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I've been meaning to write a blog post on "what if developers were paid the same way as writers and other creatives", namely residuals. I think it becoming the
by candiddevmike 3y ago
I've been meaning to write a blog post on "what if developers were paid the same way as writers and other creatives", namely residuals. I think it becoming the norm for signing away your IP rights for employment is wrong, and other creatives would never do that without ongoing compensation. There's also the guild/union aspect as well, all of which I think would help balance out the feast/famine cycle of our industry.
- HeyImAlex 3y agoIsn’t that kinda what stock options are?
- andersa 3y agoThey already are. Engineer gets paid $200k so the company can make $20M. Sound fair right?
- xyzelement 3y agoIt does sound fair, the engineer also gets paid $200k if the product ends up going nowhere, so he doesn't bear the risk. The company also provides lots of things to enable that "20M" to be generated that the engineer doesn't provide, such as sales, distribution, etc etc etc etc.
- eek2121 3y agoBook publishers also don’t make much if the book doesn’t sell. Most technology companies wouldn’t exist without developers.
- xyzelement 3y ago// Most technology companies wouldn’t exist without developers. Hence they pay to hire them, as evidenced by the $200K dev in the prior post. I don't get your point.
- thfuran 3y agoYes, and writers tend to be paid advances much less than a dev salary.
- cgriswald 3y agoWriters never have to pay back that advance, however. They just don't get paid from sales until the sales cover the advance. If the book doesn't sell, they still keep the advance.
- HPsquared 3y agoLots of things are "necessary but not sufficient" for the company to make the $20M. For example they wouldn't have made any money without electricity, should the power company get paid more just because of what someone did with their electricity?
- Aunche 3y agoOn the other hand, sometimes the engineer gets paid $200k while the company makes -$20M.
- nrdvana 3y agoRarely does a company make 20M off the work of one engineer. Every 4-5 engineers is another 1M expense, nevermind the other employee salaries. I get kind of annoyed when people look at large aggregate numbers and complain about how different they are from the individual employee pay. Even CEO pay - if they took the entire bonus given to the General Motors CEO and divided it among every employee in the company, it would come out to something smaller than their Christmas bonus. I do think CEOs are generally overpaid and under-liable, but it's not like the CEO salary is directly responsible for workers missing out on the highlife.
- Mountain_Skies 3y agoIt's difficult to imagine how that would be calculated and verified for internal systems, which are far more common than public facing, revenue generating systems.
- r00fus 3y agoVery interesting idea. How would this work? Would your name on any software give you residuals? How would your % be calculated - based on LOC? (ridiculous) but if not that then how? Would be granular down to the feature? sprint?
- paulddraper 3y agoThat's what equity is, albeit more capital friendly to R&D heavy endeavors
- renegade-otter 3y agoEquity is generally a scam - your "five thousand shares" are going to get you maybe a few hundred dollars during a liquidity event. Stop asking for equity - ask for a higher salary. Put that extra money into an index fund and it will go FAR more than any "equity".
- loeg 3y agoEquity in public companies is worth a lot more than equity in private companies. You seem to be talking only about the latter.
- paulddraper 3y agoSome might say the same about residuals
- eschneider 3y agoStock options are probably a better deal. There's accounting BS with options, but FAR less than you would see with residuals.
- nfriedly 3y agoFor public companies, sure. But for a private company, where are the options are essentially a lottery ticket, I think a decent number of folks would choose residuals.
- francoisdevlin 3y agoWhat makes you think the residuals would fare better than the options? The risk is about the same, yes?
- nfriedly 3y agoMy intuition is that residuals have a higher chance of a low payout, whereas options have a lower chance of being worth anything, but probably a higher value if they do pay off.
- lazide 3y agoResiduals for a company which is bankrupt would be zero - same as their stock price. Also, they could just rewrite the sections of code that are expensive and nuke their costs and your residuals at any point. Unlike a brand or whatever, it’s trivial to redo as it’s not user facing.
- deleted 3y ago[deleted]
- ganoushoreilly 3y agoI’d agree, especially if they’re relying on VC funding to power through growth.
- caminante 3y agoI give you a work laptop, training budget, third-party technical budget, lawyers, accountants, marketing... and I don't get the IP rights? No deal. That aside, you're describing already available comp models with equity participation.
- shard972 3y agoSo if im bringing my own laptop, staging environments, training budget then i should get some IP rights?
- caminante 3y agoNot what I said or implied, assuming your intent is to be snarky. However, I've executed deals where developers contribute assets and get royalties/earnout. You can always try to negotiate.
- deathanatos 3y agoWhile I know the comment above appears to be suggesting keeping all IP — and I agree that's not workable — there are a number of employers that would also like to own the IP to any love notes I write my sweetheart, photographs I take of my nephew, etc. Also I've seen some that want moral rights, which I don't think one should be required to give up, ever. Reform is needed here. I have no qualm about signing over IP developed specifically for the company, on the company's dime. But some IP agreements get absurd about it.
- andsoitis 3y ago> there are a number of employers that would also like to own the IP to any love notes I write my sweetheart, photographs I take of my nephew, etc. What’s a good example of an employer who wants that from someone because that person is an employee?
- eminence32 3y agomoreover, is there any case law that suggests such things are an enforceable part of an employment contract?
- deleted 3y ago[deleted]
- andrewjl 3y agoThere's a thing called Hollywood accounting for a reason
- nonethewiser 3y agoFeast/famine? Where? This article identifies the first 2 year dip in real salaries since 2000. And its a 4% drop. With the absolute figure being “only” $169,000 which is almost 400% of the median US salary.
- tempsy 3y agoIt’s not just inflation it’s interest rates that has a massive impact on anyone who does not already own a house. A $1M house with a $800k mortgage at 2.5% rates was $3161 a month At 7.5% rates today it’s $5594
- andsoitis 3y agoIs the complaint that many people can’t afford a $1 million house?
- tempsy 3y agoSoftware engineers tend to live in higher cost areas where $1M would be below average. If you live in a median cost of living area $1M would get you a decent, but not amazing, house in a good school district, which is another thing a software engineer parent would probably care about.
- dragonwriter 3y ago> It’s not just inflation it’s interest rates that has a massive impact on anyone who does not already own a house. It has a massive impact on anyone who does have a house with an ARM, and some effect if you own a house and were counting on refinancing or entering getting cash out via a new mortgage/HELOC, but if you don’t own a house, the only effect is via a potential impact on inflation specific to rental housing, not an effect additional to inflation. I mean, it affects whether now is an ideal time from going to owning to not owning, but that's hardly a massive impact generally (massive on that decision, perhaps.)
- nonethewiser 3y agoIrrelevant - that does not substantiate a feast/famine cycle in the engineering profession.
- renewiltord 3y agoYou can get this quite easily if you have the chops to match. Build software and license it to other people. You'll need to be good at the marketing and sales aspect in addition to product development, but if you don't want to you can just give away that to others and take a flat salary. Software is about the one place where you can select where on the curve you want to be for this. Either all self-owned and licensed (easier than elsewhere because VCs will fund you in software more likely than other businesses), as a solo shop, as an enterprise, or you can be salaried, or receive lots of equity, or a contractor. No one in software need complain. Almost the entire full spectrum of options exists.
- orangecat 3y agoI much prefer getting a 90th percentile salary up front and not perpetually arguing over exactly how many times my code was downloaded or executed.
- SoftTalker 3y agoThis is a solved problem for the music industry, why could it not be adapted for code?
- rcstank 3y agoI don’t want it. I’m fine with how my compensation currently works.
- jprete 3y agoIt’s not solved for the music industry at all! Publishers are perpetually looking for ways to give artists crappy deals on residuals, and artists make almost all their money on touring and merch. And that’s for the successful ones, most musicians are not successful enough to even think about making money from publication.
- eschaton 3y agoExcept it’s not really, the traditional ASCAP/BMI royalty structure and reporting gives extremely heavy favor to the most popular music and everyone else gets basically nothing, while their royalty schedules for streaming amount to basically nothing. If anything, musicians need to follow WGA and SAG-AFTRA and DGA’s lead and get proper streaming royalty schedules, anti-AI-training clauses, etc. into their standard contract structures.
- rhplus 3y agoNot looking forward to the day when I have to wait tables, while hoping that my software hits the big time.
- nrdvana 3y agoAnd the music industry solution is absolutely horrible. Every single venue that might have someone play copyrighted music is required to pay large annual sums to the RIAA, or get sued. There are armies of RIAA lawyers who go around to basically every business with a lobby and threaten to sue if they don't pay into the pool. There are entire companies who exist just to install licensed players in offices that are known to comply. Just imagining how awful this would turn out if applied to the world of software makes my skin crawl.
- Waterluvian 3y agoI was actually thinking about it the other way around. Why do residuals exist? I am paid to do X. I did X. My code is no more special than the shingles put on my roof. I hope the roofers don’t return for residuals again. What I prefer is the “get the same relative raises as the CEO” that the auto union is going for. But I’m also not a gambler. I want to know exactly what my compensation is for the hours of my life I’m giving away.
- thesh4d0w 3y agoTwo writers make an episode of TV. One sucks and is aired once, the other is amazing and gets replayed constantly for years. Should their work be valued the same?
- salty_biscuits 3y agoDepends on if the result is due to skill or luck?
- eks391 3y agoTheir pay should be what the contract agreed it to be, regardless of how popular it was. Imagine someone makes a popular show. They are hired by another company in hopes of a repeat, but it flops. The company doesn't get to hold back the money because it wasn't "replayed constantly for years" or a more measurable contribution to their companies worth, unless that was written in the contract that the performer would assume the risk. But usually companies accept the risk, which is why the risk holder, such as a CEO or lenders, make more money (or lose it all if the risk fruitioned ill) In markets like freelancing, authorship, etc; where the risk is assumed by the creator specifically, their performace can directly influence their pay. Most people would prefer a steady, risk-free paycheck though, which is why your contribution is most likely less influential to your pay, except in the case of when you go out of your way to get a new contract via promotion or job hunting.
- deelowe 3y agoI don't understand, isn't residuals in the contract?
- coffeemug 3y agoMost developers are a 2023 equivalent of 1973 assembly line workers. Very few do creative work.
- nonethewiser 3y agoOr engineers. Do engineers own the rights to the electrical housing designs they make?
- Aunche 3y ago> what if developers were paid the same way as writers and other creatives The 10% of Facebook/Google/Bytedance engineers who work on ads would be stupidly rich. The remaining 90% of engineers who work on cost centers would get paid minimum wage. If you want these residuals to be remotely equal, the metrics that determine them would be so convoluted that you might as well just pay people in stock options or RSUs.
- fragmede 3y agoAds is shooting low. You want your code to be in the network driver in the kernel for every packet received or sent.
- linkjuice4all 3y agoHopefully that network driver doesn’t rely on my ‘isOdd’ code which happens to rely completely on my other ‘isEven’ project.
- anotherhue 3y agopfft. I want residuals when the instruction pointer is incremented.
- butlike 3y agoSo the change request is to change the variable name so we can stop paying the engineer who negotiated higher residuals. Also what is a code contribution. If I write the "if" statement or the functional unit?
- ramesh31 3y agoThe multiple of ongoing productivity gain is built into your salary. The reason we make six figures is a combination of our skills and the fact that the work that we do will be useful beyond ourselves.
- hibikir 3y agoThere are many ways to do this, and most lead to some dark incentive nightmares. -If a dev get a percent of total company revenue, then you really don't want to hire many! -If you have a basket of revenue for developers, and then they split it based on whether they worked there for the last X years, then it's the devs that don't want other people hired: The pie shrinks - If it's by code getting executed and how much revenue that brought, then the difference in value of which team to work in becomes amazing. It's also a great idea to rewrite other people's code: This inner loop of the main revenue generating code is a goldmine. GDPR compliance? worth little - If instead of by execution or LOC we go by system contribution, we instead get yearly rewrites or very long tenures, as people protect the systems they worked in. Either way you slice it, the good of the company is only of tangential value, as barring a growing startup, optimizing your slice of the pie becomes far more relevant than helping the company's goal, any more than just remaining employed, and therefore capable of protecting your contribution level. It would need massive changes to the way we work to avoid massive profiteering dysfunction. The culture of software would be so different as to be borderline unrecognizable. Not unlike what would happen to plumbing if they could charge per gallon that flows through the pipe, or times a toilet is flushed.
- deleted 3y ago[deleted]
- happytiger 3y agoIs that not what equity in a startup is? Or stock grants? What would be the systematic advantage of attaching a new system to track IP residuals be?
- yibg 3y agoSo most developers would have to wait tables to make ends meet while they try to make it big?
- paxys 3y agoTech companies and movie studios have very different business models. Tech is built on the illusion of infinite growth. If you write a piece of software and it does well, the company cannot return the money back to you because they need it to hire 10x the number of new developers and create new features and growth hack more customers, and so on with each successive version. The moment they stop doing that, investors see slowing growth and the whole thing collapses. Instead these companies hand out stock options so developers themselves now become part of this game.