Oxide’s compensation model: how is it going?

> 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)

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.

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?

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 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.

> 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.

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.

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

So outsource everyone?

Why is that a good thing?

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

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.

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

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.

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.

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.

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?

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 :)

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

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.

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.