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  • Writer's pictureMatthew Lerner

Why I took a 60% pay cut in 2004

Updated: May 28

Here’s something nobody tells you: The world’s top growth people know their success depends, more than anything, on joining great companies. That’s why I took a 60% pay cut to join PayPal in 2004.

I’ll admit: I certainly wasn’t looking for a “growth” role—in fact, that term wasn't coined until 2013, and my roles tended to be in marketing, product or general management. Also, the term “PayPal Mafia” wouldn’t appear 'til 2007, and I did not imagine the revolutionary impact these people would have.

But here’s what I did know:

  1. Trajectory: While I’d joined successful companies, some of my friends' companies were growing like crazy. These friends had smaller salaries, but they were earning millions from their equity.

  2. Timing: PayPal had just been acquired by eBay. In 2004, eBay was already a growth monster, and PayPal’s “off-eBay” opportunity was still 10X larger.

  3. Team: The people I met at PayPal, particularly Dave McClure, were among the smartest people I’d ever encountered. They were bright iconoclasts, but still willing to listen to my ideas.

That’s why I didn’t worry about the massive pay cut – I believed in the opportunity. And if you look at the best growth people in the world and you’ll see how their careers were shaped by the companies they joined:

  • Andrew Chen joined pre-IPO Uber.

  • Elena Verna joined Miro, Amplitude and Survey Monkey.

  • Andy Johns joined Facebook, Twitter, Quora and Wealthfront.

Why this matters

These folks understand that when things go well, talented people get the opportunity to grow along with their companies. They also understand the risks: It's hard to grow a startup, and when things go badly, it’s always the Head of Growth who gets blamed, even if it’s not their fault. So they look for roles where the opportunity justifies the risk.

How do you know which one to join?

Graduates from Stanford Business School are encouraged to take the advice popularized by Sheryl Sandberg, and “find a seat on a rocket ship.” But how can you figure out if you’re joining a rocket ship or a ship of fools? After all, founders are good salespeople.

I’ll tell you in next week’s post. 😏

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