Hiring killer talent in DTC

Nobody can do everything themselves. Not even me.

To scale your brand, you NEED to bring on A+ players in critical areas.

Even if that means sacrificing some equity and/or profit sharing to do it.

As a startup, you typically can’t offer a competitive base salary package for high level talent. You won’t be able to compete with larger companies in this area.

But you CAN offer greater upside when the business takes off and eventually sells or goes public.

This is how smart people make a ton of money without starting a business of their own.

If you refuse to do this, you simply won’t be able to retain the talent you need for a competitive advantage in the marketplace. Sure, you might be able to convince a few to get hired… but keeping them? Not gonna happen.

So, what’s a fair deal then?

There’s 4 main ways to incentivize high-level talent without paying them a massive base salary or contract:

1) Phantom equity (where you pay out X dollars once certain millstones are hit within the business. Usually $1M+ in payouts for a $100M brand)

2) Real equity (where key players earn a small stake in the business, that sticks with them even if they leave. Usually between 1% - 5%.)

3) Profit sharing (where you pay out a percentage of your net profit after all expenses, similar to how companies pay dividends to shareholders)

4) Performance bonuses (not necessarily just tied to revenue or profit; you pay out a bonus when pre-determined criteria is met)

Each have their own pro’s and cons.

But unless you’re willing to share a small piece of the pie, you’ll never attract the people you need to make it big and delicious in the first place.

Don’t be cheap.

Till next time,