4 ms·

Well, my own experience is that the $1.49 million would more likely be reinvested in the company as a whole: hire more developers, more salespeople, expand the

by nilkn 10y ago

Well, my own experience is that the $1.49 million would more likely be reinvested in the company as a whole: hire more developers, more salespeople, expand the office, etc. That money would also take an entire year to materialize and would require your back of the envelope math to pan out perfectly. Requesting a $1.5 million dollar bonus for making the website faster seems a little ludicrous and potentially hostile to the company's continued long-term existence. Depending on the exact nature of the product, it might require additional salespeople and various support staff just to close and maintain the extra sales to create the $1.49 million in the first place -- and yet you'd be claiming it all for yourself, giving none of it to these other folks. Additionally, I don't really agree with this underlying notion that you're entitled to 100% of the extra revenue generated by the speed increase. Imagine how bizarre it would be if you actually applied this thinking consistently over the lifetime of the company to every employee. This approach spectacularly and disproportionately over-rewards people who join the company later, as it becomes increasingly easy to create large increases in revenue because on absolute terms a 1% increase keeps getting bigger and bigger. This would lead to a complete inversion of risk, where it would be more profitable to never take risk and only take stable jobs at long-running companies that have already developed a large market share. I'm not convinced this is a sensible distribution of income to employees.

jamie_ca 10y ago
And yet, it seems pretty routine for the sales team members to take residuals on leads they bring in - it's just that it's a lot harder to quantify the effects that code changes have to the bottom line.
- nilkn 10y ago
  Yes, residuals -- they don't book the entire sale for themselves. And they often have much lower salaries as well compared to development staff. Of course I cannot speak for all companies, but this is how it's been in my personal experience.
jchendy 10y ago
> Well, my own experience is that the $1.49 million would more likely be reinvested in the company as a whole: hire more developers, more salespeople, expand the office, etc A lot of it also goes to essential business expenses: HR, legal, the AWS bill, the new feature that's currently losing money but will pay off in the long term. And the person who made the $1.5mm code fix didn't do it on their own. They wouldn't have been able to improve the code if somebody else hadn't already written the first version. And neither of them would have been able to get their code into production if somebody hadn't set up the build and release process for the company. And they never would have been in the position to make the $1.5mm fix if their manager hadn't identified the need for an additional engineer on the team and recruited them. And the company wouldn't exist if the founder hadn't had the idea in the first place. And the company would have blown up last year if the lawyers hadn't made sure the company was protected from a frivolous lawsuit. Et cetera, et cetera.
- rad88 10y ago
  Yep, a great division of labor created that wealth for the company, and the developer is not entitled to 15% of it's revenue (or even profit) just for that work. This isn't a practical issue though. The everyday situation is not that a undeserving worker is granted a large ownership stake, it's that an undeserving financier/executive/founder is.
  - sokoloff 10y ago
    I read this line of argument fairly regularly and am continually amazed that more people making this argument aren't off starting their own companies to scoop themselves up a heaping helping of this easy and undeserved money. (As text is a poor medium to communicate tone, I'm positing that it's not nearly as easy as it seems, therefore nor are the profits for the successful as undeserved as they seem.)
    - rad88 10y ago
      I didn't say it's easy, or that there shouldn't be compensation! All those people add value and some of their work is very difficult. But difficulty of work is not the basis upon which they have large ownership stakes. Many jobs are not nearly as easy as they seem, but most merely pay a wage or fixed salary. The founder controls the legal business entity and contributes capital assets and real or intellectual property. The financier purchases ownership directly. This is why they "deserve" to appropriate the value created by the company in perpetuity. The founder may have done a lot of hard work in creating that intellectual property (including brand) in the first place, but it is the legal ownership of it that he trades for ownership in the company, not his hard work. In other instances it's possible to simply purchase IP or brand outright in the formation of a business. The commonality in these cases is legal ownership and the trade of capital assets, not hard work, whether their job is one I could not do personally, etc.

by nilkn 10y ago

jamie_ca 10y ago

And yet, it seems pretty routine for the sales team members to take residuals on leads they bring in - it's just that it's a lot harder to quantify the effects that code changes have to the bottom line.

nilkn 10y ago
Yes, residuals -- they don't book the entire sale for themselves. And they often have much lower salaries as well compared to development staff. Of course I cannot speak for all companies, but this is how it's been in my personal experience.

jchendy 10y ago

> Well, my own experience is that the $1.49 million would more likely be reinvested in the company as a whole: hire more developers, more salespeople, expand the office, etc A lot of it also goes to essential business expenses: HR, legal, the AWS bill, the new feature that's currently losing money but will pay off in the long term. And the person who made the $1.5mm code fix didn't do it on their own. They wouldn't have been able to improve the code if somebody else hadn't already written the first version. And neither of them would have been able to get their code into production if somebody hadn't set up the build and release process for the company. And they never would have been in the position to make the $1.5mm fix if their manager hadn't identified the need for an additional engineer on the team and recruited them. And the company wouldn't exist if the founder hadn't had the idea in the first place. And the company would have blown up last year if the lawyers hadn't made sure the company was protected from a frivolous lawsuit. Et cetera, et cetera.

rad88 10y ago
Yep, a great division of labor created that wealth for the company, and the developer is not entitled to 15% of it's revenue (or even profit) just for that work. This isn't a practical issue though. The everyday situation is not that a undeserving worker is granted a large ownership stake, it's that an undeserving financier/executive/founder is.
- sokoloff 10y ago
  I read this line of argument fairly regularly and am continually amazed that more people making this argument aren't off starting their own companies to scoop themselves up a heaping helping of this easy and undeserved money. (As text is a poor medium to communicate tone, I'm positing that it's not nearly as easy as it seems, therefore nor are the profits for the successful as undeserved as they seem.)
  - rad88 10y ago
    I didn't say it's easy, or that there shouldn't be compensation! All those people add value and some of their work is very difficult. But difficulty of work is not the basis upon which they have large ownership stakes. Many jobs are not nearly as easy as they seem, but most merely pay a wage or fixed salary. The founder controls the legal business entity and contributes capital assets and real or intellectual property. The financier purchases ownership directly. This is why they "deserve" to appropriate the value created by the company in perpetuity. The founder may have done a lot of hard work in creating that intellectual property (including brand) in the first place, but it is the legal ownership of it that he trades for ownership in the company, not his hard work. In other instances it's possible to simply purchase IP or brand outright in the formation of a business. The commonality in these cases is legal ownership and the trade of capital assets, not hard work, whether their job is one I could not do personally, etc.