Reduction in hours for same pay

[aln]

Why would anyone pay you the same for working less!?

The same reason they'd pay you more to do the exact same job. Realstically his reduction in hours shouldn't actually matter, he's straight up asking for a raise here.

Is there any reason why they should consider this? What do you bring to this company that someone else can't?

This is the questions they will ask themselves. If they come up with nothing, then it's going to be a no.

Most contractors don't get holidays as far as I'm aware. Anyway, figure out your value. Don't ask for 10% more because that'll cover your shortfall in cutting your hours, only ask for it if you can validate the amount against market rate for someone with your skill and experience.

The company knows whether or not they consider him to be performing well and whether or not he's remunerated well for a contractor. There is no reason for them to be thinking either of the above unless he's earning a higher rate already and they think he's taking the ****.

Unfortunately playing such games is par the course thus the only real leverage you have is to leave if you think you can get paid more elsewhere. This is likely to hurt the company more than the employee but thats how the world currently works.

I'm paid by the hour. I feel that committing to 50 hours per week (with only 15 days of paid holiday per year [I'm not an employee]) is too much work and not enough life.

 

[NathanE]

Hmm, so working for 1 year and the startup still hasn't launched. That equity sounds potentially toxic.

No startup should take that long to launch.

 

[Goliath]

As an alternative bargaining chip, how would you feel about asking for more days paid leave? From what you've stated, I think the company is (understandably IMO) not keen to pay you more money for less hours (which is how they will see it), however adding 5 more paid leave days over a year may be a much more palatable solution from their point of view - they still get the same amount of hours from you on a weekly basis etc.

 

[Mr. Brightside]

That equity sounds potentially toxic.

What do you mean by toxic?

 

[tom_e]

What do you mean by toxic?

It won't make you any money.

 

[NathanE]

It won't make you any money.

That, and it will actually cost you money. In the form of prolonging employment in a firm you perhaps no longer like, at suppressed salaries/day rates, because your career decisions are subconsciously biased by that dangling carrot that is always supposedly a year away from being actually materialised.

(speaking from experience)

And in my experience of this, the firm I was in launched within 3 months (way back in 2006) and was highly profitable by its third year. And still I've not yet seen a single penny from those shares.

This is by the by, but 1% is IMO an utter ****-take. If you've wrote the entire technical stack of a new company and they want to give you 1% of it whilst the directors, who IME only make small contributions and usually just ideas that their technical staff thought of weeks or months beforehand, run away with the lions share. How much money have the directors invested? And how much have you invested in terms of suppressed compensation? What do you bring to the table that other developers don't? If you know you are good and therefore in that elusive 99 percentile zone of software developers then you should not let anyone screw you over. Chances are they know you are good and they know how much they'd struggle to find somebody like you, so that alone should be a sufficient bargaining tool.

 

[D.P.]

Hmm, so working for 1 year and the startup still hasn't launched. That equity sounds potentially toxic.

No startup should take that long to launch.

What planet are you on, many technologies take several years to develop and will then go through at least a couple of years of marketing, VC securing, restructuring, refinement etc.

If there is 3 years of coding and engineering required then expecting anything to happen withi. 5 years is crazy!

 

[NathanE]

What planet are you on, many technologies take several years to develop and will then go through at least a couple of years of marketing, VC securing, restructuring, refinement etc.

If there is 3 years of coding and engineering required then expecting anything to happen withi. 5 years is crazy!

That's not really a startup if we're talking those time frames.

I didn't want to be the one to ask the OP for more information and context, so obviously some assumptions have to be made. But 5 years to launch any company is extremely extremely rare. The only thing that springs to mind is Virgin Galactic, who are finally going to launch (pun) this year.

PS: I worked 6 years in a startup. And now I'm in another startup. So I'd hope that by now I know what I'm talking about

 

[D.P.]

I know half a dozen start-up, 3-5 years is about the going rate. You can't even get a patent within 6 months and you don't want to go public without your IP protected. And if you are creating a physical product you can expect at least 6-12months of advanced prototyping and manufacturing refinement, with endless to-ing and fro-ing between chinese manufacturers, before the product is ready for re-sell, and then you might have things like safety testing the which can take another 6-9 months.

A couple of years is just about the minimum to get an idea, research it, design, architect, prototype, develop, test, modify/redesign, patent, market, seek investment.

I work in a startup and have over a dozen friends (friends that I did a PhD with) that all work in start ups. They have all been largely successful, here are some of the star-ups that I know the founder and CEO: http://www.snowpulse.com/en http://www.snowpulse.com/en http://www.routerank.com/en/ they have all received significant investments (e.g. 10-50million), non of them made it less than 4-5 years!
I have also done several entrepreneurial courses and know full well how long it takes to turn an idea into a product.

Your timeline is absolute fantasy. What value is there in a product that takes mere months to develop? Id development was so easy there would be no need to invest in it it. A product that took 3 years to bring to market represents a significant investment of both time and money that customers or competitors simply are not willing to invest, therefore they will take the easy option of investing or using your product.

 

[D.P.]

I apologise for taking things off topic.

Timeline issues aside, you have to figure that around 90% of start ups fail, so by shear probability equity in a startup is not safe money. I've been trying to exchange my equity stake for getting paid overtime as I don't mind working 70 hour weeks but I want to be regarded in something more concrete than share options. But startups simply don't have the spare cash lying around and need to stretch their money to pay salaries as long as possible.

 

[NathanE]

I know half a dozen start-up, 3-5 years is about the going rate. You can't even get a patent within 6 months and you don't want to go public without your IP protected. And if you are creating a physical product you can expect at least 6-12months of advanced prototyping and manufacturing refinement, with endless to-ing and fro-ing between chinese manufacturers, before the product is ready for re-sell, and then you might have things like safety testing the which can take another 6-9 months.

A couple of years is just about the minimum to get an idea, research it, design, architect, prototype, develop, test, modify/redesign, patent, market, seek investment.

I work in a startup and have over a dozen friends (friends that I did a PhD with) that all work in start ups. They have all been largely successful, here are some of the star-ups that I know the founder and CEO: http://www.snowpulse.com/en http://www.snowpulse.com/en http://www.routerank.com/en/ they have all received significant investments (e.g. 10-50million), non of them made it less than 4-5 years!
I have also done several entrepreneurial courses and know full well how long it takes to turn an idea into a product.

Your timeline is absolute fantasy. What value is there in a product that takes mere months to develop? Id development was so easy there would be no need to invest in it it. A product that took 3 years to bring to market represents a significant investment of both time and money that customers or competitors simply are not willing to invest, therefore they will take the easy option of investing or using your product.

What you are misunderstanding is that software/technology startups will launch and start creating revenue far sooner than waiting for some mythical 3 year stretch of development to complete. They use agile and iterative development practices that mean the product is constantly evolving. Ever heard of "minimum viable product"?

I don't think anything I have said is "absolute fantasy" at all. It is 100% hard cold facts from extensive experience. Take it or leave it.

By the way there is a substantial difference between a software-only startup and a tangible product startup. Software-only startups rarely need £50mil investments. Most can get away with anything from 50k to 500k. It depends how big the idea is and how quickly they want to scale it up. This thread is about software-only startups, so maybe that's where you're getting confused by some of the timelines being discussed. Things operate much faster in software and technology in general.

 

[PMKeates]

Indeed. Five years for a software startup? The whole industry would have changed by then!

 

[No1newts]

Small software startup =/= gift horse

However, I can see why the company are reluctant to pay you the same money for less work. I think you have to choose between fewer hours or more money rather than ask for both - if your work life balance is poor then I'd take the cut in hours (and pay) and see the equity as a bonus if it ends up worth anything.

Good first reply.

I would say this.

 

[D.P.]

What you are misunderstanding is that software/technology startups will launch and start creating revenue far sooner than waiting for some mythical 3 year stretch of development to complete. They use agile and iterative development practices that mean the product is constantly evolving. Ever heard of "minimum viable product"?

I don't think anything I have said is "absolute fantasy" at all. It is 100% hard cold facts from extensive experience. Take it or leave it.

By the way there is a substantial difference between a software-only startup and a tangible product startup. Software-only startups rarely need £50mil investments. Most can get away with anything from 50k to 500k. It depends how big the idea is and how quickly they want to scale it up. This thread is about software-only startups, so maybe that's where you're getting confused by some of the timelines being discussed. Things operate much faster in software and technology in general.

I actually know more software start ups than otherwise, and even some of the ones selling hardware like senseFly there are are only a few hardware people compared to a dozen software engineers because all the complexity is in software.

I work for a software start up well into its 3rd year and not expecting to be ready before December. To this date around $4 million have been spent on development, largely on software engineers- a good engineers salary plus all company expenses (everything from pensions, health, benefits, office rental, travel, etc.) is around $250K per annul, managers and senior staff higher (note salaries are at most half that sum). That sum is the value our company has asked a customer in order to support them with 1 engineer for 12months.

5-10 engineers at a cost of 250k each per year times 2-3 years = ??



Software takes time to develop. You can't produce quality software with novel design ideas in a short period of time. The project I am working on requires huge amounts of bespoke software written from the ground up, off the shelf technologies and libraries are just not appropriate. And thatis what makes a successful startup, if a couple of guys can just bolt together some existing technologies over a few months then there isn't a viable bussiness model because nothing will stop anyone else doing the same.

 

[Jambo]

And if you are creating a physical product you can expect at least 6-12months of advanced prototyping and manufacturing refinement, with endless to-ing and fro-ing between chinese manufacturers, before the product is ready for re-sell, and then you might have things like safety testing the which can take another 6-9 months.

It depends on the complexity. I launched a product in 6 months from first contact to manufacturer up to delivery of the stock. The website was launched and taking orders 6 weeks before the stock was delivered.

I'm working on a new one now which I aim to do in 4 months.

Anyway the point is that every startup is different but generally one of the good things about a startup is that things can be done at pace without any corporate bs.

 

[Surfer]

For the last ~year I've been working approx. 50 hours per week for a small software startup. I've written the majority of the core technology. I'm paid by the hour. I feel that committing to 50 hours per week (with only 15 days of paid holiday per year [I'm not an employee]) is too much work and not enough life.

In the process of renegotiating the terms of my consulting agreement I proposed a reduction in hours, committing to 9 hours per day. This was accepted. Then (and I perhaps should have handled it better and asked for this at the same time) I proposed a 10% increase in my hourly rate so that I earn approximately the same per month.

After discussion this proposal has neither been denied nor accepted. Rather I have been advised to "think about it again" and let them know when I have.

Dilemma is complicated by the fact that at the same time, Options for 1% equity are being added to my agreement. Product is not released yet so very much still a startup - no revenue. The card of "we're a startup and have to be careful with cash" was played.

There's the phrase "Don't look a gift horse in the mouth" but at the same time, I'm a key player and I think my life needs more balance.

OcUK, what do I do?

If you are key personnel in this startup then you have bargaining power, yes. And you also say you are finding it difficult to recruit additional developers.

So what its a startup....is it your company? No...so you're loyalty is first and foremost with your life/family.

If they refuse to budge on the increase in pay then i would want much more paid holiday days. And you are right increasing the notice period to 2 months means yeah you are definitely needed by them.

I would also look at your options in employment/contracting to other companies. See if you can check out your market value/rate.

If they think you can be headhunted by another firm then they will offer you a better deal maybe.

Its your life - look out for number 1 - you.

 

[Mr. Brightside]

Thanks for the broad spectrum of opinions!

I signed a couple of days ago at my existing rate - reduced daily commitment, reduced overall pay.

Not directly related to this, but on a similar theme:

I was asked a few hours ago in a rather presuming manner if I will be taking my laptop on holiday "in case we have any problems we need you to fix while you're away" (I'm away in Europe for a week in May with friends - it'll be my first "real" holiday in two years).

I had no intention of taking my laptop and I have no intention of taking it as a result of this presumptuous request. They might well be demoing to potential customers, but perhaps they should have thought about that before giving me so little equity.

No dilemma with this one, with only 15 days of holiday (and yeah, no bank holidays) I have to make them count!

 

[alx]

Thanks for the broad spectrum of opinions!

I signed a couple of days ago at my existing rate - reduced daily commitment, reduced overall pay.

Not directly related to this, but on a similar theme:

I was asked a few hours ago in a rather presuming manner if I will be taking my laptop on holiday "in case we have any problems we need you to fix while you're away" (I'm away in Europe for a week in May with friends - it'll be my first "real" holiday in two years).

I had no intention of taking my laptop and I have no intention of taking it as a result of this presumptuous request. They might well be demoing to potential customers, but perhaps they should have thought about that before giving me so little equity.

No dilemma with this one, with only 15 days of holiday (and yeah, no bank holidays) I have to make them count!

Is that even legal?

 

[aln]

Is that even legal?

He's a contractor. Who's he gonna sue, himself?

 

[Mr. Brightside]

I'm a self employed consultant (who just happens to work for only one company). IANAL but if it's not legal, the way that it is not legal is not at all obvious.

Company is not a UK company, I'm an "offshore developer" in that regard. That was the initial reason for me being self employed (simplified payment for them), it just has the convenient side effect of giving me no entitlement to any employee benefits from them.