Minimum pay at Basecamp is now $70k | Hacker News Reader

Minimum pay at Basecamp is now $70k

m.signalvnoise.com

130 pointsrbanffy98 comments

Good for them.

At ~54 employees according to google search, they're lean, profitable, sustainable and the employees make a good living according to their abilities. They're in control of their growth and aren't beholden to filthy rich investors forcing them to grow like a cancer.

I wish more software companies were like Basecamp.

Basecamp is the mittelstand of software companies.

There are a lot of software companies that are mittelstand-ish. Honestly, the concept could probably do a lot of good for the us economy; especially its emphasis that not every business needs to be a unicorn

This can't be said enough. Taking the time to grow the company for a long term legacy is much more rewarding than a quick buck.

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.

$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...

I’d be curious to know what portion of their employee base is Benefitting from this “minimum wage” - a couple of admins? I’d imagine all of the front office jobs and most of the back office jobs at an SF software company would command wages in excess of 70k?

The article makes mention of this, specifically customer support people are benefiting from this, which according to the article would have a 50k/year salary otherwise.

They're also based in Chicago - 70k is right where things start to get comfortable.

i think they said none of their employees live in SF and lots are remote. At least half are spread out across the globe. So $70k probably goes a long way in small towns.

even better!

My question is the PORTION who are benefitting - is this 2 employees? 20? If it’s 20 this is a serious commitment, if it’s 2 it’s more of a PR stunt...

Richard Wolff would be proud. A company that actually values all its employees. However, he would advocate the company to be OWNED by its employees, in which case this would be a likely outcome already, not surprising. It's only surprising under capitalism.

Here is another take completely:

https://qbix.com/blog/2016/11/17/properly-valuing-contributi...

wake me up when the people cleaning the office's toilet bowls are also included in this PR announcement.

A remote company has no office, hasn't it?

The post does say that this is the minimum regardless of position, not just developer salary. Of course the cleaners could be (and more often than not are) outside contractors.

Step 1) outsource low paying positions to temp/service companies. Step 2) pay all employees at least $70k.

This is a tough problem to solve but nice they are trying. Paying a receptionist or cleaning person $70k doesn’t make much sense because it’s way above market rate. But outsourcing to a company paying $11/hour doesn’t fit into the “everybody makes a good amount” message.

I don't know why you were down-voted. Practically every company does 1 these days.

I'd have more respect for a company that says "we pay everyone at least 40k" and doesn't outsource the janitor.

If you have one office location that takes a crew one or two hours to clean per week, why would you have someone on staff to do that?

That's completely irrelevant or disingenuous. Obviously you can prorate an annual wage to Basecamp's advertised hours per year of work.

I would think that most small companies don’t own their own office and are renting space in a building where the building owners contract out cleaning for all of the tenants.

It's irrelevant if market rate is below what you pay, as long as you can afford it; employees won't complain and leave for being overpaid.

The Google masseuse got $millions (in the IPO).

Or you could get the best receptionist and cleaner in the world.

usually that's external companies....

That’s the point of the statement.

While it is probably nigh impossible to find a facilities company that would pay the staff that much, I don't think simply saying it's another company and therefore out of their hands is a valid argument. You could've said the same about Nike in relation to the factories that used to supply them and use child labour.

People are paid depending on their worth.

I think people are paid based on supply and demand. I don’t think it’s accurate to say this is the person’s worth as it’s easily confused with other factors.

> I think people are paid based on supply and demand.

Not even that. People are largely paid based on the power (real or perceived) that they have.

Spending a day employed at any Fortune 500 company should disabuse you of this notion, in both directions.

While I share most of DHH positions, I still dislike him/his tonality/too dogmatic view/his lame way of doing content marketing--which is the only thing he seems to be doing nowadays.

It is click-baity and doesn't add anything substantial or new to the discussion.

To me this sounds like a pointless article. If you have a high margin/high profit company with minimum employees you can pay whatever money you want to pay.

Is DHH just saying they could pay less to earn more and they are just generous ?

Minimum wage especially with distributed teams is really a pointless metric.

The same way Google can pay top dollar and above average for all employees is not the same for most of the companies.

I am not saying the companies struggle.. I am saying companies are competitive entities fighting against other competitive entities like google.

Google extracts the vast majority of the wealth from the world that could have gone to small / medium sized businesses and so does any other highly profitable company.

Yet another self-publicity stunt.

Maybe the next book they want to sell people will be about compensation? :-)

It's a blog post, on the company blog, about the company. That's not what most people would describe as a "publicity stunt".

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