Incentives

I say this with zero experience but complete confidence: a large part of being a founder is probing people. Ultimately, you need to figure out how to motivate an array of different people, with different goals and aspirations, to produce value for the company. This is an engineering problem and can be logically resolved. There are many pathways to take, and yet fear and uncertainty, which are actually disincentives, remain common levers that people choose to exploit. I don't believe this is the optimal strategy.

Although in the short-term, fear-based disincentives (firing, PIP) may provide value, in the long term they create a hostile workplace. Since they are disincentives, they restrict freedom; they tell people what they cannot do rather than what they can. Few people are willing to tolerate those shackles and they'll leave. Natural selection in a way. The company selects for people who can survive that environment with high demands and lack of culture. That’s already a very small subset. Like evolution, such people will inevitably produce more people like themselves. And you just can’t build a company of entirely grinders. There simply aren't enough people like that in the world, and you lose out on diversity of thought and creativity.

Most companies instead rely on passion and cash incentives. These scale infinitely better. The set of people these incentives effectively motivate is much larger. These also motivate people to do their best work and not just simply any work. Disincentives stifle creativity and encourage meeting the bar i.e. what is expected. You also don't need to convince someone to stay if they're doing what they want, what they love. Too often though, company demands take first priority and people do not get to do what they want. It's not money that causes them to look elsewhere first, but this.

This is not to say there isn't any place to apply pressure. Pressure certainly works in the short-term, where things simply have to get done. People can be motivated to temporarily grind to achieve such goals, but it's a dangerous tactic to apply. If applied on individuals, it's already over. The company's fate cannot be determined by any individual and few people can perform well in that setting. To be successful, pressure can only be applied on teams, with the energy of maximal aligning all members on coming together to achieve the ambitious goal. Even then, if applied for too long, the culture will suffer and people will start looking elsewhere.

In early stages, it’s difficult to get this point across. As an individual, you can try to live with it, continually push back against the disincentives laid on you and present a face to them that shows them you’re driven not by pressure but by passion. As a leader, you can re-evaluate how you're running operations. What motivates each team member? Is it to learn, make money, work on a ground-breaking project, etc.? How can you align that motivation with company direction?