Underpaying yourself is hurting the company šø
Founders in survival mode are bad for business
Thereās a point where underpaying yourself stops being discipline and starts affecting the person making the companyās most important decisions. Thatās when the founder becomes the weakest part of the business.
I heard it put in different ways by Millennial Masters guests, and most of them treated it as part of the deal. I did that for too many years, until I realised what it was costing.
Melissa Kwan also used to think founders should get paid last and least. After years of doing exactly that, she changed her mind. āThe biggest variable to success is the founder,ā she told me, and āif you are constantly in survival modeā¦ you cannot make good decisions for your company.ā The real issue is what that does to the founder.
Before eWebinar, she described almost ten years of āpure sufferingā, paying herself barely enough to get by well into her 30s, living with multiple roommates, picking the cheapest thing on the menu, or meeting friends after theyād already eaten because she couldnāt afford dinner with them. Thatās what bootstrapping often looks like in real life.
Itās easy to package that kind of sacrifice as part of the job. It sounds different when you look at what people are actually giving up.
James Fleming went from a highly paid executive job to selling his watches while his wife sold off her gold just to keep the marketing going. He had days when he didnāt know how he was going to put fuel in the car to get to meetings. Emma Mills ended up remortgaging her house to sort out cash flow after getting too optimistic about what the business could support.
Tyler Dunagin pulled money out of his savings and retirement account and paid himself a pittance for the year. Andrew Steele pointed to another version of the same problem: founder pay thatās too low or too erratic can leave you unable to get a mortgage at all.
People blur the line between lean and self-destructive when they talk about āleanā. The word sounds smart and controlled. The reality is often much uglier.
Yota Trom says scarcity leaks. If youāre operating from that mindset, people feel it, even if you never say it outright. Her question stings: who wants to be part of a culture like that? She pushed it further by asking how you can be generous with other people if youāre not generous with yourself. That moves the conversation out of personal finance and into company culture.
The overlooked bit is what chronic money stress does while youāre still trying to lead well. It can show up as caution that looks sensible but is really fear. It can make you more defensive, tighter with people, more hesitant to hire, slower to spend where it matters, more transactional, and less trusting.
It also pulls you into short-term thinking. When money stress is constant, you start solving for immediate relief instead of better long-term decisions. You might call it prudence, but the team experiences it as pressure. And the people you most want around you usually donāt stay long in a culture shaped by private financial panic.
Damon Flowers pointed to another part people tend to leave out. Founder money stress is lonely. You canāt really take it to staff because then they start wondering whether they should look for another job. You canāt fully take it home either. So you end up carrying it in your own head, and it gets heavier. That isolation matters because people donāt make their clearest decisions when the financial pressure is constant and private.
Peter Watson made the case for taking less and keeping more inside the business. Founders should work out the minimum they can live on, then take that, and leave the rest in the company. That can give a business breathing room. It can leave you with more room to survive, invest, and move when opportunities appear. Some founders do win that way.
But Peter also shows the trade-off. Even later, after the business had improved, he was still pricing purchases against an old Ā£5-an-hour wage. He describes how hard it is to āunlockā that after years of living so frugally. Extreme discipline can help a founder survive. It can also rewire their relationship with money in ways that donāt disappear once survival is no longer the issue.
A founder taking less for a while can be rational. A founder who stays so underpaid that they become distracted, anxious, reactive, isolated, resentful, or mentally worn down is no longer helping the company.
That was Melissaās point. If youāre constantly in survival mode, you cannot make good decisions for your company. Once the strain starts affecting judgement, itās already affecting the business.
None of this means founders need luxury first, or that every business can pay market-rate salaries from the start. It also doesnāt mean frugality is fake or that every rough period is a mistake.
It means the founder should not be the part of the business quietly breaking while everyone pretends itās discipline.
The founder doesnāt need comfort first. They need enough stability to think clearly, lead properly, and keep building. Without that, the business pays for it.
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It's one of the most common tradeoffs and there is no boiler plate answer as there are so many "depends". My own founding journey has included 50% to 90% pay cuts and periods of zero pay. As an investor I think about it differently - I don't want the founders mental energy getting drained by personal finance issues whilst I also want the founder to set a decent example that is culturally robust around pay and incentives - so between those two points is a zone where we can all find a model
It is one of the topic under discussed yet has direct effects not only in your business but in your life decisions too