The Two-Basket Ownership Model
- Difficulty
- Moderate
- Time to result
- ~months to results
- Steps
- 7
- Confidence
- —
Sanderson's structure for compensating a small creative team, built on the belief that ownership is one of the things that makes people want to work and that people should be allowed ownership of what they create. He runs two baskets. Officers — long-tenured full-time staff involved in everything — receive a percentage of company net profit as an annual bonus, on top of a market-rate salary. Store staff receive bonuses tied directly to store revenue. Officer status is offered after a few years, and the percentage is genuinely theirs, passable to their descendants rather than a perk contingent on employment. He treats editors, art directors and accountants as creatives who have built the business with him.
Origin
Extracted from Deep Dive with Ali Abdaal
How to run it
- 1
Pay market rate first
Ownership sits on top of salary, never instead of it. Sanderson still pays his officers a salary at market rate, and the profit percentage is additional. Anything else converts an ownership story into a pay cut.
Watch out Profit share offered in place of competitive pay is the failure mode this model is designed to avoid.
- 2
Define basket one around company profit
Officers — people who have been with him a long time, work full time and are involved in essentially everything — receive a percentage of the nets, the figure the company pays taxes on, as a yearly bonus.
Pro tip Tying it to the taxable net keeps the number auditable and unambiguous.
- 3
Define basket two around the metric that group controls
The store team, who handle online orders and Kickstarters, have bonuses based on store revenue directly rather than on the whole book business. Each group is paid against the outcome its work actually moves.
Watch out Tying a team's bonus to a number they can't influence produces cynicism, not motivation.
- 4
Use tenure as the gate for officer status
It usually takes a few years of working there before someone is invited on as an officer. The runway lets both sides confirm the fit before a permanent stake is granted.
- 5
Make the stake real and inheritable
The percentage is actually theirs, to pass on to their descendants. It is not a wage for working for him — they have built the business with him and a piece of it is theirs. Permanence is what makes it ownership rather than a bonus scheme.
Pro tip Say explicitly what happens to the stake over time; ambiguity is what makes people discount it.
- 6
Count the non-obvious creatives
Sanderson regards accountants and editors as creative. His art director Isaac Stewart pours genuine artistic talent into the maps and symbols, and in his view deserves a cut rather than just a salary. Extend ownership on contribution, not on job title.
- 7
Offer it rather than making people fight for it
His objection to standard practice is that workers have to fight for these things instead of being offered them, inside a culture where people don't discuss salaries and companies extract what they can. He raised the stake with his first hire unprompted.
Watch out 'You're part of our family' with no cut of the profit is the corporate-speak substitute he specifically calls out.
In the wild
Peter Ahlstrom, now Sanderson's editorial director, had spent years reading his books and offering feedback for free as a friend, and had gone on to work professionally as an editor bringing manga to the US. When Sanderson hired him, the business was not yet large, but he raised the ownership question unprompted: he wanted to give Peter a percentage, because he felt he wouldn't want to be involved in something himself without seeing part ownership. He made the offer from the get-go rather than waiting to be asked.
→ A founding team member with a permanent, inheritable stake in a business he helped build.
Sanderson uses his art director Isaac Stewart to explain why the model extends past the obvious author. When Isaac works on a book he is pouring his creative energy into it — the maps, the symbols, the visual apparatus — and it is his passion as much as Sanderson's, even though Sanderson wrote the bulk of the words. In Sanderson's view that lending of genuine artistic talent deserves a cut of the outcome, not merely a salary. He extends the same logic to editors and even accountants, whom he considers creative in their own way.
→ Ownership allocated by real contribution rather than by position on an org ladder.
Common mistakes
'We're a family' with no profit share
Sanderson names this directly as common corporate speak: you're told you're part of the family but get no cut of the profit. It is very hard to feel real investment in something you work on under those terms.
Rewarding by ladder position
His view is that society disproportionately rewards people based on where they fall in a certain hierarchy rather than on the work they contribute. The two-basket model deliberately pays against contribution and controllable metrics instead.
Salary-only for creative partners
Treating editors, art directors and operations staff as pure service providers ignores that they are lending genuine creative talent. Sanderson's position is that a piece of what they built should be theirs.
From the transcript
“so for my team it is i basically have two baskets”
“one of the things that makes us want to work is ownership”
“that percentage is is actually theirs to pass on to their descendants like it's not just a wage working for me”
From the episode
Bonus Episode: Originality, Writing and Career Fulfilment with Brandon Sanderson
Brandon Sanderson