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I don't think the value you generate actually matters in regards to compensation though. What matters is how easy you are to replace.


It does, because value generated helps with your best alternative to negotiated agreement. Specifically, there's more money floating around trying to woo freelancers, technical cofounders, etc.

Also, it sets their BATNA as well - how much value they miss out on while working on replacing you.


> Also, it sets their BATNA as well - how much value they miss out on while working on replacing you.

Ah I never thought about that.

I don't really get what you mean with respect to more money to get freelancers and such. Isn't the compensation of freelancers directly related to how much they would have to pay employees anyway? After all, I can only assume that if it's significantly cheaper to hire an employee, they would do so.

I would have thought too that freelancers have some special skillsets, which make them less easy to find, and thus less replaceable as well, but I don't have any data to back that up.


It matters. The floor is how easy you are to replace. The ceiling is the marginal value that you provide to the company. Considering how incredibly high that marginal value is, there is a lot of upward pressure at the top of the scale.




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