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Comment by petercooper | Hacker News Reader

This new floor also means that the entire salary range at Basecamp is now around 5x.

So the highest paid employee at Basecamp is earning around $350k. I've seen several estimates that Basecamp's revenue is north of $100M, so even if every employee were paid $350k, their wage bill would be incredibly low compared to their revenues.

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$100 million sounds way too much. In this forbes article it says $25million in 2017. https://www.forbes.com/companies/basecamp/#1245fcb347b7

Forbes asks the company, and they guess if the company doesn't share. If the company does share, the numbers are not AFAIK audited. (This is to say that I would not expect the Forbes data to be especially accurate.)

Basecamp is claiming 200k more accounts since 2018. At 100% retention, that's $20mm per month of new revenue. Factor in whatever churn you want, a $25mm annual revenue estimate for Basecamp 2017 sounds ridiculously low. (They are claiming 700k new accounts between 2016 & 2018.)

Those aren’t net new accounts.

As I indicated:

> Factor in whatever churn you want

Right, take the $20mm/mo in gross new business & apply your favorite convert rate to that. Then, apply your favorite churn rate to the existing business.

You have to pick really pessimistic numbers to get from 2.8mm signups of a $99/mo service to arrive at a $25mm annual revenue number. Specifically: ~.75% of their total claimed signups since 2004. Or ~2.5% of their claimed signups since 2016.

(Put another way: if they converted 10% of their signups since 2016, that's > $100mm run rate before accounting for churn.)

Basically, to assume they are doing only $25mm annually you have to assume either (as the parallel comment does) they are publicly lying about their number of signups or that they have pretty poor conversion/retention numbers. My guess is option #3: they are doing much more than $25mm annually.

I've also seen that figure thrown around quite a bit and I'm a bit skeptical. It also makes the question of profit redistribution particularly interesting given the tone DHH employs everywhere.

Are you implying that they should be paying much more just because the company can afford to? This doesn't seem like good business sense, especially when they're already paying above market rate (and based on the highest market rate in the world, at that).

My thoughts are that people like Sam and Jeremy have years of open source contributions to Rails that which make their way into Basecamp, are world class programmers and would easily be 500k+ engineers at a FANG company. And they should pay them as such.

I think they're saying that it's not a very appealing place to work if you can get $500k or higher offer from the Googles and Facebooks of the world.

The vast majority of those comp packages are due to stock appreciation, and in the cases where they are not, it's due to competition between FAANG companies - all of which require you to relocate to a super high COL area and go into an office and deal with a questionable corporate environment.

None of this applies to Basecamp, and as much as I'm a fan of Rails I've spent a lot of time in that source and am not of the mind that a top Rails hacker is doing work nearly as difficult as the more sr. staff at a FAANG.

How many people can actually get that, though? Those are outlier numbers.

Take a look at the engineers at Basecamp. Many with 10+ years with the company, numerous contributions to The Rails ecosystem.

They are the outliers.

Clearly few enough that basecamp can still hire people. I'm not saying it's typical. I'm just explaining where the parent comment is coming from.

That's a strange comparison to make, though - wage is determined by labour market and is unrelated with company's profitability. I worked at many companies that didn't have any profit (and some never made it), but I still got my market-level wages. It works both ways.

Along those same lines.. They’re saying the comp is within 10% of SF based salaries.. if you don’t include the options or RSUs.

So one of the biggest factors for Bay Area comp isn’t factored in to their equation? Neat trick.

Snarkiness aside, there are a number of factors that make it a bit of an apples and oranges comparison:

- massive difference in working hours

- guaranteed compensation vs potential compensation

- ability to work remote vs a challenging commute

- COL for housing

Unless you work at some established company that is or is about to go public options and RSUs may as well be worthless.

I'd expect the top decile number to be heavily driven by public companies, though. Especially with the recent IPOs, you're now looking at Google, Apple, Facebook, Lyft, Uber, etc all of which pay a huge portion of their comp in stock.

They're not worthless in the sense that employees put value on them and take less salary as a result. Or in other words, they could get a higher salary (+guaranteed RSU) from a larger company but chose not to.

So from an employee point of view not having them counted is disingenuous.

Some of the profit goes to Jeff Bezos as a "profit distribution". https://m.signalvnoise.com/the-deal-jeff-bezos-got-on-baseca...

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