This seems like the sort of thing that’s only going to work if you have great leadership. Which oxide has, no doubt. It takes a truly unusual leader to channel the ego into making something great for humanity. A lot of executives pay lip service to this, but are actually petty kings who just want to be in charge.
Oxide’s compensation model: how is it going?
211–220 of 241 posts
Re: Oxide’s compensation model: how is it going?
#212Earlier quoted context omitted.
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 ta…
"It's an industry standard because other compensation methods for salespeople that pay them like all the other non-salespeople don't work ..."
[citation needed]
I think it's more accurate to say that it's an industry standard because it works, not because nothing else can work. There's a lot of herd mentality and (much more reasonably) risk aversion when it comes to messing with revenue generation.
Re: Oxide’s compensation model: how is it going?
#213Earlier quoted context omitted.
>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 ta…
"It's an industry standard because other compensation methods for salespeople that pay them like all the other non-salespeople don't work ..." [citation needed] I think it's more accurate to say that it's an industry standard because it works, not because nothing else can work. There's a lot of herd mentality and (much more reasonably) risk aversion when it comes to messing with revenue generation.
>, not because nothing else can work. There's a lot of herd mentality [...]
There is herd mentality yes, but you have to consider that there have been a lot of startups founded by devs who rejected herd mentality and did try to compensate salespeople in a non-standard way. See Pluralsight CEO (a former C# .NET developer) as one example.
The timeline goes like this... When dev worked as an employee at previous company, they hated that salespeople were on commission because it's "unfair". Dev later starts his own company and thus has a chance to implement his own ideas (based on intuition instead of historical evidence) on how to fairly pay salespeople. (I.e. "there's no reason I can't just pay salespeople same as my devs"). He then sees that he can't recruit superstar salespeople or the salespeople he can hire actually can't sell. The market finally "educates" the dev-now-CEO that his intuition and mental framework about salespeople's incentives and motivations were wrong. He relents and switches to the typical commission structure that he really really didn't want to do.
There have been hundreds of years of commerce history showing how salespeople are incentivized by commissions but computer programmers that start companies are an idealistic and stubborn bunch and therefore they want to pay salespeople a different way. There's no risk aversion because they're rebellious against the status quo and are convinced they're right and "everybody else is doing it wrong". Seems like a rite-of-passage that they try their alternative idea and then eventually learn it doesn't work. Ben Horowitz's a16z blog article was aimed at those startup founders (mostly ex-developers) who thought paying commissions was completely illogical and unnecessary.
Your alternative compensation plan idea to pay a delayed annual bonus exactly like the devs is more "fair"; the problem is superstar salespeople aren't interested in it. They don't have to be because they can just work for another company that pays fat commissions.
Re: Oxide’s compensation model: how is it going?
#214Re: Oxide’s compensation model: how is it going?
#215Earlier quoted context omitted.
Depends on the business model, cater to high end clients and having a ~1M$/year doctor be the once answering the phone can be a major selling point. Further you optimize around costs, when having people answer phones is expensive you try a minimize the need for someone to answer a phone. A 5 minute call with someone making 200k is like 8.50$. Empower them to figure out and fix the underlying issue thus avoiding the n…
I don't want to wade too deeply into the argument is a computer support engineer worth 200K USD per year, but this comment really stands out to me: > Empower them to figure out and fix the underlying issue thus avoiding the next 1,000 calls Some of the best software engineers that I have worked with saw every support issue as a chance to fix a bug and/or improve logging/docs. Sometimes they built little tools to do m…
Moving the goalposts so that support engineers with deep technical skillsets are actually software devs is kind of a dick move.
From someone who's worked both sides of the glass -- support engineering is way harder.
You don't get to play in a nice, standardized, performant environment. You're often parachuted into a random customer issue, with little context and an unstable environment, someone nervously watching over your shoulder, and a customer director/VP demanding updates every hour.
And from watching traditional software devs be pulled into those calls and flounder past "works on my machine," live debugging is a very different skillset on top of technical expertise.
Not only do you have to thoroughly understand the happy path, but you also have to tread both known and unknown failure paths.
One of my litmus tests for product companies is how they set up their support orgs and escalation paths: as checkboxes or continuous improvement loops.
The former approach tends to produce shitty products.
Re: Oxide’s compensation model: how is it going?
#216Earlier quoted context omitted.
Sure thing! > it seems like you sell server hardware, We do! > which sounds more like you sell cloud hosted systems The server hardware we sell has a cloud-like interface. That is, you don't administer individual computers in the rack, you treat it as one big pool of resources that you can use. We handle the details. I wrote a lengthy comment a few years back that has more detail: https://news.ycombinator.com/item?id…
You forgot the in-depth accountability for every piece of the design down to third-party firmware auditing and vetting - I see that kind of vertical integration of the whole stack (including hubris, but also the tight validation of the hardware) as the key thing :)
It’s really important to some people and irrelevant to others, so I try to suss that out before I get into it. You’re right though!
Re: Oxide’s compensation model: how is it going?
#217You can get most of the benefits of this without the downsides with profit-sharing The downside is 200k is not enough to compete with the silicon valley for top engineers, but enough to compete with everyone for support, designers etc The upsides are the ones they listed: getting rid of the bad incentives that yearly reviews bring, focusing people on what really matters (success of the company) With profit sharing yo…
We are far from making a profit, so that’s not an option right now.
Re: Oxide’s compensation model: how is it going?
#218Earlier quoted context omitted.
I can tell you that we receive options pretty much like any other startup. Early exercise is a nice perk.
Are the options grants as transparent (internally) as the cash?
There is effectively no difference internally than externally here. There’s no like, big list of who exactly has what amount of equity. Of course, talking about compensation with your coworkers is a legally protected activity, and I have discussed the topic with coworkers before.
Personally, I don’t really care how much equity my co-workers have.
Re: Oxide’s compensation model: how is it going?
#219Earlier quoted context omitted.
What receptionist? (I'm actually not sure if we hire a cleaning service for the office, actually...)
We don't. When I'm there, I see it addressed as a communal responsibility. Not to be facetious, but the way it's done is a bit of a microcosm of Oxide itself: everyone just chips in and does parts of it as needed. I even filed a ticket to get a push-broom last time to make sweeping the floor easier.
Y'all are really scrubbing toilets?
Re: Oxide’s compensation model: how is it going?
#220Earlier quoted context omitted.
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?
They are. And they have one job. To sell. So they’re motivated by the only output that matters in their job, how much they sold. A lot of selling is zero sum. For you to win, if usually means someone (a competitor) has to lose. So it attracts competitive people just like programming tends to attract more analytical people. The right skills for the right job.
> And they have one job. To sell.
There's an underappreciated corollary to sales comp.
1. If they're variable comp.
2. And corp controls equations.
3. Then corp can drive sales outcome it wants by changing equations.
Simply by tying sales comp to whatever the specific sales plays leadership wants more or less of.
Smart sales people are excellent at self-aligning their behavior to compensation incentives.