If you take any comment to its absolute extreme, it will stop making sense. If you consider my comment from the more reasonable stance that startups have limited resources compared to large companies and come with extra risks for employees, the fewer benefits can be valuable for dissuading people who might not otherwise be good culture fits.
For example, a 45 year old father who might be screwed if the startup shuts down 2 months later probably should not be applying to startups. However, a young recent college grad will have a much easier time bouncing back if the startup shuts down, simply because she has fewer responsibilities than the father. As a result, a lot of those benefits that the father is looking for are also less important to the recent college grad.
Of course, the startup should give the best possible benefits it can afford. But I don't see anything wrong with the startup focusing its limited resources on finding the employees that are better fits.
Funny, I didn't think that was even remotely an extreme. An extreme here would be something like, "Charge people money to work at your company, that way you only get the most extremely dedicated." Simply paying less salary in addition to giving fewer benefits seems like an extremely minor extension.
There's nothing wrong with paying less because your resources are better placed elsewhere. I just don't buy the idea that paying less gets you better candidates. Sure, it might filter, a little bit, for people who really care about your business. But it's also going to filter, a lot, for people who can't get better jobs elsewhere.
For example, a 45 year old father who might be screwed if the startup shuts down 2 months later probably should not be applying to startups. However, a young recent college grad will have a much easier time bouncing back if the startup shuts down, simply because she has fewer responsibilities than the father. As a result, a lot of those benefits that the father is looking for are also less important to the recent college grad.
Of course, the startup should give the best possible benefits it can afford. But I don't see anything wrong with the startup focusing its limited resources on finding the employees that are better fits.