7 ms·

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 see

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.

golergka 7y ago
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.
blocked_again 7y ago
$100 million sounds way too much. In this forbes article it says $25million in 2017. https://www.forbes.com/companies/basecamp/#1245fcb347b7 https://www.forbes.com/companies/basecamp/#1245fcb347b7
- runako 7y ago
  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.)
  - davidivadavid 7y ago
    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.
  - 1123581321 7y ago
    Those aren’t net new accounts.
    - runako 7y ago
      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.
SmellyGeekBoy 7y ago
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).
- theredbox 7y ago
  No but DHH's attitude is holier than thou. He is from denmark so called socialist paradise but he wont ever admit why Denmark cant work for everyone the same way Basecamp cannot be a good example as a company. Basecamp pulls in incredible sums of money and can afford the few that they employ the benefit of earning a reasonable wage.
  - jstgdwrd 7y ago
    Are you suggesting that not all companies can pay a reasonable wage?
    - scarface74 7y ago
      Looking at all of the money losing tech companies that are operating, most of them could not afford to pay their employees if not for VCs. Edit: added Not
      - deleted 7y ago
        [deleted]
  - bluedino 7y ago
    At the end of the article, he says: Just remember to go at your speed. Basecamp wasn’t paying these top end salaries when we started. Or even after we’d been around for five years. We do it because it’s possible now. Not because we’re putting ourselves in a bind trying to keep up with Mr Venture and Mrs Capital.
- vostok 7y ago
  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.
onion2k 7y ago
Some of the profit goes to Jeff Bezos as a "profit distribution". https://m.signalvnoise.com/the-deal-jeff-bezos-got-on-basecamp/ https://m.signalvnoise.com/the-deal-jeff-bezos-got-on-baseca...
aantix 7y ago
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.
- dsfyu404ed 7y ago
  Unless you work at some established company that is or is about to go public options and RSUs may as well be worthless.
  - thedufer 7y ago
    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.
  - marcinzm 7y ago
    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.
- michaelbuckbee 7y ago
  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

golergka 7y ago

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.

blocked_again 7y ago

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

runako 7y ago
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.)
- davidivadavid 7y ago
  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.
- 1123581321 7y ago
  Those aren’t net new accounts.
  - runako 7y ago
    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.

SmellyGeekBoy 7y ago

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).

theredbox 7y ago
No but DHH's attitude is holier than thou. He is from denmark so called socialist paradise but he wont ever admit why Denmark cant work for everyone the same way Basecamp cannot be a good example as a company. Basecamp pulls in incredible sums of money and can afford the few that they employ the benefit of earning a reasonable wage.
- jstgdwrd 7y ago
  Are you suggesting that not all companies can pay a reasonable wage?
  - scarface74 7y ago
    Looking at all of the money losing tech companies that are operating, most of them could not afford to pay their employees if not for VCs. Edit: added Not
    - deleted 7y ago
      [deleted]
- bluedino 7y ago
  At the end of the article, he says: Just remember to go at your speed. Basecamp wasn’t paying these top end salaries when we started. Or even after we’d been around for five years. We do it because it’s possible now. Not because we’re putting ourselves in a bind trying to keep up with Mr Venture and Mrs Capital.
vostok 7y ago
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.

onion2k 7y ago

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

aantix 7y ago

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.

dsfyu404ed 7y ago
Unless you work at some established company that is or is about to go public options and RSUs may as well be worthless.
- thedufer 7y ago
  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.
- marcinzm 7y ago
  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.
michaelbuckbee 7y ago
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