How To Get Free Labor For Your Startup

Let’s talk about when we need to start paying the true believers working for our startup. With actual dollars.

I’m going to be nuanced on this one because I used to do something similar. In fact, it’s pretty common. At the very beginning of the startup cycle, unless the founder is independently wealthy or incredibly risk-tolerant or enviably well-connected, there’s no money and no one is getting paid.

It’s very difficult and time consuming to get an idea into reality on one’s own. It takes a broad skill set, a lot of iterative work, and a bunch of lucky breaks for one person to create a minimum viable product, validate it, and start generating revenue from it. Invariably, that single individual will need help, and if there’s no money and no access to it, they will need an alternative means of remuneration.

That alternative is usually promises. And promises in startup are always, always a bridge built to burn.

“I’m losing them.”

Yesterday, I got an email via my website from “Chad,” a founder working on a new startup with volunteers for staff. He admits straight up that the lack of pay is due to his own lack of funds, but he’s looking forward to paying them all a salary as soon as possible.

The problem is, as Chad puts it, their productivity has fallen off despite the promise of wages down the road. He puts this on himself and his lack of leadership. What does he do?

Oof. Chad. Buddy. I think you skipped a bunch of steps.

First things first: Nothing is free

We founders need to understand that nothing in startup comes without a cost. Nothing. I went to great lengths a few weeks ago to drive this point home and put some quantification around it with a post called You Need $250,000 To Start a Company.

I had detractors, of course, but I stand behind my point 100%. No matter how we pay for it — with sweat equity, paper equity, time, cash, or opportunity cost — we’re going to end up spending the equivalent of about a quarter-million to turn an idea into something that can sustain itself. Even if those costs are hidden or, more to the point, obfuscated.