| I wasn't trying to be weirdly antagonistic. Your original comment sounded like you were trying to reconcile the common HN views of "developers don't get paid enough", "big corporations are soul-crushing", and "startup equity is a scam". At the time I didn't see how it came together as a cohesive whole. You've add some detail here about this business model, which involves giving developers commission directly correlated to the performance of projects they work on. This gives me more of an idea of what you're talking about. Commission tends to work really well when you can easily quantify someone's contribution, for example sales. I suppose this might work alright for developers in a consultancy, although it would be hard to separate the developer's work from the work of whoever landed the sale. A developer could do a terrible job on a project, giving the firm a bad reputation down the line (although their manager might not be aware of this at the time of completion). If the project was big and lucrative, they would get paid a lot. On the other hand, a developer could do a great job on a small project, that led to a much bigger contract which that developer was not able to work on for some reason. They would miss out on the benefits of their good job. For a product company, it sounds even harder. How do you compensate the people making internal tooling for example? How do you compensate devops people? What's the split between the developer who programmed a feature and developer who runs it in production? My suspicion is that for a product company this compensation scheme would start to look really similar to the normal practice of using market rates and negotiating for raises, since attribution of revenue would be really unclear. |
You need to place them in your business model.
What are the tools used for? What would happen if the tooling didn’t get built and your colleagues used off the shelf tools?
That will tell you how much your team is worth.
Most people seem to throw up their hands at this point and say “it’s hard, and imperfect” and they stop working on the business model.
But any model is imperfect. Even the sales person you mentioned, who earns a flat commission on sales... they could be costing the company more than they’re bringing in, if their sales are forcing developers into crunch, or if their customers churn, etc. The point of the model is not to mirror reality perfectly, it’s to give you numbers that can guide your negotiations, as I said.
Just because it’s unusual to think about how developers fit into your business model doesn’t mean it’s impossible or it shouldn’t be done.