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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 profitable business.

Support is typically low paid because it's a lot of effort for little reward, no matter how much you pay someone in support, there's only so much impact they can have on the bottom line. The organization as an organism where every organ is as equally important as the other is a beautiful sentiment but the appendix is getting jettisoned at the first sign of trouble. Support, no matter how valued and important to the organisation it is, is never worth $200k/year on the output of 1 person.

The exception to the rule for sales is the canary in the coal mine: sales measures itself, but every role can (and will) be measured when the pressure is on, there will be competition for budget, and the support team will get squeezed until they're empty while the engineers coast. I would be more convinced that this model could survive outside of the vc bubble if sales had bought in to too. Sales as a competitive sport is cultural, not fundamental.

Anyway, not criticism, just musing, love that they're trying it, even if this doesn't work out, everyone had a few good years, it's worth a shot.

> 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 engineer who helped solved performance bugs when he was on my team. We were actively using strace weekly to troubleshoot deep process internals to optimize perf.

(Hi Will, I miss you, and you are definitely worth $200k don't listen to this guy. <3)

This is a very interesting point.

I wonder how many roles there are like this: low valued because they are low valued, in a vicious cycle. We hire people to fill a prescribed low-value role and don't expect much of them so we don't pay them much and so we don't get much out of them, because we designed the role to be low impact.

If we treat every role as a $200k/yr role, it makes sense that the first thing that would happen is that we find a way to give people leverage to make >$200k of difference in each role! And that's a really exciting proposition from both the employee and customer perspective.

So much this. We also underestimate how motivated people can be in these roles when they make an atypical comp; my experience has been that people push themselves hard to prove they’re worth that rather than coast.

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?

Also some of their customers are airgapped so if they’ll let you touch the machine that’ll make debugging a lot easier.

    > some of their customers are airgapped

I don't have any details, but on their public website, they highlight LLNL (ELI5: US nuclear weapons research lab founded by Edward Teller) as a customer. I am not 100% certain they require airgapping, but it is totally conceivable that them or similar customers in that vein do. Oxide business probably selects for a biased sample of such customers (the customers that don't have esoteric requirements also have public cloud options AWS/GCP/Azure to choose from).

Certain production studios (Commercial / Feature Entertainment) may have air-gapped datacenters. I'd expect anyone making an Apple commercial is doing that on air-gapped infrastructure.

Defense contractors, Pharma companies, basically anyone who has IP that they want to tightly control access to.

They mention it a few times on the podcast

Maybe not all the datacenter, but why wouldn't you airgap backup and long term cold storage?

well those are pretty big customers…

So this surprised me. If their customers are the kind that have airgapped servers, I’m surprised to see roles that all accept worldwide applicants.

You don't need to be in business of security clearances to require air-gapping.

I wasn’t aware of that. Any particular examples?

Everything that can be airgapped probably should be. Healthcare, education, public safety, social services, public administration. Anything that touches massive troves of sensitive data for an entire country or continent.

Curious, why did you pose this statement as a question?

> An engineer that can talk to customers, find bugs, and fix them, is not worth $200k?

I always watch these kinds of discussions on HN with interest, because depending on what is being discussed, one of two viewpoints dominates:

* If we are discussing salaries, of course people deserve compensation, and good work is worth a good salary.

* If we are discussing software cost, HOW DARE THE DEVELOPER ask for subscription pricing, and everything should really be a $5 one-time purchase.

BTW, a very good point in the thread above is that the company is spending VC money.

"Let's remove all fire extinguishers from campus buildings!" vs "We can't appraise extinguishers as worth $50k each quarters", the reasonable PoV must be somewhere inbetween.

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.

We're building our product in a way that we stave that off as long as possible! In many ways the whole theory of our product is to avoid that kind of issue.

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 next 1,000 calls and that looks cheap.

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

If I were to guess about Oxide's view of "support engineers": They aren't traditional L1/L2 support. They are essentially software devs who happen to excel at support. As a mentioned earlier, if they respond to a customer call (or email), they might have a quick workaround, then go and fix a bug or update logging/docs.

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.

I mean, if a software system is not behaving as the user expects, either the software system behavior is incorrect or the system producing the user expectations of the software is incorrect, and wherever the problem is, if it is not fixed it is likely to recur.

Loading up this thread I knew this kind of response would be here. Like, I was willing to bet money on it.

Examples of support people worth $200k+ are abundant, and the business case is the same every time. When you do the work to place a monetary value on customers and their retention your support personnel costs relative to that are easy to justify. When a support person is preventing churn of X number of customers worth $Y dollars a year the math becomes trivial.

The (American) tech industry is so accustomed to massive scale and lack of competition that the notion of giving a damn about customer retention has risen to the level of a cultural, not economic, problem.

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?

I understand where you are coming from but it doesn't work like that. Sales people are have direct measurement where the rest of us have proxy measurement. They also typically hold pre-existing relationships with potential clients. They take on more risk than any other side of the business except for executives (who are often former sales people).

But if a sales person performs wildly above what is expected of them it can change EVERYTHING for a company. Engineers are actually similar in potential impact, but measurement is a challenge... which is why we are typically paid higher than other cost centers in a business but why we are not on variable comp.

Below, we see lots of interesting replies, but none mention the fact that nearly all sales jobs have variable comp. Thus, if you do not offer variable comp, the best sales will never work for you. A good way to think about variable comp: It allows you to attract and retain superstars. In some sense, big tech already does this with their top 5-10% of technical staff by paying regular, large cash/share bonuses.

The thing that's unusual about sales is that it's the only metric that anyone's ever found that's (mostly) an exception to Goodhart's Law. Companies would love to pay a lot more people on commission if you could find a way to calculate commissions that gave the desired incentives.

It's not really that it's an exception to Goodharts Law, it's that Goodhart's Law only applies to measured proxies. If the goal of a company is first and foremost to make money, then sales is the only organization within the company that can be measured exactly according to the primary goal of the company rather than a proxy.

Goodhart's Law still applies to the extent that companies have other goals and sales's incentives totally screw those goals up. But they are very effective incentives at increasing money earned.

> If the goal of a company is first and foremost to make money, then sales is the only organization within the company that can be measured exactly according to the primary goal of the company rather than a proxy.

This feels culturally accurate but also reductive. The best sales teams cannot sustainably sell a product that fails to have product-market fit. Likewise, the best product requiring a sales-led GTM will fail if sales teams are not able to understand and articulate the value.

A compensation imbalance between customer-facing and non-facing roles builds an imbalance of power dynamics within a company that will ultimately destabilize the culture and success of a company.

I don’t have a perfect answer, only observations.

Making sales and making money aren't the same thing. They're close and clearly related, but sales going up while money goes down is very possible!

It's a few things. 1. Sales people see the exact dollar amount they are making for the company. This is different than almost any other role. Most people can't quantify how much value they generate. A lot of people here are arguing that the reason is that there is a direct quantification, but that's not it. The reason is that there is a direct quantification AND they know exactly what it is.

2. These are people that convince others of things for a living. The skills that allow them to be good at their job also allow them to negotiate for extremely favorable compensation mechanisms.

3. At this point, it's how their industry works. If you try something else, you won't be able to hire sales people. They are very competitive, and not idealistic like engineers. You're not going to convince them to take a flat comp structure that is the same as every other employee's.

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.

Really good sales people know the literal dollar value of their work. They often times have large networks, existing relationships, and know how to use them to make money. Every really good sales person I’ve ever known gives literally no shits about what anyone tells them because they’re closing. They know it’s their relationships more than anything pulling in the cash. When you’re closing deals for millions upon millions of dollars, if you aren’t getting paid enough there’s a competitor out there willing to do so to buy your relationships.

If engineers knew the literal dollar value they provided they, and could prove it, we’d likely be more motivated by money as well.

Addendum/Edit: I still think the best job ever is selling commercial aircraft. Close a deal on a fleet of 747s? You’d probably make a lot of CEOs blush with that pay day.

It's just an industry standard. They are merchants, they could just buy the servers and resell them, so they negotiate a comission/a lower than listing price.

If you actually considet all of the merchants, what's actually uncommon is to be anything other than 100% commission/margin based.

I think of it as "we have a team developing this product, the product makes money, and we use that money to compensate the team". if the team as a whole needs support people in order to do its work, it seems like a great thing to consider those people full-fledged team members deserving of equal compensation.

to the point that their labour does not scale in the same way a software engineer's does - think of the fact that you need more support people to do the amount of revenue generation that fewer devs could do as part of the cost of running the business, rather than as a measure of the fraction of the rewards that should go to them.

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.

> when there's a bottom line to answer to

Having VC money doesn't mean that you can ignore finances. We are in a relatively capital-intensive business compared to a lot of the startups on HN.

> Support is typically low paid because it's a lot of effort for little reward,

Respectfully, I think this attitude is flat-out wrong. Because of this:

> there's only so much impact they can have on the bottom line.

Directly, sure. But that's the fundamental error. Good support is absolutely worth it, and do bring in value, only indirectly. That customer you kept because when they had an issue, it was resolved quickly and professionally? That's money, even if it's more difficult to quantify than sales. And it's not like support engineers aren't doing engineering as well.

Long-term growth really seems to come from keeping paying customers.

Thank you, Steve.

> We are in a relatively capital-intensive business compared to a lot of the startups on HN.

Doesn't that just mean that employee compensation is an even smaller percentage of expenses versus other companies? So you can ignore that side of finances even more than other startups?

It means we need to make every dollar count, because we need a lot of them.

> Support, no matter how valued and important to the organisation it is, is never worth $200k/year on the output of 1 person.

This reads more like a reflection of how we’ve historically designed support roles than a fundamental truth about them.

Oxide’s approach seems to invert the premise: instead of paying people based on a low-leverage job description, they design roles where every team member is expected to operate at high leverage — including support engineers. That means hiring differently, scoping differently, and building a product that aligns with that structure.

It’s fair to be skeptical of anything cushioned by VC — but skepticism cuts both ways. Just because traditional comp structures haven’t empowered support doesn’t mean they can’t. We’ve seen engineering, design, and even ops roles evolve dramatically when companies raised the bar. Why not support?

>Support, no matter how valued and important to the organisation it is, is never worth $200k/year on the output of 1 person.

self-contradictory statement if there ever was one.

related: have you heard of system administrator appreciation day?

or heard of:

https://www.reddit.com/r/todayilearned/comments/2b4n7a/til_h...

?

> Support is typically low paid because it's a lot of effort for little reward, no matter how much you pay someone in support, there's only so much impact they can have on the bottom line.

As someone who was in Support and moved to the sales (engineering) side, I'll put it this way, if we had 3-4 of me in Support, my job would be 2-3-4x as easy.

> Sales as a competitive sport is cultural, not fundamental.

Can you name a single successful business that reflects your claim? Because I don’t know of any successful sales organizations that don’t pay commission.

You didn't read the article and the previous article that it came from closely.

You hit the nail on the head re sales being the canary in the coalmine. I just read the original post which I found distasteful and on-brand with Cantrill virtue signaling. Everyone is equal but some people are more equal: some get founder equity and some measly basis points. To boot, founders already made their money from Sun Microsystems looking for retirement entertainment and more than 175 or 200k is gonna be taxes anyway. If they hit it big they’ll be billionaires and their employee number 24 will do as much as if they’d gone to FANG with much stress and liquidity concerns along the way.

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!

I guess you've basically proven my point, although it appears I may have been poorly communicating it as if I meant you can afford a yacht or not, which I would certainly think would be deserved, but none of my business to comment on: you have a house/mortgage and your kids are now grown to college aged, but for someone who's not had as long of a career, the low-variance compensation means they have fewer opportunities to get ahead by trying harder and totally bound by equity performance [which actually does vary quite a lot, I'd suspect] so the risk-reward of a flat-comp startup generally favors the more established players in the labor market, unless the amount is somewhat above the range of the base salary they'd command elsewhere (which is the case with cash-rich players like OpenAI).

Frankly, when you look around and everyone around you is focused first and foremost on getting rich, that's a good indication that the rich veins have already been mined.

Wealth is built on creating something of value. There is gamesmanship played to acquire that value once it is created, but without the thing itself they are all just picking each others' pockets.

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

I don't work at Oxide but I have done an Emeryville <-> Sunnyvale commute, so I can confirm that Oxide employees almost certainly do not want to deal with that

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 ;)

God you are an unpleasant person. If this compensation model gets rid of people like you, it might be worth it by itself.

As an Oxide employee, let's just say...it does, and it is :)

To each their own I guess :) Exploited hacker congregation isn’t my cup of tea you’re correct.

To be frank, even if you had a point to make, making outlandish claims about someone else’s personal financial status when I’m willing to bet you know absolutely nothing about it, is pretty distasteful.

And frankly if you don’t like how Cantrill and company structured their compensation incentives, start your own company and do something different?

Huh, this is some Bluesky-level manufactured offended-ness.

The only comment I made about an individual in particular was related to virtue signaling. The financial commentary was about the profile of the founders, not an individual's finances in particular. If you have been a mid-level engineer at FANGs for half that long in Bay Area, riding the tech wave of 2010s alone and bought a house, I would expect they would be in low single digit millions net worth plus or minus, which is be an entirely different league today than someone who is just getting started. This is not a comment on a single person's financial status, but a much more general observation about why the everyone-is-equal model does not result in equal sacrifice by startup employees.

Of course they are more than entitled to their compensation structure for their own company. I am not even objecting to it being appropriate for their circumstances (for example, if you expect all your employees to be relatively senior that might work just fine.) However, once you proselytize a model by writing a blog post, it is fair game for me to comment on it. If you think that's not appropriate, feel free to be offended.

> 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.

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

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 all do our part, but our CEO is ultimately responsible for dish duty at the office.

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.

That's a hedge fund thing but it does exist.

I knew a guy whose tech company managed to keep a chef through the 2008 crash but lost her a few years later when Apple made it harder to sell apps. I saw some pretty impressive leftovers.

>I'd love to be a $207k/mo. lunch lady.

I mean, I'd settle for being a $207k/yr lunch lady. Perhaps I'm unduly devaluing myself..

No, I have no first-hand evidence that they are.

It's possible they're 100% remote with no receptionists or cleaners. Even if they have offices, a surprising number of highly remunerated jobs involve pushing a mop from time to time.

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...)

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.

But the real hero was the person who walked 100 yards to home depot and back with the push broom!

Y'all are really scrubbing toilets?

At 75 headcount I very much doubt you need either of those on staff full-time?

You can certainly make do without if your goal is to keep paying everyone the same.

I think in a smaller company I was part of all support tasks were rolled into a single ‘office manager’ role. When it’s all combined like that 200k becomes easier to justify.

That's not an efficient way to spend money. Fine if that is not your goal I guess, but there's no way this lasts if/when they have 500 employees and go public.

To a certain extend that is likely what they do. But I don't really think this is bad. Its impossible the force anybody else to have the same compensation model, and its impossible not to work with many, many other companies and people. This applies to many people who make under 200k and many who make over 200k.

So in some sense its a decision of who is one the core of the team and who is in a different kind of relationship. And its fine to have those different kinds or relationships.

At some point the company might be big enough to have somebody doing or organizing cleaning full time, or work reception full time. By that time that person will be valued the same as everybody else.

This make the decision on what to make internal and external very meaningful. And it makes it so that person will be empowered to make the needed changes in order to do their job very well.

Lets see for how long they can keep going with this strategy.

Why is that a good thing?

I don't read GP as saying it's a good thing necessarily, just pointing out that it can be or become a bit arbitrary.

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.

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.

It's not. He's just pointing out that their "we pay everyone the same" line probably isn't true.

So outsource everyone?

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.

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)

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

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.

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

Variable pay for sales roles is the driver of vast amounts of broken behaviour. You've seen it it your own companies, but also in the various financial crashes. It immediately sets everyone's goals in non-coherent directions. Wonder why your favourite software is getting so crap? Pressure from "sales execs" cos they are getting a bonus for the poorly thought out, inconsistent crappy feature they sold to some enterprise.

Regardless of the content of the article, I was very impressed with the design of this company's website. Very neat.

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.

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 never managed direct sales teams might not immediately grok is: good sales people are experts at gaming incentive schemes. Their work and output adapts to their comp schemes in ways nobody else's does. If you cap a salesperson's comp in a quarter, they will work to move sales out of that quarter; exactly what you don't want.

> 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.

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.

> 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 it's close and I've already done a lot in this one; I might more diligently create tickets for every little incidental thing that popped up (rather than just quietly getting it done).

I'm not comp'd according to that, but it's the same behaviour, it's just 'a measure becoming a target' really isn't it?

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.

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/

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 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.

Additionally, some of the points don't work the same way with sales, that is, the variability is easily measured and objective. Sales people don't write promo packets, you count up the amount they sold.

> 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.)

> 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.

Thank you. Two followups, trying to learn from Oxide:

1. Did you go straight from founders and marketing/relations people doing sales, to hiring salespeople with a conventional compensation scheme? (Or were there some other things you tried in between?)

2. Given the opinionated and unconventional ideas that you have for engineering and product culture, and also given that traditional enterprise sales culture was powerful enough to overwhelm that for hiring... is there anything you're consciously trying to do differently in enterprise sales, and how do you accomplish that within the (fairly transactional?) relationship that you have with your sales team?

1. I don't work on that side of things, but yeah, that's my understanding. We did discuss if we were going to try and do the flat scheme, but I believe we made the decision to be more traditional before we ended up putting up the job descriptions.

2. I can't answer that, as I don't work on that, but maybe someone else will read the thread and chime in. Sorry about that!

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.

In practice, what % of the salespeople make a higher base salary?

I don't personally know. We also only started hiring for these roles very recently, so I don't think it would really even be representative yet.

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.

> why sales people get instantly rewarded with cash comp while everyone else on the team might wait years for a potential liquidity event.

Because sales people also do not make money if they don't sell?

What's your counter proposal on how they should pay and attract top sales folks?

I know some sales folks who would love to have $200k base with no variable component: The bad ones.

Every salesperson that I've ever worked with that was worth their salt was worth the commission they made.

You could say the same thing about paying everyone a flat salary that you attract the middling ones.

And no way all salespeople are worth all the commission they are paid as all times.

You think the quality of Anthropic’s salespeople had much to do with them crushing their numbers as Claude exploded?

Even the most incompetent salesperson could sell their service if it’s currently the best model out there.

While that should increase everyone’s equity, it’s dumb that non-salespeople can’t participate in that abundance.

> You could say the same thing about paying everyone a flat salary that you attract the middling ones.

This depends on where your flat salary lands right? 200k base pay for remote is a very good salary for most of America.

The hiring process will weed out the middling ones.

> You think the quality of Anthropic’s salespeople had much to do with them crushing their numbers as Claude exploded?

You are right -- a rising tide raises all ships.

> it’s dumb that non-salespeople can’t participate in that abundance.

I think most people can't stomach the risk of the variability. Or else they'd become sales people :D

    > You think the quality of Anthropic’s salespeople had much to do with them crushing their numbers as Claude exploded?

Also, in my personal experience, the best sales really shine when there is an economic downturn, but they manage to outperform everyone -- existing and new accounts. Or, in the words of Warren Buffett: "Only when the tide goes out do you discover who's been swimming naked."

>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.

Is there a notable company with enterprise sales that's successful without sales commissions?

Companies in the past have tried a "flat salary no commissions" comp structure for salespeople before and it doesn't work even though intuition seems to tells us that it should. The thinking goes something like... "If salespeople are paid a good salary and therefore aren't under any pressure to meet any quotas to earn a high income, that mental freedom should allow them to sell."

What actually happens is that fixed salaries for sales positions attracts underperformers who can't sell and simultaneously, makes the job not attractive to "rainmakers" who know they're worth more than the fixed salary.

E.g. Pluralsight made the news in 2014 for not paying commissions to salespeople with a list of intuitive-sounding reasons: https://www.inc.com/aaron-skonnard/why-sales-commissions-don...

... But 2 years after that story, they changed their policy and had to pay sales commissions again. They eventually learned what previous companies already figured out: variable pay for salespeople works the best.

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 employees that doesn't lower the compensation to salespeople and make the job less attractive to rainmakers?

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.

>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/

"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.

That's because the folks who are buying enterprise technology (aka the economic buyers) for a solution that can potentially cost millions of dollars know if the person attempting to persuade them to do so belongs in that room or not. That is a skill learned over years of negotiation, contracts and legal reviews and executive messaging.

You have to have been in those rooms to acquire the skills that make for successful executive salespeople, and their variable comp is a requirement or you wouldn't be able to staff the team.

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

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...

do sales folks have the option to take the flat salary instead? or is that seen as a lack of confidence in their abilities?

Honestly it makes sense and resembles how other companies pay sales people. Lower base salary than other roles in the company for similar years of experience (roughly) but with a commission component that's some percentage of each sale. Commission is a big big part of sales culture that I suspect is hard to eliminate in an effort to be different.

What's interesting is that often times the commission has no cap, so top sales people can take home higher income than even than executives (at least in cash compensation).

But to the commenter's point, true transparency would share the commission % as well :)

For a startup Oxide's compensation model is fine. Eventually it won't be, and that's fine too. Eventually Oxide will get past the early startup phase and mature as a business, and then it will need a much more traditional compensation model in order to acquire and retain talent because new-hires then will not have gotten on at the ground floor. Compensation is a business tool.

Very interesting to see Valve's famous org structure and handbook referenced here. Equal salary was a bold move from the start, but that's exactly what a successful company needs to avoid dropping into commodity terrain. This is especially relevant to the Operating System space, I think there's a lot of creativity here and Oxide's approach embraces that.

> And, importantly: if/when those folks are making more than the rest of us, it’s because they’re selling a lot — a result that can be celebrated by everyone!

This is such a toxic mentality. Yes sales always sits at the end of the value stream, but they aren’t selling thin air. Everyone in the company contributes to making that sale possible. The waiter gets a tip because “everything tasted amazing” but the chef gets stiffed because “he just made it”

As always, they have equality but some are more equal than others. And they are transparent, but obviously not on the parts where transparency would expose the inequality because that wouldn’t be popular.

You can’t hire sales people without a carrot, and the variable component is very much a part of the sales mindset since they are all used to have immediate feedback on their success and have an unshakable belief that they control how much they earn by succumbing to the “gotta catch them all” impulse.

It’s addictive, and, ultimately, far more toxic than what you describe.

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 they aren’t doing enough“). One solution could be to offer traineeships, where the you offer actual coaching for a fixed duration. While clear goals like: finishing first small task, first doc, led first initiative. Then automatically completing after one or two years.

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.

There's a really sad failure mode for talented raw engineers that get no feedback in the first few years. They write a lot of code, and it's trash, but noone steers them in a better direction. Wait maybe three years on zero feedback and they've convinced themselves that their work is great and this new critical feedback they're getting can't possibly be right. You end up with clever and productive and shite, all mixed up in one indignant bug farm.

One of my most memorable “this interview is over” moments was I used to ask people to reflect on their last project and ask what they would do differently if they knew then what they know now.

One fellow, sitting with both myself and the owner, answered with a single word, “nothing.” And that was a very awkward silence.

I’ve been asked this question myself, which is why I stole it. Even on a project that went exceptionally well, where you pick the right tech and don’t spend a lot of time working around issues, there is usually at least one question you should have asked a little sooner to save some rework or avoid blocking issues. And I had to answer that way once. I had a feeling we should check on this thing but I or someone else talked me out of it, and three weeks later I regretted it.

It reflects on your capacity for continuous improvement. If you can’t think of anything then that’s less about how the project went and more about your opinion of yourself, and your ability to notice feedback from others, or from the situation.

If you picked the junior carefully they'd be fine in terms of added value.

Training useless junior engineers is excruciating. There's a strong sense of pouring time into the void. Good juniors are a different game. Someone that understands new stuff on the first try and asks piercing questions about what stops a given approach from working is great.

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.

I understand that currently (and maybe because you are "only" 75 employees) it feels fair for everyone, or people are even feeling bad about it. Also it sets the bar high when hiring someone, I get that.

But what if in a year or two a person is not so great anymore? Just by my own past work experience at 2-3 companies, there were always some colleagues that were definitely not good at their job (and this was pretty much common knowledge, multiple people had the same opinion). Maybe they were good at the beginning, or not even then. I would have felt it to be super unfair for them to get the same money, or the same salary bump as me.

Wouldn't this person be put on a PIP and then fired if their performance didn't improve?

Even at companies with non-uniform salaries, it's difficult to down-level someone. Their morale will drop, the team's anxiety will go up, and (if they were genuinely bad for a long time), the team will wonder why they weren't fired.

The thing is, our team has extraordinary breadth so everyone's good at some things more than others. What matters (and what we select for) is curiosity and openness to learning.

I previously worked on distributed systems with lots of immutable state. Here I've learned tons about distributed systems that have lots of mutable state, and it's made me realize immutable state is easy mode.

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.

No, it was more like dropping out of college is a red flag.

Hm, well I am not sure about that either.

> The completion of a formal education is much more important than the institution

From https://rfd.shared.oxide.computer/rfd/0003 -- which was top of mind since I started looking at the postings after reading the article. ;-)

It's not saying that doing so is a requirement, it's saying that, if you have a degree, the fact that you have one is more important than where it is from.

I dropped out of school, had terrible grades, and ended up going back and finishing, but still got like a 2.something GPA. The subject of school never came up. When I review applicants, I don't rate them poorly if they didn't get a degree.

That's totally fair! I just sympathize with gp as the quoted section and the sentence that emphasizes "completion" from the last paragraph are easy to misinterpret as "you should have finished a four-year degree".

e: hopefully clearer, but tired and still commenting on the internet, so who knows. =)

That section is comedic gold. It reads like a character from Silicon Valley opining on hiring "only the finest." Poe's Law hilarity.

Looks coherent and well considered to me. Oxide can't really get away with hiring friendly-but-incompetent. I liked this section from the written part, that looks worth doing as a self reflection exercise.

> What work have you found most challenging in your career and why?

> What work have you done that you are particularly proud of and why?

> When have you been happiest in your professional career and why?

> When have you been unhappiest in your professional career and why?

They require a lot just to apply, and they didn't get back to you until three months later? That's unacceptable.

Three months is long. We are upfront that the process takes a while. Part of the reason is that while we ask a lot of people, we also then give a lot: reviewing everyone's materials takes a significant amount of time. But the goal is usually half of that, six weeks or so.

As someone who is unfamiliar with your product could you maybe explain to me what your company sells? I looked for a while at your website, and it seems like you sell server hardware, however, when I go to the products section, it talks of demos etc, which sounds more like you sell cloud hosted systems. I don't see any way to find the prices or order the hardware itself. Very confusing website.

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=30678324

I'm happy to elaborate on this or anything else you're curious about.

> I don't see any way to find the prices or order the hardware itself.

We do not publish pricing, and to place an order, you can contact sales: https://oxide.computer/contact

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!

they sell you a "cloud in your closet" -- the "apple of enterprise" -- buy their boxes, which run their os with deep integration to the hardware because they make both, and a support contract and you have and end to end solution where Oxide deliver the literal entire stack.

"On premise cloud computer offering a virtual machine on demand, easily hardware extendable in most directions, using proprietary hardware¹ and software²"

IBM mainframe on premise, offering virutal machines on demand, easily hardware extendable in most directions, "using proprietary hardwareand software"

¹ Will Oxide certify 3rd party vendors as fully integratable and offering the same support as harware solutions from themsevles.

² What other operating systems cna Oxcide Cloud Computer run aside from the default one? (IBM LinuxOne "bare metal(?))

I'm not sure what that quote is from. Regardless:

1. We'd have that conversation if we had a third party vendor exist. No point in having that conversation until then.

2. It's your hardware. You can run whatever software you'd like on it. You're probably going to need to port something, though, I doubt anything other than our software runs out of the box.

To be clear on 2, I thought you're asking about the host software. You can run anything on the VMs that you want, with our host software, via standard images.

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 scarcity of resources still causes poor incentives that lead to not as good human/team outcomes. Maybe better than in a "normal" compensation structure though?

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.

OT: how does anyone buy their cloud? Is it only available as a public alpha/beta with remote control? I might have a client interested into this, but needs to have some guarantees that their data remains on-premise.

> how does anyone buy their cloud?

https://oxide.computer/contact

> Is it only available as a public alpha/beta with remote control? I might have a client interested into this, but needs to have some guarantees that their data remains on-premise.

You are purchasing hardware. You put it on-premise. Our software gives you a cloud-like deployment model, but it's not going anywhere other than your rack.

Happy to answer any other questions, even if they're off-topic :)

Ah nice, I thought for a second it was more vertical with its own hardware (which has its pro and cons, maybe it's in your plans..). Would that work as a SAAS? Or price per hardware device/machines I can create?

We have built our own hardware, yes.

> Would that work as a SAAS? Or price per hardware device/machines I can create?

I'm not 100% sure what you're asking. You could use this to build your own SAAS business if you'd like, but you can't rent the hardware from us, or run your software on hardware we own, if that's what you mean.

Ah now I understand what you meant with "You are purchasing hardware", I missed completely that point. "You are purchasing hardware from us" :) yeah, then it's what I originally understood. Good :) so I guess one time payment, I get the hardware, I set up with your software into your hardware that I purchased and then I should be good.

> so I guess one time payment,

We sell support too, but yes, fundamentally it's a one-time payment: we don't have software licensing fees, for example (and the vast majority of it is open source). You're purchasing physical hardware.

> I set up with your software into your hardware that I purchased and then I should be good.

You don't even need to set it up! Heck, the rack comes pre-cabled. You roll it into the data center, hook it up to power and internet, turn it on, and get going.

The post I want to see is: "Oxide's revenue model: how is it going?"

Looking on the website, I just see "try a vm and play with us", I'm super curious how this translates to sales.

Updated: s/rent/try/

> I just see "rent a vm and play with us",

To be clear, you cannot rent anything from us: you are buying a rack-scale system.

True, rent was the wrong word. I was referring to this:

https://oxide.computer/remote-access

Ah yeah, this is something new I frankly forgot we have. I don't personally know how well it specifically converts.

It is the primary CTA on your website, so maybe it isn't converting well if you forgot about it. ;-)

Hahah, well, you see, I have access to our dogfooding rack, so I'm not in the market right now anyway...

I looked at the careers page and could not see any administrative roles - I wonder it they pay the same for these (very impressive if so) or outsource those roles to staffing agencies.

I don't believe we have any traditional dedicated administrative staff at the moment. We're certainly not outsourcing any kind of employees, to my knowledge. (EDIT: I'm told we do currently outsource accounting, I don't interact with that part of the business so I wouldn't know about it, heh. We do have one dedicated finance employee but that's a recent hire.)

interesting! how are the administrative tasks managed, or are there just not that many of them? I've worked for a pretty small startup that still had a dedicated admin person who had a ton of stuff to do, though maybe Indian companies need that more.

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.

I'm more curious how the business is going? Have they got a Fortune 1000 on board yet?

It's going well! We often can't share details about our customers. We did do a joint announcement with Lawrence Livermore National Labs: https://oxide.computer/blog/oxide-computer-company-and-lawre...

Last year Shopify was named as a customer[0], which I found both surprising and not.

[0] https://blocksandfiles.com/2024/07/04/oxide-ships-first-clou...

While there are a few things highlighted in the post that are unique to this flat comp structure (e.g. no middle managers worrying about comp and leveling), for things like “we hold a high hiring bar”, it isn't at all clear that paying everyone the same has has anything to do with where the bar is set.

I wonder why not just make it an employee-owned cooperative at that point?

I understand there are funding considerations, and founders won't get the lion share, but it fits the stated values better.

Good point.

The other aspect that I didn't buy too much was the original blog entry claims the salary is enough since the founders themselves have kids and are living in San Francisco.

They are coming from a point of economic safety from prior successful ventures and maybe are on multiple boards with other income streams.

Anyways. I like the intent so I won't be too critical.

The Bay Area is expensive, but I assure you that many families with kids live on less than $207,264.

That said, everyone has their own personal requirements, and startups aren't for everyone. Around a quarter of the company, last I checked, lives in the Bay area, so while we obviously miss out on some good people who want more money, we haven't had an issue with finding enough people who are happy with the compensation.

(I myself took a pay cut to join Oxide, but I live in Austin, which isn't cheap but also isn't as expensive.)

I disagree based on my own personal experience of raising kids in California but they are all young and I'm paying quite a lot for preschool :P I'm also carrying a mortgage as I'm younger which is ~30-40% of my take home pay.

Total tangent: 2024 Jujutsu was my favorite tool to learn and your posts helped me learn it. Thank you.

https://www.sfchronicle.com/california/article/how-much-mone...

> the [SF metro] area’s median household income [was] roughly $120,000 [in 2022]

That, being the median, includes a lot of folks who make less.

> Total tangent:

Awesome, so glad to hear it! You're welcome. I wish I could find more time to continue writing V2...

Yeah $175k plus 30% say stake in high growth company plus already owns home plus parents help woth kids and they own home nearby is different to $175k none of above.

That $175k was pre-pandemic, as the post says, it's $207,264 now.

I'd also say that you're presuming a lot about the lifestyle of some strangers on the internet.

Which is $167,202 in pre-pandemic, inflation-adjusted dollars.

That's the point. "$175k is good enough for me" doesn't mean much, especially as they also have a large stake in the company (not an assumption) as well as possibly other advantages (or not, they dont divulge).

Don't get me wrong. Rethinking comp is great and they are paying well. But you can't make the argument that X is enough for founders (plus let's forget equity!!) and so X is generous for everyone.

We all receive equity.

All the same equity, I assume?

No, it’s variable. This is covered in this thread and in the original article.

Eye roll. I get capitalism. It's OK. Just say "we do capitalism". Why pretend otherwise?

Nobody is pretending we’re not doing capitalism.

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.

> I wonder how far traditional bank loans + loans for the founders themselves could have gotten them.

There's a reason startups generally don't get traditional bank loans: they're far too risky of a loan for the bank to be interested!

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

>I wonder why not just make it an employee-owned cooperative at that point? I understand there are funding considerations,

The ~75 employees probably don't have enough personal money to buy out the previous investors to convert it into a true workers co-op. Reportedly ~$78 million total raised (over 3 rounds) and last round was $44 million:

https://www.google.com/search?q=0xide+raised+funding

https://www.crunchbase.com/organization/oxide/company_financ...

The alternative of turning it into a hybrid/partially employee-owned company where the VC investors still own their % shares is still too expensive for employees to "buy" because you're supposed to value the shares at the same present price as the investors' shares. (We're not talking backdating stock options at an artificially lower price here.)

I guess one could create loans where company let's employees pay for their ownership over time. The current investors probably won't agree to that.

But compensation is the opposite of ownership? And there's no mention of equity here.

In fact equity compensation is very common in SF startups.

Equity is mentioned in the previous post:

> Some will say that we should be talking about equity, not cash compensation. While it’s true that startup equity is important, it’s also true that startup equity doesn’t pay the orthodontist’s bill or get the basement repainted. We believe that every employee should have equity to give them a stake in the company’s future (and that an outsized return for investors should also be an outsized return for employees), but we also believe that the presence of equity can’t be used as an excuse for unsustainably low cash compensation. 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.

Yeah, but equity is very standard in SF startups, Oxide actually goes in the opposite direction, by reducing weight from equity and placing it on salary.

What makes you say that? We talk about salary compensation, yes, but there's also equity compensation.

Oh I didn't notice I was talking to a primary source.

Below I have tried to make clear what the original statement was (root comment), the implicit presumption in it that I adressed (that flat salaries make a company more co-op) instead of addressing the actual now invalidated question (why not 'make it this other thing), why I think it's wrong and what I think is the case (the opposite).

None of this is necessarily worthy of such deep elucidation, mind you, but I quite enjoy the nerdy depth-first nitpickiness that only internet threads can afford. So here goes nothing:

The root comment asks "why not make it an employee owned co-op at this point." implying that Oxide's salary policy difference, (diff between the Oxide fork and the SF Startup base) brings it too close to employee-owned status.

What I say is, au contraire mon amie, the delta that Oxide's bylaws/RFP apply on top of the base Corp Structure refer to the fixed compensation, where equity/ownership remains largely unchanged (unchanged from the base, not inexistent or unchanged compared to the base of the base, the commodity non-sf Corp.). So to the extent that it is employee-owned, it is a property of the immediate base and not of the fork.

One could even argue that since total compensation a limited resource, an increase in fixed compensation means a decrease in equity compensation and viceversa (more salary less profits, less salary more profits), therefore the flat salary difference of Oxide pulls them AWAY from employee-ownership (albeit only slightly admittedly), by making fixed compensation a stronger component of compensation than equity, (at least compensation-wise, as there are non comp. properties of ownership)

If I may mathematically summarize in oversimplified 1D political terms. Consider the Political Alignment 'PA' of company structures as reals [-1;+1], where right = (0;1], left = [-1;0) and center = [-ε;+ε]. Then:

PA(Co-op) < PA(SF Corp) < PA(Oxide) < PA(WY/DW Corp)

And not:

PA(Co-op) ≈ PA(Oxide) < PA(SF Corp)

As root comment would suggest.

I guess what I'm saying big picture is that Oxide is a political-center Company and OS. It was born treading the needle between Linux and Oracle, which are already quite centered Orgs/OS when compared to the extremes like GNU and Apple.

Thank you for coming to my TED talk and yes, before someone asks, I have kissed a girl before.

You 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 you design per role how much of a share of the profits one should get and everyone in the same role is paid the same. It's not tied to your output, your yearly review, nor your experience and the only way to make it go up is switch roles or make the company grow

We are far from making a profit, so that’s not an option right now.

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

In short, they pay everyone the same as they pay themselves.

"We decided to do something outlandishly simple: take the salary that Steve, Jess, and I were going to pay ourselves, and pay that to everyone. The three of us live in the San Francisco Bay Area, and Steve and I each have three kids; we knew that the dollar figure that would allow us to live without financial distress – which we put at $175,000 a year – would be at least universally adequate for the team we wanted to build. And we mean everyone literally: as of this writing we have 23 employees, and that’s what we all make."

Later update:

"Since originally writing this blog entry in 2021, we have increased our salary a few times, and it now stands at $207,264. We have also added some sales positions that have variable compensation, consisting of a lower base salary and a commission component."

Everyone but salespeople (who can make more or less based on their sales figures) receives the same salary, currently $207,264. As stated in the blog.

"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."

One thing I've been listening for in the podcasts is a discussion of equity. I'd love to get the company's perspective on equity, options, liquidity, etc. The Silicon Valley Way (tm) of using stock options to "juice" compensation while injecting large amounts of risk and drama into the employee's tax returns is certainly something I'd like to hear Bryan's (and Oxide's) take on.

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.

This implies that the goal of compensation transparency is to satisfy people's curiosity. I don't think that's the case. Regardless of how it's denominated, I think the goal of compensation transparency is ... uh... equity... no pun intended.

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