Entrepreneurship implies risk and the possibility of a payoff.
A startup, as we know it, is one for of entrepreneurship.
In this context, the concept of market salaries has no meaning at all!
More and more and more startups I see, hear, read about are trying to behave like larger, more structured organizations. The worst part is that they model "compensation" (oh, how I hate that word - its what accident victims get, not motivated people working towards a dream) and other "HR practices" on how-its-done-at-big-co-X. Where is the innovation there, people ?
- Market salaries : this is an absurd phrase for anyone in even a partly decision-making position in a startup.
- You need empowerment, ownership, flexibility way more than you need processes
- Try this : Keep a very small 'retainer' component, and then a percentage of profits, not equity stake etc. Sure, do that as well for the early ones, but since you're small and all, nothing like direct participation in profits, and nothing quite like that to keep folks 'real' and focused on the bottomline. It'll build a business like nobody's business :)