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What a terrible idea. I mean, heck, who is even measuring revenue here? Certainly, their work to measure it isn't increasing revenue, so I guess they're just do

What a terrible idea. I mean, heck, who is even measuring revenue here? Certainly, their work to measure it isn't increasing revenue, so I guess they're just donating their time. Likewise, we certainly don't need a security team; there's no way to measure their impact on revenue just over two weeks. And DevOps? Forget about it; despite all the work they do it doesn't have any measurable effect on revenue (since even a measurable speed up in time to market doesn't allow you to A/B test the impact on revenue in a measurable way). I think this is intended to be just a bonus (though I didn't see where it was clearly called out as such) or in lieu of contract work. At least, I hope so. But as written it's farcical. It also is written with a "hypothetical" tone of voice; they imply they're doing it but don't actually demonstrate any results or measurable impact (let alone how they address the obvious shortcomings). Maybe they just mean "feature developers", but then that's just trying to tie bonuses (hopefully not base comp) to things those developers don't control. I think something along these lines might be viable, where increases in revenue lead to increases in compensation in a direct and measurable way (i.e., revenue doubled with no additional headcount; everyone's comp doubles; rather than indirectly via RSUs, which isn't really tied to profitability but instead market perception), but as written this is so obviously untenable for any mature company, and isn't even a case study of trying it.

light_hue_1 5y ago
It's so much worse than that. If someone else can come around and "claw back" my money, I want to make my contributions as impossible to build on, to change, and to understand as I can make them. This will lead to intentionally-horrific code. It also makes no sense practically. You can only A/B test so many alternatives at the same time. This is a huge problem even at the scale of Google and Amazon who have a lot of infrastructure to run overlapping A/B tests. How is a feature that makes $1000/week going to run even 10 concurrent A/B tests? There is also zero accountability. The company wants to make profit and pay you as little as possible. You have no way of knowing if any improvements came from you or from someone else. Is giving your source code to random people that don't give a damn about your company a good idea? I bet you can make more money selling zero days for many products than you can make by improving them. This is just the beginning, the list of problems with this model is just endless for everyone.
- rodgerd 5y ago
  > It's so much worse than that. Hollywood accounting, but for your pay.
  - endymi0n 5y ago
    I meant to write a lengthy answer here, but this one hits the nail on the head. Companies take the full risk for starting projects and hiring people: especially those just very indirectly relevant to the bottom line. For that, they get the full reward of taking this kind of risk. That's the nature of business and entrepreneurship. Smart employers recognize value created by employees — direct as well as indirect — and give these employees a share of success. Sometimes in salary, sometimes in stock. And I said smart because in the long run, there's nothing cheaper than keeping insanely productive employees around by issuing some company stock, promoting them and keeping them happy and productive in any other way possible. Trying to keep tally on a cent-by-cent base doesn't just create a massive bureaucracy (I've seen one full-time person just doing the compensation plans for the sales team), it also opens up a massive field of bickering around details that could have gone into the product.
    - EGreg 5y ago
      If it makes you feel better, imagine if the worker started their own startup and then approached us with a business proposition. How would we fairly pay that startup, versus exploiting them? “Wrap” the person in a startup since you feel that only companies should be entrepreneurial. I don’t mind. Then let’s look at the QCM again. This is exactly about attracting the most productive people and giving them a share of the company’s revenues. If you want to do it via stock grants - sure, pay the QCM out in that!
  - Taniwha 5y ago
    Yes, this is exactly the point I came here to make
- Nevermark 5y ago
  They don’t “claw back” your money. They can “claw back” the percentage they give you by growing revenues. You lose nothing in absolute terms. It simply means whoever triples revenues after you reduces your percentage by 3, so you didn’t contribute to the 3x and it’s a complete wash for you, the payments you get neither go up or down. As it should be. As described this scheme seems unrealistic. But it has good ideas in it.
ljm 5y ago
Unfortunately the title has been editorialised because my first red flag was 'an alternative to hiring and paying employees'. That language isn't used inside the post. It's not far off the mark though - the 'model' asks you to contribute work up-front and then sets up a few conditions you have to meet if you expect to see any compensation for the work. One of these conditions is actually launching it into prod and measuring it for a month, after spending a few weeks beta testing it. Any contributor is looking at a multiple-month project where the cost of the project is not contractually set in stone, and where they earn nothing while the business cooks up some metrics to avoid paying out. And let's be honest, no business using this model is going to pay a contributor $10k a week using this calculation, potentially for 5 years, when a full time hire would cost them less. The model is a scam. The only thing missing is that it doesn't ask you to rope in other people to help contribute for you, to passively earn up to half-a-million bucks a year.
HWR_14 5y ago
> Certainly, their work to measure it isn't increasing revenue, so I guess they're just donating their time Well, that's why they keep 90% of the increase they measure, and only pay out 10% of it. Presumably that 90% covers security, business and other functions. > I think this is intended to be just a bonus I think it's intended to get some of the benefits of open-source collaboration (you write the feature you want) with a formula to compensate contributors. Of course, they are limiting themselves exclusively to revenue generating features, which is a particularly Econ 101 way of valuing contributions. They are quite clear that these people have no base contribution or other connection to the company.
EGreg 5y ago
I think you are missing the point. This is totally voluntary. It is not for dev ops nor the security team. It is for people who freely choose to share the risks and the rewards of their contributions. They approach a company that has already done the work of getting a userbase, goodwill etc. improve its bottom line by X, and get the proportional compensation. That’s how patio11 advocates selling your services. This is just the company making it as easy as possible for folks like patio11 to come and do their thing!

light_hue_1 5y ago

It's so much worse than that. If someone else can come around and "claw back" my money, I want to make my contributions as impossible to build on, to change, and to understand as I can make them. This will lead to intentionally-horrific code. It also makes no sense practically. You can only A/B test so many alternatives at the same time. This is a huge problem even at the scale of Google and Amazon who have a lot of infrastructure to run overlapping A/B tests. How is a feature that makes $1000/week going to run even 10 concurrent A/B tests? There is also zero accountability. The company wants to make profit and pay you as little as possible. You have no way of knowing if any improvements came from you or from someone else. Is giving your source code to random people that don't give a damn about your company a good idea? I bet you can make more money selling zero days for many products than you can make by improving them. This is just the beginning, the list of problems with this model is just endless for everyone.

rodgerd 5y ago
> It's so much worse than that. Hollywood accounting, but for your pay.
- endymi0n 5y ago
  I meant to write a lengthy answer here, but this one hits the nail on the head. Companies take the full risk for starting projects and hiring people: especially those just very indirectly relevant to the bottom line. For that, they get the full reward of taking this kind of risk. That's the nature of business and entrepreneurship. Smart employers recognize value created by employees — direct as well as indirect — and give these employees a share of success. Sometimes in salary, sometimes in stock. And I said smart because in the long run, there's nothing cheaper than keeping insanely productive employees around by issuing some company stock, promoting them and keeping them happy and productive in any other way possible. Trying to keep tally on a cent-by-cent base doesn't just create a massive bureaucracy (I've seen one full-time person just doing the compensation plans for the sales team), it also opens up a massive field of bickering around details that could have gone into the product.
  - EGreg 5y ago
    If it makes you feel better, imagine if the worker started their own startup and then approached us with a business proposition. How would we fairly pay that startup, versus exploiting them? “Wrap” the person in a startup since you feel that only companies should be entrepreneurial. I don’t mind. Then let’s look at the QCM again. This is exactly about attracting the most productive people and giving them a share of the company’s revenues. If you want to do it via stock grants - sure, pay the QCM out in that!
- Taniwha 5y ago
  Yes, this is exactly the point I came here to make
Nevermark 5y ago
They don’t “claw back” your money. They can “claw back” the percentage they give you by growing revenues. You lose nothing in absolute terms. It simply means whoever triples revenues after you reduces your percentage by 3, so you didn’t contribute to the 3x and it’s a complete wash for you, the payments you get neither go up or down. As it should be. As described this scheme seems unrealistic. But it has good ideas in it.

ljm 5y ago

Unfortunately the title has been editorialised because my first red flag was 'an alternative to hiring and paying employees'. That language isn't used inside the post. It's not far off the mark though - the 'model' asks you to contribute work up-front and then sets up a few conditions you have to meet if you expect to see any compensation for the work. One of these conditions is actually launching it into prod and measuring it for a month, after spending a few weeks beta testing it. Any contributor is looking at a multiple-month project where the cost of the project is not contractually set in stone, and where they earn nothing while the business cooks up some metrics to avoid paying out. And let's be honest, no business using this model is going to pay a contributor $10k a week using this calculation, potentially for 5 years, when a full time hire would cost them less. The model is a scam. The only thing missing is that it doesn't ask you to rope in other people to help contribute for you, to passively earn up to half-a-million bucks a year.

HWR_14 5y ago

> Certainly, their work to measure it isn't increasing revenue, so I guess they're just donating their time Well, that's why they keep 90% of the increase they measure, and only pay out 10% of it. Presumably that 90% covers security, business and other functions. > I think this is intended to be just a bonus I think it's intended to get some of the benefits of open-source collaboration (you write the feature you want) with a formula to compensate contributors. Of course, they are limiting themselves exclusively to revenue generating features, which is a particularly Econ 101 way of valuing contributions. They are quite clear that these people have no base contribution or other connection to the company.

EGreg 5y ago

I think you are missing the point. This is totally voluntary. It is not for dev ops nor the security team. It is for people who freely choose to share the risks and the rewards of their contributions. They approach a company that has already done the work of getting a userbase, goodwill etc. improve its bottom line by X, and get the proportional compensation. That’s how patio11 advocates selling your services. This is just the company making it as easy as possible for folks like patio11 to come and do their thing!