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It's not just engineers this applies to. Sure, if everyone makes $400k + benefits and profit share with good work-life balance and such, I guess that might fly.

It's not just engineers this applies to. Sure, if everyone makes $400k + benefits and profit share with good work-life balance and such, I guess that might fly. But most companies have customer support, IT, and other cost centers where you have entry-level employees who need to progress, and that necessarily means increasing wages over time to retain and advance good employees. Besides, junior developers / interns are supposed to do what exactly if there is no increasing revenue at a company and no one leaves above them? Just hang out until someone quits even though they're not going to? Retraining a junior developer is costly. Advancing them is as well, but less costly than constantly cycling in new junior developers and interns to do the HTML/CSS + ETL script jobs no one likes doing. Growth is natural and important towards keeping your staff happy and moving up. Both Basecamp and Valve were growing massively, so I don't think those are good examples.

icelancer 5y ago
Besides, you run the real existential risk of getting your margin cannibalized by another startup or Amazon if you don't grow enough. In a world where you pay everyone a lot of money, the product is awesome, and there's no growth, there's a lot of margin in your product that someone is going to target - some subset of customers you aren't serving, or customers who aren't that loyal and willing to switch for 20-50% lower costs. I'm not saying VC funding is a good thing; I largely think what we are seeing due to massive QE is malinvestment on a grand scale and is why you see dumb shit like Juicero. But natural, bootstrapped growth is a good thing - and necessary, if you want to survive. Trending sideways is waiting for death on many fronts - your labor force being the largest one.
tsimionescu 5y ago
If your workforce is improving, you might have a kind of natural growth where they either deliver better products or more efficient services and you can acquire more customers (or charge more) without expanding your operations. Besides, if you are paying a good wage, have a good work/life balance, a good environment and so on, people will be content and just work there. It's like farming or factory work - you're doing what you expect to be doing for the rest of your life, or at least the next 10-20 years.
- lotsofpulp 5y ago
  > Besides, if you are paying a good wage, have a good work/life balance, a good environment and so on, people will be content and just work there. How does this work when your competitor is offering half of compensation via RSUs skyrocketing in value? >It's like farming or factory work - you're doing what you expect to be doing for the rest of your life, or at least the next 10-20 years. This describes no one I know that earns a lot of income. I imagine a person that expects little change over 10 to 20 years will probably not be in position to grab opportunities when they present themselves.

icelancer 5y ago

Besides, you run the real existential risk of getting your margin cannibalized by another startup or Amazon if you don't grow enough. In a world where you pay everyone a lot of money, the product is awesome, and there's no growth, there's a lot of margin in your product that someone is going to target - some subset of customers you aren't serving, or customers who aren't that loyal and willing to switch for 20-50% lower costs. I'm not saying VC funding is a good thing; I largely think what we are seeing due to massive QE is malinvestment on a grand scale and is why you see dumb shit like Juicero. But natural, bootstrapped growth is a good thing - and necessary, if you want to survive. Trending sideways is waiting for death on many fronts - your labor force being the largest one.

tsimionescu 5y ago

If your workforce is improving, you might have a kind of natural growth where they either deliver better products or more efficient services and you can acquire more customers (or charge more) without expanding your operations. Besides, if you are paying a good wage, have a good work/life balance, a good environment and so on, people will be content and just work there. It's like farming or factory work - you're doing what you expect to be doing for the rest of your life, or at least the next 10-20 years.

lotsofpulp 5y ago
> Besides, if you are paying a good wage, have a good work/life balance, a good environment and so on, people will be content and just work there. How does this work when your competitor is offering half of compensation via RSUs skyrocketing in value? >It's like farming or factory work - you're doing what you expect to be doing for the rest of your life, or at least the next 10-20 years. This describes no one I know that earns a lot of income. I imagine a person that expects little change over 10 to 20 years will probably not be in position to grab opportunities when they present themselves.