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Oxide’s compensation model: how is it going?

oxide.computer

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Re: Oxide’s compensation model: how is it going?

#21

Post by boulos »

Apparently, I'm one of the people that would have given feedback on the original proposal :).

> Some will say that we should be talking about equity, not cash compensation.

I think of compensation as total compensation. It would be fine to say this is Oxide's salary model. And I think it's a fine choice.

It sounds like the equity grants are naturally variable, though I doubt it's just newer vs older employees:

> As for how equity is determined, it really deserves its own in-depth treatment, but in short, equity compensates for risk – and in a startup, risk reduces over time: the first employee takes much more risk than the hundredth.

Edit to add: I assume there aren't cash bonuses for salaried employees. (I've always found it a bit weird anyway, but it's not mentioned explicitly, and would seem against the ethos, too)

Re: Oxide’s compensation model: how is it going?

#22

Post by throwaway81523 »

charlotte-fyi wrote: post #9
throwaway81523 wrote: post #8

Is there a 1 sentence description of the model? It wasn't apparent in a minute of scrolling down the long winded blog post.

"our compensation is not merely transparent, but uniform" second paragraph

Is equity compensation also uniform?

Re: Oxide’s compensation model: how is it going?

#23

Post by michaelt »

> One of the more incredible (and disturbingly frequent) objections I have heard is: "But is that what you’ll pay support folks?" I continue to find this question offensive, but I no longer find it surprising: the specific dismissal of support roles reveals a widespread and corrosive devaluation of those closest to customers.

The easy way to "pay everyone the same amount" when you sorta don't want to is to outsource everything you don't want to pay the same amount for.

Don't want to pay $200k to your receptionists and cleaners? Rent a serviced office and you get their services without them appearing on your payroll.

Re: Oxide’s compensation model: how is it going?

#24

Post by ziddoap »

throwaway81523 wrote: post #22
charlotte-fyi wrote: post #9

Earlier quoted context omitted.

"our compensation is not merely transparent, but uniform" second paragraph

Is equity compensation also uniform?

No.

This is also covered in their original blog (linked from this post in the first paragraph).

"As for how equity is determined, it really deserves its own in-depth treatment, but in short, equity compensates for risk – and in a startup, risk reduces over time: the first employee takes much more risk than the hundredth."

Re: Oxide’s compensation model: how is it going?

#25

Post by Arnt »

bcantrill wrote: post #5
endianswap wrote: post #2

Wish they would've gone into more detail about the sales exemption - it seems to undermine many of the other points on the page...

Happy to go into it in more detail, but the salient points are in the piece: sales folks are eligible to make more -- but can also make less. This is in keeping with the way enterprise sales is done more or less everywhere: sales is different from every other company activity in that it is very quantifiable. I don't think that there's a whole lot more to say about it?

Do you to to quantify promises they make?

Sometimes salespeople boost their metrics by promising features that come from other people's work. But they also sometimes provide valuable information on what people are willing to pay for (very different from what they say the want).

Re: Oxide’s compensation model: how is it going?

#26

Post by boulos »

endianswap wrote: post #2

Wish they would've gone into more detail about the sales exemption - it seems to undermine many of the other points on the page...

As others have said, the sales compensation model is fundamentally a low base and then a percentage of the sale. I think Ben Horowitz had an early blog post about not trying to innovate on sales compensation models, and having seen a few attempts at "innovation" at Google Cloud, I agree. It's almost never worth the complexity.

You can figure out various sliding scales, maybe even caps (but adjusting the scale is more rational), but I think flat pay is basically anathema to being a salesperson.

Edit: found it, though it isn't from as long ago as I remembered. https://a16z.com/why-must-you-pay-sales-people-commissions/

Re: Oxide’s compensation model: how is it going?

#27

Post by theoryofx »

bcantrill wrote: post #5
endianswap wrote: post #2

Wish they would've gone into more detail about the sales exemption - it seems to undermine many of the other points on the page...

Happy to go into it in more detail, but the salient points are in the piece: sales folks are eligible to make more -- but can also make less. This is in keeping with the way enterprise sales is done more or less everywhere: sales is different from every other company activity in that it is very quantifiable. I don't think that there's a whole lot more to say about it?

"this is in keeping with the way enterprise sales is done more or less everywhere..."

For non-sales roles you're doing things very differently than (most) everywhere else, which is why it seems like a compromise to give in to an 'industry standard' model for enterprise sales.

The fact that sales is quantifiable doesn't explain why sales people get instantly rewarded with cash comp (+ equity) while everyone else on the team might wait years for a potential liquidity event.

The real explanation for why sales people get paid so well is that some really good sales people sold the idea of a highly favorable 'industry standard' model for enterprise sales.

Re: Oxide’s compensation model: how is it going?

#28

Post by bcantrill »

Arnt wrote: post #25
bcantrill wrote: post #5

Earlier quoted context omitted.

Happy to go into it in more detail, but the salient points are in the piece: sales folks are eligible to make more -- but can also make less. This is in keeping with the way enterprise sales is done more or less everywhere: sales is different from every other company activity in that it is very quantifiable. I don't think that there's a whole lot more to say about it?

Do you to to quantify promises they make? Sometimes salespeople boost their metrics by promising features that come from other people's work. But they also sometimes provide valuable information on what people are willing to pay for (very different from what they say the want).

One important detail: their comp model is different -- but the hiring model is the same. And that has yielded a deeply thoughtful and customer-centric sales team. We are very mindful of go-to-market anti-patterns![0]

[0] https://softwaremisadventures.com/p/uncrating-the-oxide-rack...

Re: Oxide’s compensation model: how is it going?

#29

Post by bcantrill »

boulos wrote: post #21

Apparently, I'm one of the people that would have given feedback on the original proposal :). > Some will say that we should be talking about equity, not cash compensation. I think of compensation as total compensation. It would be fine to say this is Oxide's salary model. And I think it's a fine choice. It sounds like the equity grants are naturally variable, though I doubt it's just newer vs older employees: > As f…

We have had cash bonuses but they are (wait for it?) uniform -- and they have been based on company-wide events.

Re: Oxide’s compensation model: how is it going?

#30

Post by bcantrill »

theoryofx wrote: post #27
bcantrill wrote: post #5

Earlier quoted context omitted.

Happy to go into it in more detail, but the salient points are in the piece: sales folks are eligible to make more -- but can also make less. This is in keeping with the way enterprise sales is done more or less everywhere: sales is different from every other company activity in that it is very quantifiable. I don't think that there's a whole lot more to say about it?

"this is in keeping with the way enterprise sales is done more or less everywhere..." For non-sales roles you're doing things very differently than (most) everywhere else, which is why it seems like a compromise to give in to an 'industry standard' model for enterprise sales. The fact that sales is quantifiable doesn't explain why sales people get instantly rewarded with cash comp (+ equity) while everyone else on th…

Do not walk by their lower base! Sales people can make more -- but they won't unless they crush their number.
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