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Comment by user5994461 | Hacker News Reader

More than that.

Companies spend the the majority of their costs on office space, then employees spend the majority of their salaries on a home.

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I disagree. Office space is relatively cheap compared to employee salaries. For a 25 person startup in SF, office space pencils out to the cost of 1-2 employees depending on the quality of the office. We have capacity to cram in up to 35.

But then the employees have to dedicate a good chunk of salary to rent.

Market rate rent in SF is something like $3k for a studio, which is like 50-75% of those employees' take-home pay if they're making low six figures.

isn't mid 6 figures 550k?

Oops, you're right.

I was thinking 100k-200k for some reason :/

On a logarithmic scale, mid-6-figures is 10^5.5 = $316228 . Maybe your brain prefers to deal with larger numbers in terms of orders of magnitude?

This would assume that they both live in SF and don't have any roommates.

Some people commute an hour and get roommates and can pay < $1000

I think the last startup I worked for in London had the monthly rent peak at half or 1/3rd of the gross salaries when they reached 25 people.

That's when they moved to a high quality office in a prime location on a rooftop. With a lot of free space, to accommodate hiring 1 person per week for the next year.

How much of employee salary goes to rent on their apartments?

That's the second part of the original statement and he's not questioning that.

Oh, I missed that. Whoops.

Not office space.

The math: most companies are doing roughly 150 ft2/employee. You can get good office space for $60 ft2; quite nice office space for $80 ft2. On the lower end, that will come out (+ services) to $5.50-$6 ft2/mo. So maybe $800 - $1200/emp/month.

Note you can do much better than that $60 if you don't want to be close to caltrain. I looked at stuff in the $40 range that was your standard peninsula office park.

As for housing costs... the bay area is fucking stupid. Next round (I'm a founder) we're going to be opening an engineering office anywhere else. Candidates are probably Chicago (ugh that flight), Oregon, Seattle, maybe Reno. The difference is is $150k barely making it or a pretty decent salary.

It's not just housing either. A founder friend bought health insurance for employees in Oregon. She thought her broker screwed up the price was so low.

Don't even get me started on the fuckwits in our government and the commute situation.

You could always hire remotely, which means zero in office costs.

In our experience, lower velocity. Which we prize above almost everything else.

Office cost savings are $0. We can't incrementally buy office space. Plus a week of travel to sfbay costs order $4k each time.

Based on cost of living sites, you could probably buy Reno on $150k/year. The only problem would be you're living in Reno.

"Companies spend the the majority of their costs on office space"

Have my doubts about this. Would love to see your sources

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