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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?

#111

Post by sunshowers »

jszymborski wrote: post #90
tptacek wrote: post #19

Earlier quoted context omitted.

Presumably because it would be untenable to fund a hardware startup that needs to carry inventory as an employee-owned co-op.

Funding for co-ops is usually a sore spot for sure, and like you pointed out, they're a hardware startup, which often require more funding than most. That said, I wonder how far traditional bank loans + loans for the founders themselves could have gotten them. Clearly not as straightforward as just keeping it a private corp and trading funding for equity.

Without going into specifics, both debt and equity financing have their place.

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

#112

Post by tgma »

ahl wrote: post #80
tgma wrote: post #77

Earlier quoted context omitted.

Sun or otherwise it’s not the beginning of his career. I don’t mean they are billionaires but I’m willing to bet they don’t need to collect cash to pay downpayment like an average Google L4 on their first starter townhouse in Sunnyvale which will get more expensive while they receive their 200ks, so yeah I know exactly what I’m talking about. He knows very well too.

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. :)

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

#113

Post by steveklabnik »

zem wrote: post #107
steveklabnik wrote: post #100

Earlier quoted context omitted.

What kinds of tasks are you asking about, specifically? Admin can be pretty far-ranging.

off the top of my head, making sure that the building rent was paid and maintenance and supplies taken care of for various offices, managing calendars for the executives, managing software licenses, doing any government paperwork that was needed, perhaps even doing the admin side of HR if there're no dedicated HR roles.

As far as I know, our CEO does a lot of this sort of work himself. There's just not very much of it so far. We only have one office, we don't license much software, and we pay a company to manage employee benefits.

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

#114

Post by sunshowers »

cobertos wrote: post #39

If you free up the peer/employee/worker from thinking about the constraints of scarcity of money, doesn't the next resource of scarcity become time (or perhaps, intellectual property)? Which can still lead to a straying from the candor and other ideals this compensation system hopes to promote. The corporation still owns all your time, and all your production during that time. I just can't help but think this scarcit…

It is true that scarcity along any dimension sucks at some level. (Though it can also help develop the skill set to manage that scarcity well.)

But some scarcities are more fundamental than others.

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

#115

Post by tonyarkles »

steveklabnik wrote: post #33
boulos wrote: 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...)

The first startup I worked at had a year-end bonus tied to meeting all of a list of company goals. The last year I was there, the list consisted of 3 engineering goals and 1 sales goal. We had around 25 engineers and 2 salespeople.

We nailed the three engineering goals by about October. Sales didn’t hit their goal. No bonus for anyone.

You want to build animosity in a company? I can’t think of a better way than that.

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

#116

Post by theoryofx »

jasode wrote: post #50
theoryofx wrote: post #42

Earlier quoted context omitted.

Yeah no doubt you have to have performance based compensation but that's exactly what equity and bonuses are for everyone else. Sales people are special in getting large amounts of cash comp in addition to equity.

>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 way. The reason they're not is just that it's considered an 'industry standard' to reward instantly with cash.

Sales people have themselves a sweet deal they're loath to give it up whether or not it's in the best long-term interests of the company or even themselves. It's not a terrible thing but it does seem an anachronism that will go away.

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

#117

Post by jzelinskie »

abxyz wrote: 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…

No commentary on your latter points about Oxide's compensation structure, but I fundamentally don't share the same sentiment you have about the dynamics of cash flow for venture-backed startups.

Maybe there are still VC-backed companies having catered food, but I think they're by far the exception and not the rule. ZIRP is long over and a decent portion of this generation of startups began in COVID and subsequently don't even have an office. Maybe I'm the one that's in the bubble, but when you take VC money you're on the line to hit growth numbers in a way that you aren't when you bootstrap and can take your time to slowly grow once you've hit ramen profitability.

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

#118

Post by bcantrill »

tgma wrote: post #77
ahl wrote: post #75

Earlier quoted context omitted.

Several mistakes here, perhaps most egregious: Sun Microsystems might have made some people rich but that was looooong loooooong ago.

Sun or otherwise it’s not the beginning of his career. I don’t mean they are billionaires but I’m willing to bet they don’t need to collect cash to pay downpayment like an average Google L4 on their first starter townhouse in Sunnyvale which will get more expensive while they receive their 200ks, so yeah I know exactly what I’m talking about. He knows very well too.

Are you... actually willing to bet? Because I would take the other side of that bet. But please, let's make it meaningful: I still have a mortgage to pay and college-aged kids!

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

#119

Post by neilv »

steveklabnik wrote: post #13
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...

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 can't find the analog of that among good salespeople?

> Sales people don't write promo packets, you count up the amount they sold.

And you manage the imperfect alignment? (Imperfect, like the incentive to close a sale by lying to a customer, in a way that won't be discovered until next year. Or incentive to close a sale now, and don't communicate back a customer insight that would nudge the product line in a better direction longer-term, since that insight risks someone at the company wanting to talk to the customer, which puts the imminent commission at risk.)

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

#120

Post by senderista »

cashsterling wrote: post #47

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.
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