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What Should Founders Get Paid

The next transcript features a training from Thrive15.com, one of the best business schools in Florida, with Clay Clark, US Small Business Administration Entrepreneur of the Year! Check out what you can learn about paying founders of a company!

Caleb Taylor:             Okay, good. Number nine, can we change what the founders are getting paid?

Clay Clark:      This just happened, I was in a business deal just a month and a half ago.

Caleb Taylor:             Okay.

Clay Clark:      Irritated me.

Caleb Taylor:             Really?

Clay Clark:      Yeah. It's in the agreement that we can change what we're getting paid and they came in and wanted to lower what I'm getting paid after I've done my part to make it big.

Caleb Taylor:             Yeah.

Clay Clark:      I couldn't be more upset.

Caleb Taylor:             Because it was in there from the beginning?

Clay Clark:      Mh-hm (Affirmative) but this is one thing that has been there for a long time and I should have done step nine. I did not.

Caleb Taylor:             Right.

Clay Clark:      Dumb tax I just paid it ching ching.

Caleb Taylor:             The key here, spell it out for me again, with all my co-founders, I'm starting a company ...

Clay Clark:      Yeah.

Caleb Taylor:             The key here is deciding if you can change what people are getting paid?

Clay Clark:      Right.

Caleb Taylor:             As it goes depending on circumstances.

Clay Clark:      Yeah, because a lot of times people do that. While things are going the way we expected, can I cut your part?

Caleb Taylor:             You've got to build that in from the beginning?

Clay Clark:      You want to otherwise it's weird.

Caleb Taylor:             Yeah, okay. Who is going to be the key decision maker? You've built Thrive so that's ... There's not any question there?

Clay Clark:      Yeah, so I call it a benevolent dictatorship which basically means I'm a dictator and I plan on being benevolent.

Caleb Taylor:             Right.

Clay Clark:      I can make the decision, the final decision on any situation. As a funny situation, it's a fun example, but Dan is one of our partners.

Caleb Taylor:             Yeah.

Clay Clark:      I disagree with Dan almost all the time but is our discord that it's like there's one cord.

Caleb Taylor:             Right.

Clay Clark:      Then there is another cord an we have this discord but it becomes this rope ...

Caleb Taylor:             You dis right there.

Clay Clark:      Becomes this rope and it's stronger. It's more and I never agree with him at the beginning. I almost implore, I don't even want to talk to him. Sometimes I'm like, "Here comes Dan, crap." It's like, "Clay, what do you want to get for lunch?" I'm just like, "What do you want?" Because I don't even want to say what I want because I know if I say it, he'll be like, "Why would you want that?" I just know it's going to be that way but ...

Caleb Taylor:             Plus it's his intention.

Clay Clark:      Honestly, we put him in a position because he has an unmatched track record for being high integrity, and for thinking differently.

Caleb Taylor:             Right.

Clay Clark:      He saves us all the time. It's unbelievable. It's a great relationship but it's a situation where we have to know who makes the decisions. I let him make decisions in this area, nine times out of ten but sometimes I have to hop in and say, "I disagree, we're going to do this."

Caleb Taylor:             You've got the ultimate authority to make decisions wherever needed but you've also staffed the team with people who are great in certain areas. Even you've got Deedra Determan, also a mentor here. She's very experienced in advertising and you're fine with letting her run with that?

Clay Clark:      Yeah.

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Caleb Taylor:             You've got the ultimate authority?

Clay Clark:      Yeah, Deedra said something that I did not agree with and I've given her authority and I listened and I listened and I listened. I still didn't agree. She ended up being proved out to very right.

Caleb Taylor:             Yeah. It's because she has experience in that area but I ultimately could decide whether to delegate that or nor, Does that make sense?

Clay Clark:      Yeah, it does. That's the thing and I want to give you an example here that of one maybe this is a little free bonus marriage tip for you. If you're married right now, let's say you're a dude, and you've decided that you'll decide on all decisions?

Caleb Taylor:             It's all in your play. You got this.

Clay Clark:      Then she's also decided, "I'm going to decide on every decision?"

Caleb Taylor:             I could see some discord.

Clay Clark:      It's going to be a problem.

Caleb Taylor:             Yeah.

Clay Clark:      You need decide right now in that marriage. Now I subscribed to a certain the Judea Christian World View where I'm the head of the household so I decide. Some people might say, "You're a sexist, you're terrible." That's fine then decide who decides but we cannot have two chiefs.

Caleb Taylor:             Right.

Clay Clark:      We cannot have two masters. We need one otherwise there will be a conflict and it will be bureaucracy.

Caleb Taylor:             That makes sense.

Clay Clark:      Okay.

Caleb Taylor:             I think it fits nicely into this next point number eleven: How will decisions be made? Remember, these are all questions you have to ask before you start in your company with your co-founders or else you will run into massive problems in the future. At number eleven, how do decisions; how are decisions made?

Clay Clark:      There are three options; one is the majority vote.

Caleb Taylor:             Okay.

Clay Clark:      Hey, there;s three of us, let's vote. I, nay, I. Okay, there's two Is and one nay; Is win, boo; boom. That's it, majority.

Caleb Taylor:             Got it.

Clay Clark:      Okay, whoever has the most votes and an uneven number, whoever has the most. Five people vote; three people say yes, two people say no, majority wins.

Caleb Taylor:             Yeah.

Clay Clark:      Second area here is the unanimous vote.

Caleb Taylor:             Okay.

Clay Clark:      That's where it has to be; everyone agrees.

Caleb Taylor:             Does that ... I feel like that would stop productivity at times?

Clay Clark:      Actually there is organizations that want to do that on purpose.

Caleb Taylor:             Okay.

Clay Clark:      There are like In-N-Out burger is an example of a company. They have set up certain things in their by-laws so that they can't be tampered with which will keep their structure exactly the way it's always been.

Caleb Taylor:             That makes sense.

Clay Clark:      It's what they do. The United States government is that way.

Caleb Taylor:             Yeah.

Clay Clark:      Where it's designed to have a decent. It's designed for democrats to go, "We're in favor." Republicans are like, "We're not in favor."

Caleb Taylor:             Yeah, the checks and balances.

Clay Clark:      They argue; checks and balances, okay and the final one is a benevolent dictatorship.

Caleb Taylor:             Which is you?

Clay Clark:      Well this is good if you have a king that you trust.

Caleb Taylor:             Okay.

Clay Clark:      When you sign up for a benevolent dictatorship, you better say it like, "I agree with this person or I don't." If you don't, you better not be a part of that.

Caleb Taylor:             Right.

Clay Clark:      Hypothetically, if you live in North Korea and I know in North Korea, a hundred percent of the people vote in favor of their dictator every year.

Caleb Taylor:             Right.

Clay Clark:      I know a hundred percent of their people ... If you're in Cuba right now, I know a hundred percent of you voted in favor of your awesome dictator.

Caleb Taylor:             Right, I think I'm seeing what you're saying.

Clay Clark:      I'm saying these are situations so I prefer to have a benevolent dictatorship as long as I'm the dictator.

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