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How To: Spend your investors’ money
- shafqat 15y agoVery helpful benchmarks. Anyone know why there should be a premium per employee for a platform as a service company? Why is PaaS any different from any other startup with regards to a per employee burn rate?
- fleitz 15y agoIt's less cool therefore it costs you extra money. That's why engineers in finance cost more than non-finance engineers.
- hkarthik 15y agoHigher up front infrastructure costs would be my guess.
- meterplech 15y agoI would imagine part of it is that SaaS and PaaS startups have an easier path to revenue. For most of them, a single user means revenue, which means you have more wiggle room for salary. It's also easier to do long term planning if you have recurring revenue streams and possibly multi-year contracts.
- JoachimSchipper 15y agoThe article says: > The thinking here is that SaaS/PaaS companies require more infrastructure, better/higher quality infrastructure, more bandwidth, and more senior/seasoned engineers.
- EGreg 15y agoWe hire overseas, so we get by on around $6,000 per month per employee.
- anon330 15y agoI'm employee #1 at a Canadian startup, and they get by paying me about 3300 per month, before tax. Based on my asking-around, this doesn't seem to be out of the ordinary for the area.
- jonknee 15y agoThat's only one portion of the costs. Besides the associated taxes and insurance they have to pay rent/utilities, purchase equipment, etc etc. The quoted figure was total expenses / employees, not employee compensation.
- tlrobinson 15y agoThe figure I've heard is 1.25-1.5x base salary.
- jonknee 15y agoThat sounds right for direct staffing costs (health insurance isn't cheap!), but low if you mean counting in all the other stuff. I suppose it depends on the business--someone like Dropbox spends a lot more on servers than say Groupon.
- tlrobinson 15y agoRight, that's for the incremental cost of each employee: taxes, benefits, equipment (for the individuals, not servers), office space. It's useful for calculating how much a new employee will cost you.
- bigiain 15y agoI've always used a rule-of-thumb of a 100% overhead rate for employees - it's a spectacularly easy number to work with mentally, and its right to well within acceptable error bounds an awful lot of the time. If I'm paying you $90k, I'll expect to incur an additional $90k in costs resulting from employing you.
- frederickcook 15y agoWhat is the investor expectation on runway for a seed round like attachments.me did? 12-18 months?
- crcastle 15y agoI love stuff like this. It's like answering a question to which everyone wants to know the answer but is too ashamed or overly confident to ask. It would be interesting to know the variance in responses. I know this wasn't meant to imply statistical significance, but I'm just curious what these results would be with a larger and more random sample.
- softw2 15y agoMy question is, how do you get $500,000 for a feature you can get by clicking "Show Search Options" in Gmail? I do get the bigger picture but I don't see how to monetize it or prevent Google from mimicking it a 1000% better if it gets popular.
- bigiain 15y agoI suspect there's a profitable sized market consisting of "People who don't want Google mining and indexing all their mail". You could make gmail "the best email reading and management experience on the planet by 2 or 3 orders of magnitude", and they're still not going to end up handling mail for the nsa.gov domain. I'm not sure how far down the paranoia scale from director@nsa.gov you need to go before having Google index your internet-cat-pictures and know your social graph becomes the right choice, but there are certainly people with email management needs that Google are not going to address.
- 3pt14159 15y ago1. You can't search your attachments in Gmail. At least I can't (though these days with split testing you never know). 2. Ben and Jesse are in the top 1% of Toronto talent. Ben did his masters in NLP. 3. Google has a history of buying off companys like this for 20 to 30 million, so if you're an investor that is comforting. 4. Jesse has cofounded a successful company before.
- BenjaminCoe 15y agoAt this point we're not just a tool for searching attachments in Gmail. We support Yahoo Mail, Twitter, and Facebook as well. We also plan to branch into other services, e.g., general IMAP. We let you pull together these various accounts into one simple, visualized, central index. The philosophy of "why build something, because company x, with infinite money, will just build it better" I think is a flawed one.
- runT1ME 15y ago>The philosophy of "why build something, because company x, with infinite money, will just build it better" I think is a flawed one. Fascinating quote, but do you think you can articulate why it is flawed? Was it something your investors asked you? I think the hardest question to answer for a lot of startups is "what happens if [company X with infinite money] decides to copy you"? My first instinct might be to say I'm one of the top ten or twenty people in the world who are capable of writing the code for my product (however arrogant that might sound), but even if that's true, that still leaves nine or so others that Infinite Money Company could recruit to compete. Is truly the only good answer being the very absolute best in the field, or are there other good answers?