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Oxide’s compensation model: how is it going?

oxide.computer

121–130 of 241 posts

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

#121

Always one for transparency in salary (given I share my own, publicly at https://www.jvt.me/salary/ ) and applaud the model y'all are following!

Hey Jamie, nice to see you here! I've been a big proponent of salary transparency in previous roles and also publish my history on my website at https://matthewsanabria.dev/posts/salary-transparency/.

I think a lot of people here are in a tizzy about this blog post because it's against the norm of how companies view compensation. I'm willing to bet most readers haven't fought for salary transparency personally or professionally or perhaps they are on the negative side of inequitable compensation. Granted, that's perfectly fine and I hope readers reflect on their career and make the positive change they need but don't berate companies for spending money however they choose to. Especially when that spending is truly equitable across employees, barring sales of course but that's already been discussed and I'd be hard pressed to find an Oxide employee that's angry about sales people making commission.

I personally took a pay cut to join Oxide. The uniform salary across the board has saved so much time that would otherwise be spent propping up metrics to get a promotion during review season based on some arbitrary goal that's set. Time that I get to spend doing actual work. It also motivates me to stay productive because I know all my teammates count on me the way I count on them to deliver work to sell Oxide racks. If other teammates are doing their best for their $207k salary I need to be doing my best for my $207k salary. On the equity side I'm sure I didn't get as much equity as the people that have been here for years but those people took more risk than I did so who cares? I'm gonna do what I can to help Oxide equity be worth so much that we all come away with a fantastic pay day and I'm sure my teammates are doing the same. Not that it's all about the money but every startup wants their equity to be worth something one day.

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

#122
post #119

Earlier quoted context omitted.

I forget the details, but the rough shape of it is that sales makes a lower base salary, but with a commission component that can lead to a higher salary than the standard one. I can't remember if there's also some sort of cap. You could take it as undermining those other points, but I don't. (I am, of course, biased.) We didn't do this because we needed to address some failing of these other things, we did it becaus…

> we did it because sales has an incredibly strong culture of this compensation model, to the degree that it would be difficult to hire otherwise. That isn't an issue with other staff. SF Bay Area SWEs are famously compensation-focused, and this uniform salary is basically Google new-grad SWE entry-level TC. Are you hiring from the minority of good engineers who aren't driven primarily by compensation, but you just c…

> SF Bay Area SWEs are famously compensation-focused,

We don't hire only SF Bar Area SWEs. Only about a quarter of the company is in the Bay Area.

> but you just can't find the analog of that among good salespeople?

I'm not sure I've ever met an equivalent salesperson. Maybe that's a personal thing. Given the other responses in this thread, it seems to be fairly universal.

> And you manage the imperfect alignment?

No measure is perfect, that's true.

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

#123
post #64

Earlier quoted context omitted.

Not sure what you're saying, are you implying Oxide is doing this?

Almost certainly. You really think they are paying their cleaners and receptionist $200k?

What receptionist?

(I'm actually not sure if we hire a cleaning service for the office, actually...)

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

#124
post #93

Earlier quoted context omitted.

They inevitably are, because anyone who has a service subscription is doing this. Because doing every single thing in-house is a different, more extreme value. I'd love to be a $207k/mo. lunch lady.

We do not currently have any lunch ladies, outsourced or in-house.

I want to experience a lunch made by a “lunch lady” that makes 200k a year. That sounds amazing.

I can count on both hands the number of meals I’ve had that would be made by such a person.

But what I wouldn’t want to experience is the amount of additional exercise I would require for my clothes to still fit.

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

#125

I really hope the best for Oxide and applaud their compensation model. I applied to one of their roles which required me to write about 10 pages of text to answer all their questions... which I think is a big ask but I did it because "why not". They took over 3 months to get back to me, but at least they got back to me (with an apology and a polite "no").

I never bothered applying because they explicitly said they didn't want candidates who didn't finish college.

Where did we say that? My general understanding of our hiring practices is that we do not have minimum education requirements.

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

#126
post #32

Earlier quoted context omitted.

Also reasonable! A little annoying though, since I find most people are better served by uniform paychecks, but I understand the celebratory aspect.

It doesn't happen often enough for you to rely on it for budgeting, it's a nice surprise, not something that you think of as part of your regular compensation. (I've worked at places where your "bonus" was regular, until it wasn't: that did not go over well...)

Oh, I failed to say annual bonuses. Actual, true bonuses make more sense that way.

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

#127

> 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…

Why is that a good thing?

I suppose it depends. Maybe something isn’t worth doing in house. Like for instance if the parts show up unfinished or damaged you don’t pay someone to straighten bent rails, chamfer bolt holes and de-burr surfaces. Maybe you pay the vendor a bit more, find a new vendor, or hire a middleman to bring the parts in ready to ship.

Paying your support staff well is virtue signaling to be sure but as someone who’s always had a soft spot for top shelf QA and support folk, that’s not a bad thing.

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

#128
post #43

Earlier quoted context omitted.

Why is that a good thing?

its not, its a method of “x-washing”. IE; Green-washing[0] and so forth. [0]: https://en.wikipedia.org/wiki/Greenwashing

More like commoditization of your complement.

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

#129
post #50

Earlier quoted context omitted.

>Sales people are special in getting large amounts of cash comp Not sure what you mean by "getting large amounts of cash comp" as if it was a given. Co-founder clarified their base pay is lower . If they don't sell, they won't get large amounts of cash comp. What's the alternative idea you have in mind for compensation? How does one re-divide the pie to be more "egalitarian" to the fixed-salary $200k non-sales employ…

Sales people that don't sell just get fired, that's the thing about being such a quantifiable role. So in practice at a startup with a hot product you end up with a team of sales people receiving huge amounts of cash comp. Everyone in in a well run startup org gets performance based compensation in the form of increases in salary, bonus, and equity. There's no reason sales people couldn't be compensated in the same w…

>Everyone [...] gets performance based compensation in the form of increases in salary, bonus, and equity. There's no reason sales people couldn't be compensated in the same way.

There is a reason and it's based on the external market dynamics that the company itself can't control. The potential candidate salespeople can see/compare how other companies pay for sales.

Whatever principled stance the company wants to take on compensating salespeople in a different way than "industry standard" e.g. "same salary + same bonus as the devs" or "flat salary no commission" etc ... those idealistic plans still have to compete in the marketplace with other companies paying high sales commissions. Therefore, if the more egalitarian sales comp structure means the "rainmakers" are choosing other companies instead of yours, it's a moot point.

E.g. 0xide's comp plan for recruiting good salespeople still has to be competitive with everybody else such as: https://www.cbinsights.com/company/oxide-computer/alternativ...

Sales commissions aren't an "industry standard" just because they're an "industry standard" type of circular reasoning. It's an industry standard because other compensation methods for salespeople that pay them like all the other non-salespeople don't work so most successful companies converge on paying high commissions for high performers. A lot of non-salespeople don't understand this so it seems like paying commissions for sales positions is arbitrary and unnecessary and therefore, "unfair". As a dev, I used to think sales commissions that exceeded my salary were ridiculous but having attempted sales myself, it now makes perfect sense.

Salespeople don't want to be paid like devs with an annual bonus. You have to treat them differently: https://a16z.com/why-must-you-pay-sales-people-commissions/

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

#130
post #91

I have personally followed the same strategy, but at the expense of my ‘career development’. Trying to perform well or getting a promotion can be a lot of unproductive effort. I think the only downside of 100% uniformity is that you don’t hire and train junior engineers, which should also be like a duty. While you could pay juniors the exact same salary, this might give that person a lot of stress (“ concerned that t…

I’ve worked with a lot of engineers who punch down and what they all have in common is that they don’t have a clue how to make lemonade from “lemons”. They just want people who can read their minds. Tough shit. Never going to happen.

New people ask questions and make mistakes that reveal organizational problems that would help everyone if fixed. As a company grows there are more parts added to the system and at some point senior staff are going to feel like newbies doing something they haven’t touched in two or three years. All that work you did for newbies now pays off as lower overhead for putting projects into maintenance mode or scaling them up for a big initiative.

The worst outcome for everyone is if you hire a new employee and then let them alone. That’s short changing everyone.

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