Another thought re: giving more equity to people who are operating in Founder Mode - it's a super cheap usage of capital.
Companies routinely pay 2-5% for a CEO, even at multibillion $ public companies. They'll also pay 10-15% of their market caps to acquire (among other things) higher octane founder mode talent that can rejuvenate the business. It's also not uncommon to pay a single *new* exec 1-2% just to get them in the door in the startup and scaleup stages.
Meanwhile, imagine if you take just 1% of the company and split it across the 5 smartest hungriest people on your team. They'll be vetted extremely well; in many cases you'll have a multi-year track record in evidence. At a modern Series B-C valuation of a $1B, that's a nominal value of $2M for each which is highly motivating to many people especially when it comes with upside. Virtually every successful company that I know would trade 1 unhired CMO, CTO for a guarantee that their 5 best people won't quit for 4 years.
First off, he's right as usual.
In practice, orgs get blocked on rewarding outlier performers who really act like owners by their own red tape. Typical blockers:
- "This isn't in our comp band": Well, the alternative is that they walk out the door and found something or join a different place as a more senior executive. These people know they're busting their asses for you and this isn't a charity.
- "The optics look bad": Nobody has to know, and the people who find out are going to respect the decision because founder mode is so blindingly obvious. The big catch here is that often the people with founder mode are young, or inexperienced, or not from central casting. But you need to push through this.
- "What if we make a mistake." You won't, because detecting founder mode is so so so easy. The people who are exhibiting it are not only more productive and more proactive but they also follow up more, have a better attitude, take things to completion, hold higher standards, etc. It's not like some hard-to-detect secret where you're gambling on whether it's going to be worth it. The equity is much better spent on these people than some new exec where the error bars are 100 meters wide.
Two anecdotes:
* I got a very large grant at the beginning of a startup's growth phase, and the founders basically sat me down and said "we could've used this to hire 2-3 engineers or a new exec, but we believe in YOU so here it is." For about a year after receiving it I would've put on a ski mask and smashed our competitors' office windows with a crowbar if asked. I worked ~80% of weekends for years.
* I recently gave someone on my team w/ very long tenure and probably 0.8-0.9 Founder Mode tendencies a much larger grant than they were expecting. Morale, job performance, inspirational performance to his team notably improved. But I had to argue with several internal teams, reference times that I'd teed him up as a top performer years before (thankfully I saw this day coming), make a case, reduce equity grants for other people to make it happen. It was totally ridiculous. This guy is probably worth a couple % of the company's market cap.