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Oxide’s compensation model: how is it going?

oxide.computer

131–140 of 241 posts

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

#131
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…

In practice, you pay out the commission over time. So if someone was extremely deceptive, or the customer churns nearly immediately, you don't just keep getting the commission.

At Oxide's scale, it would likely be hard to hide out in the way you're suggesting. It's a very technical sale, and probably any material deal is going to involve some discussion with someone beyond just a single sales rep.

Perhaps to bcantrill's point in the post though, I would suggest you reconsider the assumption that Sales people are purely coin operated. I'd love to hear from their reps directly, but as an example from my own experience, lots of the early Google Cloud sales folks were there because they hated how places like Oracle or Microsoft treated their customers. They were absolutely taking less peak pay, for what they felt was a better relationship.

Sales is fundamentally about relationships and trust in this kind of high-touch transaction. Badly behaving reps are pretty quickly outed, one way or another, though at big companies it can take a while to fire them.

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

#132
post #18

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

Especially if you're doing account manager-type high-touch sales, which I assume Oxide is given its product, it would be difficult to hire strong sales people at all without variable compensation. It's best to think of sales as an entirely different kind of animal as the rest of the company. Like the post says, when they're making lots of money, everybody else is making even more money. One thing people who have neve…

> Like the post says, when they're making lots of money, everybody else is making even more money.

I’ve worked with sales people whose compensation had loopholes you could drive a truck through, make sales that cost us more money than we made on the contract. Now a few of those are good for attracting VC money, but you have to be strategic and I’ve seen too much evidence of them not being so.

If you lock up your biggest potential customers with bad contracts that makes you default dead and no good way to weasel out.

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

#133
Gonna take a positive sentiment on this one - godspeed, oxide! Middle management can often be such a drain on the effectiveness of an organization, that for that reason alone I readily applaud any effort which eliminates at least some layers of it.

Will there be challenges - of course!! What growing business doesn't face challenges? Lots of commenters will argue that your structure won't work for this reason or that... but, what are we comparing to? Most corporate structures don't work either, and are full of crippling amounts of waste. People have just convinced themselves that the usual way of doing things is the only way of doing things.

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

#134
post #48

I like it a lot and their thoughtfulness about it but it's a little hollow when they're spending investor money. I'd like to see how this model evolves once they're off the vc teat: when there's a bottom line to answer to, does the dynamic shift? Everyone has an on-site chef when the money vc hose is on. Valve's flat structure was exciting because it wasn't 3 vc's in a coat larping as a business, it was an actual pro…

I imagine they had to introduce variable comp for sales because they weren’t able to hire even a single good enterprise sales rep for a flat $200k. It’s not a culture thing, it’s just the market rate for the role. If they paid a flat $500k they’d stand a better chance of avoiding variable comp.

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

#135
post #51
post #18

Earlier quoted context omitted.

Especially if you're doing account manager-type high-touch sales, which I assume Oxide is given its product, it would be difficult to hire strong sales people at all without variable compensation. It's best to think of sales as an entirely different kind of animal as the rest of the company. Like the post says, when they're making lots of money, everybody else is making even more money. One thing people who have neve…

> One thing people who have never managed direct sales teams might not immediately grok is: good sales people are experts at gaming incentive schemes. Is that just circular though? i.e. I think everyone's like that, it's just unusual that it's tied directly to compensation. e.g. if I feel that my Jira output is being critically monitored, I might push something (or the reporting of something) into the next sprint if…

I don't have a more precise way to articulate this other than that adapting your behavior to your compensation is a skill, most of us are not expert in that skill even if we think we are, but even bad salespeople are like ninja masters at it.

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

#136
post #112
post #80

Earlier quoted context omitted.

I can't speak for everyone at Oxide, but I'm practically certain that none of us wants to live in Sunnyvale.

Haha I can tell South Bay isn’t quite communist enough for the People’s Republic of Berkeley compensation model. :)

Oxide is actually in Emeryville ;)

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

#137
post #18

Earlier quoted context omitted.

Especially if you're doing account manager-type high-touch sales, which I assume Oxide is given its product, it would be difficult to hire strong sales people at all without variable compensation. It's best to think of sales as an entirely different kind of animal as the rest of the company. Like the post says, when they're making lots of money, everybody else is making even more money. One thing people who have neve…

> Like the post says, when they're making lots of money, everybody else is making even more money. I’ve worked with sales people whose compensation had loopholes you could drive a truck through, make sales that cost us more money than we made on the contract. Now a few of those are good for attracting VC money, but you have to be strategic and I’ve seen too much evidence of them not being so. If you lock up your bigg…

A compensation plan that aligns incentives to address the principal-agent problem of sales representatives is probably necessary, but definitely not sufficient, to manage an effective sales program.

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

#138
post #54

Earlier quoted context omitted.

> Support, no matter how valued and important to the organisation it is, is never worth $200k/year on the output of 1 person. I... think you are thinking more "Customer Support Representative" (how to reset a password) and not Support Engineering . An engineer that can talk to customers, find bugs, and fix them, is not worth $200k? One of the Oxide Support engineers was (still is) an INSANELY strong performance engin…

To add: I saw job listings recently posted on bsky and was enjoying how well written they were. The support engineer role description asked that they be able to fly to a customers site at short notice. That’s a whole other level of on-call right there.

> The support engineer role description asked that they be able to fly to a customers site at short notice.

Kinda makes sense if you sell physical hardware?

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

#139
post #48

I like it a lot and their thoughtfulness about it but it's a little hollow when they're spending investor money. I'd like to see how this model evolves once they're off the vc teat: when there's a bottom line to answer to, does the dynamic shift? Everyone has an on-site chef when the money vc hose is on. Valve's flat structure was exciting because it wasn't 3 vc's in a coat larping as a business, it was an actual pro…

I imagine they had to introduce variable comp for sales because they weren’t able to hire even a single good enterprise sales rep for a flat $200k. It’s not a culture thing, it’s just the market rate for the role. If they paid a flat $500k they’d stand a better chance of avoiding variable comp.

I find the whole variable comp for sales so bizarre. It’s like people trying to claim that the only way to get decent work out of programmers is by giving them comp on lines of code written.

Why can’t a salesperson be properly motivated by just, you know, doing their job?

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

#140
post #48

I like it a lot and their thoughtfulness about it but it's a little hollow when they're spending investor money. I'd like to see how this model evolves once they're off the vc teat: when there's a bottom line to answer to, does the dynamic shift? Everyone has an on-site chef when the money vc hose is on. Valve's flat structure was exciting because it wasn't 3 vc's in a coat larping as a business, it was an actual pro…

I work at Oxide, and support engineering is worth far more than that. It literally means the rest of us don't have to be on customer oncall all the time — I've spent long stretches of my career doing that and it's extraordinarily stressful. Do you know how valuable that can be?

Sure, but at some size, the support engineers are at max workload and you hire somebody to triage calls for them.
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