6 ms·

Balsamiq and profit sharing. Should be read alongside Balsamiq on salary.

71 points by marklittlewood 15y ago

marklittlewood 15y ago
Read this alongside the salary article that was posted http://news.ycombinator.com/item?id=2986379 http://news.ycombinator.com/item?id=2986379 Balsamiq is a fairly unusual business and Peldi has grown something pretty extraordinary. This is a highly profitable business that has made a conscious decision to be great on its own terms, not on the terms that a Silicon Valley venture capital firm might impose on the business. If you want some more background, go and watch this video of the talk Peldi gave at Business of Software last year. There is also a transcript you can speed read if you don't have an hour to spare. http://blog.businessofsoftware.org/2011/08/do-worry-be-happy-peldis-brilliant-talk-about-keeping-sane-as-a-software-ceo-video-transcript.html http://blog.businessofsoftware.org/2011/08/do-worry-be-happy...
stuff4ben 15y ago
I've never worked at a startup that was consistent about giving out it's bonuses. Usually they did some variation of the "making our numbers" policy usually in place at larger corporations. As a startup, you hardly ever make your numbers. So I've come to discount bonuses altogether (along with worthless stock options) when negotiating my salary. Now that I'm at a bigger company, having a consistent bonus every year is quite nice. There are tradeoffs to be made though...
jaryd 15y ago
Have you guys considered opening up the books to the public as well? Note: This question is partially relevant to the adjoining article "Balsamic: Salary Policy"
rapind 15y ago
Seems fair except maybe for the part where compensation takes living expenses into consideration. If an employee decides to live somewhere cheap and it works out well, then they should see the benefits of this decision. If it means the employer must make certain sacrifices to accomodate this (telecommuting issues), then the employee should bear some extra cost to cover that, but it shouldn't be related to his living expenses. If an employee chooses to live in Manhattan so they feel plugged in or w/e then they're responsible for covering their exorbitant rent. Only if the employer demands they live somewhere specific should living expenses be taken into consideration.
- skrebbel 15y ago
  Note that this is just the bonus. The salary is not dependent on local living expenses, but on average income for similar work in the area (plus a little bit).
  - johnrob 15y ago
    Why should a bonus be treated any differently than salary with respect to living expenses?
    - nknight 15y ago
      I see no more insanity in basing a bonus on cost of living than in basing a salary on market rate. They're both outside the direct control of either party and lack any fundamental relationship to the properties of the particular company.
  - evbart 15y ago
    The salary is dependent, its in another post: http://blogs.balsamiq.com/team/2011/09/12/salary/ http://blogs.balsamiq.com/team/2011/09/12/salary/
chanderson0 15y ago
Back-of-the-envelope math: Suppose Google were to implement the same policy. Their quarterly profits last quarter were $2.5B, and had approximately 30,000 employees. So 10% of $2.5B split among 30k employees means an average quarterly bonus of $8,300, or a yearly bonus of $33k. This seems like a pretty good bonus, particularly since if Google used salary.com to define their salaries, an incoming software engineer in the Bay Area would make $70k.
- onemoreact 15y ago
  On day one you would only be getting 2.5% not 10% so 8,250$. However, if you have 4x the average senority then you would get 33k x (.75 x 4 + .25) = 107k which would be much harder to walk away from.
palves 15y ago
The impact of seniority in the profit sharing program is way too big, in my opinion. I don't even exactly understand what seniority has to do with it, and I'm a (very?) senior developer, working professionally for more than 10 years. Isn't it an incentive for working less as you become a "dinosaur" in the company? I mean, we can't make the time stop - this is actually an automatically increasing prize, regardless of your performance or any other thing whatsoever, and I'm a little uncomfortable with automatic prizes. Besides, seniority is already reflected in the salary. Additional prizes should be a direct consequence of productivity, which again, have nothing to do with seniority. In general, I'm very much in agreement with Peldi's ideas and admire the openness he cultivates but I just don't get this one.
- count 15y ago
  Maybe the theory behind it, is that the more senior your get, the more valuable you will be to other organizations. As a way to keep you around, your comp. goes up.
  - rhizome 15y ago
    That's the theory as commonly applied to CEOs and university administrators, but if cash is the only thing keeping a employee from jumping ship I'm not sure that should be rewarded.
    - count 15y ago
      I think cash helps build up an insulation layer to outside offers and poaching. If you pay / compensate above market, and the employee knows this, they're less likely to 'just take a look' at the competition or other employers offers, as they know it'll be difficult to even make an straight transfer. I don't know that I'd even call it a golden handcuffs style 'benefit' - it's just greasing down a small, possible source of friction for an otherwise happy employee.
      - rhizome 15y ago
        I think cash helps build up an insulation layer to outside offers and poaching. Does it, though? Is this based on anything more than gut feelings? My impression is that it just raises the offer level of poaching, and no company is going to overpay to the degree that it becomes prohibitive, except for positions where secrecy and/or thieves' honor is paramount (see: finance).

Read this alongside the salary article that was posted http://news.ycombinator.com/item?id=2986379 http://news.ycombinator.com/item?id=2986379 Balsamiq is a fairly unusual business and Peldi has grown something pretty extraordinary. This is a highly profitable business that has made a conscious decision to be great on its own terms, not on the terms that a Silicon Valley venture capital firm might impose on the business. If you want some more background, go and watch this video of the talk Peldi gave at Business of Software last year. There is also a transcript you can speed read if you don't have an hour to spare. http://blog.businessofsoftware.org/2011/08/do-worry-be-happy-peldis-brilliant-talk-about-keeping-sane-as-a-software-ceo-video-transcript.html http://blog.businessofsoftware.org/2011/08/do-worry-be-happy...

stuff4ben 15y ago

I've never worked at a startup that was consistent about giving out it's bonuses. Usually they did some variation of the "making our numbers" policy usually in place at larger corporations. As a startup, you hardly ever make your numbers. So I've come to discount bonuses altogether (along with worthless stock options) when negotiating my salary. Now that I'm at a bigger company, having a consistent bonus every year is quite nice. There are tradeoffs to be made though...

jaryd 15y ago

Have you guys considered opening up the books to the public as well? Note: This question is partially relevant to the adjoining article "Balsamic: Salary Policy"

rapind 15y ago

Seems fair except maybe for the part where compensation takes living expenses into consideration. If an employee decides to live somewhere cheap and it works out well, then they should see the benefits of this decision. If it means the employer must make certain sacrifices to accomodate this (telecommuting issues), then the employee should bear some extra cost to cover that, but it shouldn't be related to his living expenses. If an employee chooses to live in Manhattan so they feel plugged in or w/e then they're responsible for covering their exorbitant rent. Only if the employer demands they live somewhere specific should living expenses be taken into consideration.

skrebbel 15y ago
Note that this is just the bonus. The salary is not dependent on local living expenses, but on average income for similar work in the area (plus a little bit).
- johnrob 15y ago
  Why should a bonus be treated any differently than salary with respect to living expenses?
  - nknight 15y ago
    I see no more insanity in basing a bonus on cost of living than in basing a salary on market rate. They're both outside the direct control of either party and lack any fundamental relationship to the properties of the particular company.
- evbart 15y ago
  The salary is dependent, its in another post: http://blogs.balsamiq.com/team/2011/09/12/salary/ http://blogs.balsamiq.com/team/2011/09/12/salary/

chanderson0 15y ago

Back-of-the-envelope math: Suppose Google were to implement the same policy. Their quarterly profits last quarter were $2.5B, and had approximately 30,000 employees. So 10% of $2.5B split among 30k employees means an average quarterly bonus of $8,300, or a yearly bonus of $33k. This seems like a pretty good bonus, particularly since if Google used salary.com to define their salaries, an incoming software engineer in the Bay Area would make $70k.

onemoreact 15y ago
On day one you would only be getting 2.5% not 10% so 8,250$. However, if you have 4x the average senority then you would get 33k x (.75 x 4 + .25) = 107k which would be much harder to walk away from.

palves 15y ago

The impact of seniority in the profit sharing program is way too big, in my opinion. I don't even exactly understand what seniority has to do with it, and I'm a (very?) senior developer, working professionally for more than 10 years. Isn't it an incentive for working less as you become a "dinosaur" in the company? I mean, we can't make the time stop - this is actually an automatically increasing prize, regardless of your performance or any other thing whatsoever, and I'm a little uncomfortable with automatic prizes. Besides, seniority is already reflected in the salary. Additional prizes should be a direct consequence of productivity, which again, have nothing to do with seniority. In general, I'm very much in agreement with Peldi's ideas and admire the openness he cultivates but I just don't get this one.

count 15y ago
Maybe the theory behind it, is that the more senior your get, the more valuable you will be to other organizations. As a way to keep you around, your comp. goes up.
- rhizome 15y ago
  That's the theory as commonly applied to CEOs and university administrators, but if cash is the only thing keeping a employee from jumping ship I'm not sure that should be rewarded.
  - count 15y ago
    I think cash helps build up an insulation layer to outside offers and poaching. If you pay / compensate above market, and the employee knows this, they're less likely to 'just take a look' at the competition or other employers offers, as they know it'll be difficult to even make an straight transfer. I don't know that I'd even call it a golden handcuffs style 'benefit' - it's just greasing down a small, possible source of friction for an otherwise happy employee.
    - rhizome 15y ago
      I think cash helps build up an insulation layer to outside offers and poaching. Does it, though? Is this based on anything more than gut feelings? My impression is that it just raises the offer level of poaching, and no company is going to overpay to the degree that it becomes prohibitive, except for positions where secrecy and/or thieves' honor is paramount (see: finance).