Fred Wilson of Union Square Ventures wrote on the subject of Loyalists versus Mercenaries, and I’ve been meaning to address how I think about this subject.
But teams come in all flavors. There are highly loyal teams that can withstand almost anything and remain steadfastly behind their leader. And there are teams that are entirely mercenary and will walk out without thinking twice about it. I once saw an entire team walk out on a founder. That company survived it, remarkably.
Clearly, our team at BP3 and BP3 UK is the kind of team that can withstand almost anything and stick together. I don’t know that it is so much “behind our leader” as it is “behind each other”. We’re a team.
Fred chalks this spectrum up to four factors:
- Leadership, and having a great leader
- Mission – and loyalty to the mission
- Values and culture, and how you cultivate them
- Location – and how much pressure there is from other opportunities
There’s really nothing to argue with here. But I think the key point on location is covered well by Fred:
These are very different talent markets that the bay area or NYC. In the Bay Area and NYC, your employees are constantly getting hammered to leave for more cash, more equity, more upside, more responsibility, and eventually it leads to them becoming mercenaries. It is incredibly hard to hold onto a team in the Bay Area and NYC. If you are building your company in Ljubljana, Waterloo, Des Moines, Pittsburgh, Detroit, or Indianapolis, you have a way better chance of building a company full of loyalists than if you are building it in the Bay Area or NYC.
It isn’t just the quantity of opportunities, it is the relentless nature of the pursuit in some locations, and the cultural acceptance and even admiration for mercenary behavior. Speaking of which, we can look no farther than Amazon’s corporate behavior to see that mercenary is a label we can apply to many corporations as well:
My final thought it that even if Amazon were as the NYTimes article described, it would be a legit approach to business:
“Amazon is O.K. with moving through a lot of people to identify and retain superstars,” said Vijay Ravindran, who worked at the retailer for seven years, the last two as the manager overseeing the checkout technology. “They keep the stars by offering a combination of incredible opportunities and incredible compensation. It’s like panning for gold.”
This is just another reason to Choose Austin as a place to build a company. You don’t have to be focused on lifetime loyalists, but when you work hard to attract a great team, and you love working with them, you want to have a longer working relationship as well. And when you join a team you love working with, you get a longer runway working together. Lifestyle and team sometimes trump the money chase.