decide how they get a stake; I don't see you being able to setup contingent ownership where if said partner fails to produce 5 works a week that they forfeit their ownership.

I completely understand where you're coming from, and there are probably cases where this works. I happen to think that, on the whole, people want the guaranteed money for their work (by hour/by job) then to take a flier on your company and a small slice of equity. Also, if it's not someone who brings a lot of value (think Shark Tank and those discussions), it's a hell of a lot of work for something you can scrap money together to cover.
 

Kid

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Somewhere someone posted that $100-$200 per ONE article is worth paying.
So i don't see doing a good article for $30 a pop. Consider that.
 
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Riccardo12

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Thanks for all your replies!

It sounds like you're looking for people you can train up and help grow.

You've been running this company yourself for a while now, so you must have some knowledge and skills that you can teach others.

Think about how that would provide value to someone newer in the field. If you are offering some kind of mentoring, then many beginner writers would be happy to work for you at lower rates.

It's going to take more of your time to train people up, but it may work out better for you in the long run. You can guide your team to work exactly how you want them to, and you can likely keep them at lower rates than if you were to just hire an expert.

I liked a lot this suggestion. I now have to think how to make this in practice. How I structure the partnership with the team?
 

SeanLewis

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You could offer them a small stake in the company, maybe. Even if it's 5% + "promised" increased pay in the future. That'll encourage them to work for the good of the company, rather than rushing through their 10 articles to get the highest possible hourly rate.

I'd advice against this, ownership is everything.
 

Lex DeVille

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I've had good results in the past by offering payment + revenue share on products created. In a blog it might be $15-$30 for a blog post that leads to product purchase (affiliate link, checkout page, sales page etc.). Then give the freelancer a percentage of those sales. It gives them incentive to try hard to make the individual product (article) as good as possible, and they also get paid for their work, so even if it doesn't sell well, it wasn't all for nothing. With this method I've attracted high-quality freelancers without spending a fortune.
 
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Riccardo12

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Thanks for the great suggestion!
I've had good results in the past by offering payment + revenue share on products created. In a blog it might be $15-$30 for a blog post that leads to product purchase (affiliate link, checkout page, sales page etc.). Then give the freelancer a percentage of those sales. It gives them incentive to try hard to make the individual product (article) as good as possible, and they also get paid for their work, so even if it doesn't sell well, it wasn't all for nothing. With this method I've attracted high-quality freelancers without spending a fortune.
 

csalvato

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Thanks for all your replies!



I liked a lot this suggestion. I now have to think how to make this in practice. How I structure the partnership with the team?

I asked you a question and you ignored it. Tbh I’m not quite sure why I’m following up.

I have 600k/year in talent working for me for free. If I were you I’d probably answer my question.
 

Riccardo12

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I asked you a question and you ignored it. Tbh I’m not quite sure why I’m following up.

I have 600k/year in talent working for me for free. If I were you I’d probably answer my question.

Sorry was not my intention. The fact is that I dont' have a fixed budget in the sense it depends how much benefit I get. From articles in itself for example I don't get any direct benefits as ads on it don't bring much, so it depends by the action that readers take like buying the affiliate product or online course.
I am paying now a freelance to deal with social media and updating old articles 800$ a month, but I am not very happy because I cannot estimate if it's worth in the sense as income that I get out of it. So the suggestion of @Lex DeVille was very appreciated.

If you have any suggestion please share, was my lack of knowledge about budget the fault. My company income is around 100K/y and I would say 30-40% costs
 
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csalvato

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Sorry was not my intention. The fact is that I dont' have a fixed budget in the sense it depends how much benefit I get. From articles in itself for example I don't get any direct benefits as ads on it don't bring much, so it depends by the action that readers take like buying the affiliate product or online course.
I am paying now a freelance to deal with social media and updating old articles 800$ a month, but I am not very happy because I cannot estimate if it's worth in the sense as income that I get out of it. So the suggestion of @Lex DeVille was very appreciated.

If you have any suggestion please share, was my lack of knowledge about budget the fault. My company income is around 100K/y and I would say 30-40% costs

No problem. I assume you are living off that $60k, so you have very little to spend on talent. At this stage, maybe 5k or something like that.

Peanuts in the grand scheme of things.

It really depends on how big you think this can grow, how fast you want to do it, and how much you want to maintain control.

If you think this can be a massive business worth splitting, then you need to paint a picture of a grand vision. Something that will challenge and inspire people to accomplish this mission, and realize this grand vision.

To quote Antoine de Saint-Exupery:

"If you want to build a ship, don't drum up people to collect wood and don't assign them tasks and work, but rather teach them to long for the endless immensity of the sea."​
You communicate that vision to people who you want to recruit and try to get them on as long-term commitments to work with you for several months or years in exchange for equity or profit sharing points.

A great model to do this is laid out in Slicing Pie, which also accounts for the delta between how much you agree to pay them, and how much they should be getting paid.:

Slicing Pie Handbook: Perfectly Fair Equity Splits for Bootstrapped Startups: Mike Moyer: 9780692584620: Amazon.com: Books

And if you're going this route, you'll probably also want to pick up Founder's Dilemma and read the section on equity splits in particular:

Amazon.com: The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup (The Kauffman Foundation Series on Innovation and Entrepreneurship) (8601404512056): Noam Wasserman: Books]

I've done this to build out my team. So has @Ravens_Shadow (though he does not use Slicing Pie's model).

We have both have very high paid engineers working for us for free and have retained a vast majority share in our ventures so far.

I personally don't mind giving away a % of the company because I know it will be so much bigger with my team rather than on my own. You need to decide how you feel about that though.

Bear this table in mind from Founder's Dilemma:

29747


If, instead, you're trying to build a lifestyle business for yourself, then you will need to hoard cash and pay market rate. As you already know, this is going to be slow.

This is very similar/the same to @Lex DeVille's advice and pay market rate + revenue/profit sharing – just with a bit more meat on the bones. It's going to be a lot easier to get those people to work for reduced pay if you have a vision and specific compensation model that makes sense.

So think about the mission and vision for the company (which shouldn't be about making money) then consider Slicing Pie, which has a great model for these kinds of dynamic splits.
 

Miketing

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Thanks for all your replies!



I liked a lot this suggestion. I now have to think how to make this in practice. How I structure the partnership with the team?

You could offer something like an apprenticeship.

I'm not sure about the states, but they do these in the UK. The employee works at about half minimum wage or so, while being trained on the job.

I did one of these myself at a marketing agency for a year and it was 100% worth it. I got mentored by successful marketers and built a lot of skills. I was then ready to get a job or start freelancing like I did.

This was the route I took instead of going to uni for 4 years and paying £30k+ in fees to learn a lot of irrelevant knowledge.

Anyway, you can likely keep someone like this on your team at a lower rate than a new hire if you treat them right. They'll be loyal to the business and happy to continue working for someone who's taught them useful skills.

Just do some vetting first to figure out their motivations. If they're just looking to learn from you and apply the skills elsewhere, I can imagine you'll want to go with someone else.
 
Last edited:

Riccardo12

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Jan 13, 2020
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You could offer something like an apprenticeship.

I'm not sure about the states, but they do these in the UK. The employee works at about half minimum wage or so, while being trained on the job.

I did one of these myself at a marketing agency for a year and it was 100% worth it. I got mentored by successful marketers and built a lot of skills. I was then ready to get a job or start freelancing like I did.

This was the route I took instead of going to uni for 4 years and paying £30k+ in fees to learn a lot of irrelevant knowledge.

Anyway, you can likely keep someone like this on your team at a lower rate than a new hire if you treat them right. They'll be loyal to the business and happy to continue working for someone who's taught them useful skills.

Just do some vetting first to figure out their motivations. If they're just looking to learn from you and apply the skills elsewhere, I can imagine you'll want to go with someone else.

Thanks a lot, yes that should be very inspiring for people to grow and learn skills
 
D

Deleted74396

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No problem. I assume you are living off that $60k, so you have very little to spend on talent. At this stage, maybe 5k or something like that.

Peanuts in the grand scheme of things.

It really depends on how big you think this can grow, how fast you want to do it, and how much you want to maintain control.

If you think this can be a massive business worth splitting, then you need to paint a picture of a grand vision. Something that will challenge and inspire people to accomplish this mission, and realize this grand vision.

To quote Antoine de Saint-Exupery:

"If you want to build a ship, don't drum up people to collect wood and don't assign them tasks and work, but rather teach them to long for the endless immensity of the sea."​
You communicate that vision to people who you want to recruit and try to get them on as long-term commitments to work with you for several months or years in exchange for equity or profit sharing points.

A great model to do this is laid out in Slicing Pie, which also accounts for the delta between how much you agree to pay them, and how much they should be getting paid.:

Slicing Pie Handbook: Perfectly Fair Equity Splits for Bootstrapped Startups: Mike Moyer: 9780692584620: Amazon.com: Books

And if you're going this route, you'll probably also want to pick up Founder's Dilemma and read the section on equity splits in particular:

Amazon.com: The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup (The Kauffman Foundation Series on Innovation and Entrepreneurship) (8601404512056): Noam Wasserman: Books]

I've done this to build out my team. So has @Ravens_Shadow (though he does not use Slicing Pie's model).

We have both have very high paid engineers working for us for free and have retained a vast majority share in our ventures so far.

I personally don't mind giving away a % of the company because I know it will be so much bigger with my team rather than on my own. You need to decide how you feel about that though.

Bear this table in mind from Founder's Dilemma:

View attachment 29747


If, instead, you're trying to build a lifestyle business for yourself, then you will need to hoard cash and pay market rate. As you already know, this is going to be slow.

This is very similar/the same to @Lex DeVille's advice and pay market rate + revenue/profit sharing – just with a bit more meat on the bones. It's going to be a lot easier to get those people to work for reduced pay if you have a vision and specific compensation model that makes sense.

So think about the mission and vision for the company (which shouldn't be about making money) then consider Slicing Pie, which has a great model for these kinds of dynamic splits.

WOW @csalvato that's some valuable info. Feeling stuck and was about to jump in and ask a couple of questions but you answered them later in the post. I'm going to read those books instead. Thanks for sharing! :)
 

Riccardo12

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I just want to say that following the advice of offering a fixed price (a bit lower than market rate) plus profit sharing I got 2 team members accepting to work for me! I am very happy about it. Thanks a lot to all your appreciated suggestions!
 
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