Generosity & Entitlement

I’ve been trying something new at Moz. I schedule 90 minutes every week or two for “office hours,” and invite anyone from any team at the company to come visit and chat about whatever’s on their mind. So far, attendance has been sparse (only 1 person the first week, ~10 the 2nd week, and 4 each of the last two weeks), but I think that’s a good thing. Hopefully it means that the other channels of communication and feedback are supporting most Mozzers’ needs.

Today, one of our senior engineers, Brandon, stopped by. He was worried about a growing sense of entitlement on the team. About 9 months ago, we talked about the risk of hedonic adaptation at an all-hands gathering, but this engineer felt that those risks were becoming reality. Brandon pointed out some feedback from TinyPulse (a tool we use to gather and report anonymous feedback at Moz) and some of the things he’d personally overheard when socializing around the company. These included complaints about the increased hours and stress associated with our recent launch/rebrand, a lack of availability of particular kinds of food and snacks, challenges with scheduling vacation time, some folks not getting the kinds of hardware/furniture they wanted, and about there not being enough open timeslots when we had a masseuse visit the office.

the hedonic treadmill: an unavoidable result of evolutionary biology

This is a really tough topic for me, because I deeply believe in empathy and generosity (two important elements of TAGFEE), and asking people to just deal with long hours, high stress, a lack of their favorite foods/snacks/hardware, or not getting a massage when others did seems, on the surface at least, to conflict with those values.

Brandon and I had some really good back and forth, and I know his opinion is shared by others at Moz who worry about whether we’re being wasteful or encouraging feelings of entitlement. I tried to state the case from the other side, and it led to a few big topics that Sarah Bird and I have had passionate conversations around in the past. I thought I’d share these here.

Is a Perk a Reward? Does Removing a Perk Constitute Punishment?

No one’s done a better job of writing about what happens when perks get changed and the informal, loose culture of a startup changes to feel like a “big company” than Steve Blank:

The Elves Leave Middle Earth – Sodas Are No Longer Free

One day the engineering team was clustered in the snack room looking at the soda machine. The sign said, “Soda now 50 cents.” The uproar began. Engineers started complaining about the price of the soda. Someone noticed that instead of the informal reimbursement system for dinners when they were working late, there was now a formal expense report system. Some had already been irritated when “professional” managers had been hired over their teams with reportedly more stock than the early engineers had. Lots of email was exchanged about “how things were changing for the worse.” A few engineers went to the see the CEO. But the damage had been done. The most talented and senior engineers looked up from their desks and noticed the company was no longer the one they loved. It had changed. And not in a way they were happy with.

At Moz, we had a period of ~3 years where the hardest part of growing was finding talented software engineers who could tackle projects of the scale and complexity we wanted to take on. Every engineer we interviewed was also being recruited by some combination of Facebook/Google/Amazon/Microsoft. Those companies have a lot of cash, and no fear of using it to lure in talent. But along with direct competition on the salary front, there’s a tremendous number of benefits offered by these firms (with the possible exception of Amazon, who has a famously frugal culture). As we became less financially constrained, we competed in the classic ways – salaries, snacks, office amenities, catered lunches, beer nights, and in some weird and unique ways like paid paid vacation and mashed potato sculpting contests (that one’s surprisingly affordable).

To many who were at Moz during the launch of these new benefits and perks, the announcements were greeted with celebration and glee. We’d been through the tough, leaner times and it felt great to have these visible signs that we’d made progress as a startup.

But you cannot expect that same emotion over time. After a while, we hop on our hedonic treadmills and we get used to those catered lunches and sponsored beer nights and paid, paid vacations. Once we’re used to them, they’re no longer special. They aren’t “perks” we can do without, as we once did. Those are part of our “employment package.” And if we want to make a few extra hires or invest in some new outlay that’s outside the budget plan, too bad. Those benefits are owed to us; heck, they’re part of why we joined the company. If they leave, why shouldn’t we leave, too?

At least, that’s how human nature and evolution have conditioned us to think.

And if management or financial controllers fail to recognize that, I think they’ll find themselves falling victim to the kind of disgruntlement and frustration Steve described in his story about $0.50 soda.

This is a tough problem, and I don’t honestly know the solution, or even how to start. I know that I want paid, paid vacation and miniature candy in the office, and mimosas to celebrate a launch, and 401K contributions to always feel special. But I also know that’s not how we’re wired. I’ve found myself feeling entitled to my very particular kinds of soda being stocked in our fridges and thinking about how to use next year’s vacation cash. I think this will always be a thorny issue. There’s no way to force people to feel grateful, especially when the big company down the street may make even sweeter offers.

What I do know is that we’ve got folks on both sides of this issue at Moz today, and if I had to guess, we’re all actually on both sides of it. Sometimes we feel entitled. Sometimes we feel like we could live with less. Sometimes we wish we could be more empathetic to our co-workers who just worked a long weekend. Sometimes we wish our co-workers would be more empathetic to our customers by launching project XYZ sooner. Historically, when I’ve seen both sides get roughly equal amounts of feedback, my sense is that we’re keeping a healthy balance, and just need to stay vigilant in case the scales tip.

How Do We Reconcile Impact vs. Savings?

Moz is in a lucky position. Despite the fact that our recent launch was significantly delayed and our expenditures this year have been dramatically above budget (mostly contractor spend, additional hosting costs, and hiring a bit ahead of schedule), we’ve got a lot of runway from our funding round last year, and thousands of customers who help us pay the bills. But someday, that could change.

As we’ve been doing budget planning and looking at worst case scenarios (we actually drew one up where 10% of our subscribers quit after we launched the re-brand to Moz, thinking it might be like when Netflix launched Qwikster), we tried to figure out what would happen if, in the months to come, we couldn’t get costs under control, couldn’t get our new product delivered, and were feeling cancellation pain (thankfully, the week since launch has looked pretty darn good). Part of that meant coming up with a worst-case budget that would find cost savings.

There was back and forth about how and what might be prioritized for cost savings. I expressed concern that things like beer nights, catered food, new laptops, or conference travel don’t amount to much compared to our much bigger budget line items like hosting and contractors. What does a few thousand dollars saved each month matter when we’re spending $650K+ at AWS, and another $600K/month on professional contractors?

Sarah made some compelling counter-arguments:

1. Cognitive Dissonance. I wouldn’t feel right telling people they can’t hire a contractor or bring on a new team member, when we spend on fancy catered lunches. I don’t like telling people they can’t get a new desk, when we send mozzers all over the world to conferences.
2. Small Expenses Do Add Up. I know that adjusting our spending policy on any one item will not make a huge financial impact. But lots of small impacts do add up. For example, paid, paid vacation is almost $400k/year. That does impact our finances. Travel too. It adds up. There are at least a couple new hires worth of travel at Moz.
3. TAGFEE Isn’t About Perks. Moz was tagfee before catered lunches, before charity match, before retina screens, before beer night, before mozcation, before it all. TAGFEE isn’t just generosity. TAGFEE is about how we treat others, person to person. Are we respectful? Are we kind? Are we honest? It’s about loving what you do. I think we’d be tagfee even if we had to scale back some perks in times of need. Hopefully people would trust that as we got back to a more stable position, we’d ramp perks back up.

Looking back over these emails now, I feel a lot of relief that our launch has gone well (at least in week one), our hosting/contracting spend is shrinking, and that both revenue and costs are likely to be in a place over the next 3 months where we won’t have to worry excessively about this stuff (fingers crossed, knock on wood, and all that).

But Sarah’s strong arguments do make the conundrum all that much harder. As startups face the highs and lows that inevitably come with growth, we’re challenged to strike a balance between adding perks (that can be emotionally taxing and feel non-generous to remove, should the need arise) and running lean (which can make it feel like the founders/investors are hoarding all the value the company generates).

Much like the situation with hedonic adaptation, there’s no simple solution. Startup founders and boards need to determine where to find balance between adding in new costs that provide benefit to the team and recognizing the pain that might come should those costs need to be unwound. The startups I interact with often think about this when it comes to people and salaries, but sometimes consider neither the value nor pain of benefits spending.

Does Startup Speed Have to Be Constant?

Moz has long been a place where most of us have lives outside of work, even in tough times. Lately, though, with the re-brand and the upcoming release of Moz Analytics, the pressure has been on in a way that’s rarely existed at the company. That pressure, and the long nights and weekends for many engineering team members, has, naturally, led to stress and anguish.

I’m of the general belief that the first 30-40 hours we work each week are the most productive, and that the curve of productivity generally falls off pretty fast after ~50 (especially after 2-3 weeks in a row). In the past 6 weeks, I’ve been feeling guilty about asking all these people to put in extra hours, and as a result, have been pouring in hours of my own (many that aren’t particularly productive or useful). Over Memorial Day weekend, I did 12 hour days both Saturday and Sunday, and stared at my screen on Monday until I realized that I was getting nothing done, so Geraldine and I went to see Star Trek. I felt so bad about taking a few hours away from my computer that I didn’t even check-in on FourSquare. I didn’t want other Mozzers seeing my time-off.

That sucked, and it was totally wrong. As Jerry, my CEO coach, would say, “if you don’t show other people that you take breaks, they’ll never feel like they can take a break, and you’re not being truly empathetic.”

When I talk to other CEOs, and other startup employees, I get this weird sense that Moz is an outlier. I think there’s either A) a lot of very unhealthy (and probably unproductive) expectations around hours or B) a lot of BS about how much time people at startups really spend at work. Maybe both.

But, I understand where they’re coming from. The logic Paul Graham lays out in his seminal essay on startup wealth is held as gospel by many in the field:

Here is a brief sketch of the economic proposition. If you’re a good hacker in your mid twenties, you can get a job paying about $80,000 per year. So on average such a hacker must be able to do at least $80,000 worth of work per year for the company just to break even. You could probably work twice as many hours as a corporate employee, and if you focus you can probably get three times as much done in an hour. [1] You should get another multiple of two, at least, by eliminating the drag of the pointy-haired middle manager who would be your boss in a big company. Then there is one more multiple: how much smarter are you than your job description expects you to be? Suppose another multiple of three. Combine all these multipliers, and I’m claiming you could be 36 times more productive than you’re expected to be in a random corporate job. [2] If a fairly good hacker is worth $80,000 a year at a big company, then a smart hacker working very hard without any corporate bullshit to slow him down should be able to do work worth about $3 million a year.

An inescapable part of the pitch is that we startup folks should work 3X as hard for 2X the number of hours.

I don’t buy it. I might be able to work 3X as hard for half the hours, and if I’m truly exceptional, work that hard for 1X the hours. But after 1.5X the hours in a given week, my work quality is diminishing. And if I do that for 2 months in a row, it’s abysmal.

The problem becomes when you find whatever the healthy pace is for your startup and your employees, and then you need to change it. I’ve seen both sides of this.

On one end of the pendulum is the startup at breakneck speed trying to slow down, build a bit more process, and scale up with new hires who aren’t built for 80hrs/week. They end up with conflicts of culture and accusations around commitment and people who don’t know how to slow down or what to do with a life outside work growing angry and resentful at the new “normal.”

On the reverse side of that pendulum is the startup that takes a more balanced approach to working hours finding themselves facing a critical moment, like we recently did. Hours are suddenly way up, and many of us who aren’t used to it find our nerves more frayed, our communication more challenging, and our friends/families more angered by our unavailability.

So is it the case that we’re tied to a single speed? That our gears can’t move up or down? I don’t think so, but I do think expectations and transparent communications are the only way to solve for this. Going into the last couple months, we’ve tried to be really honest with the Moz team about the crunch and the all-hands-on-deck mentality. For 90% of the people 90% of the time, I think it’s worked. And for the 10%, I hope we can make it up to them, and I hope we can do better next time. While part of me hopes there is no next-time at this pace, another part of me knows that times like these are when we get to test our mettle and see if our hard work can earn customers’ praise and business. Every now and then, it can be exhilarating and inspiring to test your accomplishments in that fashion.


One of the toughest parts of today’s conversation was the request Brandon made. He wanted me to bring up entitlement and talk about how it could become a worrying trend and something we need to address. But, as I expressed to him in our discussion, I feel like I’m not in a position to do it. Yes, I’m the CEO, but that’s precisely the problem. CEOs have it easy – they get to set the rules and change them. They can decide whether this particular trip on the company’s dime is worthwhile or not. They can determine how many hours they work in a given week, and no one gets to say otherwise. They can slide on their project dates and no one calls them on it. They have the greatest ability to influence which sodas go in the fridge or which benefits make the cut. And, since their salaries tend to be so high, perks and benefits matter less to them; they can afford all that stuff anyway.

I feel like a total asshole if I stood up in front of 130 people who work at a company where I own nearly 25% of the stock, and asked them to “feel more happiness” at the benefits we provide and to “stop being entitled” about massages or snacks or retina-display monitors. I don’t think I could do it. I don’t think it would be right.

But, while CEOs may not have the moral authority, we do have the obligation, the hierarchical authority (my least favorite kind), and the pressure (internal and external) to keep our teams happy and productive. If the fight against hedonic adaptation can make a difference to both,  it deserves at least some investment. Maybe I can find a way to talk about these issues in a way that is empathetic and generous, and recognizes the complexities and balance around all these issues.

p.s. Or maybe I could ask Brandon himself to talk about it. He’s a very compelling debater. 🙂 Delegation FTW!

p.p.s. After initially publishing this post with Brandon anonymously cited as a “senior engineer,” he gave me permission this morning to include his name in the post. I’m grateful for that, and very grateful to him for bringing it up with me yesterday.