Ryan Rutan: Welcome back to another episode of the Startup Therapy Podcast. This is Ryan Rutan joined as always by Wil Schroter, my friend and the founder & CEO of Startups.com. Wil, pretty much everybody—this isn't just a founder thing—pretty much everybody is still kind of hung up on this concept of a 40-hour work week. And it seems like a pretty outmoded construct in a lot of ways. And yet nobody's really come up with a much better answer for this. We're still trading units of time for units of money, and we've rethought a lot of other aspects of the workplace. From, you know, what gets done remotely to what gets done by AI, to lots of different approaches for how work gets done. And yet we all still kind of do it within this same construct of units of time. Why, why are we still hung up on this? Why are we still doing it like this?
Wil Schroter: I think for a couple reasons. One, we've just been doing it forever, right? It's all we've known. Since the Industrial Revolution, people have been paid for units of time. And so Ryan, if you and I got hired at the dock, we would both be paid for the units of time until, you know, until we clocked out.
Ryan Rutan: Thank God, cause if they were measuring our output, it would be a losing proposition for everyone.
Wil Schroter: All right, so before we get into this next topic, I just want to let you know what we talk about here is like 1% of the conversation. You know, really, this conversation is going on all day long online at groups.startups.com, where Ryan and I pretty much talk endlessly with founders about every one of these topics. So if by the end of this discussion, you like the topic and you want to dig into it a little bit more with Ryan and I, just head to groups.startups.com and we'll pick it up from there. But now we're in a much, much different situation in many parts of the business world and certainly the startup world. And here's what's really interesting: in the entire time that we've been trying to figure out how to pay people, the implication is that I'm paying for the outcome, right? So if I'm hiring somebody in customer success, I'm paying for the outcome of what that is. If I'm hiring somebody to do legal, I'm paying for the outcome. And yet we're always finding ourselves in this odd position of trying to shoehorn that outcome into units of time. As if, "if you worked this number of hours, that must mean I'm going to get this outcome." When really we want the outcome. On top of that, we've somehow decided—and again, this is a labor law thing too—that 40 hours is the exact amount of work for every single job that can be done on the entire planet.
Ryan Rutan: Which is funny, right? We defined us both a minimum and a maximum, right? You don't work less than 40 hours a week, you must not work more than 40 hours a week. Like how, how did we decide this? Like where was the study that was done to prove this empirically? Never have.
Wil Schroter: Or when when was it updated? Was it done in the 1920s?
Ryan Rutan: Probably before then.
Wil Schroter: If you were to take the modern workplaces we know of—particularly around startups, and again, that's what we're focused on here—and you were to say, "Let's design a pay schedule, let's design a work schedule all around what's current." And someone said this, someone said, "I got an idea: let's just assume every job needs, let's call it 40 hours exactly to be done." Everybody in the room would start laughing, right? That doesn't make any sense, right? I can do my job in 12. The 2nd is: "And let's just pay people in units of time, regardless of whether they perform." You're like, okay, that that doesn't make sense, but am I gonna have to try to manage their performance? Let's say you're a developer, for example—we'll get into all this—but let's say you're a developer. And you worked for an entire year, but you don't deliver anything. People will say, "Well you would get fired!" Cool, but you still got paid. We're in this mechanism where we assume hours equals productivity. Conversely, we assume that "if I'm not working all of the hours, I must not be fully productive." And I think we just need to tear this apart today. Let's dig into it, let's think a little bit—let's rethink—how this system works, where it breaks down, and maybe where it holds up, you know, it it comes back that way. What do you think?
Ryan Rutan: Yeah. I mean, you and I have talked about this in other episodes, we've talked about this offline, online. We're still going to have this one really sticky issue that I I doubt we'll solve today, because we've tried to solve this, and it's that at the end of the day, it really is not just easiest but sensical that when you boil it all down and you get down to that final little empirical formula for how you're going to pay people, it does sort of map back to time in one way or another, right? You can say, "Well, no, it's based on the product." Well, sure, but calculations of all of the inputs and the cost of that product went into it, a lot of which were time, and traditionally speaking, units of labor over time. And so I'm really curious to see where this goes. And at some point, I'm hoping we get some feedback from other people who thought through this. But as much as I agree with the entire concept—of blowing up the notion of the 40 hour work week—I'm not sure how we entirely get away from "time equals month." So let's explore it.
Wil Schroter: So let's pick it apart. So the first thing we just talked about a moment ago was this concept of paying for outcomes. And I just want to be clear: there are two very different ends of the spectrum of this argument, or of this benefit. The average person is going to look at this and say, "I agree! It doesn't matter if it takes me 40 hours, if it takes me 12...As long as you got the outcome, I should be paid!" Hold up. What if it takes you 200 hours? Should you still only get paid for, you know, the original amount? "Well no! Then it took me longer."
Ryan Rutan: Yeah, this is one of those that only works one direction. Right? "This only works if what you're saying is that I work less." Right?
Wil Schroter: Right, when I say "Let's kill the 40 hour work week", people are thinking, "Oh, I dig it! I work less!" Well, not if you suck. That might work differently.
Ryan Rutan: Yeah but that's an interesting proving point. I mean like there's probably some correlation between that and the Peter Principle, which is to say that like if it did take you 200 hours to do something you're supposed to be able to do in 40, you're probably in the wrong job.
Wil Schroter: Yeah. Yeah, pretty much!
Ryan Rutan: I hired that painter once as a matter of fact. And I paid him hourly.
Wil Schroter: We all have, right. And so let's go with with the advantageous, you know, to the employee, err really to the employer side, which is: I'm going to pay you for outcomes,. And based on those outcomes, you take as long as you take, right? But we'll just take hours off the table for a second. Here's where it gets a little bit gnarly. We try to do this in our own business, obviously Ryan, at Startups.com. Where we've got, you know, a fair amount of people, and we try to look at all of their KPIs if you will, or OKRs, and say, "We're going to pay you for this job and we expect you to get these results." Here's where that gets a little bit tricky for us. And I'll give you a good example. Let's talk about something that everybody deals with, like working with a developer. Right? And so the developer says, "I can have this done by Friday." Cool. But, what if in the past, you used to be able to get that done by the end of the day.
Wil Schroter:Just to be clear, I'm still paid over a period of time, right? So I have no incentive anymore for things to happen any more quickly. Right? So in other words, whereas before we used to say, "Well hold on a second, you used to get that done in a day. Now all of a sudden it takes you a week?" "Well you're just paying me for outcomes, so when it gets done, it gets done." Well that's a little bit different, know what I mean?
Ryan Rutan: Theoretically there are incentives there, right? It depends on—so are we are we talking about, you know, full time employment? Which again, once you blow up the 40 hour workweek, what exactly does that mean? Because again, even the terminology around this is time, right? So let's look at this in two different ways. You've got the full time equivalent, right? You've got somebody who works for you and only works for you. That is an absolute trap for the employer, because now they can just push that back and say, "Okay, you just want the outcome. I gave you the outcome. We don't agree on the time frame that it should have taken." But again, we're back to time. So there's always gonna be some component that is going to be impossible to complete.
Wil Schroter: Here's what I'm saying. The assumption is that we have accurate accounting for how long things should take and what we should pay for that. That's not as easy as it sounds. And people will push back and say, "Well good managers know how to do that." Dude, I don't know how long every single job in the entire company takes! I'm guessing if you're listening, you don't either.
Ryan Rutan: Yeah, let me paint a picture, because this is, so the other side of that, you got the full time influence on one side, you've got let's call it freelance on the other. So, there's been a massive boom in freelance, and people leaving full time jobs during the pandemic and going off and starting to do their own thing, right? And, you know, a lot of cases, those freelancers are now doing project-based work where there's a defined deliverable with a defined cost. And that's great. And in theory, that works really well for both sides. It takes the time pressure off of the employer. They no longer care. The buyer, in this case. "I'm paying you to get this thing." Now, timelines may still be important. I may not say, "Because I'm only paying you $10,000 for this product—this thing I want from you—doesn't mean I can wait 2 years for it to get put behind every one of your other projects." So time may still be important, but it takes the pressure of "I overpaid you for the amount of time that you delivered on this thing." From the freelancers side, it puts the time pressure on them, right? So now it's their best interest to deliver as quickly as possible. Here's what happened. This is the proof in the pudding in terms of, not everybody is good at knowing exactly how long it's gonna take. How many freelancers or people who branched up on their own in the last 2 years, Wil, have you talked to who are now way over their toes in terms of projects? Because why? "Well, this one took a little longer than I thought." "We had a little bit of delay on this one." Right? It constantly happens. This is when you have full agency and control over the project, and you're still not getting it right? So this isn't easy to do. Project costing is a trillion dollar industry, because it's so damn complicated. So the idea that we can get super clean and clear and objective on this and say, "Well look, we figured it out. We know exactly what this thing is going to take from a time perspective." And then again, then what do you do? Is there any buffer on that? Or are we back to the 40 hour work week? You don't work any less than that, you don't work anymore. So even if we are really accurate, how much does that buy us?
Wil Schroter: Well, look, again, I think if we were to say we only pay for outcomes, I think that would actually be way more advantageous to startups, because—you know, to the employers—because you could know your fixed costs and everything, right? Because the truth is, we don't care how many hours our team actually works. We're just trying to do this weird math to map that back to the outcomes we're trying to get to, right? So again, two ends of the spectrum. One end of the spectrum are folks that are working purely on project: doesn't matter how long things take; it takes me 20 minutes or 200 hours, that's my problem. You pay for the outcomes. You want to be clear. There are only so many things you can spec out like that, right? But okay, let's call that on the other end of the spectrum is you're going to pay me regardless. You're gonna hope I get outcomes. You're gonna try to manage to those outcomes. But the truth is that meter is just going to keep on running. That's the way the world mostly works within startups, right? You know, we look at all our different operating teams, whether it's marketing or development or whoever it is, and we say, "Well, you're kind of gonna get paid either way. I'm hoping there's an outcome. But you're going to kind of get paid either way." And again, people will say we gotta manage better or you can fire people...If it were only that easy. We're in a system now where we pay for units of time, when in reality we actually want the outcomes. But we have this bizarre construct that we've been holding onto forever, so people get paid whether they deliver an outcome or not. Now again, they may have a consequence later, but they're still getting paid. That's a shitty system, it's wildly inefficient, right?
Ryan Rutan: And that's the thing, the consequences after the fact, right? It doesn't necessarily even help us get the outcome that we wanted. And all we can do is say, "That was a subpar outcome, and a series of subpar outcomes perhaps, and now we'll make a different decision", which is to say, part company with that person, or take them off that project, whatever. Doesn't actually still get us what we wanted, and it's it's only punitive. And not even really, because to your point, they did still get paid. They're not gonna get paid anymore, but that's a different issue.
Wil Schroter: Now in the middle, you kind of hybrid that we're kind of really talking about, or working toward, is all I care about are your outcomes. They're extremely well-defined and I'm gonna pay you a salary for the course of the year to get to those outcomes. They take as long as they take. The only thing you can't come back to me and say is, "Oh, it took me more time, so that's a problem." You have to deliver on those outcomes within those timelines or you failed at your part of the contract. Now, most people say, "Well, isn't that how employment works?" No, it's really not. It sounds like it works like that. It just doesn't. So I think, again, there's a bit of a push-pull here. From the employer, it's, "Look, I'm taking like this hours tracking thing off the table." But from the employee, there has to be a more defined outcome and consequence. If those outcomes are held. We see that in project work.
Ryan Rutan: Yeah. Okay, so project work, it's possible in that scenario, right? It's possible where we have really clear definitions. But by virtue of what we're doing in a startup, a lot of what we're paying for is for people to figure shit out. Right? How do you put a timeframe on that? How do you say this is how long it should take you to figure this out? You can't!
Wil Schroter: Moving on, again, I think the hybrid there is being able to say, "I don't give a shit how long it takes you, but you have to have these outcomes." Right? Or, or else, right? Either you're fired, or maybe you're an incentive bonus, whatever, right?
Ryan Rutan: But when you say you don't care how long it takes - you don't exactly mean that either, right? Because we did say, "You have to deliver by this time." Right? So we don't care if it takes you less time than that.
Wil Schroter: Uh, the deadlines are what they are. Right? This has to be done by Friday. If it takes you 20 minutes or 80 hours, right? And you don't sleep until Friday? That's on you. It's your incentive to get it done shorter. I'm not saying that you have until Saturday to do it.
Ryan Rutan: I think this is where it becomes really problematic because you not only need really clear definition. You also need agreement and in consortium on how long this is going to take, right?
Wil Schroter: So hard!
Ryan Rutan:Because it's so hard as the founder, as the employer, as the manager—whoever is on the upper end of this equation—you also don't want to to find out that it took them 80 hours, right? As a good human at least you don't. I don't want to find out that, you know, I had somebody working until 4:00 AM every night simply because we mis-spec'd a project. If it's just down to them, like, let's say, you know, 80 hours elapsed between the time we said we're gonna get this done and they finished it, that's different than it took them 80 hours to do it. You know, we would have both been very wrong if it was like "you can get it done by this week" and it took 80 hours. But this kind of thing happens and this is the danger with outcome-based is that, you know, and some of the management systems account for some of this, right? Like, OKR... you're not supposed to get more than like 70% of your OKRs. If you did, it was too easy. If it's less than that by, you know, a magnitude, then it was too hard. Right? And so there has to be some flexibility within this. I think one of the big questions becomes how much flexibility can exist before it starts to be taken advantage of by one side or the other - intentionally or otherwise.
Wil Schroter: I think one of the systems that we've had in place, we've talked about it on other episode's for a long time at Startups.com, is our 1-week sprint system, right? Ryan, me, you and the other leaders in the organization. Every Monday we sit down and we say, "Here's what we're gonna get done by Friday." Right? That's it. Now, I'm not saying that system works for everyone, but here's what's really interesting. We don't have to sit around and wonder how much time people spend write it. Either it was done or it wasn't done come the following Monday. Now, some things take longer. Some things take longer than a week, and where possible, we try to chunk it up until, you know, what we can get done this week versus the next week. But here's what's really interesting: because we're only focused on the outcome and not the time involved, that's the only thing that we're really tracking, right? On Monday it either got done or it didn't and because that's the case, people have a little more flexibility in kind of how they get them done. If it takes longer, they just eat more hours. It seems to work out great. Again, that works out for our management team. If w were to roll that out really across the whole company exactly like that, it would only work if people were working fewer than 40 hours. Right? If every one of these—and you could adjust the timelines of the projects—but again, you mentioned this a moment ago: when we talk about "let's pay for outcomes," what we're really saying is, "Let's allow everybody to work less hours." Because no one's signing up for this pay for outcome program if it costs them more hours than they're working now. So it's our job as the managers just to kind of figure out exactly what the work is. And I think we're still coming back to somewhere around 40 hours. But I think I want to dig into that again, a little bit later too, about kind of what the 40-hour benchmark even looks like.
Ryan Rutan: Yeah, I think it's important because without some definition around that like, it's not clear for either side of this. The other inherent issue if you truly let this be kind of self-defined, like if we were to roll this out and say, "We don't care how much time it takes, these are the things are getting done this week." Where that becomes a little problematic is when you have dependencies across departments or even within a single department, right? If somebody gets the important critical component of their project done on their side in 5 hours and somebody else drags it out for 2 weeks....what happens to the project? So you've got all of these other really complicated dynamics when people are reliant on each other as part of the total outcome. Yeah, this is where my my brain just starts to hurt....
Wil Schroter: You know, by the way, I just want to mention if what we're talking about today sounds like the kind of discussion you wish you were having more often, you actually can. You know, we're online all day, every day, working through exactly these types of topics with founders just like you. So any question you would have or maybe some problem you just want to work through, we're here and we love this stuff. And we're easy to find! Head over to groups.startups.com and let's just start talking. Let me jump ahead a little bit to this idea of like abandon the 40-hour benchmark because because I want to talk about that in terms of. Because we keep coming back to it, right? We keep coming back to, well, um, is it working less than 40 hours, etc. I just want to open this part of it up by saying The idea that everyone should work exactly 40 hours to get the same job done. I think everybody would agree is absurd, but we've also kind of baked in kind of a worker's right? And I'm not opposed to it, by the way, you know, don't, don't put up the pitchforks on me just yet. I'm not opposed to it. But we've gotten this concept that that that the 40 hours is uh do not exceed threshold, which in the startup world is almost heretical, right? That's like, so like we'd kill the work of 40. I've never worked a 40 hour work like that's called vacation. And that's not awesome by the way, I'm not bragging about that. It's it's shitty, It's horrible, right? Um but I think we've got this idea that 40 hours is as much as a human should work, right? Or said differently if you're working last, you're a slacker and if you're working more, you're overworked, where do you think that comes from? Like if you look at not just yourself Ryan, but but the people around you. Why does that feel like something that's generally agreed upon?
Ryan Rutan: I mean, this goes back to some bad labor practices in the past where people were being overworked and worked into the ground, but we're talking about like hard physical labor jobs where the expectation was, you worked a 12 hour day and a lot of cases and this is the industrial period you were working six days a week at 12 hours on Sundays, your body's exhausted, right? And so there was a combination of, you know, some level of unionization, unionization where people came back and said like, hey, we're not going to do this anymore, collectively, we're saying no, because this is really bad for us, how we landed on 40. I have no idea because if you talk to, you know, people in, in the productivity space, they'll tell you were far less productive than that, right? It was the same thing As a kid, right? As a kid, that whole thing, like the optimal amount of learning in a single session is 20 minutes, right? And the, you know, you can, the average person can learn for, you know, up to two hours a day. I'm like, and why are we sitting here for 7.5 to 8 hours every day in school?
Wil Schroter: It's crazy. But let's stick with that. You and I talked a while back about how we had broken out our days, remember, you know, we were listening kind of like exactly how like every 15 minute increment in our days went where we're productive, where we were and both arrived at roughly the same conclusions. In my case I have at most on a good day if I've slept, which is rare. Um, a 2-3 hour like moment of clarity where I can, you know, I can write stuff like the stuff we talked about on the show, deeper creative work or whatever, right? So If I were to go to another company and they were to say, well, we want, we want that 40 hours a week. I'm like, I physically don't have have it, right? I mean like, I love that be awesome When I said a moment ago that, you know, I've never been able to work 40 hours. Here's, here's the part that I'm leaving out. I show up more than 40, 40 hours. When I say work, this isn't me slacking. I've actually got a painfully good work ethic. I just can't perform right for more than those hours. So, so what am I doing in the other time ship man, maybe I'm recording this show with you, right? Or you know, maybe I'm resolving some employee issue or whatever, right? My point is the work that people would pay me for what they really want from me is so limited. And it's so rare that it's consistent on any given day and I'm going to go so far as to say, that's probably the case for a lot of other people too. So when we think about 40 hours, I don't think we have a linear 40 hours to think about right. I think maybe for most people for the kind of work that we pay for these days, 15, 20 and maybe I'm still being generous, which is why I'm starting to like, you know, kind of like look at that 40 hour benchmark and saying, what are we really looking at?
Ryan Rutan: Are we measuring against the standard that never really existed?
Wil Schroter: It's your 7 hours of being in school, right? Like I was in school for 7 hours. Dude, they did studies like you, You learned an hour and a half tops, right? That would've been a week for me. But when I think in these terms, right, right? Like when I start to think like, Oh man, we're so hung up on 40 hours or oh my God, it worked 60 hours. And we did an episode recently we were saying, I don't care how many hours you worked around once you get done. I think the 40 hour benchmark is bullshit. I think we need to have basically an output benchmark of where am I at peak? The things that you're actually paying me for and how do we, how do we absorb and focus on that as a, as a benchmark.
Ryan Rutan: In theory, it's simple, right? You, you start to do the same types of things that we did, which were to break down our day parts and look at, you know, what type of work will be getting done here and there, which I think in the case of a founder executive it can make more sense. They're pretty dynamic. What about when you're talking about somebody whose job it is and I mean we're in the startup space so these don't exist nearly as much but there are certain roles and I guess we'll probably just exclude those from the discussion where you are kind of just filling space and time. Right? You need somebody to greet people when they come into our restaurant. Right?
Wil Schroter: But that's back to the dock worker Ryan that you know, there's no, that's not measurable output there. Right? And so we hold those aside, if the person just has to be on standby to answer phones for customer success, then I'm sorry business hours probably makes sense because we literally need hours and units of people being present for those things.
Ryan Rutan: Questions still becomes is for the right number. Right? Is that enough? Is it not enough? Like is it too much? I don't know. Right? Like conceivably if that's all you have to do. Um, and now you're doing it from home and it's more flexible. Couldn't you make the case that well you could actually do that for 60 hours a week. Now that's my point. Right? And look again, I think I think with without having the labor attorneys kind of popping up out of the out of the ceiling attack us.
Wil Schroter: Let's focus this part of the discussion around being, what hours are we actually trying to pay for? For example, for salespeople, right. I want to pay for the hours and by way that the outcome where they're actually on calls or their sit in front of clients or their or their closing sales and that's why we have commissioned structures and for sales, the performance side, no one gives a sh it about their hours right there. So focused on performance and sales and it's so measurable. But when we looked at softer stuff like from the creative team, the marketing team, the development team, They don't have 40 hours of nonstop production and by the way, if you do call Ryan and I will hire just waiting for you that is either so hard to even get too much less achieve. And yet our entire pay structure is based on that arbitrary benchmark. What I would love to be able to say is look, how many hours would you say are your most productive hours good. How can I buy those hours? I give an example, we recently contracted with some, some outside developers have the option of paying for full time or part time. And one of the thoughts I had was, you know, maybe if we paid half the rate, but we paid for that like kind of the better hours, maybe we'd be better off lo and behold. And I think it's also because their contract and their performance space, they tend to be a little bit more higher output relative to the number of hours that we're contracting for.
Ryan Rutan: But let me let me expand on that. So, so I've given this this particular aspect, I never really thought about it in terms of time versus money because it wasn't really that, but I get asked all the time how to hire people into marketing roles. Right? And so one of the things that I talked about is that where you get this right is on role definition, right? And and and narrowing that as much as you can. This conversation always comes up in in terms of people asking about hiring a generalist, a marketing manager and I'm always I'm always wary of that and saying, well look, here's the challenge with that type of a role, right? If you're not at like a CML, you're talking like, you know, an entry level generalist, what are they actually gonna be good at? Where are there like super powers, What are you gonna do? The chances are they have some but you're gonna be paying them for 40 hours worth of stuff. But you're maybe gonna be getting 5 or 10 hours of what they're actually good at, right? And in the startup space sometimes that's okay because like we said before, there's a lot of flexibility and how we get things done by nature of the beast, right? We're learning. So we're in this constant cycle of identified problem, try to figure out a solution for it, you know, learn something, apply something, take stock of what happened and then react accordingly. Maybe going back to learning case or whatever. But I think that in the same way the in order to maximize people's productivity beyond like all of the mechanical things that we can do in terms of the amount of time that work where they're working, all these things that were like we're talking about now, the one that we haven't touched on is this role design and I think that's a really important one. If you don't design somebody's role such that they're focused on those hours that you want them to perform for. It's not going to happen by accident. Right? Agreed. Yeah. So I think your your example is a great one and that if you've got, you know, a highly specific function and a highly specific project, then why would you hire that person to do something slightly ludicrous? It would sound we often end up in situations like this. Imagine if you're like, okay, well that developers only gonna spend 20 hours a week on this project because that's all they can, We're gonna have a great copy for the other 20 hours a week. Alright. Sounds ludicrous, right. But we often end up having people do things that they're not amazing at and so I think that one of the, one of the things that can happen is we re envision what work looks like as a whole and this would be a panacea is your only ever paying people for their superpowers. Now that does not fit well into our current employment constructs. Not at all. Right. Fractional work. Yes, but we're not in the way we do.
Wil Schroter: It now takes me to our next point. Part of this is because we've set business hours, right? Somebody determined because of daylight that we had between 9:00 AM and 5:00 PM or 6:00 PM to pen a structured it, uh, every day that we're going to be productive and within that time, uh, that's when everybody has to determine that they're not only productive, but they actually need all of those hours at exactly that time. Now we've seen this, right? Because we've been a remote team for almost a decade, right? That no one seems to follow that pattern. Almost every developer and creative is like, no, I work better at night. Um, because people have families and lives and a lot of people are at home right now, there's a lot of things going on throughout the day so that the 9-5 schedule doesn't really make sense for anybody. And I would even go so far as to argue again, we reset the meter and we all sat down for the first time and work hadn't existed. No one would propose, let's all work exactly from 9-5, right. It just, it just wouldn't actually make any sense. Now you get a retail business, you need customers to come in, so you have to be there for something. Sure. If you have to be on the phones at a certain time. Sure. Right. If you're making sales calls and generally your sales calls are are happening when people aren't eating dinner. Sure. Right. I get that at a high level, but here's where it messes up things a little bit. We said it's between nine and 5 or nine and 6, depending if you count the lunch hour. Cool. Um, why is that the case for literally everybody? Right. Not everybody needs all those hours. So what we end up doing is we say I'm going to pay everybody for 40 hours regardless of whether we need those hours or not. Look, if it takes you a few hours, you shouldn't need to do 40 hours and if it takes you longer, you probably suck at your job. Like I shouldn't pay any more for that. It's this really interesting construct that's dating is fun.
Ryan Rutan: Yeah. Yeah, it is. And I think that unfortunately a lot in the startup space, especially productivity is largely left as an individual effort, right? Meaning that it's incumbent upon the employee to figure out how I can be most productive and if they're relatively young or they're in a new role or it's a rapidly growing role. They may not have any inkling on how to actually accomplish that is I think back to, you know, my most productive periods, they've always been times where I had a lot of clarity around being able to switch from one thing to another, so I sort of knew that I'm gonna spend my productive hours on this for this type of thing, like I've got super analytical work that I've got to get done when my brain gets tired of that, I've got another project waiting in the wings, that doesn't require that part of my brain, I can do something more creative or something, just a bit more road. And so it was those periods, but that was all on me to design that right, it wasn't somebody else saying do this thing and find your your optimal work balance that was incumbent upon me. And I largely see that productivity within startup companies tends to be a function of the individual as opposed to a function of team design, role design. Um and I'm not suggesting that that should absolutely change because I don't know that that's possible going back to just how dynamic these things are. I'm not sure that it's possible for a manager when we have the luxury of having a manager for for some of our staff at early stages to sit back and say, you know, here's how you should structure your day any more productive, Let me coach you through this. There just seems to be a lot less of that in the startup space than in the corporate space. Which is ironic because I still think that if you look at output, you know, and you can objectively measure that. I generally feel like startups are more more productive, have more output than you see in a corporate environment, right? And so, you know, some of these things that we do and we tell ourselves like, well it would be better if we could do this. I'm just not sure we have that much of an impact here.
Wil Schroter: What we need are responsive hours, right? These are the times where when you just need to be responsive, if something happens or collaborating, right? If we need to work through an issue and there's four of us, let's say on a Slack chat or that need to get on a Zoom call, we just need a certain amount of expectation that will all be responsive. Right? That's different than than what business hours have historically been. Business hours are more like sit by your phone for 8 hours in the chance that it rings in case somebody you know, needs to ring you, it turns out that our business hours and are productive hours aren't necessarily the same. So if you're most productive time Ryan is between 5:00 AM to 8:00 AM. But that doesn't sync with the collaborative business hours, aren't we kind of totally overlooking things?
Ryan Rutan: Why I moved 2 time zones away. I made my productive hours aligned with business hours because I am good between 5 and 8.
Wil Schroter: And that's the same with me. So you know, I get up crazy early in my most productive hours, like a lot of people who get up crazy earlier or in the morning, here's where that messes with me. So I usually get up around 4:30 or five and it's not, it's not cool. I'm not bragging about it. I don't do it intentionally. Um and but I end up working until I call like a dish, right? We'll ship now by nine o'clock I've got like four hours of my day burned. And technically by virtue of business hours I haven't worked any hours, right? Here's where that messes with me. Now I've got another clock that starts from 9-6. Okay, so by the time six o'clock rolls around dude, I've been working for 13 hours, right? And that's if I clock out at exactly six o'clock um My for like I know for developers historically work work at night there in the opposite schedule, their like dude people are dragging me all throughout the day and by the time I'm about to start my work right in the evening where I'm gonna get all my work done, I'm exhausted.
Ryan Rutan: Yeah. You know, I struggle with it too because now, especially, okay, so now we're only one hour apart, so our time zones have gotten a little closer together. Um and and that's a bit easier for me because I had the same issue, I start really early. Um and then just because everybody else tends to be done at four o'clock, my time local, I don't stop at four o'clock my time, I stopped at 677 38 sometimes, which again, you know, I started at eight your time or six my time. Um so yeah, we end up working these, these really protracted days. Um because you know, we're, we need these responsive ours, we need some hours of overlap. But then I also really crave that time where I'm working and nobody else is. I love those hours because everybody says that productive, right?
Wil Schroter: People saying that they would come in on a Saturday and they loved coming in on a Saturday because they were undistracted and and they got to a point where they're like, "Man, I get so much more work done." That's the way I feel between 5:00 AM to 8:00 AM. But guess what? I hate the fact that it doesn't count mentally in my mind to this day 30 years later when 9:00 AM hits, that's when the workday starts, right And when 6:00 PM closes, that's when like most of the work day ends for me and this is a personal thing. It sucks because I feel super guilty if I'm not, you know, super like focused that entire time? It would never occur to me just like stop working for 4 hours because I may have worked 4 hours prior to that. I probably shouldn't, it doesn't work.
Ryan Rutan: It doesn't, but you can't, I mean to some degree that that implies that everybody else can also just not have you around for those 4 hours, right? And so like you said when we're in a collaborative model that doesn't really work, like yes, technically you could do that practically speaking. It doesn't work in a lot of cases. It would it would create shortfalls for other other individuals. And just emotionally doesn't feel good to know that like, "Oh, I'm not working out, people are seeing me not working." Because the reality is they don't know. It's funny people don't notice when you are working, but they tend to notice when you're not worried about whether I was productive or not when I was working, but the minute my Slack light goes off, everybody starts to worry is somebody paying attention that they see that I'm not working now right? Or said differently, "Were they paying attention before, when I was 3 hours before them?" You know, two time zones away. And the answer is no, no they don't. Wil, one of the things we haven't really talked about today is why are we trying to figure this out at all. Where are we going with this? So I have my own thoughts, I want to hear yours. Why does this matter? What is it that we're trying to figure out what we're trying to give people more time back? So if we're saying that it's not necessary about giving more people more time back, but it's really about focusing on productivity different issue, but it does sound like we are still somehow equating this to time and saying, blow up the 40 hour work week to what end, what benefit are we trying to create here? What in your mind is the is the upside of saying "Let's get away from 40 hours"?
Wil Schroter: I think I keep looking back at this antiquated system that we would have never created, right, in the same way I feel about the current modern day office. If we're to create this from scratch, it doesn't align with anybody's lifestyle. It doesn't align with with how people are actually, as employers are actually trying to pay for work. And yet we all seem to be shoehorning our lives and our careers and our compensation and everything into a model that actually doesn't quite make sense for everybody. And I think, look maybe we look at and go, oh yeah, she said it's not the greatest model, but it's the only one we got right, You know, we have a lot of other things in life that that we, that we backtrack to that on. Um and, and so, you know, maybe we stick with it for a minute, but I don't know, man, I think there's enough cracks in the wall by now where I'm starting to look at this and going, this doesn't really make sense. Like I don't need you to be sitting by your phone all day. I've got Slack, I've got text, I've got 100 other ways to asynchronous, asynchronously communicate with you ever since email, right? I didn't care if you had a desk phone anymore. I'm gonna call you. I guess my thought is the world has changed so much, right? We're in such a different constructs than we used to be. Why hasn't all of all the fundamental constructs that we're now putting out there and how we employ people and how we manage time, etcetera, Why haven't all all of those caught up with us? Like why are we still in the Stone Ages?
Ryan Rutan: Fear, I think fear, you know, at the things won't get done. Fear that we will lose productivity. Fear that we will lose money. I think it it does sort of map back to that, right? And it was an interesting question that we've asked ourselves before and we've asked the team. Like, if you could only work 30 hours a week, what would you be worried that you wouldn't get done? Nobody came back with anything very meaningful, but where does that end? Like if you take that down to 10 hours a week, what would you be afraid you wouldn't get done? I think at that point that I could easily list a lot of things that I would be worried that they wouldn't get done, but you know, I think again, it goes back to how much clarity do we have and it's the bigger the organization gets, the harder this becomes because those individual inputs and that productivity, you know, obviously impact the larger system, but they become less meaningful on a percentage basis. And so it just becomes harder and harder to say if you don't achieve this level of productivity, here's how it objectively impacts the company. But when I was asking the question before, around why it was really about what, what impact would you hope that this would enforce? You know, I agree with you, there's cracks in the wall, this doesn't really make sense. And yet, unlike the traditional construct we had around the office, which, you know, basically same time frames where all these things kind of came came around in the same vintage, um there was an easy answer for that one, right with the technologies that we have now, we simply said, okay, what would be better than working in an office? And the answer was literally anywhere else. And everybody went, "Okay," right, because people have different answers for that, right? Everybody has a different answer for that. And the reality is we have an infrastructure that supports that. You can do a lot, you know, the type of jobs that we're talking about most startup type functions um if you're not, you know, retail, brick and mortar, that requires a physical presence, you can do a lot of these things from sort of anywhere you want to be. Um and and so that had an easy and obvious answer. The challenge we're having with this one is yes, it makes sense to break this down, but into what? Right. And is it is it a lack of infrastructure? Is that the fact that, you know, we don't have, you know, I mean if we had an AI system, let's say for for measuring productivity in the same way that we have, you know, SaaS infrastructure to support communication and collaboration, all of these things that we thought an office was required to do, um if it does come down to productivity, so if ai immediately existed that could measure people's productivity, Would we simply stop measuring time and only measure productivity because then you run into like that's what we're going for. But then to your point, man, what happens, you can't actually do that for 40 hours a week.
Wil Schroter: Well you shouldn't have to, that's the whole point that AI or any other metric would say, "Look Ryan, you've got 17 hours a week to sell, right? You know, if you're gonna go work to a company and you can you should sell that as the highest rate." You can but that's what you've got Any other time. It's bullshit time. I don't need you here for from 9-5. I like our company will set a productivity. I'm sorry, collaboration window right? We need everybody to be to be available to collaborate between these four hours. And so that's where you need to be on your job. By the way. It also means you won't be distracted for more hours. So, that's that's our window, right? Those are our business hours, so to speak, as we call them, right?
Ryan Rutan: Yeah. At this point you could easily call them slack hours.
Wil Schroter: Oh my God, yeah. That you can. No one expects you to be there etcetera. And get your ship done during that time right? It's like anything else. We grow to the size of our fish bowl. So look Ryan. As far as I'm concerned, we've got to kill this construct now, whether or not we build it back, it's somewhat similar. Using some some some new and and kind of more recent technology etcetera. So be it. But what I am saying and I think you feel the same way is this is too big of a construct to keep ignoring anymore. It affects too many people, it affects too big a part of our lives just start saying, "Well, let's just keep it the way it is." I think for everybody's benefit for the startups, for the employees, for everybody in the ecosystem, we've got to take a fresh look at this and come up with a new plan. Alright, so that was fun. Well, let's actually keep this conversation going. You've heard what we think about this. But you know, Ryan and I would really like to hear what you think and we're online, like all day long, pretty much talking about every startup topic you could think of from fundraising, the customer acquisition to just really have to get all of this crazy startup stuff out of your head. And there's tons of other founders, just like you, they're weighing in on these topics so you'll get a chance to just hang out and meet some really smart founders were also super, super easy to find. You head over to groups.startups.com and let Ryan and I hear what's on your mind, let's get to know each other a little bit. And let's just start having more of these conversations.