I can completely understand where you are coming from, but also speaking as a startup founder, i would propose another perspective, efficiency wage theory:
“Efficiency wage theory posits that an employer must pay its workers high enough so that workers are incentivized to be productive and that highly skilled workers do not quit.” https://www.investopedia.com/efficiency-wages-5206757
While indeed the startup may be incentivized to “pay people the least amount” as long as they fulfill their tasks and keep them in your team; in the long run this amount would normalize to be market (even barely over market) prices. Otherwise you would be left behind and would have to keep spending capital in the overhead of hiring and training new people, which is less productive than having someone trained and motivated.
Maybe you didn’t mean it in that way, but I would strongly recommend against playing chicken with the wages of your employees and testing how low you can go and still get applications. I believe doing this will fill positions with people that are not skilled enough to get a better paid job (or have high rotations), and usually that means that your company is going to move slower than your competition.
I always thought these kind of things give rise to efficiency founder theory which posits that founder-induced prosperity needs to be maintained well beyond the level where lesser companies "pay people the least amount that keeps them productive, engaged, and on the team."
This is what you will be known for.
If you're just going to start up more of those kind of companies, why even bother?
Quite a good analogy there about "playing chicken", these are your people so why not want the best for them that you can possibly offer.
“Efficiency wage theory posits that an employer must pay its workers high enough so that workers are incentivized to be productive and that highly skilled workers do not quit.” https://www.investopedia.com/efficiency-wages-5206757
While indeed the startup may be incentivized to “pay people the least amount” as long as they fulfill their tasks and keep them in your team; in the long run this amount would normalize to be market (even barely over market) prices. Otherwise you would be left behind and would have to keep spending capital in the overhead of hiring and training new people, which is less productive than having someone trained and motivated.
Maybe you didn’t mean it in that way, but I would strongly recommend against playing chicken with the wages of your employees and testing how low you can go and still get applications. I believe doing this will fill positions with people that are not skilled enough to get a better paid job (or have high rotations), and usually that means that your company is going to move slower than your competition.