3 ms·

non-technical staff need access to tools like Notion, Slack and Hubspot, the bills add up quickly

luckylion 7y ago
They do, but it only matters if you're working in a region with very low wages or you have a lot of people that only work for a few hours. I see those tools mostly like a fast computer, good internet, drinks and snacks etc. They really aren't that expensive compared to the employee but they will help the employee be much more effective.
- PeterStuer 7y ago
  I see this argument get trotted out a lot. Compared to <dev salary cost>, adding service x,y and z percentage wise is just a small increment. The problem that gets easily overlooked is that compared to the costs being made, the profit in many cases is also just a small percentage of the revenue, and the small % increment in costs can mean a large % decrement of profits. You should always compare incremental cost of revenue to the margin, not to the base cost. Now if you are running a profitable SaaS business with 80% margins, a 4% increase in spend might not mean the end of the world even if it was wasted on spurious licenses or other frills, but if you are a healthy service business operating on 12% margins then that 4% increase will reduce your profits by a massive 33%. This doesn't mean that you have to make do with the bare minimum and skimp on decent hardware or development environments, but it also means the marginal productivity/retention/quality increases must in the end be worth it in terms of increased aggregate profits, and not be justified as 'you already pay me 5K a month, so whats another 250 for ...
  - luckylion 7y ago
    Sure, buying as an end in itself isn't wise. If the tools aren't improving the metrics, they are too expensive and it doesn't matter if it's $10 or $1 per month. But if they do improve the metrics, you'll typically get more done, which will translate to more revenue. Software & tools tends to be somewhere between 0.5 and 3% of total employee cost in my experience, but of course it's not priced per market, so that would be significantly higher with the same tools in an area with lower salaries, less non-wage labor costs etc.
  - satyrnein 7y ago
    Yes, unless the alternative to the saas is spending dev time to build/customize/host something; then the comparison makes sense.
76543210 7y ago
What does notion do? I've seen businesses run on Microsoft tools and Engineering tools exclusively.
- alexchamberlain 7y ago
  To be fair, a lot of businesses used to run on typewriters and a really big ledger.

They do, but it only matters if you're working in a region with very low wages or you have a lot of people that only work for a few hours. I see those tools mostly like a fast computer, good internet, drinks and snacks etc. They really aren't that expensive compared to the employee but they will help the employee be much more effective.

PeterStuer 7y ago
I see this argument get trotted out a lot. Compared to <dev salary cost>, adding service x,y and z percentage wise is just a small increment. The problem that gets easily overlooked is that compared to the costs being made, the profit in many cases is also just a small percentage of the revenue, and the small % increment in costs can mean a large % decrement of profits. You should always compare incremental cost of revenue to the margin, not to the base cost. Now if you are running a profitable SaaS business with 80% margins, a 4% increase in spend might not mean the end of the world even if it was wasted on spurious licenses or other frills, but if you are a healthy service business operating on 12% margins then that 4% increase will reduce your profits by a massive 33%. This doesn't mean that you have to make do with the bare minimum and skimp on decent hardware or development environments, but it also means the marginal productivity/retention/quality increases must in the end be worth it in terms of increased aggregate profits, and not be justified as 'you already pay me 5K a month, so whats another 250 for ...
- luckylion 7y ago
  Sure, buying as an end in itself isn't wise. If the tools aren't improving the metrics, they are too expensive and it doesn't matter if it's $10 or $1 per month. But if they do improve the metrics, you'll typically get more done, which will translate to more revenue. Software & tools tends to be somewhere between 0.5 and 3% of total employee cost in my experience, but of course it's not priced per market, so that would be significantly higher with the same tools in an area with lower salaries, less non-wage labor costs etc.
- satyrnein 7y ago
  Yes, unless the alternative to the saas is spending dev time to build/customize/host something; then the comparison makes sense.

76543210 7y ago

What does notion do? I've seen businesses run on Microsoft tools and Engineering tools exclusively.

alexchamberlain 7y ago
To be fair, a lot of businesses used to run on typewriters and a really big ledger.