Answer by Jonathan Brill, Startup Specialist, on Quora

The economics of startups that leverage technology are that every technical employee is inherently highly leveraged, and every non-technical employee has to do the work of five people to achieve parity. Most non-technical employees are incapable or unwilling to commit to doing the work of five people. But there's a model for doing this and it makes sense to take a closer look.

The Law of Leverage in Tech Companies

Gordon Eubanks, former head of Symantec and Oblix once told me about the law of leverage in technology companies, and that he loved starting software companies because the margins are so great. He said everybody in software companies complains about how hard it is, but they're stupid. Restaurants! Those are a hard business! You have to come in every day and make a bunch of food, and after you're done, you have to come in tomorrow and do the same thing! Ah, but not so with software companies. You hire a bunch of programmers to build some software and once it's built, you just keep making copies and selling the crap out of it forever!

This is, of course, an oversimplification of how software and, to a lesser extent, technology companies really work. But it is the driving assumption behind the magnificently inflated values technology companies get versus other businesses, like restaurants.

The key for technology companies is the maker of technology, or technical talent. This law of leverage means that the programmer in cubicle A is theoretically building something that can be sold a thousand times, and if that works, ten thousand more times. It's possible that this code could be used by hundreds of millions of people. Now that's leverage. In that instance a single programmer could create tens or hundreds of millions of dollars of eventual value.

But what about the salesperson sitting next to the programmer in cubicle B? Every sale that person makes requires a call, a meeting, some emails, etc. They might be really good, but there's an assumption of a low ceiling on what they can achieve. After all, if it takes a set amount of time for each sale, they'll never have the potential to be leveraged as highly as the programmer in cubicle A. At best, under optimal conditions, you'd expect an early stage $200k a year salesperson to produce revenue on the order of $2m at plan. That may be 100% of quota but it's a crap sandwich compared to potential of the All-Star Coder in cubicle A.

To maximize their ability to produce highly leveraged technology, companies have started organizing themselves around distribution systems that are less reliant on people like the salesperson in cubicle B. Sure, there are still some needed (full disclosure, I'm one of these people!) but the litmus test is often that the business person in question has to have an inherent ability to use technology to achieve leverage.

Force Multipliers

Force multiplier: A force multiplier refers to a factor that dramatically increases (hence “multiplies”) the effectiveness of an item or group. Some common force multipliers are: Morale. Technology. Geographical features.


To achieve the same leverage as a maker of technology, business people often need to employ Force Multipliers. This doesn't just require the soft skills that are table stakes for most people who've chosen the sales and marketing path, but something like an ability to design and execute a plan for low cost, high yield distribution. This may mean making a deal to stick your browser into every operating system you sell, like Microsoft did to kill Netscape. Or maybe it means that you're the person who cracked the code on getting Flappy Birds to go viral, netting that guy tens of millions of dollars in app sales--but it sure doesn't mean grinding it out call by call like it used to.

Every startup is hiring technology makers en masse to increase their chances of harnessing the leverage they can get from a magical piece of code. If you're looking to score a non-technical gig with that kind of company, you need to be capable of producing that kind of value. You need to show them you're capable of not just grinding out sales, but of building new distribution systems.

So what can you do? Build something that grows past your needing to personally grow it. Build a blog that gets really popular; build a massive Twitter or LinkedIn following; take a product nobody heard of and get it a critical mass of early adopters; prove that in a given industry you train a bunch of people to go out and sell for you.

In the new age of technically adept startups where every programmer is capable of building a system to replace themselves within a few years, the same is now also expected of non-technical talent. Instead of thinking about performing a non-technical function at some hot startup, start thinking about what systems you could build there to get you the leverage they'd need to pay you rather than some hotshot engineer.

Why is it so hard to get a job as a non-technical employee at an early stage startup?: originally appeared on Quora: The best answer to any question. Ask a question, get a great answer. Learn from experts and access insider knowledge. You can follow Quora on Twitter, Facebook, and Google+. More questions:

 

Published on: Aug 4, 2015