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Today, Titas is the Director of Infrastructure at the second-hand fashion and home goods platform Vinted, which grants stock options to its employees. However, despite this practice being prevalent globally, Lithuanians often don’t know what it is and why it’s beneficial.
“Stock options enable young companies, which can’t yet offer big salaries or other benefits, to attract and retain highly qualified specialists. There’s no mystery here – just an opportunity to buy stocks (a “chunk” of the company) at a lower price. It’s a big pile of money that encourages people to look for solutions rather than simply quit. For instance, let’s say I’m annoyed by my co-workers’ actions. “They’re nothing but trouble”, and “I know better” – many of us have felt that way at some point. “Would you solve the problem for a 100K?”. Probably, yes. Stock options enable people to see things from a different angle,” Titas explained.
He points out that, for some people, stock options are the decisive factor in choosing to work at startups, while others realise their value only when a co-worker cashes out and buys a new car or even an apartment. The Director of Infrastructure at Lithuania’s first unicorn shares his thoughts on attracting and retaining IT specialists.
- Tell us about your career path. How did you decide to start coding?
- At school, education was speciality-based, so by grade 10, you had to decide on your future career path. I considered studying either something to do with computers or law, because my father is a legal practitioner. Maybe it sounds odd today, but I wanted to choose a speciality where nobody could doubt that I’ve achieved everything all by myself. Having completed my systems engineering studies at Vilnius University, I still like to build systems, monitor their operation, and see them bring about the desired result. My first job was at a development company, where I worked until the 2008 crash hit Lithuania, at which point they replaced me with someone cheaper from India. Then I started working remotely, which lasted for 7 years. Back then in Lithuania, this kind of work culture was much less prevalent.
- That stage in your career, it seems, was quite the dream job, allowing you to work from anywhere, on your own schedule, while still making € 5,000 after taxes, correct?
- When motivated, I loved working as an outside consultant. When motivation waned, though, it was much easier for me to “hide”. Office work breeds routine and you’re always surrounded by co-workers, all moving in lockstep. If management is subpar – and in smaller companies and startups, it’s still only developing – it’s very easy to lose track of such employees. In that period, I was building a non-critical system for an American company. The salary was good, but I struggled to find any meaning in my work. For instance, after noticing that a certain process took 24 hours to play out, I offered to optimise it, and then worked really hard to make it launch continuously and in different locations, rather than once per day. Despite my efforts, however, they would still launch it once a day, even though it only took an hour to complete. I wanted to see actual results and have a reason to keep working and tackling challenges there.
Stock options enable young companies, which can’t yet offer big salaries or other benefits, to attract and retain highly qualified specialists.
- The work of programmers is often mystified – what does it look like in reality?
- Most of the myths I’ve seen only reflect a very narrow band of responsibilities devolving on the IT department. Sure, someone has to make sure the printers are working, and some people do stay glued to the screen all day, but more broadly – what programmers do is solve problems. I like the metaphor that, at Vinted, we’re building a city where something is always going on. The development team is merely looking after a single neighbourhood. Say, they’re responsible for the roads, only in this case, instead of car traffic you get ones and zeros. To enable customers to seamlessly browse, purchase, and pay for goods through an app, and then reclaim them at a parcel terminal requires a massive system.
Some programmers specialise in smartphones, others – in servers. Some try to implement functionalities beneficial to users, while others maintain existing systems in real time; others still work on AI and forecasting. Possibilities here are no less plentiful than personality traits – we have both extroverts and introverts, all shaped by different experiences and inclinations. What’s common between them, however, is analytical thinking, a preference for planning over spontaneity, and knowledge of maths and structures – that’s how I see it, anyway.
- Was your journey – programmer to technical team lead to Vice President for Engineering – deliberate or organic? What did these changes bring you?
- Computers are straightforward. You may struggle in formulating the task, but once you do, the computer won’t talk back to you, get tired or take leave. It’s predictable. It’ll do what it’s told. If you give it erroneous instructions, it’ll repeat that mistake a hundred times, because that’s all it knows. People, though, have an internal filter, which means their actions may differ from their stated intentions. Building a system out of people is more difficult, and I find it interesting.
- This change brought you to Vinted, although not immediately. How did it happen?
- The first invitation came with an offer I didn’t like. I could’ve just kept working remotely while traveling and work up to a managerial position. Vinted, on the other hand, was just starting out, so the offer was basically to slash my earnings in half, start going to the office daily, and tinker with Justas’ (a co-founder of Vinted) code. Stock options weren’t even considered then.
- Why are stock options so important to you, personally?
- I think our society is not very well educated financially. An option is, essentially, a stock. By receiving one, you become an investor. Although I’m not a very active investor myself, I also don’t want the money deposited in my bank account to lose value. For this reason, a part of my savings has been put to work, i.e., tied with the success of Vinted, and I can influence it through my labour and talent. When I joined Vinted 7 years ago, only some employees were offered stock options, and this practice remains at most companies and young startups – if they offer them at all. We’re trying to change this because joint ownership of a thing or a business totally changes your relationship with it. I only wanted to work with co-owners.
People, though, have an internal filter, which means their actions may differ from their stated intentions. Building a system out of people is more difficult, and I find it interesting.
- Do Lithuanian employees value stock options? Do they express a desire for them during, or after, job interviews?
- There have been cases where the fact that we grant stock options was decisive in attracting highly qualified talent. There have also been cases where people showed no interest in them, until a group of co-workers sold theirs, making tens of thousands of euros in the process. It’s important that they see the real monetary value provided by stock options.
Don’t mistake this for financial advice, but my personal investment portfolio contains: 1) real estate; 2) shares in stable companies; 3) growth-oriented Vinted options. Vinted grants options to each new employee, although in different proportions. Under regular market conditions, an options package is distributed within 4 years, where the first year – considered to be a probationary period – yields nothing, the second year grants ¼ of the package, and the rest accrues either gradually or in connection with changes in the employee’s role.
- Without mentioning any real people or companies – what financial benefits can stockholders expect? Do you know of any specific cases?
- There’s plenty of speculation about the number of millionaires at Vinted, but estimates should only be made when shares become liquid – when they can be sold on the stock exchange during an IPO. I estimate that my unexercised stocks have a value of over €1M. The more responsibilities you have at a company, the more success stories you’re likely to get.
- In your opinion, which option-granting strategy is the most attractive to employers and employees alike? What practices do you follow? Which risks are important to assess?
- The only risk with options is that they can end up beıng worthless. I’ve myself previously “thrown out” several options because the company had neither a growth strategy, nor future prospects. It’s important to trust the people you’re building a business with. If you’re holding any stock options, you’re no longer an employee – you’re building a business, just like your managers and co-workers are.
- Granting options is just one means of providing additional motivation to employees. What next steps could startups take? What are today’s talents looking for?
- Some people say that a job is just how you make money, while others want their employers to take care of them in other spheres of life, too – from private insurance to cleaning services. Having thought about this a lot, I believe that startups need to work more actively in bringing up talent. Some of the bigger startups have their own academies, helping talent to requalify or gain more experience. However, startups don’t put very much effort in working with, e.g., universities regarding study programmes oriented towards their needs. Our approach to training talent in the startup ecosystem is still quite short-sighted.
