Well done. Personally, as a remote developer, I always make a point of billing at my "Bay Area Rate", even though I've never lived there.
There was a point, early in my guy-on-the-beach-with-a-laptop era where I would cut my bill rate in half while working from the beach with a laptop. Clients were happy about that, and it more than paid for beers and thatch huts. Then one time I tried not cutting my bill rate in half on a proposal. Nobody but me seemed to notice. So now I don't do that anymore.
As the article so nicely points put, the work you're doing is exactly the same regardless of where you do it from. Charge accordingly.
It's true that living costs are less in other places. It makes a lot more sense for that difference to be captured by me rather than somebody else's company.
Glad to see these guys stepping up and setting an example from the employer side.
Imagine the work currently being done in a cubicle. Now remove the two external monitors and fill the bottom third of the cube with sand.
That's pretty much the only difference. Lots of guys try dividing their bill rate by four, but as I said above, that's just personal preference. (And also diminshes the perceived value of what you do.)
It goes like this -- as you are waiting for webpack to rebuild your modules, you gaze into the crystal blue water, see someone getting a massage for five bucks, and realize that you're the only one without a beer. Webpack finally finishes up, but you don't notice, and for good reason. Nothing else gets done the whole day.
He's probably exaggerating, but I can see the allure of remote work. You may be working on a laptop in a cheap room in a hot country, but when 5PM comes, you'll be a few steps away from the surf.
And depending on the client's timezone, you could start work later during the day...
This was my experience. When I was a digital nomad my workdays were just spent in a variety of airbnbs instead of my home office. I did spend two weeks working on a beach in Cadiz, but I found that either I was too focused on the work to enjoy the beach or too focused on the surroundings to be productive.
How much is your/the "Bay Area Rate"? Thinking about internationalization of my consultancy and have no real insight into hourly rates for devs in the US. Don't want to leave too much money on the table because I haven't done my research.
For employment yes, consultant or contractor (which you probably will be if you're remote) can make double or more. 100 USD/hour is Prague, Czech Republic-level rate for a skilled consultant.
You mean in Prague? I don't have experience (by choice) with projects that span more than a year. I prefer to do several short term projects (~3-6 months) at a time.
To be honest, I have never seen rates so high in Prague either. Very good offer for me would be 42 USD/hour for longer term project, 35 being more standard (yet still good). I currently live outside of Prague (regional city) and salary of employed developer (I know, not fair comparison) here are less than 14 USD/hour. Actually when I claimed I would not work for that much, I was told everyone wished for that kind of salary.
I should really look into what is to be known to get 100 USD/hour for medium term projects in Prague. I would be able to live from 2 to 3 month project for full year.
Employment is a whole different world because of various compulsory benefits, compensations for time not worked, much higher taxation etc.
You have to transform yourself into a consultant, being a contractor locks you into the rates you mentioned (the ceiling is around $50 to $70; big agencies are able to sell contractors to enterprises for around $80). It's not for everyone though, the rate is higher for a reason, you have to do a lot more things yourself and many devs don't enjoy doing them. Narrowing you specialization helps very much; it's also helpful to choose only a few (around 2) verticals (e.g. logistics, material production, ...) that you work in and mention that to everyone.
Depends on what contracting work you are doing. The average web/mobile dev can't charge that much anywhere in the US. Company that I work for itself (an app dev company) does not charge more than $120/hour/dev to their SF clients.
In my experience employers often pay less than it takes to keep the employee happy and working. Most of the full-time jobs I've quit have been for pay and little else.
Interesting ... I've usually quit when I've been reasonably OK with the pay but the work no longer is interesting, the company culture changes, or I'm disturbed by the company's direction and don't think it will last. The switch has always translated to higher compensation as well.
If I were to look up salaries for those positions in bay area, they would be equal to those in rural Montana? If that's the argument you are making, I have no data to disprove it, so I would have to believe you, but it doesn't seem very likely.
That is not argument I am making. The difference in salary is in negotiation power, not in need, as shown by people who earn less while living at same location. Need is the same for janitor and programmers, however programmer have other employment opportunities and is more scarce resource.
Just up the beach from my $6/night bungalow in Thailand there was a resort that costs $1,500/night. The work I'd do from there would be functionally equivalent from my employers' perspective.
So as long as we're covering expenses, I'd prefer they cover mine at that second place. The fact that I might actually be living cheaper is none of their concern.
If there's an equally qualified dev willing to take $1494/day less, employer would take that one. But if the only available people live in resorts, then the employer has no choice.
Lower living expenses is a stupid reason to charge lower rates. I am not a contractor, but I can only imagine lowering my rates (if I were) if I was consistently underbid and not getting enough work or if I were doing charity work for a nonprofit doing important work.
If my living expenses were far below my rate, I'd save my money happily against the possibility my living expenses would go up or my income would go down in the future, and would not lower my rates.
If I occasionally lost a bid but still got enough work, I would not lower my rates.
As a worker, lowering your rates unnecessarily screws other workers, and future-you is another worker getting screwed.
As I hiring manager I can say that is a huge if. You get what you pay for. Eventually people who are really good wise up and up their rates (as they should) even though their cost of living is lower.
I have met Indian developers living in India making just about as much as they would in the US and they were always busy.
No, it's a market-clearing rate like everything else. It is for the work and only for the work. Otherwise you get the bad old days where unmarried employees were paid less than married ones, and so on.
Given a situation with two developers working remotely with exactly the same skills, experience and knowledge on the same project, but one works in India, the other one works in the Bay area.
Can you give me one valid reason why the developer in India should get a penny less than the developer in the Bay area?
And that the cost of living is less in India than in SF is not, in my opinion, a valid reason.
You pay your developers, or any staff come to that, what they're worth to you.
> You pay your developers, or any staff come to that, what they're worth to you.
It's not that easy. What they are worth to you is your upper limit. What they are willing to work for is the lower bound. It's composed of many things, mostly supply and demand, but not an insignificant portion is living expenses. Most employers would gravitate towards the lower bound. And for a dev in India, it might be reasonable to pay them less. If there's another company willing to pay Bay rate, that's great for the dev, but the expectation that everyone (let's stay in remote developers category) around the globe should be paid the same is not based in reality.
I certainly realise that developers (or other employees) aren't, and likely will never be, paid the same despite where they live. I accept that is the reality, however is it reasonable? I don't believe it is at all reasonable to pay developers in India less, if they're able to perform their duties in the same manner as a developer in a western nation.
Developers in India are generally paid less because employers can, which is clearly why companies look to employ staff in India.
As a developer living in the UK, while I don't work remotely (often), if I was in a position to do so and decided I was going to move to India, I certainly wouldn't expect my employer to cut my salary as a result. If they did, I'd be out of the door and looking for a new employer promptly.
I have dev teams in several locations in Europe, one in India, and one in the US. Speaking specifically of the India developers, they are fully qualified and, given equal conditions, I believe they could perform in the same manner as a western developer.
From the company's perspective, the conditions are not equal, try as we might (and do) to make them so. They are working on the other side of the clock from much of their peers and technical leadership. They are 18 hours of flight away when it comes time to visit on-site. They spend more time, on average, commuting to/from work. They face weather conditions that preclude reliable commuting several weeks per year.
They face disadvantages inherent to their location and related to the fact that their location isn't the HQ. It's not their fault, but to make the economics make sense for the company, they are paid well for the local market, but less than the Bay area market. If wages in India were Bay area wages, we wouldn't have started new dev teams in India.
The condition of one experienced dev moving away to a different location (I don't care whether higher or lower cost) is different from trying to build a de novo team in a different location. You take with you the experience and relationships you developed and that makes you different from your hypothetical identical twin who is applying to work remotely from wherever you are contemplating moving.
As a public company, many of our employees are shareholders (literally: owners), some via share-based comp, some via secondary purchases.
We don't enforce that, as a condition of employment, you must accept share-based compensation. Employees are mostly [1] paid in cash and we let employees decide how much of that cash they want to invest in the company.
[1]-some executives are "forced" to accept share-based compensation as part of their comp.
Sure, given a dev in India and a dev in SF with the same skill set, then the one in India will be willing to work for less. But when you offer a SF salary in India, then you might get a much better dev.
So, theoretically, in case of remote work and a global pool of talent, it is a less optimal use of your dollars to adjust salaries to the cost of living (all other things being equal, e.g. skill set level, culture).
Depends on competition. Suppose you pay $300k a year in SF and the guy/gal in India's next best alternative is working for a local company making $50k which pays for a very nice lifestyle there. If you pay $100k, you're still substantially above most competitors, and the employee will be very happy.
Now with more competitors, salaries will probably end up rising close to SF ones--which are likely near to the upper bound, marginal value produced by the employee.
The biggest problem would be identifying and contacting the good devs in India. By and large they don't have access to Bay Area hiring managers, and vice versa. There's a lot of money to be made arbitraging this, hence the body shop phenomenon. It could definitely be an interesting problem to solve, but given how scummy recruiting and freelancing sites tend to be, I don't know how you would avoid an ugly race to the bottom.
As a rule of thumb, you pay people 25%-33% of what they are worth to you. That other 67%-75% covers the costs of employing them, the overhead of your business--including employees that don't make money for you directly--and some profit for the owners.
If you pay less than 25%, the employee is very likely to find a better deal somewhere else. If you pay more than 33%, you might have occasional difficulty operating your business or giving raises.
There are plenty of potential employees willing to work for less than 25%, and a few more that will demand more than 33%. You should leave them to other employers, that will have other means of monetizing their work.
Candidates are perfectly able to self-sort themselves into a pay range appropriate for them, especially those that know their own worth versus the companies that routinely try to lowball.
This is why one of my stock interview questions is "how do you measure the value to the company of work done by this position?" For me, whether the response is honest or evasive is often more telling than any details given. In my view, the value an employer should bring to the table is the ability to monetize my work to a far greater extent than I could manage on my own. I might be able to provide $2X in value and charge $X for it as a freelancer, so an employer should at least be able to magnify my work into providing $3X or $4X and then pay me more than $X for it. Ideally, the employer squeezes $5X or more of value out of my work, and then pays me $1.6X or more to do it for them.
So what I'm willing to work for is not my lower bound. That bound comes from what I could get working the same job for someone else, or for myself, and that comes from how well different companies can convert my work into cash, and how greedy they are about capturing that additional value for themselves.
I would likely be willing to work for $40/hr. That amount keeps the bills paid. But it won't ever keep me from looking elsewhere for better work.
So my expectation is that employers that comb the globe looking for bargain employees are crap at monetizing the work of their employees. And to some extent, I think that Silicon Valley salaries are way above that 33% threshold, and are dooming those employers to future cash flow problems, unless they actually are able to bring in an extra $1M per developer--which I suppose could really happen with the right unicorn magic. It's really hard to judge, unless you can look at how the company makes money from their developers' work.
> Can you give me one valid reason why the developer in India should get a penny less than the developer in the Bay area?
You can reverse that question to help answer it.
Can you give me one valid reason why the developer in the Bay area should get a penny more than the developer in India?
One of the reasons the Bay area developer is paid more is because it costs so much to live there that they need to make more to pay their bills. If they won't work for less because of the cost of living, then it's a factor in how much they get paid. As such, it's not just the employer that's factoring employee location into the amount they get paid.
One reason would be similiar timezone. Without knowing the candidate details language, experience and knowledge might be better on the indian side but if the hq is based in sf than the native employee will have more value.
Salary levels aside I have been part of a company based in sf that had money issues so the indian side took over with local financing and closed all worldwide offices and moved r&d to india. Which made sense because the future customer base was in india.
Location and connection to customer base matter. I guess less so for developers compared to the product manager.
Jealousy factor can't be beat. But beyond making your friends/acquaintances drool on social media, yes the ergonomics stink for classic development.
However, I think variety is nice. Just like in an office situation, sometimes a breakthrough idea comes when sitting alone in an uncomfortable meeting room (and without secondary monitors). At home, I do some work on my back deck (partially remote worker here) but it's only when I'm in that mental place where I need to crawl out of a box and get a fresh look on things. It's also nice during meetings, so long as you prevent outdoor audio from distracting the conference call.
Worked in tel aviv for a few weeks in "remote work for a customer , from a nice environment". Here's your schedule : walk along the beach to go and pick up your breakfast, back to your place or stay at the terrasse for some work, then grab a sandwich at lunch, go for a swim. Work a few hours again, then swim before the sun goes down.
It's a very addictive schedule. The only downside is that you'll be alone pretty much all day because not a lot of people can work like that.
Basecamp is selling all over the world. What should their salary level be like? Bay Area because that’s where a lot of the larger tech companies are situated? Washington State (Microsoft, Amazon)? Copenhagen (where one founder, DHH is from)? Sudney where one major competitor, Jira, is from? I’d say whatever the market is that they hire in. If you wanna pay above market rate, by all means do that. If you can attract employees in Chicago for less than Copenhagen or Bay Area salaries, then by all means, feel free to do that. Employees are free to leave.
What I don’t see is why all companies should follow Bay Area salaries.
DHH goes deeply into the discussion about why they do it. It's worth for them as this way they can be very selective and keep the employees happy, also they don't have to think about changing jobs, and the company doesn't have to worry about good employees leaving. They basically treat people as not interchangable.
People often tell me, "Yeah the Bay Area is expensive but the tech salaries make up for it."
By being able to get a Bay Area salary (e.g. $150k/year) while working from anywhere in the world (e.g. any city where $40k/year is considered comfortable living and $80k/year is considered "well off"), the incentive to continue saturating the area with local talent decreases.
Same salary, lower cost of living, AND the ability to be a homeowner in the foreseeable future? That's a hard deal to beat.
Does it? Are you including vested stock at a large company? The proportion of talent in the Bay Area is the same - from my experience interviewing people - in other tech hubs.
Not including stock. Just thinking back to last time I solicited job offers I live in a US metro area with a cost of living about 1/3rd less than SF according to Wolfram Alpha's data and got offers that ranged between 120k and 220k. Anecdotally most of the senior level engineers I know in my area are making between 150 and 200k. Adjusted for cost of living an employer in SF would need to pay something like 200 - 300k to just match their current salaries. Maybe the stock portion of a salary would make up for that difference but I don't see how they are competitive in the wider market if they are paying 150k for senior engineers.
No way on this earth, $150,000 is anywhere near normal in the Bay Area, let alone in other less expensive metros. Most people are absolutely not making that much money writing code. People have serious tunnel vision on HN.
I'm tired of posting and re-posting the links, but according to Glassdoor and Salary.com, median software engineer salary in the bay area is around ~110K. You can criticize the online source but at least it's a data point besides "I totally know a guy working at BigCorp who makes $200K"
EDIT:
Friends, this is what happens when you post before coffee. As ams6110 points out I'm in violent agreement with the person I'm rebutting. Should have stayed in bed.
Right, so at the very least half are making less than $110,000 which is $40,000 less than the "everyone is making $150,000" in all major cities. There are a small percentage making a ton of money, and most making normal sub six figure salaries.
I think at some point it comes down to skill of talent too.
Most locales also have companies that know that the best talent can go to the Bay Area and make $150,000 and much more, so they offer salaries that are way above normal for the area, but competitive to Bay Area salaries.
But if you’re not on that side of the talent scale (or not perceived as being on that side of it), your salary ends up being in line with your locales average salary across multiple industries for “mid level job requiring a bachelors degree”
Sure, but every single person going to the Bay Area isn't the "best talent", that's just not even realistic. So yes, talent demands big bucks, but it's still a bell curve, and that peak is below $150,000
People are downvoting without looking at the graph themselves. The graph is not a bell curve and is skewed, it's median isn't at the peak of the graph.
I see a bar at 159k, and Glassdoor is seems to also be separating by variants of the title "Software Engineer", like "Lead Software Engineer" and "Software Engineer II" which could change results (not sure that those are subsets of Software Engineer in their system)
The words "total compensation" should just be banned from these discussions. It conflates a principle measure (base salary) with intangibles such as RSUs (a future value) and benefits. Without comparing specific companies it is impossible to say which is better (unless there is an extreme variance).
RSUs for public companies are effectively cash, as you can generally sell them immediately at the time when they vest. The value isn't fixed, but if the company is doing well that's a benefit to employees.
But in reality the bonus and RSU's are a very significant portion of compensation. I know several people in their late 20's in SF with salaries around $150k but after adding RSU's and annual bonus and other oddities like recurring "signing bonuses" they pull in between $200k and $250k per year before taxes. Even if it's slightly variable it is still a big difference from the base salary. As an example of why this matters, my base salary is $20k more than a certain friend of mine but my employer doesn't do RSU's and has relatively low bonuses, so in the end my friend makes around $50k per year more than me, which equates to a significant lifestyle difference.
* This is base salary only. Total compensation is significantly higher once you include factors like equity compensation, bonuses, benefits.
* This does vary a lot with stage of company. Earlier-stage startups use more equity and less salary. We work with companies from pre-series A to public megacorp.
* This is for senior engineers. Less experienced engineers do typically earn less.
* We're fairly selective in the engineers we work with, but it's based on the abilities you demonstrate in our multiple-choice quiz and technical interview, rather than your credentials.
Thanks for the response, like you said, you're very selective, and this is for only senior roles. Of course everyone is not a senior, the vast majority I suspect.
You're welcome. I can't share the numbers, but I believe most software engineers are eventually operating at the senior engineer level within under a decade of professional engineering experience.
The other comment is correct. Another way to view it is at "Senior" you are able to keep yourself productive indefinitely. It is similar to journeyman in the trades but sounds fancier.
I would love to see something like "true salary" where people can enter the actual hours they work, vacation days they get and salary (+ taxation as an option). If I compare on a per hour basis and factor in vacation time quite a few good looking US salaries become a lot less attractive for say a French software developer who is working a 35h workweek.
It's especially interesting if you compare "boring" development jobs to "highly innovative" ones because in boring jobs (in house J2EE etc.) you're often actually able to more or less stick to the 40h/week without much overtime.
I think this is irrelevant, because the question was AVERAGE. Personally triplebyte rejected me (as somebody who considers himself in the top 5-10% [won a math award, 1500/1600 SAT, worked at B-tier companies in SF, started coding around 8]).
I guess that explains why tech companies always complain about having a tough time recruiting talent then. Relative to other locals their salaries aren't competitive.
"Yeah the Bay Area is expensive but the tech salaries make up for it."
This could be good for people who send some money back home (e.g. Indians). If you have a high number is absolute terms, then you can send more money to family.
Well if companies can be have absurd valuations (or even, gasp, be profitable) while paying Bay Area salaries, it makes sense to me to expect to be paid as if you're working in the Bay Area. After all you produce pretty much the same amount of value whether you sit in SF or in Bukarest.
I think that is changing, as more opening in Seattle, Washington, New York, Boston, Denver and Austin. If I am based in SF/North Cal, yeah, I am okay working in Bay area. Since Bay area is getting more expensive to recruit, companies seem to be more willing to accept more remote workers (but usually limited to senior positions).
It's really not true. I'd say that it's more Silicon Valley recruiting all over America, than the rest of the US trying to recruit in Silicon Valley. And even if they did, they don't need to pay SV salaries to compete. Salaries adjusted for taxes and living costs is what matters, and other perks such as the City, family friendly areas etc matter too.
And worldwide, Silicon Valley is probably less than 1 percent of all tech hires and less than 10 percent of the top hires. Silicon Valley takes an impressive amount of the top talents for its size, but not most, and almost certainly a decreasing amount. The world is large, and by far the most talents couldn't even get a visa for the US if Google or Apple wanted them.
Allow me: I think just about all companies engaged in the business of technology and marketing to the same market segments Bay Area technology companies market to ought to pay the same as their Bay Area counterparts.
Arbitrarily high salaries are often more of a retention play for existing employees than anything else. Note how strong the disclaimer was at the end that they're <b>not hiring.</b>
I live in the SF Bay. My "onsite" day rate is much higher than my "remote" rate.
All of my local clients accept a compromise; meet in-person once per sprint (every 2-4 weeks). Otherwise all work is done remotely.
My remote employees and contractors are not required to commute or work onsite, therefore the remote rate applies.
Kudos to Basecamp for committing to standard salary levels, but I believe geographic cost-of-living adjustments are more accurately assessed through periodic bonuses.
The idea to match salary to cost of living is economically ridiculous, but I want to share a couple of personal experiences and ideas.
> As the article so nicely points put, the work you're doing is exactly the same regardless of where you do it from. Charge accordingly.
First of all, a remote employee is not worth the same as one in the office. For 2 engineers of the same capacity, any employer or coworker would rather have the engineer physically near than physically afar. How much that discount is extremely hard to guess, but there should be one in the general case.
Also, being hired as a remote engineer from the get go is not the same commitment as being hired to be in the office. There is no personal or professional relationship yet. This means that being hired as a remote worker, you will generally be assigned remote work, and if they want collaborative, product and team roles, will hire someone to be in the office. The processes of hiring and working relationship are different.
Now, to my personal experiences: I worked remotely my first few years, and then as an in-office employee for a couple of years to a SF startup. After that, I left the US and worked remotely for the same company for 2 years. There was a minimal adjustment to salary: and then I had the incentive to study the finances of what was going on.
The company paid less payroll taxes, and I did not receive any benefits: no 401k matching, no free food, no snacking, no coffee expenditures, etc. The benefits lost my have compensated a chunk of the remote-ness productivity loss in the long run. But there was a cost to productivty and I could compare it solidly between my two periods: it took longer cycles to get some projects finished, and issues of importance sometimes had time-zone differences that made them more inconvenient to resolve.
But then I also saw why talk about cost of living. Working in the same company, I had seldom talked about salary with co-workers (and my personal policy is to disclose mine immediately, even if they dont disclose theirs). But after turning remote I got asked about my salary by a considerable amount of people, even from ex-coworkers!
I dont think people have a right to be upset about it, but they do feel upset about such a thing. They perceive it unfair, because the costs are there for them, and maybe their job or their manager wont allow them to be remote.
I don't agree with your premise of "remote workers being worth less (even if slightly) because there's less efficient collaboration".
The last part is only true because most of today's organizations and processes are organized this way. Objectively, there's very little (outside of the individuals ability/willingness to work) that can't be optimized for remote work using modern technology.
I've been working remote for many years now and even many large enterprises I have worked for recently have adopted tools needed for working remotely efficiently (easy video/chat/screen share, collaborative productivity tools etc.). At this point, my impression it's mostly mental barriers (managers!) that stall any progress in this area.
Until the open plan office fad finally dies, I suspect some developers are more efficient working remotely.
Collaboration is great, but it's better as a purposeful thing spaced between uninterrupted work. As two-minute interruptions several times an hour, it's a serious impediment to focused work.
For me at least, my experience working remotely was that I was less integrated into the team, and struggled to contribute and keep up when planning involved ad hoc discussions. But I got more done per hour, and the conversations I did have with teammates were more structured and productive than they tend to be in person. We also had a better knowledge base and lower bus factor, because information was passed in text more than by word of mouth.
Under ideal circumstances with experienced teams, in-person work probably has an edge. After all, you can interact like it's remote work in any case where that's a better system. But in the real world, I suspect remote work has clear advantages for some tasks.
> The last part is only true because most of today's organizations and processes are organized this way. Objectively, there's very little (outside of the individuals ability/willingness to work) that can't be optimized for remote work using modern technology.
Only the most important one: communication.
Its like saying you dont need to meet someone in person before marrying them, because all you need to know can be asked on an email or a skype call..
> I've been working remote for many years now and even many large enterprises I have worked for recently have adopted tools needed for working remotely efficiently (easy video/chat/screen share, collaborative productivity tools etc.). At this point, my impression it's mostly mental barriers (managers!) that stall any progress in this area.
I have been mostly a remote worker and I'm positively confident in-office working is more productive than remote, the same way going to the gym is more effective than working out at your home for the whole.
There are exceptions and deviations, but the generality is true. Thats my model, but reality also matches with that idea: othterwise remote companies would be eating in-office companies, but they arent.
I suppose you were working in not remote-first companies. Then indeed water-cooler talks keep remotees behind. But I can't agree on productivity and gym parts.
Massive telecommuting is quite recent habit thanks to technology advancements and it still needs some paradigm shift especially on management level. Such shift had to happen in the past with introduction of computers in offices, on-line shopping, on-line banking, selling insurances etc.
I'm not entirely sure of what to make of this. At the least, if more companies do this, may be the congestion in SF reduces and average wages go up in other places.
> (And before you ask, sorry, we’re actually not hiring. That’s part of the restraint bit. We have a team of fifty five of the most kind, wonderful, and capable people I’ve ever had the pleasure of working with. That’s all we need at the moment to do what we want to do.)
Good to see this. I think that hiring remotely and paying Bay Area salaries (or very close to it) does indeed open up access to talent that might be harder to reach otherwise. Especially, if hiring globally remote.
As someone who worked in Manhattan and San Francisco and currently lives in Japan, San Francisco wages for tech workers are definitely the highest and most competitive that I've seen. You can argue that the cost of living offsets the higher wages, but that's not what Basecamp or its employees need to deal with.
> (And before you ask, sorry, we’re actually not hiring. That’s part of the restraint bit. We have a team of fifty five of the most kind, wonderful, and capable people I’ve ever had the pleasure of working with. That’s all we need at the moment to do what we want to do.)
Since the developers who live in cheaper parts of the country/world are now, effectively, paid more than those who live expensive parts of the world, are they not incentivizing employees to move out of the big cities?
I'm also curious about traveling expenses. I don't know if they do or not, but if they had an "all hands" meeting in Chicago, would they fly their employees in from all over the world? If so, do the people who live 10 blocks away from the office get the same "travel voucher" as those who live 10 hours away?
> Since the developers who live in cheaper parts of the country/world are now, effectively, paid more than those who live expensive parts of the world, are they not incentivizing employees to move out of the big cities?
They do a lot of that by creating satellite offices. But there's always some level of advantage to being closer to customers.
Anecdotally, there's a non-trivial correlation level between people who like the breadth of activities available in the city and level of professional development.
> are they not incentivizing employees to move out of the big cities?
Yes, that's broadly, rapidly occuring in the US (I can't speak to any other markets). It's a trend that will likely result in Silicon Valley getting partially distributed to two dozen cities in the US. Something changed in the last five or so years quite dramatically when it comes to telecommute work. It went from a concept that never seemed to quite live up to its potential, to now delivering. Credit probably goes to the dramatic cost of living increases since the great recession in major cities, ~5x increase in average broadband speeds in ten years + high quality mobile, and companies gradually dipping their toes into the telecommute world and finding value there (constantly reinforcing upward cycle, more companies try it + more people try it, volumes increase, repeat).
People have been suggesting this is gonna happen to Silicon Valley "any year now" for over a decade. Instead the startup world just shifted its center to SF, which is no more affordable than the valley.
> If so, do the people who live 10 blocks away from the office get the same "travel voucher" as those who live 10 hours away?
I'd consider those near the Chicago offices as the lucky ones. No flights, no hotels, they get to tuck in their kids and sleep in their own beds. So I'm sure they won't feel like they're due anything.
Another argument for globally similar rates could be that cost of living is also to some degree a reflection of additional value (high quality education and healthcare, safety, etc...) which individuals in low income locations may lack. Getting paid the higher rate is a form of compensation.
However, I haven’t seen the same argument for other salaries. What makes a developer different from a musician, a lawyer, an architect? Or, for that matter, from a teacher, a waiter, and a bus driver? Shouldn’t the same argument that the work is the same apply?
I'm not positive, but for one thing, a developer can more easily work remotely than most of the jobs you mention. That makes them more likely to be able to find another job hiring from just about anywhere to compete on pay. A janitor must uproot her life in order to move to the site of a new, better-paying job, and that often comes with additional costs (not only for moving, but also increased cost-of-living).
Fast Hiring at that salary level is probably why SV startups burn through money so quickly.
I doubt they will see major performance boosts with the salary increase. If they don't, it indicates the team is already working optimally OR salary increases don't always translate to increased performance. If they do, do they then start asking themselves why performance was so average (relatively)?
Or they stop seeing a bunch of their employees interviewing with Bay Area companies. For a team of 55, losing 5 key people to higher Bay Area salaries could cost tens of millions of dollars in lost opportunity. In that context, bumping everyone’s salaries even 30% (say on average 60k*55 = 3.3 million) is not such a big deal. Especially if revenue and income over the past year grew a lot more than that.
Great to see such initiative by Basecamp. This is good for devs around the world. GitLab sits on the other extreme with their "open salaries": https://news.ycombinator.com/item?id=10924957
As remote work proliferates, I think that local market rates become less relevant anyway. So I’d say they are paying the remote worker rate, not the SF rate. It’s not so much because Basecamp wants to give away extra money, but rather because they are competing for top developers that have the choice to work for companies in places like SF and must offer salaries that are competitive with those companies.
I think some people have this image that Basecamp and DHH is some scrappy bootstrapper fighting the establishment. But really he is living the life that even most successful "exited" venture fueled founders wouldn't be able to attain, and he's just saying there's another (perhaps even easier) way.
As I build my company, DHH + Basecamp, Jan Koum + WhatsApp, are my role models. Maximize the revenue per employee, not the number of employees (cough Twitter).
Instagram bragging is so incredibly cliche at this point that it actually makes me sad for those who engage in or with it. It's like a race to see who can appear more desperate for the approval of strangers.
People with money have nice things. I don't think anybody is surprised by this. DHH is also someone that people want to follow, whether for Rails, or business, or whatever. It's not necessarily bragging. I don't know much of anything about DHH's personality, so maybe it is, maybe it isn't.
But come on, the dude is loaded. Is he supposed to move his desk to the other side of the room so that people don't carp on him for "bragging?"
But then he counted his money again, bought a house in the hills of Malibu, a couple of mad cars (family car is a Rolls-Royce Phantom), starting being a race car driver (Le Mans),...
Never believe ANYONE who says money isn't the a key to happiness. Not the sole reason, but just take a look at his Insta again.
Money isn't the key to happiness, however it lets you get rid of a lot of the bullshit of life. And that bullshit of life is what's making the majority of unhappy people unhappy.
Yeah if you hate your spouse, don't have friends, don't have hobbies, etc, adding a few zeros to your bank account won't change that. But there are plenty of people who are unhappy largely because of the stress around the financial side of their lives.
Of course it does but the impact on your life is minimal in comparison. Compare "I need to pay this financial adviser thousands a year to handle my medium and long term financial goals" with "I need to make $500 for a car repair appear out of thin air or I'll be forced to walk to work in the middle of the winter, and if I miss work I'll be fired in which case the money problems will increase tenfold."
While I've never been rich, I've been objectively poor and I've been comfortable, and the difference in mental load is unbelievable if you haven't experienced it.
Relationships (both romantic and otherwise) can become incredibly complicated when your wealth goes beyond comfortable. I'd say that's more than a minimal impact. Human nature tends to show its ugly side when you have a lot of something others want or feel like they deserve more than you.
That's another reason why I don't really understand the instagram bragging thing. It's like these people are actively trying to create bullshit for themselves.
> That's another reason why I don't really understand the instagram bragging thing. It's like these people are
actively trying to create bullshit for themselves.
There's a pretty fascinating British doco on the phenomenon that I saw on a recent plane trip. In some cases they are actually that vain. In other cases it seems kind-of ironic, like they are doing it just to troll online haters.
I don't see what happiness you get from his Instagram. I get that he doesn't need to worry about money, but so..? He might be super-miserable for all we know.
Starting 2018, Basecamp is paying everyone as though they live in San Francisco and work for a software company that pays in the top 10% of that market (compared to base pay + bonus, but not options)
Options can be fairly large part of the compensation in SF, often as much or more than your salary (which is already highest in the market). Depending on the maturity of the company those might be a lottery ticket or actually liquid stock that you can sell on the public market.
The author of the blog post seems to be rather confused about stock. Many, perhaps most tech companies in the SF/SV area use stock grants (RSUs), not options. And if you ignore that, then you're not actually matching compensation for the area.
>This is not how companies normally do their thing. I’ve been listening to Adam Smith’s 1776 classic on the Wealth of Nations, and just passed through the chapter on how the market is set by masters trying to get away with paying the least possible, and workers trying to press for the maximum possible. An antagonistic struggle, surely.
Sounds exactly like Jeff Bezos, who owns part of Basecamp.
I agree that many companies should pay more competitive salaries , but doesn't this disproportionately hurt people in higher cost of living areas? Everyone else gets a pay increase, the company's bottom line tightens, and higher cost of living area folks get nothing for it. I live in an area with a relatively low cost of living, and the only way I would consider moving elsewhere would be if the salary were increased proportionately to that higher cost of living such that I could maintain a similar level of comfort (beach+not negative degree temperatures ~ a couple $K).
One of the reasons I can never work in the bay area. I'd need somewhere between $300k and $400k cash comp a year to maintain an equal QOL, due mainly to the cheap housing in my area. That's simply not attainable with my skillset, which is much closer to CRUD/line-of-business applications than senior infrastructure at Netflix or anything else that would pull that level of compensation.
To me, this is a good move. As work becomes more remote, living in the super expensive urban areas is a choice that has a price associated with it. Everyone benefits when that choice isn't constrained by the need to be there so you can commute 2 hours into a cube farm.
If anything the scenario you describe is helpful to those of us who choose to live in high cost of living areas. Folks like you aren't going to move here, and some who are here will happily move to a lower cost of living area to bank the difference. The net here is a decrease in local labor supply.
They need to pay those salaries to keep the talent and attract new one. Sign of a very hot market, "remote" does not mean not able to move to SF at any time and command those salaries.
You lose one or two key people to AGfA and you start shitting your pants.
I think this is a great idea, but it has its risks. The risk I would worry about is that a person would adjust their life style 'burn rate' to their salary. Then, when they lost their job there isn't any other job in the area that will pay them what dhh was paying. So now they have to scale back in a radical way. Can they? Will they?
What is perhaps a similar challenge that I do have direct experience with are people who have been at a company and had a series of raises and gotten to a healthy salary. Then they get laid off or lose their job for other reasons and now they are looking for work. But the jobs they can find aren't paying what they need to make to support their current expenses. Sometimes I've seen people hold out for that higher paying job and burn right through all of their savings. Leaving them vulnerable to future economic shocks.
I admire Basecamp for making this decision, I hope it doesn't screw things up for people.
I completely agree. That doesn't change how uncomfortable it can be to watch someone you respect and care about remain unemployed because they have one notion of their 'worth' that doesn't match the market's notion.
I remarked in the earlier submission related to this that this is a great event. It should encourage workers at other companies to take note and demand better compensation from their employers. There's no good reason for pay in this industry to be tied to geography.
Every time I see a post from the Basecamp guys and how well they treat their team, it's more depressing than uplifting - just because I know I'll never be good enough to work there, and that they're so unique that no other employer will ever do the same.
I hear what you're saying...and I've felt this quite often myself with previous employers. However, I challenge you (in a good way!) to consider using this as a question (or a set of questions) for your next job interview. You like the "basecamp" treatment, that's clear...and ok, maybe no other company might be exactly like them...but this can arm you with some ideas to ask your next potential employer/contract-holder, etc. Think of how you can structure your questions to that potential employer to see if they would value you as an employee like basecamp-type of companies do. It couldn't hurt, right? Best of luck!
I'm sure they're good but a lot of that is branding. Trust me, when you get on the inside of such "elite" places, they're not as different from your average workplace as you might think.
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[ 1.8 ms ] story [ 290 ms ] threadThere was a point, early in my guy-on-the-beach-with-a-laptop era where I would cut my bill rate in half while working from the beach with a laptop. Clients were happy about that, and it more than paid for beers and thatch huts. Then one time I tried not cutting my bill rate in half on a proposal. Nobody but me seemed to notice. So now I don't do that anymore.
As the article so nicely points put, the work you're doing is exactly the same regardless of where you do it from. Charge accordingly.
It's true that living costs are less in other places. It makes a lot more sense for that difference to be captured by me rather than somebody else's company.
Glad to see these guys stepping up and setting an example from the employer side.
Think Google/Facebook total comp if you need a number to plug into your mental model. Software is a nice gig.
That's pretty much the only difference. Lots of guys try dividing their bill rate by four, but as I said above, that's just personal preference. (And also diminshes the perceived value of what you do.)
And depending on the client's timezone, you could start work later during the day...
ORIGINAL: I believe it should be about 100 USD/hour for skilled consultant, but maybe someone with more experience can correct that.
I should really look into what is to be known to get 100 USD/hour for medium term projects in Prague. I would be able to live from 2 to 3 month project for full year.
You have to transform yourself into a consultant, being a contractor locks you into the rates you mentioned (the ceiling is around $50 to $70; big agencies are able to sell contractors to enterprises for around $80). It's not for everyone though, the rate is higher for a reason, you have to do a lot more things yourself and many devs don't enjoy doing them. Narrowing you specialization helps very much; it's also helpful to choose only a few (around 2) verticals (e.g. logistics, material production, ...) that you work in and mention that to everyone.
But the "bay pay" isn't for your work. It's so you can work - i.e. cover your expenses associated with working at that particular place.
The work is not worth more just because you happen to live in the bay area.
More here: https://news.ycombinator.com/item?id=16051409
So as long as we're covering expenses, I'd prefer they cover mine at that second place. The fact that I might actually be living cheaper is none of their concern.
If my living expenses were far below my rate, I'd save my money happily against the possibility my living expenses would go up or my income would go down in the future, and would not lower my rates.
If I occasionally lost a bid but still got enough work, I would not lower my rates.
As a worker, lowering your rates unnecessarily screws other workers, and future-you is another worker getting screwed.
I have met Indian developers living in India making just about as much as they would in the US and they were always busy.
Given a situation with two developers working remotely with exactly the same skills, experience and knowledge on the same project, but one works in India, the other one works in the Bay area.
Can you give me one valid reason why the developer in India should get a penny less than the developer in the Bay area?
And that the cost of living is less in India than in SF is not, in my opinion, a valid reason.
You pay your developers, or any staff come to that, what they're worth to you.
It's not that easy. What they are worth to you is your upper limit. What they are willing to work for is the lower bound. It's composed of many things, mostly supply and demand, but not an insignificant portion is living expenses. Most employers would gravitate towards the lower bound. And for a dev in India, it might be reasonable to pay them less. If there's another company willing to pay Bay rate, that's great for the dev, but the expectation that everyone (let's stay in remote developers category) around the globe should be paid the same is not based in reality.
Developers in India are generally paid less because employers can, which is clearly why companies look to employ staff in India.
As a developer living in the UK, while I don't work remotely (often), if I was in a position to do so and decided I was going to move to India, I certainly wouldn't expect my employer to cut my salary as a result. If they did, I'd be out of the door and looking for a new employer promptly.
From the company's perspective, the conditions are not equal, try as we might (and do) to make them so. They are working on the other side of the clock from much of their peers and technical leadership. They are 18 hours of flight away when it comes time to visit on-site. They spend more time, on average, commuting to/from work. They face weather conditions that preclude reliable commuting several weeks per year.
They face disadvantages inherent to their location and related to the fact that their location isn't the HQ. It's not their fault, but to make the economics make sense for the company, they are paid well for the local market, but less than the Bay area market. If wages in India were Bay area wages, we wouldn't have started new dev teams in India.
The condition of one experienced dev moving away to a different location (I don't care whether higher or lower cost) is different from trying to build a de novo team in a different location. You take with you the experience and relationships you developed and that makes you different from your hypothetical identical twin who is applying to work remotely from wherever you are contemplating moving.
To increase profits for owners, actually.
We, like most for-profit companies, generally try to do things that increase profits.
We don't enforce that, as a condition of employment, you must accept share-based compensation. Employees are mostly [1] paid in cash and we let employees decide how much of that cash they want to invest in the company.
[1]-some executives are "forced" to accept share-based compensation as part of their comp.
So, theoretically, in case of remote work and a global pool of talent, it is a less optimal use of your dollars to adjust salaries to the cost of living (all other things being equal, e.g. skill set level, culture).
Now with more competitors, salaries will probably end up rising close to SF ones--which are likely near to the upper bound, marginal value produced by the employee.
If you pay less than 25%, the employee is very likely to find a better deal somewhere else. If you pay more than 33%, you might have occasional difficulty operating your business or giving raises.
There are plenty of potential employees willing to work for less than 25%, and a few more that will demand more than 33%. You should leave them to other employers, that will have other means of monetizing their work.
Candidates are perfectly able to self-sort themselves into a pay range appropriate for them, especially those that know their own worth versus the companies that routinely try to lowball.
This is why one of my stock interview questions is "how do you measure the value to the company of work done by this position?" For me, whether the response is honest or evasive is often more telling than any details given. In my view, the value an employer should bring to the table is the ability to monetize my work to a far greater extent than I could manage on my own. I might be able to provide $2X in value and charge $X for it as a freelancer, so an employer should at least be able to magnify my work into providing $3X or $4X and then pay me more than $X for it. Ideally, the employer squeezes $5X or more of value out of my work, and then pays me $1.6X or more to do it for them.
So what I'm willing to work for is not my lower bound. That bound comes from what I could get working the same job for someone else, or for myself, and that comes from how well different companies can convert my work into cash, and how greedy they are about capturing that additional value for themselves.
I would likely be willing to work for $40/hr. That amount keeps the bills paid. But it won't ever keep me from looking elsewhere for better work.
So my expectation is that employers that comb the globe looking for bargain employees are crap at monetizing the work of their employees. And to some extent, I think that Silicon Valley salaries are way above that 33% threshold, and are dooming those employers to future cash flow problems, unless they actually are able to bring in an extra $1M per developer--which I suppose could really happen with the right unicorn magic. It's really hard to judge, unless you can look at how the company makes money from their developers' work.
You can reverse that question to help answer it.
Can you give me one valid reason why the developer in the Bay area should get a penny more than the developer in India?
One of the reasons the Bay area developer is paid more is because it costs so much to live there that they need to make more to pay their bills. If they won't work for less because of the cost of living, then it's a factor in how much they get paid. As such, it's not just the employer that's factoring employee location into the amount they get paid.
Salary levels aside I have been part of a company based in sf that had money issues so the indian side took over with local financing and closed all worldwide offices and moved r&d to india. Which made sense because the future customer base was in india.
Location and connection to customer base matter. I guess less so for developers compared to the product manager.
Because they are willing to take less.
Too much light, sand, and heat to be able to concentrate
Even if you're working in a coastal hut, nothing beats good ergonomics of a real office
Jealousy factor can't be beat. But beyond making your friends/acquaintances drool on social media, yes the ergonomics stink for classic development.
However, I think variety is nice. Just like in an office situation, sometimes a breakthrough idea comes when sitting alone in an uncomfortable meeting room (and without secondary monitors). At home, I do some work on my back deck (partially remote worker here) but it's only when I'm in that mental place where I need to crawl out of a box and get a fresh look on things. It's also nice during meetings, so long as you prevent outdoor audio from distracting the conference call.
It's a very addictive schedule. The only downside is that you'll be alone pretty much all day because not a lot of people can work like that.
I find it relaxing and easier to concentrate. Probably related to how I stare out the window when thinking about a problem.
What I don’t see is why all companies should follow Bay Area salaries.
By being able to get a Bay Area salary (e.g. $150k/year) while working from anywhere in the world (e.g. any city where $40k/year is considered comfortable living and $80k/year is considered "well off"), the incentive to continue saturating the area with local talent decreases.
Same salary, lower cost of living, AND the ability to be a homeowner in the foreseeable future? That's a hard deal to beat.
Edit: made less jerky
EDIT:
Friends, this is what happens when you post before coffee. As ams6110 points out I'm in violent agreement with the person I'm rebutting. Should have stayed in bed.
Most locales also have companies that know that the best talent can go to the Bay Area and make $150,000 and much more, so they offer salaries that are way above normal for the area, but competitive to Bay Area salaries.
But if you’re not on that side of the talent scale (or not perceived as being on that side of it), your salary ends up being in line with your locales average salary across multiple industries for “mid level job requiring a bachelors degree”
But I definitely don’t agreee the peak is below 150k...
https://www.glassdoor.com/Salaries/san-jose-software-enginee...
Note that salary is a misnomer. The term now is "total compensation" which has a significant RSU portion.
$150K is below the median base salary offer we see for senior software engineers. See https://triplebyte.com/software-engineer-salary -- with a few notes:
* This is base salary only. Total compensation is significantly higher once you include factors like equity compensation, bonuses, benefits.
* This does vary a lot with stage of company. Earlier-stage startups use more equity and less salary. We work with companies from pre-series A to public megacorp.
* This is for senior engineers. Less experienced engineers do typically earn less.
* We're fairly selective in the engineers we work with, but it's based on the abilities you demonstrate in our multiple-choice quiz and technical interview, rather than your credentials.
What about the guy with 25+ years of experience?
Typical for what? SF? Your company? CA? For people with your level of experience?
It's fairly atypical for French to work only 35h a week. I've never seen that anywhere in tech in the private sector.
[https://github.com/anfurny/scalaRiddle]
According to SO salary estimator the median salary of a 5y experience Java dev with a masters degree is $108k in SF.
Same profile in Hamburg yields €38k and in Paris €42k on average.
This could be good for people who send some money back home (e.g. Indians). If you have a high number is absolute terms, then you can send more money to family.
And worldwide, Silicon Valley is probably less than 1 percent of all tech hires and less than 10 percent of the top hires. Silicon Valley takes an impressive amount of the top talents for its size, but not most, and almost certainly a decreasing amount. The world is large, and by far the most talents couldn't even get a visa for the US if Google or Apple wanted them.
Did anyone suggest they should?
All of my local clients accept a compromise; meet in-person once per sprint (every 2-4 weeks). Otherwise all work is done remotely.
My remote employees and contractors are not required to commute or work onsite, therefore the remote rate applies.
Kudos to Basecamp for committing to standard salary levels, but I believe geographic cost-of-living adjustments are more accurately assessed through periodic bonuses.
How many employees/subs do you have?
< 10 employees.
> As the article so nicely points put, the work you're doing is exactly the same regardless of where you do it from. Charge accordingly.
First of all, a remote employee is not worth the same as one in the office. For 2 engineers of the same capacity, any employer or coworker would rather have the engineer physically near than physically afar. How much that discount is extremely hard to guess, but there should be one in the general case.
Also, being hired as a remote engineer from the get go is not the same commitment as being hired to be in the office. There is no personal or professional relationship yet. This means that being hired as a remote worker, you will generally be assigned remote work, and if they want collaborative, product and team roles, will hire someone to be in the office. The processes of hiring and working relationship are different.
Now, to my personal experiences: I worked remotely my first few years, and then as an in-office employee for a couple of years to a SF startup. After that, I left the US and worked remotely for the same company for 2 years. There was a minimal adjustment to salary: and then I had the incentive to study the finances of what was going on.
The company paid less payroll taxes, and I did not receive any benefits: no 401k matching, no free food, no snacking, no coffee expenditures, etc. The benefits lost my have compensated a chunk of the remote-ness productivity loss in the long run. But there was a cost to productivty and I could compare it solidly between my two periods: it took longer cycles to get some projects finished, and issues of importance sometimes had time-zone differences that made them more inconvenient to resolve.
But then I also saw why talk about cost of living. Working in the same company, I had seldom talked about salary with co-workers (and my personal policy is to disclose mine immediately, even if they dont disclose theirs). But after turning remote I got asked about my salary by a considerable amount of people, even from ex-coworkers! I dont think people have a right to be upset about it, but they do feel upset about such a thing. They perceive it unfair, because the costs are there for them, and maybe their job or their manager wont allow them to be remote.
The last part is only true because most of today's organizations and processes are organized this way. Objectively, there's very little (outside of the individuals ability/willingness to work) that can't be optimized for remote work using modern technology.
I've been working remote for many years now and even many large enterprises I have worked for recently have adopted tools needed for working remotely efficiently (easy video/chat/screen share, collaborative productivity tools etc.). At this point, my impression it's mostly mental barriers (managers!) that stall any progress in this area.
Collaboration is great, but it's better as a purposeful thing spaced between uninterrupted work. As two-minute interruptions several times an hour, it's a serious impediment to focused work.
For me at least, my experience working remotely was that I was less integrated into the team, and struggled to contribute and keep up when planning involved ad hoc discussions. But I got more done per hour, and the conversations I did have with teammates were more structured and productive than they tend to be in person. We also had a better knowledge base and lower bus factor, because information was passed in text more than by word of mouth.
Under ideal circumstances with experienced teams, in-person work probably has an edge. After all, you can interact like it's remote work in any case where that's a better system. But in the real world, I suspect remote work has clear advantages for some tasks.
Only the most important one: communication.
Its like saying you dont need to meet someone in person before marrying them, because all you need to know can be asked on an email or a skype call..
> I've been working remote for many years now and even many large enterprises I have worked for recently have adopted tools needed for working remotely efficiently (easy video/chat/screen share, collaborative productivity tools etc.). At this point, my impression it's mostly mental barriers (managers!) that stall any progress in this area.
I have been mostly a remote worker and I'm positively confident in-office working is more productive than remote, the same way going to the gym is more effective than working out at your home for the whole. There are exceptions and deviations, but the generality is true. Thats my model, but reality also matches with that idea: othterwise remote companies would be eating in-office companies, but they arent.
Massive telecommuting is quite recent habit thanks to technology advancements and it still needs some paradigm shift especially on management level. Such shift had to happen in the past with introduction of computers in offices, on-line shopping, on-line banking, selling insurances etc.
This is a good way to ensure unhappy employees stick around due to being paid a lot more than what they’d earn otherwise.
Refreshing!
I've recently signed up to see if I could use it for a team, and it was barely more useful than a piece of paper.
Obviously its success proves me wrong, but I don't get it.
It's a trend I see over and over and over.
If you want good / the best, pay them accordingly, no matter where they live - because someone else might do it and pocket your talent.
Win-win for everyone involved.
So you picked San Francisco? Not London, Hong Kong, Tokyo, Singapore, etc? Why not pay everybody as if they live in Manhattan?
Did the author just pull a "Cartmanland"? :-)
http://southpark.cc.com/clips/152804/cartmanland-commercial
Since the developers who live in cheaper parts of the country/world are now, effectively, paid more than those who live expensive parts of the world, are they not incentivizing employees to move out of the big cities?
I'm also curious about traveling expenses. I don't know if they do or not, but if they had an "all hands" meeting in Chicago, would they fly their employees in from all over the world? If so, do the people who live 10 blocks away from the office get the same "travel voucher" as those who live 10 hours away?
They do a lot of that by creating satellite offices. But there's always some level of advantage to being closer to customers.
Anecdotally, there's a non-trivial correlation level between people who like the breadth of activities available in the city and level of professional development.
Yes, that's broadly, rapidly occuring in the US (I can't speak to any other markets). It's a trend that will likely result in Silicon Valley getting partially distributed to two dozen cities in the US. Something changed in the last five or so years quite dramatically when it comes to telecommute work. It went from a concept that never seemed to quite live up to its potential, to now delivering. Credit probably goes to the dramatic cost of living increases since the great recession in major cities, ~5x increase in average broadband speeds in ten years + high quality mobile, and companies gradually dipping their toes into the telecommute world and finding value there (constantly reinforcing upward cycle, more companies try it + more people try it, volumes increase, repeat).
I'd consider those near the Chicago offices as the lucky ones. No flights, no hotels, they get to tuck in their kids and sleep in their own beds. So I'm sure they won't feel like they're due anything.
However, I haven’t seen the same argument for other salaries. What makes a developer different from a musician, a lawyer, an architect? Or, for that matter, from a teacher, a waiter, and a bus driver? Shouldn’t the same argument that the work is the same apply?
Anecdotal mention: https://open.buffer.com/layoffs-and-moving-forward/
Fast Hiring at that salary level is probably why SV startups burn through money so quickly.
I doubt they will see major performance boosts with the salary increase. If they don't, it indicates the team is already working optimally OR salary increases don't always translate to increased performance. If they do, do they then start asking themselves why performance was so average (relatively)?
I think some people have this image that Basecamp and DHH is some scrappy bootstrapper fighting the establishment. But really he is living the life that even most successful "exited" venture fueled founders wouldn't be able to attain, and he's just saying there's another (perhaps even easier) way.
As I build my company, DHH + Basecamp, Jan Koum + WhatsApp, are my role models. Maximize the revenue per employee, not the number of employees (cough Twitter).
But come on, the dude is loaded. Is he supposed to move his desk to the other side of the room so that people don't carp on him for "bragging?"
But then he counted his money again, bought a house in the hills of Malibu, a couple of mad cars (family car is a Rolls-Royce Phantom), starting being a race car driver (Le Mans),...
Never believe ANYONE who says money isn't the a key to happiness. Not the sole reason, but just take a look at his Insta again.
Kudos.
I'm looking. I see a guy who really likes Rolexes and cars and flaunting his wealth to strangers on the Internet. What am I supposed to be seeing?
Yeah if you hate your spouse, don't have friends, don't have hobbies, etc, adding a few zeros to your bank account won't change that. But there are plenty of people who are unhappy largely because of the stress around the financial side of their lives.
Wealth brings with it plenty of other bullshit to make up for the bullshit you lost when you first obtained it, though.
While I've never been rich, I've been objectively poor and I've been comfortable, and the difference in mental load is unbelievable if you haven't experienced it.
That's another reason why I don't really understand the instagram bragging thing. It's like these people are actively trying to create bullshit for themselves.
There's a pretty fascinating British doco on the phenomenon that I saw on a recent plane trip. In some cases they are actually that vain. In other cases it seems kind-of ironic, like they are doing it just to troll online haters.
https://www.youtube.com/watch?v=pnD3_-zVjec
Options can be fairly large part of the compensation in SF, often as much or more than your salary (which is already highest in the market). Depending on the maturity of the company those might be a lottery ticket or actually liquid stock that you can sell on the public market.
Sounds exactly like Jeff Bezos, who owns part of Basecamp.
To me, this is a good move. As work becomes more remote, living in the super expensive urban areas is a choice that has a price associated with it. Everyone benefits when that choice isn't constrained by the need to be there so you can commute 2 hours into a cube farm.
In addition, it would be interesting to get a comparison of the resulting purchase price power in the various countries.
They need to pay those salaries to keep the talent and attract new one. Sign of a very hot market, "remote" does not mean not able to move to SF at any time and command those salaries.
You lose one or two key people to AGfA and you start shitting your pants.
What is perhaps a similar challenge that I do have direct experience with are people who have been at a company and had a series of raises and gotten to a healthy salary. Then they get laid off or lose their job for other reasons and now they are looking for work. But the jobs they can find aren't paying what they need to make to support their current expenses. Sometimes I've seen people hold out for that higher paying job and burn right through all of their savings. Leaving them vulnerable to future economic shocks.
I admire Basecamp for making this decision, I hope it doesn't screw things up for people.