
Basecamp doesn’t employ anyone in SF, but now we pay everyone as though all did - onmyway133
https://m.signalvnoise.com/basecamp-doesnt-employ-anyone-in-san-francisco-but-now-we-pay-everyone-as-though-all-did-3ee87013cfc2
======
jasonkester
Well done. Personally, as a remote developer, I always make a point of billing
at my "Bay Area Rate", even though I've never lived there.

There was a point, early in my guy-on-the-beach-with-a-laptop era where I
would cut my bill rate in half while working from the beach with a laptop.
Clients were happy about that, and it more than paid for beers and thatch
huts. Then one time I tried _not_ cutting my bill rate in half on a proposal.
Nobody but me seemed to notice. So now I don't do that anymore.

As the article so nicely points put, the work you're doing is exactly the same
regardless of where you do it from. Charge accordingly.

It's true that living costs are less in other places. It makes a lot more
sense for that difference to be captured by _me_ rather than somebody else's
company.

Glad to see these guys stepping up and setting an example from the employer
side.

~~~
flexie
Basecamp is selling all over the world. What should their salary level be
like? Bay Area because that’s where a lot of the larger tech companies are
situated? Washington State (Microsoft, Amazon)? Copenhagen (where one founder,
DHH is from)? Sudney where one major competitor, Jira, is from? I’d say
whatever the market is that they hire in. If you wanna pay above market rate,
by all means do that. If you can attract employees in Chicago for less than
Copenhagen or Bay Area salaries, then by all means, feel free to do that.
Employees are free to leave.

What I don’t see is why all companies should follow Bay Area salaries.

~~~
CiPHPerCoder
People often tell me, "Yeah the Bay Area is expensive but the tech salaries
make up for it."

By being able to get a Bay Area salary (e.g. $150k/year) while working from
anywhere in the world (e.g. any city where $40k/year is considered comfortable
living and $80k/year is considered "well off"), the incentive to continue
saturating the area with local talent decreases.

Same salary, lower cost of living, AND the ability to be a homeowner in the
foreseeable future? That's a hard deal to beat.

~~~
pmorici
150k sounds way low for the Bay Area you can get that in other much less
expensive metro areas.

~~~
overcast
No way on this earth, $150,000 is anywhere near normal in the Bay Area, let
alone in other less expensive metros. Most people are absolutely not making
that much money writing code. People have serious tunnel vision on HN.

~~~
compumike
(Disclosure: I work for Triplebyte and helped publish our salary dataset
recently.)

$150K is below the median base salary offer we see for _senior_ software
engineers. See [https://triplebyte.com/software-engineer-
salary](https://triplebyte.com/software-engineer-salary) \-- with a few notes:

* This is base salary only. Total compensation is significantly higher once you include factors like equity compensation, bonuses, benefits.

* This does vary a lot with stage of company. Earlier-stage startups use more equity and less salary. We work with companies from pre-series A to public megacorp.

* This is for senior engineers. Less experienced engineers do typically earn less.

* We're fairly selective in the engineers we work with, but it's based on the abilities you demonstrate in our multiple-choice quiz and technical interview, rather than your credentials.

~~~
kriro
I would love to see something like "true salary" where people can enter the
actual hours they work, vacation days they get and salary (+ taxation as an
option). If I compare on a per hour basis and factor in vacation time quite a
few good looking US salaries become a lot less attractive for say a French
software developer who is working a 35h workweek. It's especially interesting
if you compare "boring" development jobs to "highly innovative" ones because
in boring jobs (in house J2EE etc.) you're often actually able to more or less
stick to the 40h/week without much overtime.

~~~
lallysingh
I made total $220k/yr at ~40hrs w/4 weeks vacation a year w/base of 140k at a
prior job. This was typical.

~~~
antisthenes
You can't just write "typical" and not explain.

Typical for what? SF? Your company? CA? For people with your level of
experience?

~~~
lallysingh
Typical for my level of experience in tech industry in NYC.

------
Androider
DHH has the coolest desk and home office I've ever seen:
[https://www.instagram.com/p/BcnPtAwlAKe/?hl=en&taken-
by=dhh7...](https://www.instagram.com/p/BcnPtAwlAKe/?hl=en&taken-by=dhh79)
Check out the rest of the house too, amazing.

I think some people have this image that Basecamp and DHH is some scrappy
bootstrapper fighting the establishment. But really he is living the life that
even most successful "exited" venture fueled founders wouldn't be able to
attain, and he's just saying there's another (perhaps even easier) way.

As I build my company, DHH + Basecamp, Jan Koum + WhatsApp, are my role
models. Maximize the revenue per employee, not the number of employees (
_cough_ Twitter).

~~~
shadowtree
He used to promote himself like this: [https://m.signalvnoise.com/the-day-i-
became-a-millionaire-55...](https://m.signalvnoise.com/the-day-i-became-a-
millionaire-55d7dc4d8293)

But then he counted his money again, bought a house in the hills of Malibu, a
couple of mad cars (family car is a Rolls-Royce Phantom), starting being a
race car driver (Le Mans),...

Never believe ANYONE who says money isn't the a key to happiness. Not the sole
reason, but just take a look at his Insta again.

Kudos.

~~~
pc86
Money _isn 't_ the key to happiness, however it lets you get rid of a lot of
the bullshit of life. And that bullshit of life is what's making the majority
of unhappy people unhappy.

Yeah if you hate your spouse, don't have friends, don't have hobbies, etc,
adding a few zeros to your bank account won't change that. But there are
plenty of people who are unhappy largely because of the stress around the
financial side of their lives.

~~~
659087
> Money isn't the key to happiness, however it lets you get rid of a lot of
> the bullshit of life.

Wealth brings with it plenty of other bullshit to make up for the bullshit you
lost when you first obtained it, though.

~~~
pc86
Of course it does but the impact on your life is minimal in comparison.
Compare "I need to pay this financial adviser thousands a year to handle my
medium and long term financial goals" with "I need to make $500 for a car
repair appear out of thin air or I'll be forced to walk to work in the middle
of the winter, and if I miss work I'll be fired in which case the money
problems will increase tenfold."

While I've never been rich, I've been objectively poor and I've been
comfortable, and the difference in mental load is unbelievable if you haven't
experienced it.

~~~
659087
Relationships (both romantic and otherwise) can become incredibly complicated
when your wealth goes beyond comfortable. I'd say that's more than a minimal
impact. Human nature tends to show its ugly side when you have a lot of
something others want or feel like they deserve more than you.

That's another reason why I don't really understand the instagram bragging
thing. It's like these people are actively trying to create bullshit for
themselves.

~~~
jboles
> That's another reason why I don't really understand the instagram bragging
> thing. It's like these people are actively trying to create bullshit for
> themselves.

There's a pretty fascinating British doco on the phenomenon that I saw on a
recent plane trip. In some cases they are actually that vain. In other cases
it seems kind-of ironic, like they are doing it just to troll online haters.

[https://www.youtube.com/watch?v=pnD3_-zVjec](https://www.youtube.com/watch?v=pnD3_-zVjec)

------
billsix
> (And before you ask, sorry, we’re actually not hiring. That’s part of the
> restraint bit. We have a team of fifty five of the most kind, wonderful, and
> capable people I’ve ever had the pleasure of working with. That’s all we
> need at the moment to do what we want to do.)

Did the author just pull a "Cartmanland"? :-)

[http://southpark.cc.com/clips/152804/cartmanland-
commercial](http://southpark.cc.com/clips/152804/cartmanland-commercial)

------
phantom_oracle
It definitely makes sense to not hire for a certain period to see how this
salary bump impacts the company as a whole.

Anecdotal mention: [https://open.buffer.com/layoffs-and-moving-
forward/](https://open.buffer.com/layoffs-and-moving-forward/)

Fast Hiring at that salary level is probably why SV startups burn through
money so quickly.

I doubt they will see major performance boosts with the salary increase. If
they don't, it indicates the team is already working optimally OR salary
increases don't always translate to increased performance. If they do, do they
then start asking themselves why performance was so average (relatively)?

~~~
mjmahone17
Or they stop seeing a bunch of their employees interviewing with Bay Area
companies. For a team of 55, losing 5 key people to higher Bay Area salaries
could cost tens of millions of dollars in lost opportunity. In that context,
bumping everyone’s salaries even 30% (say on average 60k*55 = 3.3 million) is
not such a big deal. Especially if revenue and income over the past year grew
a lot more than that.

------
shadowtree
Or, reading this as a hiring manager:

They need to pay those salaries to keep the talent and attract new one. Sign
of a very hot market, "remote" does not mean not able to move to SF at any
time and command those salaries.

You lose one or two key people to AGfA and you start shitting your pants.

------
12s12m
Great to see such initiative by Basecamp. This is good for devs around the
world. GitLab sits on the other extreme with their "open salaries":
[https://news.ycombinator.com/item?id=10924957](https://news.ycombinator.com/item?id=10924957)

~~~
spraak
The other extreme being low end salaries?

------
ikeboy
>This is not how companies normally do their thing. I’ve been listening to
Adam Smith’s 1776 classic on the Wealth of Nations, and just passed through
the chapter on how the market is set by masters trying to get away with paying
the least possible, and workers trying to press for the maximum possible. An
antagonistic struggle, surely.

Sounds exactly like Jeff Bezos, who owns part of Basecamp.

------
gedrap
Good to see this. I think that hiring remotely and paying Bay Area salaries
(or very close to it) does indeed open up access to talent that might be
harder to reach otherwise. Especially, if hiring globally remote.

Win-win for everyone involved.

------
binaryanomaly
Very fair and progressive strategy. This is the future imho.

If you want good / the best, pay them accordingly, no matter where they live -
because someone else might do it and pocket your talent.

------
enra
_Starting 2018, Basecamp is paying everyone as though they live in San
Francisco and work for a software company that pays in the top 10% of that
market (compared to base pay + bonus, but not options)_

Options can be fairly large part of the compensation in SF, often as much or
more than your salary (which is already highest in the market). Depending on
the maturity of the company those might be a lottery ticket or actually liquid
stock that you can sell on the public market.

~~~
TulliusCicero
The author of the blog post seems to be rather confused about stock. Many,
perhaps most tech companies in the SF/SV area use stock grants (RSUs), not
options. And if you ignore that, then you're not actually matching
compensation for the area.

------
ChuckMcM
I think this is a great idea, but it has its risks. The risk I would worry
about is that a person would adjust their life style 'burn rate' to their
salary. Then, when they lost their job there isn't any other job in the area
that will pay them what dhh was paying. So now they have to scale back in a
radical way. Can they? Will they?

What is perhaps a similar challenge that I do have direct experience with are
people who have been at a company and had a series of raises and gotten to a
healthy salary. Then they get laid off or lose their job for other reasons and
now they are looking for work. But the jobs they can find aren't paying what
they need to make to support their current expenses. Sometimes I've seen
people hold out for that higher paying job and burn right through all of their
savings. Leaving them vulnerable to future economic shocks.

I admire Basecamp for making this decision, I hope it doesn't screw things up
for people.

~~~
j4kp07
This is Lifestyle Creep and you have to take responsibility for your own
decisions.

~~~
ChuckMcM
I completely agree. That doesn't change how uncomfortable it can be to watch
someone you respect and care about remain unemployed because they have one
notion of their 'worth' that doesn't match the market's notion.

------
whack
_" Basecamp is paying everyone as though they live in San Francisco and work
for a software company that pays in the top 10% of that market (compared to
base pay + bonus, but not options)._"

If you're working at the major SV employers like Google, a huge chunk of your
compensation comes in the form of RSUs (ie, stock). For someone with 5-10
years experience, this can be ~30-40% of your total compensation. The quote
above mentions base and bonus, but it doesn't say anything about RSUs and
stocks. Good for them regardless, but that distinction makes a pretty big
difference.

------
albertgoeswoof
> (And before you ask, sorry, we’re actually not hiring. That’s part of the
> restraint bit. We have a team of fifty five of the most kind, wonderful, and
> capable people I’ve ever had the pleasure of working with. That’s all we
> need at the moment to do what we want to do.)

Refreshing!

------
cityhall
This is a trend I can get behind, recruiting by advertising that you pay well
instead of telling people they should get a sense of pride and accomplishment
by working on hard problems after surviving your interview process.
Unfortunately I didn't see any numbers in the article.

------
downandout
As remote work proliferates, I think that local market rates become less
relevant anyway. So I’d say they are paying the remote worker rate, not the SF
rate. It’s not so much because Basecamp wants to give away extra money, but
rather because they are competing for top developers that have the choice to
work for companies in places like SF and must offer salaries that are
competitive with those companies.

------
option_greek
I'm not entirely sure of what to make of this. At the least, if more companies
do this, may be the congestion in SF reduces and average wages go up in other
places.

------
Edd314159
Every time I see a post from the Basecamp guys and how well they treat their
team, it's more depressing than uplifting - just because I know I'll never be
good enough to work there, and that they're so unique that no other employer
will ever do the same.

~~~
mxuribe
I hear what you're saying...and I've felt this quite often myself with
previous employers. However, I challenge you (in a good way!) to consider
using this as a question (or a set of questions) for your next job interview.
You like the "basecamp" treatment, that's clear...and ok, maybe no other
company might be exactly like them...but this can arm you with some ideas to
ask your next potential employer/contract-holder, etc. Think of how you can
structure your questions to that potential employer to see if they would value
you as an employee like basecamp-type of companies do. It couldn't hurt,
right? Best of luck!

------
jasonlfunk
This is really an interesting idea.

Since the developers who live in cheaper parts of the country/world are now,
effectively, paid more than those who live expensive parts of the world, are
they not incentivizing employees to move out of the big cities?

I'm also curious about traveling expenses. I don't know if they do or not, but
if they had an "all hands" meeting in Chicago, would they fly their employees
in from all over the world? If so, do the people who live 10 blocks away from
the office get the same "travel voucher" as those who live 10 hours away?

~~~
adventured
> are they not incentivizing employees to move out of the big cities?

Yes, that's broadly, rapidly occuring in the US (I can't speak to any other
markets). It's a trend that will likely result in Silicon Valley getting
partially distributed to two dozen cities in the US. Something changed in the
last five or so years quite dramatically when it comes to telecommute work. It
went from a concept that never seemed to quite live up to its potential, to
now delivering. Credit probably goes to the dramatic cost of living increases
since the great recession in major cities, ~5x increase in average broadband
speeds in ten years + high quality mobile, and companies gradually dipping
their toes into the telecommute world and finding value there (constantly
reinforcing upward cycle, more companies try it + more people try it, volumes
increase, repeat).

~~~
TulliusCicero
People have been suggesting this is gonna happen to Silicon Valley "any year
now" for over a decade. Instead the startup world just shifted its center to
SF, which is no more affordable than the valley.

------
TulliusCicero
> Basecamp is paying everyone as though they live in San Francisco and work
> for a software company that pays in the top 10% of that market (compared to
> base pay + bonus, but not options).

Most companies seem to use stock grants these days, not options, no? And
ignoring those means you're not actually paying comparable compensation,
right?

------
hashkb
The last paragraph (we aren't hiring) is key. Any SF company could pay SF
rates (they usually try to get out of it) if they played the same game
Basecamp plays (e.g. build profitable product, don't hyper-grow company).

------
leecarraher
I agree that many companies should pay more competitive salaries , but doesn't
this disproportionately hurt people in higher cost of living areas? Everyone
else gets a pay increase, the company's bottom line tightens, and higher cost
of living area folks get nothing for it. I live in an area with a relatively
low cost of living, and the only way I would consider moving elsewhere would
be if the salary were increased proportionately to that higher cost of living
such that I could maintain a similar level of comfort (beach+not negative
degree temperatures ~ a couple $K).

~~~
pc86
One of the reasons I can never work in the bay area. I'd need somewhere
between $300k and $400k cash comp a year to maintain an equal QOL, due mainly
to the cheap housing in my area. That's simply not attainable with my
skillset, which is much closer to CRUD/line-of-business applications than
senior infrastructure at Netflix or anything else that would pull that level
of compensation.

To me, this is a good move. As work becomes more remote, living in the super
expensive urban areas is a choice that has a price associated with it.
Everyone benefits when that choice isn't constrained by the need to be there
so you can commute 2 hours into a cube farm.

------
zerr
That's how you won't be whining about "talent shortage".

------
philipps
Another argument for globally similar rates could be that cost of living is
also to some degree a reflection of additional value (high quality education
and healthcare, safety, etc...) which individuals in low income locations
_may_ lack. Getting paid the higher rate is a form of compensation.

However, I haven’t seen the same argument for other salaries. What makes a
developer different from a musician, a lawyer, an architect? Or, for that
matter, from a teacher, a waiter, and a bus driver? Shouldn’t the same
argument that the work is the same apply?

~~~
jonlucc
I'm not positive, but for one thing, a developer can more easily work remotely
than most of the jobs you mention. That makes them more likely to be able to
find another job hiring from just about anywhere to compete on pay. A janitor
must uproot her life in order to move to the site of a new, better-paying job,
and that often comes with additional costs (not only for moving, but also
increased cost-of-living).

------
tareqak
Congratulations Basecamp! If anyone from Basecamp is reading, your
[https://basecamp.com/about/jobs](https://basecamp.com/about/jobs) and
[https://m.signalvnoise.com/employee-benefits-at-
basecamp-d2d...](https://m.signalvnoise.com/employee-benefits-at-
basecamp-d2d46fd06c58) still say "Salaries are standardized on the Chicago
market."

------
sidlls
I remarked in the earlier submission related to this that this is a great
event. It should encourage workers at other companies to take note and demand
better compensation from their employers. There's no good reason for pay in
this industry to be tied to geography.

------
a_imho
While the exact amount is interesting too, the linked article [1] sends a
stronger message.

[1] [https://m.signalvnoise.com/how-we-pay-people-at-
basecamp-f1d...](https://m.signalvnoise.com/how-we-pay-people-at-
basecamp-f1d04f4f194b)

------
chmars
It would interesting to get a list of the resulting net salaries after taxes,
health, retirement and social insurance premiums etc.

In addition, it would be interesting to get a comparison of the resulting
purchase price power in the various countries.

------
jbb67
Nice. Be interesting to see if this policy lasts through changes of management
and if it survives any reduction in profits or growth of the company.

~~~
hashkb
Their management won't change. They are profitable and employee owned.

------
MaggieL
Better not tell SF; they'll want you to pay SF taxes.

------
nkkollaw
I've been using Basecamp since version 1, and in my opinion it became worse
and more overpriced at every release.

I've recently signed up to see if I could use it for a team, and it was barely
more useful than a piece of paper.

Obviously its success proves me wrong, but I don't get it.

~~~
Danihan
Bad software makes $$$.

It's a trend I see over and over and over.

------
b6
> It started to increasingly seem like an arbitrary choice, and if we were
> going to make one such, why not go for the best and the top?

So you picked San Francisco? Not London, Hong Kong, Tokyo, Singapore, etc? Why
not pay everybody as if they live in Manhattan?

~~~
dennmart
As someone who worked in Manhattan and San Francisco and currently lives in
Japan, San Francisco wages for tech workers are definitely the highest and
most competitive that I've seen. You can argue that the cost of living offsets
the higher wages, but that's not what Basecamp or its employees need to deal
with.

