Sometimes, I read things by CEOs about how a company works on the inside and I wonder if it really looks like that, or if it is a view from the top that doesn't reflect what it's really like.
This article, with its discussions of the upsides and downsides, is accurate to my experience and my understanding of other people's experiences. For many people, Gumroad wouldn't be a great place to work, but for those of us who want to work like this, it is exactly what we need. Very glad to be working at Gumroad and working in the ways the article describes.
Edit: Following up with a few FAQs from posts in the thread:
* Health Insurance: I'm personally lucky enough to still be covered on my dad's health insurance until I turn 26, thanks to the ACA, though for supplementary (vision, dental) I make more than enough to afford proper health insurance on the open market. Everyone at Gumroad is paid very well and should be able to afford the same.
* Regarding overtime, benefits, etc: we make very competitive rates as contractors. I sincerely appreciate your concern, though.
* On the shift from full-time employees to contractors, the company declined and was rebuilt over a period of five years. I'm a relatively recent addition, so I only know Gumroad as it is now, I cannot comment on how it was. All I can say is that it's not like Sahil went out and fired everyone and then the next day it was a bunch of contractors.
> I make more than enough to afford proper health insurance on the open market. Everyone at Gumroad is paid very well and should be able to afford the same.
This might be true for everyone at Gumroad, but I wouldn't be so sure. You also seem dismissive (probably unintentionally) of one of the biggest problems we have in the US right now: health care and insurance is ridiculously expensive–especially for people with families who want to be self-employed or contractors.
A family of 4 who doesn't qualify for ACA subsidies is going to pay $1,400/month or more out-of-pocket for health insurance. And it goes up every year. Imagine paying 10%+ of your salary just for health insurance.
> Imaging paying 10%+ of your salary just for health insurance
I decided to actually look at my budget from the last year and see how this compares to my costs.
In Australia I pay about ~28% of my salary in tax. 2% is for medicare, and I have private health insurance on top of that for roughly the same cost again (for dental, which isn't covered in our system because of dentists lobbying an exception back in the 80s). You still have to pay part of most costs in Australia, looking at my budget that's come out to about another ~1% of my income in the past year.
So I pay 5% of my salary for health services. It's pretty much inline with other costs like food and utilities. Doubling it to 10% would be doable, but it would suck.
It seems that the US system doubles the cost and the extra money serves as the very healthy profit margin of their private health industry. Keep in mind Australia manages to sustain a private health sector off that 5%, this isn't abolishing private health by any means.
A proper government health system could probably be even cheaper than the 5% I pay because the US has much better economies of scale. Not to mention the benefit of untying it from employment.
I'm not really making a point here, your comment just inspired me to compare the numbers and it sure is grim...
> In Australia I pay about ~28% of my salary in tax. 2% is for medicare ...
This is a common misunderstanding in Australia.
The Medicare levy, as it's called, is an administration levy, not a 'this all goes to healthcare, and healthcare is only funded by this' tax.
Originally set in 1984 at 1% and guaranteed to never to go up <tm>, it is now at 2%.
(Aside - within two years it was raised to 1.25%, then in 1993 bumped to 1.4%, in 1995 raised to 1.5%, in 1996 the Howard government set a temporary <sic> increase to 1.7% (ostensibly related to gun control costs) which did drop back in to 1.5% the following year, but in 1999 there was an attempt to bump it up again to 'cover the costs of our military involvement in East Timor' - this didn't happen, but it speaks volumes. In 2010 we suffered the regrettable corruption of 'if you earn more than ~$100k AUD you will pay an additional 1.25-1.5% unless you buy private health insurance'. Further fiddling got us to where we are now. Much sad.)
Point being it's incorrect, and quite misleading, to assert that 2% of your salary 'is for medicare', as a simple breakdown for public health shows that, per-dollar, it's somewhere in the range of 10-25%, though because money is fungible, budgets are intentionally fuzzy, and definitions of healthcare somewhat flexible, an exact figure isn't easy to determine.
Fair point, I was looking up pay withholding breakdowns and that's all that's directly paid to Medicare.
> Point being it's incorrect, and quite misleading, to assert that 2% of your salary 'is for medicare', as a simple breakdown for public health shows that, per-dollar, it's somewhere in the range of 10-25%
I want to push back on this a little though.
The implication that it actually costs 10-25% of your salary is just as misleading, as individual taxes only account for <50% of government revenue [0]. 60% if you include other taxes reasonably attributed to an individual (GST and Superannuation).
So maybe a better middle-ground would be to say it costs 5-12.5%? Even then, I'm not sure where you're getting that upper 25% figure from, a cursory search shows _total_ expenditure on health care (medicare + private together) was <10% of GDP in 2013. [1]
Looking at the budget, it's ~14% of expenditure [2]
So if we assume that all this money is fungible we could expect that ~7% of my salary, or 8.5% of all tax I ever pay, goes to government health expenditures.
Adding on my private cover and out-of-pocket expenses get me to about 10%, exactly what the OP is claiming they pay...but that was paying for _just_ insurance. The US government still spends huge amounts on health care, so a chunk of their taxes are going there too, and there is the out of pocket expenses etc.
As you say, an exact figure isn't easy to determine. But comparing the 2% medicare levy + my private health insurance to the 10% OP's US insurance cost seems pretty reasonable. They are paying more than that for healthcare out of pocket and their other taxes, so am I. The deal in Australia still seems much better than the US one.
You're absolutely right, and my apologies. I failed to heed my own warning about the complexity of trying to reverse engineer these numbers.
I believe I was thinking - if not typing - that it was anywhere from 10-25% of the average person's income tax burden.
I found figures similar to the ones you did - around 14% of federal expenditure. There's local, as well as state, health costs, and those are funded via disbursements originating from federal budgets, but not tracked in detail in same. There's also aged care, which will come under this, much of which is semi-funded through ersatz religious groups that have their own tax avoidance schemes in place, and other complexities.
But the ~14% figure seems about right -- and reminds me that I also forgot to tie that back to OP's figures, which, prima facie, aren't too horrendous in light of that figure.
However, that assumes those insurance payments cover all (or the vast bulk of) costs for health care ... which they clearly do not within the USA health system <sic>. Copayments and exclusions appear, from what little I've heard, to be a significant cause for concern even for people with 'good' insurance coverage.
Just as an aside i think dental care in Australia is ripoff expensive. As anecdotal evidence; with the ban on international travel local dentists are apparently very busy as people can no longer fly abroad for more cost effective care.
I read somewhere that dental issues are universal enough that you don't get nearly the same cost averaging that you can get for other medical problems.
When I looked into it, dental insurance basically amounted to "a payment plan for dental expenses you would pay anyway"
Meh over a large population that is not actually true. Some people just don't make that much salvia for example and get dental problems way more than others, even with identical dental care behaviors and diet of someone with pretty much no dental problems.
Also it prevents bigger issues in the future that a socialized healthcare system would have to pay for. Cheap socialized dental care basics I think is a net positive for a society in general. The poor will be more productive and create more tax revenue than the amount of money put into it.
That’s because most dental care is predictable: prophylaxis. Insuring against it is just adding an admin fee. Insurance is good for unpredictable things.
As context for non-Australians, dental care has only very limited funding in the Australian public healthcare system. I have read that the government of the day thought that opposition from dentists might jeopardise the battle for public health cover. It is the policy of at least one party (The Greens) to expand dental cover under Medicare in Australia.
Part of the issue here too is that not only is US health insurance very expensive, but for all practical purposes it doesn’t kick in until you’ve had a fairly significant issue. So you are paying a lot of money for insurance you hope to never use, and in the event you need some kind of basic care you are still paying out - and have no meaningful negotiating power. I’m under the impression in most countries with single-payer / government run health schemes, you might also pay a great deal for your coverage, but that it’s all inclusive.
Also not a single mention in this subthread of what happens if you aren't poor enough to qualify for medicaide (in most states you have to be near-homeless levels of poverty), but not anywhere near rich enough afford a $1500 a month plan for your family.
In Canada the waiting lists for mri and other advanced testing can be long where the same tests/operations can be done as a walkin option that day in the US.
A substantial difference is that healthcare tends to be incredibly regressive in the US. People with good jobs that have good pay tend to get pretty good company insurance. People in jobs that don't pay very well tend to have bad insurance, if they have it at all. Bad insurance typically means you pay a lot of out of pocket costs, meaning lower earning people often pay more out of pocket for the same medical treatment. It's more poignant in reverse though; high earners should expect to pay less than low earners for the same medical care. If it didn't work that way, why would any of us pay for more expensive health insurance?
If you have bad insurance, your options are usually to do the walkin option and pay whatever your insurance won't. That's probably more than you can afford unless you're sick enough to get a doctor to order it (which often means you've missed a critical window in treatment options). Or you can try one of the clinics, and wait for forever trying to get it looked at. Or you can do what many Americans do and ignore it, hoping that it goes away on its own.
We do have better options than other countries, but whether those doors are open often depends on your income level. Socialized healthcare does equalize that, even if it means dragging down the standard of care for the wealthy in exchange for bringing up the average.
waiting lists "can be long" – it's time to stop parroting these misleading statements. They can be, if your test/operation isn't urgent. Urgent things are treated right away.
Frankly, as an American, I think we have shit quality of health service, based on the insurance cos' red tape and restrictions and paperwork alone. Getting healthcare in this country is a bureaucratic nightmare. Maybe the docs and meds and tests are good, but the overall service is bad.
(Disclaimer that I insist on Kaiser, an HMO – I would not live in a US area without it – which is pretty good, but helping family through health issues who had "gold standard" normal PPO was... different).
My friend in Vancouver had lung xray show up something weird and the doctor scheduled her for an MRI. The appointment was in 7 months. Instead she got the MRI in a private clinic for a pretty reasonable cost and came back with the results for her doctor.
If that's not indicative of something broken, then I don't know what to tell you.
If she was able to get the MRI at a reasonable cost, doesn't that suggest that the system isn't that broken? As far as I can tell almost nothing comes at a reasonable cost in the US.
I think the criticism is probably of the Canadian health care system a la "She had to go to another country to get her scan in a reasonable period of time (and that country has a terrible global reputation for being insanely expensive and broken itself in the health care department)."
>“In Canada, the absence of a private system is not due to the illegality of private health care per se,” reads a 2001 analysis in the Canadian Medical Association Journal. “Rather, the lack of a flourishing private sector in Canada is most likely attributable to prohibitions on subsidization of private practice from the public plan.”
> Extra billing is defined as additional fees charged by a physician or a clinic for a publicly-funded health procedure that is medically necessary, or when a patient pays out of their own pocket for such a procedure in a private facility
This is about extra billing, not per se about MRI. So still seems fair to me.
What do you think the odds were that it was something that would cause problems in fewer than seven months, or that if she experienced symptoms that they would move her up in line?
Genuinely asking, since I don't know any details about her situation or much about lung ailments.
I don't know the specifics, but there's also the mental cost of the doctor seeing something concerning enough that warrants an MRI and waiting 7 months just for the test; praying nothing gets worse in the meantime.
What were the results? If it was a serious issue that needed treated urgently there is a problem. If it was not then she was prioritised correctly and there's no issue.
I'm in Canada. In 2010 my son was unwell, having issues with lethargy, balance and vomiting. We took him to the local children's hospital and he had a CT scan within 2 hours and an MRI an hour after that.
As part of his ongoing treatment the hospital scheduled an MRI every 3 months for a year, then every 6 months for 5 years, and now it's annual. The scans happen on time every time.
Each province administers it's own health care. So the level of service and time you have to wait varies significantly depending on where you live in Canada. Waiting six months for a specialist appointment is not unusual, for example, in say Quebec.
Not so easy in the US. My sister is in the first trimester of her pregnancy. She had to go to ER last week because she couldn't eat (keeps vomiting and lose sleep because of vomiting). She was in a bad state (very weak and was almost passing out) when they (her in-laws) brought her there. They had to wait for 2 hours to be attended by the nurse/doctor eventually. It's not because the hospital was crowded with COVID patients (Rochester, NY isn't overwhelmed with COVID at the moment). It's mostly because there are few doctors assigned for each shift at the hospital (the supply of doctors in the US is scarce--partly because of the artificial restrictions put in place by American Medical Association [https://www.washingtonexaminer.com/thanks-to-doctors-there-a...)
When I broke my nose, I went to ER and registered at around 12am. A doctor finally treated me at around 8:15am. That's at the Strong Memorial Hospital in Rochester, NY ~6 years ago.
> In Canada the waiting lists for mri and other advanced testing can be long where the same tests/operations can be done as a walkin option that day in the US.
Are there no private MRI machines in Canada? In many countries with free healthcare, you can still "just walk in" to any private hospital/clinic and get an MRI done.
They did however bring some under the provincial healthcare fold, so general turnaround times have improved with more scanners... And they are running more often (they weren't running 24/7.
I work in imaging, visited 100s of hospitals in Canada and mainly USA.
Would be uncommon to see a unreported list in USA with exams 24 hours or older.
In Canada it was common to see months.
These are scans performed but not interpreted by a radiologist .
So for urgent cases(like dieing in the hospital), there is hardly any wait and read right away.
But if it's somewhat none urgent (friend waiting 1 year for a MRI for nerve/back pain), you might have to wait awhile for the scan and then the report.
If you in a population dense area, you might be waiting awhile, but may get quicker service in smaller nearby towns(I had a 3 month wait for. Knee scan, went for a 2 hours drive for a scan a week later)
Our public healthcare has caps on how much a radiologist can read/get paid, so there is no incentive in Canada for radiologists go full force.
In USA they are paid per exams, and depending on case types could be reading 100s per day.
It wasn't specific to MRI clinics, but they elimited two tiered healthcare opti9ns as some perception it benefited the wealthy, and would attract doctors to privatized healthcare, further impacting public healthcare.
Same thing for non-elective surgeries.
You can't goto a private clinic for a surgery offered under public healthcare
Basically removed being able to pay to skip the queue, some people felt it was unfair, and to uphold integrity of public healthcare...
In Ontario, private MRIs aren't allowed except as a third-party service — such as an employer paying through private insurance. Think professional sports team ordering an mri for a basketball player.
We all pay taxes that build and maintain our roads, but that's no reason to not shell out for an airline ticket if we want to get somewhere faster.
In my country I can see a doctor for free after a 0-4hr queue in a hospital waiting room or pay USD$10 to immediately see any of the dozen private doctors within a 5 min drive of my home.
My taxes already pay for free healthcare, but I'm more than happy to pay more to avoid wait times.
But I live in the "third world", so I understand your experience might be different.
I think the waiting lists can be exaggerated sometimes. There are definitely waiting periods, but if something is a priority, things can move pretty fast.
As well, I'm basing this off not a lot of evidence other than doctor shows (which I recognize are probably ridiculously inaccurate), but I get the impression that (for those who have the right insurance) in the U.S. that testing and imaging is overprescribed, and doctors will often order an MRI when an ultrasound or a CT scan would be perfectly fine. So even if MRIs have a relatively longer waiting period, it's overall rarer that you'll need to get one in the first place (and CTs can usually be ordered fairly quickly - I had one today that was booked within a week for relatively minor symptoms)
> I think the waiting lists can be exaggerated sometimes
In fact, you can view it this way: the waiting lists are long because the important things are prioritized. People who really need treatment fast are being consistently moved to the front of the queue with no option to pay to get ahead of them for people at lower priority.
My reference point is Australia, and it was awe inspiring to see how fast things moved for a relative with breast cancer.
I was on a 5 month waiting list to see a provider that took my insurance in a major metro area in the US. Even if I chose to pay for visits upfront and in cash, there were still 3+ month long waiting lists from other providers.
I've also learned from friends who have family members with substance abuse issues that there are 6 or more month long waiting lists for even out-patient rehab, and for doctors that specialize in treating substance abuse. Addiction is often deadly, so it's pretty urgent to treat.
I just looked into it now. As of 2018, apparent 38% of Americans are obese and 28% of Australians. So it's probably a difference that _does_ factor into costs, but I wouldn't know how much.
That is such a big difference. Is it food suply related or lifestyle? The states with larger cheese production tend to be heavier than hotter states which could mean location might be the cause but it might be genetic.
A related factor: US sugar subsidies make sugar expensive, so a lot of manufactured foods in the US contain High Fructose Corn Syrup (HFCS) instead. On a kilojoule-for-kilojoule basis, excessive intake of HFCS is a lot more harmful to health than excessive intake of sugar is. By contrast, Australia has a long history of being anti-agriculture subsidies, and fewer foods here include HFCS (most of those that do are imported from the US)
> excessive intake of HFCS is a lot more harmful to health than excessive intake of sugar is
That's mostly an inaccurate myth that has persisted for decades. Despite the "High Fructose" part of the name HFCS, the balance of fructose and sucrose in HFCS is roughly the same as regular table sugar, 50/50. HFCS 90 is actually worse for you than table sugar due to it's high fructose content (which is primarily only absorbed in the liver, unlike sucrose), but it is rarely used and the taste is very sweet compared to normal HFCS or sugar.
You can easily search for tons of sources (queries as simple as "HFCS vs sugar" will give you decent results), but including one to back up what I said above:
There's chemical differences and some HFCS is a lot more fructose than sucrose. But, yeah, I also haven't been able to find any conclusive evidence that it's any worse with your garden-variety HFCS
In the US a good chuck of federal & state taxes go to government employee health care, active soldier & veteran health care. This added to medicare tax and health care premiums and medical expenditures gets me fairly close to the 18% of US GDP spent in the medical sector.
My company pays $3,000/month for health insurance for my family of 5. I assume it's pretty good insurance at that price, but we still have to fight the insurance company tooth and nail whenever we have medical bills.
The total cost of healthcare is high and allocated all over the place in the US depending almost solely upon the mercy of one's employer. From a total systemic cost the US has the highest cost in the world per person on every metric possible. What typically happens is many will simply drop from insurance pools and because they tend to be poor make the statistics for the insured look better, which makes our conservatives believe the system produces better health outcomes similar to the statistics for charter schools. I'm quite sure that the actual cost per person for the Netherlands is not actually what the system pays in total because there's taxes whether levied upon income or at the side of an employer or other non-government entity will make up the difference. In the US, unless you're desperately poor or retired (Medicaid or Medicare, respectively), your insurance plan is essentially whatever pricing the market will bear, which means "whatever insurers and health providers charge each other."
Family of five, $2000/month on ACA for a high deductible plan with a lot worse coverage than I used to get at my previous four employers. No vision insurance, and pretty weak dental too.
ACA is not a great alternative and I lament the fact that I pay more for health care (even if I don't use it at all) than I do for my mortgage, utilities, internet, and phone bill every month. (Midwest, LCOL).
> Imagine paying 10%+ of your salary just for health insurance.
In Germany it's 14% that is split between you and your employer, so I guess you'd have to all of that on your own if you are self-employed. Granted, you can also choose to have a private health insurance which will seem cheaper but gets outrageously expensive with ages and it is very very difficult to get back to statutory insurance.
To my understanding this plan should include the spouse and any number of kids up to the age of of 23 (age limit for the kids, not for the spouse of course). Dental care and eye care might be a bit limited in these kinds of plans. This means that you have to pay extra if you want more then the medical necessary minimum.
In Sweden, about 9% of my salary goes towards healthcare and I pay almost nothing extra for any of my healthcare needs. This 9% also covers things like elderly care and I don't lose this benefit if I lose my job.
> This might be true for everyone at Gumroad, but I wouldn't be so sure. You also seem dismissive (probably unintentionally) of one of the biggest problems we have in the US right now: health care and insurance is ridiculously expensive–especially for people with families who want to be self-employed or contractors.
I don't want to be dismissive, but with a full remote job why not go live in a country where healthcare is a thing? Especially if you have a family. Now that I'm writing that, I realize that it might be hard to get a Visa.
Replying to this directly because I'd otherwise have to reply to so many other sibling replies individually with overlapping versions of this :)
Just for comparison.
Disclosure: I no longer live in Germany _but_: In Germany, 90% of people are insured via the mandatory public health insurance system (do a Google translate on https://www.bundesgesundheitsministerium.de/gkv.html, which is the official federal health ministry website). That's 70 million people out of ~83 million in an estimate of 2019 according to Wikipedia. There's still a bunch of different companies that provide coverage under this public system. I remember ~15%+ depending on which company you went with for health insurance. And that's the _public_ system.
You can play around here if you want: https://www.brutto-netto-rechner.info/. I plugged in 70.000EUR per year (which is reasonable for a senior dev depending on city (i.e. this is way more than I was paid in Frankfurt 10 years ago but we're talking different level and 10 years ago ...) but you'll get less even as a senior today probably if you're in some "flyover state" equivalent of Germany.
Where it says "Rentenversicherung" that's your pension.
Where it says "Arbeitslosenversicherung" that's your EI.
Where it says "Krankenversicherung" that's your health insurance. Remember, this is the public system, which has been going way down hill since I was working in Germany. Nowadays you gotta have a separate insurance for certain things in dental care for example, that were just covered for me, when I was there.
So for my EUR 70.000 / year example health insurance is ~4.5000EUR or about 6%. You gotta remember in that that the employee and the employer share this 50/50, meaning the ~4.500EUR is for the employee only. The employer pays another ~4.500EUR (officially the public health insurance system rate is like 15% and there's all sorts of rules about what extra percentage a public health insurance can charge and different companies charge different extra rate to try and 'compete' with each other.
So with all this in mind and percentages already given (and please do look up the German "progressive tax system" as opposed to the tax bracket system in the US and Canada), 70.000 EUR is about 86.000 USD or 4.500 EUR being about 5.500 USD.
I'd say it's relatively affordable if you are employed in a company (even though some things like dental care etc you'd have to pay for it yourself if you are doing more than two checkups per year afaik or basic filling) but if you're self employed, you'd have to pay the 14% all by yourself which is a lot!
That $1400 sounds super low. Last time I saw what my employer paid for my health insurance, it was $1500/mo, for just me. And if you're buying insurance on the open market, it's more expensive than it is for an employer.
I live in The Netherlands as a freelancer, and thus there's no employer in between that obscures taxes somehow. It's all visible to me, and I pay roughly 8% of my income on health insurance.
The Netherlands is just this tiny little kingdom in Europe that basically has all their ducks in a row. Nothing is super great, but nothing is bad either. It's my gut feeling that anything around 8% is really just the cost of health insurance that covers mostly everyone.
$1,400/month for a family of 4?! Lucky you! The cost greatly depends on the oldest person in the family, not on the health status. I'm 46 and the premiums are nearly $3,000/mo for my family, but, glory to God, we almost never have major issues, but I'm sure there are young people who drain the insurance more with risky lifestyles and unhealthy behaviors. How is this fair? Also, isn't age a protected class to penalize based on it in pricing? Meanwhile, I can't recall seeing a senior citizen discount in many years. I know long ago they removed "free entry" and other benefits for which only women were eligible for. I was finally offered a high deductible plan with HSA so I don't lose all the money when I don't use it.
Don’t forget almost 10% sales tax on most things you buy, the most expensive gas in the country, and property taxes that–while low compared to other states–are still applied to much more expensive properties.
> insurance is ridiculously expensive–especially for people with families who want to be self-employed or contractors.
That cost doesn't go away for people who are regular employees, it just gets absorbed by the employer. That's a big part of the reason you need to make more as a contractor than as an employee. Lots of costs get covered for you pre-paycheck as an employee that you have to pay post-paycheck as an independent contractor.
In the USA ~17% of GDP appears to be spent on health care. I guess that skews fairly heavily toward elderly people, but 10% on health insurance for a family of four doesn't seem out of the realms of sanity.
By itself maybe not. The problem is I live in California, which means I pay about 40% income tax (state and federal combined). Yet I still don’t get health care/coverage.
Also notice how the gap in that graph is getting wider. It gets worse every year.
A consequence of the US being richer. They spend more on education too. Baumol’s cost disease means as a country gets richer more money will go to labor costs and medicine is really labor intensive. I’m not sure I’d say the US needs more healthcare so much as they can afford it and that’s how they choose to spend the money. Healthcare and education will soak up a practically unlimited amount of money, and if you’re the richest country in the world you have more money. The US has higher household consumption than anywhere else bar Hong Kong. Rich countries spend more on healthcare and the US is the richest.
As another data point, I pay ~$350/mo for a low-deductible, high-quality HMO ACA plan as a single male in Maryland. (It would have been $550 in California).
I'm incensed at the idea we leave families out in the cold like that - IMO healthcare should be free - but I don't find my care to entirely unaffordable.
Process is one of those things you have whether you think about it or not. It's up to you collectively to decide if it is BS or not, too heavy, too light, etc. I'm not suggesting everyone has the influence to change process much at the place they work, but they idea that there is a single "thing" called process and some places have it and some don't is just dangerously misleading.
It is true that process tends to naturally scale with org size and longevity because communication becomes more complicated with this scaling - but that only gives you a bit of a lower bound (i.e. if you go below this, you start shooting yourselves in the feet)
It really depends how that process is adopted. If it's organically in-house grown and it does makes sense then it becomes a synergic glue. If it's imposed top down from the outside because "that company does it, lets follow suit" then it can become a pain and cause more harm than good. I liken that to goo.
This is always a red flag I'm dealing with someone inexperienced, or desperate. Processes can be very unique to each company, especially the problems that they're facing, and trying to shoehorn someone else's process into your own business without understanding the problems that process is solving is a recipe for failure.
There are two sides to that. Some processes grow organically in house in ways that ignore industry best practices. Everyone likes to think that their organization is special but few really are. They could often benefit from an improved process imposed top down by someone with broader experience and an ability to see the big picture. Of course changing processes always involves some short term pain.
"Process weight" is a good concept I wished more people understand. Building released-to-web software without hardware, big teams, long-term API support, etc. should really have almost no process, except for maybe high-level prioritization of features/functional areas (which a small-company CEO or PM can do). Reflecting on my own experience, it's the micro-management of most development processes that kills me -- 45 minute stand-ups where I'm arguing over whether something will take 2 or 4 hours. I honestly don't know and the powers that be just can't accept that. "How do you not know how long doing that will take!?!"
I think most teams would be capable of this, it's just that the people signing the checks get really, really uncomfortable with the apparent lack of accountability.
it's the tension between the bean-counter side of the company (finance, top level management, marketing vis-a-vis timelines) versus the creative side of the company (design & development, R&D). One side requires rigid predictability to perform optimally and the other side flexibility and ambiguity. Where the line is drawn and expectations are set is a function of company culture, hence why bigger companies/enterprises tend to come down heavy on requiring estimates.
(I don't mean bean-counter pejoratively; the world needs order and predictability just as much as it needs creativity).
Agreed. One additional source of disconnect in discussions is that the appropriate amount of process varies depending on what your goals are, your team composition (seniority, personality, communication styles, etc.), your regulatory environment, and myriad other factors.
If you're early-stage Facebook or most consumer-facing recreational apps, "move fast and break stuff" with minimal process is great, since the potential downsides of pushing a bug to production are usually far outweighed by the value of iterating quickly. You can trust your developers to do the right thing, because for the most part developers will, and on the rare occasion that someone doesn't, the consequences are not severe.
If you're Signal, or a FinTech company, or NASA, or a medical device company, then you need significantly more robust process to ensure that appropriate quality control, chain of custody, etc. is being applied at each stage of the process. Trust alone no longer works because even though it will get you the result you need _most_ of the time, that is not a high enough success rate.
Put more generally, more/improved process is required when you cannot tolerate a given failure rate, and in general you trade off throughput against failure rate.
Having said all of this, many companies cargo-cult Google and add process when they don't need to raise the quality bar, or implement poor process that fails to increase the quality bar; these would be examples of bullshit process as the GP puts it. However I feel like we're often not presented enough context to disambiguate appropriate process from BS.
Surely, you have a process that you follow in your own work though?
There are formal codified processes and there are informal tribal ones. Often when I hear people have disdain for processes, it’s usually they don’t like someone else’s process. Unfortunately, standardized processes tend to become more necessary as systems get more complicated in order to ensure an operation becomes fault tolerant by not being reliant on a person that may leave but instead reliant on a process that stays.
Processes mitigate risk. Just because that risk isn’t important to you doesn’t mean that risk isn’t important to someone. With that said, there are smart, efficient ways to mitigate risk and there are inefficient, burdensome ways
> Surely, you have a process that you follow in your own work though?
Personally, no. I have spent enough time at enough organizations to simply adapt to whatever they do. But if I want to write some code I just do that. I might toss in testing or whatever for bigger projects, but it’s all ad hock.
Processes are about repeatability, but for personal projects you can customize based on more specific goals. If I want speed, accuracy, or whatever I am going do made different choices. I am even going to change things up based on whatever mood I am in at the time.
The moment your personal project becomes an open source project with you as the maintainer, there will be process. Manually making releases without any process gets real tiring, real fast.
> There are formal codified processes and there are informal tribal ones
True but misleading. A lot of the time the difference is simply doing a bunch of process activities versus not doing them. E.g. imagine team A develops software in a more-or-less sensible way, and team B spends 80% of their time doing the same things that team A does and 20% of their time estimating how long those things are going to take. It seems fair to say that team B has not just different processes from team A or less formal processes than team A, but actually has more process than team A.
> Processes mitigate risk. Just because that risk isn’t important to you doesn’t mean that risk isn’t important to someone.
Processes can be a mechanism for mitigating risk. They can also be entirely devoid of value.
I'm not saying all process is worthless, but someone who wants you to follow a process should be able to tell you who that process benefits and how. If the only reason you're following the process is because it's the process, it's probably a waste of time.
I’m not sure we’re talking about the same thing. What you’re talking about is the difference between value-added processes vs busy work disguised as risk mitigation. Both are processes but of differing value.
Pointing out bad processes does not refute the point that processes exist and they exist because somebody is trying to mitigate a risk. It’s just a comment about the effectiveness of the process design.
In that case your claim is completely unfalsifiable. I might equally well claim that processes exist because they're works of art, and the fact that some processes are not aesthetically pleasing doesn't refute that.
How is “the intent of a process is to mitigate a risk” completely unfalsifiable? Is your claim they exist simply because they exist and have no underlying purpose? You can evaluate the risk, as well as evaluate the effectiveness of the process at managing the risk. You falsify the intent by describing the relevant risk severity/probability reduced by the process.
You not agreeing with the risk assessment is not the same as denying the intent. It’s also not the same as saying it’s effective at managing the risk.
If there’s a required review, you may think it adds no value. But you may also be ignorant of the downstream risks it mitigates. “You” may not care, but somebody downstream does. “Your” ignorance of the situation doesn’t invalidate the process, although it may speak to poor leadership in terms of making sure people understand why the process exists. You can, however, invalidate the process by interrogating the intent. E.g., maybe the downstream interaction has changed and the review is no longer necessary. Maybe the probability has dropped enough to become a negligible risk because of a design change. The process can be falsified in terms of meeting the intent because the risk would no longer exist.
Re-reading this, I realize it’s needlessly wordy. To condense my point, you can simply ask, “what risk is this process trying to mitigate?”
If the answer is “none”, it validates your point that the process is needless and the claim about risk is proved false. But most responses will be able to articulate what the risk is, whether it’s relevant to your position or to someone else.
> But most responses will be able to articulate what the risk is, whether it’s relevant to your position or to someone else.
Not my experience at all. Most responses to the question as phrased would be "huh?"
I would claim that most processes are not born of an intent to mitigate risk; in my experience there's rarely an intent at all, people cargo-cult the idea that they should have processes without understanding why or even conceptualising that there should be a why.
I think I may understand why we’re slightly talking past each other on this.
I’ve certainly worked in organizations that continued processes out of sheer inertia of “this is the way we’ve always done it.” While someone may have inherited a process and continued using it without understanding why, if you reach back to the initiator they will have a risk they were trying to mitigate. Even if their predecessors are oblivious. Again, I would chalk this up to a failure of leadership to explain the “why” when passing it off rather than a failure of process.
Even in instances where people copy processes just because they are emulating a different org, that original organization had a risk they were mitigating. Blindly following suit like an automaton says more about the person pushing it than the validity of the original intent.
A process can certainly outgrow its intent. If I am prescribed medicine and blindly continue taking that medicine after I’m well, it doesn’t mean the there was no original, valid intent. The risk profile changed; the process did not update keep inline with that changed risk profile.
I've worked with many organisations that had processes, that placed a lot of value on process. At most one of them would have described their processes as being about risk mitigation. For all I know it may be true, as a kind of etymological curiosity, that the concept of process originated as a means of originating risk, but that's certainly not a useful perspective for understanding how and why most organisations that adopt processes today do so.
Processes mitigate risk of repeating a mistake, but they don't prevent new ones, unless you have very wise people building them, and keeping them current.
Processes can be thought of as an institutional form of OCD. There are costs, and they shouldn't outweigh the benefits.
>Processes mitigate risk of repeating a mistake, but they don't prevent new ones
I’m not sure I fully agree. Reactive processes prevent recurring mistakes, because they layer on a requirement to close a gap. I think people can go overboard, particularly when they are myopically focused on a single risk in their wheelhouse and miss the big picture.
Better processes can be more proactive. For example, a process requiring a failure-modes-effect-analysis can identify potential faults that have never been experienced. Developers may feel like they don’t need to work on an FMEA because they “know what they’re doing” and miss latent failure modes
Work on what, though? Work how? What gets prioritized? How are things released? How are issues handled?
Without process, more employees just increase entropy. The process brings everything together.
What’s described in the OP is a process. I run a very similar process myself - contractors, minimal friction, weak deadlines, no stand ups and all. Supremely effective.
Exactly. Good process is there to protect you, bad process slows you down.
For example, in companies that deal with medical data/PHI/PII, having to go through processes is necessary because of liability, no way of getting around it.
I personally don't dislike people but prefer small teams where we almost get to read each other's mind. There's no magic formula for that, it's just compatibility and it usually forms organically. But I also like to get some 'let me think alone' time without which my performance starts slipping..
I'm curious how they hold their technical architecture together. Is the architecture mature enough that there are no decisions to be made? I know if I ran my team without syncing up directly on things we'd end up with horrific inconsistencies all over the place and it would become impossible to support. I would guess longer term quality would suffer as well.
how do FOSS projects run by volunteer contributors hold their architecture together?
either one person is calling all the shots, or decisions are made through email discussions or irc or whatever forum they favor nowadays.
synchronous meetings are not required. if you consider that in a meeting everyone takes their turn, people respond to each other, and eventually maybe vote on decisions, all this can be done by email. it just takes a bit longer, and you have to factor that in your time planning.
not having meetings doesn't mean that people don't talk to each other.
They say that they write a lot, so maybe what other organizations do with direct sync up, they do with detailed documents and async discussions around those documents.
Are you willing to provide any additional clarity on "very competitive rates as contractors"? I understand if not but would be useful to help some of us externally think about this model.
Honestly that's very nice money and more than I make full time. I'd happy take a role like that and work (10 hours per week?). Even if I wasn't that keen on the role (that's 30 hours per week to do what I want!)
I'm not sure where the company nor the employees are based, but it does seem ridiculously high and probably more than what 90% of the people in this world earns while working full-time. With that high salary and low amount of hours, I would personally feel bad, as the contrast against my peers and people around me would be too high.
But then you’d also be able to afford spending it helping your community and giving some to local or non-local charities
Heck; I’ve always thought that the first thing I’d do after winning the lottery would be paying off my parents’ mortgage ¯\_(ツ)_/¯ (disclaimer: haven’t won yet)
Indeed I could, but I much rather hire two co-workers and cut my salary is three pieces and give them one piece each, if it would come to that. Life's more than money and people jump on the chance to do something they find is meaningful.
You might feel that way but remember how much profit tech companies make. I know of small companies that make millions in profit and don't pay their staff even competitive rates. Diverting a bit more of that profit into someones salary seems fine to me. The example here is Gumroad which is very profitable.
Money is not how you count if you made it. I made as much as OP at that age (and am now a few years older) and I'm very far from making it. Millions don't go as far as they used to when everyone around you is even richer.
With all due respect, your comment suggests that you were spending beyond your means, or keeping up with the Joneses. Millions go very far if invested properly and drawn down properly so that the principal is never touched. If you're spending the millions instead, then yeah, that's definitely not gonna go far.
There's a huge trough in what you can do with what you can buy when you earn between $80k a year and ~$8m.
It's the same shit just better.
Your shitty commuter house 3 hours out of town is now a mansion 20 min outside of town. Your shitty 1990 ford fiesta is a very nice 2020 BMW. Your shitty healthcare plan is a great healthcare plan, but the main difference is how nice the plants at the doctors office are. If you want to get a divorce your new partner looks a lot better than your old one. Your furniture isn't chipboard from Ikea, it's hand made ethically sourced mahogany. Your flights aren't economy class, they are business+/first class. You don't have to run your washing machine, you pay someone to do it.
If you want anything interesting, like say a nuclear reactor in your basement, or a jet two seater Canard, you can't afford it because no one makes it. Unless you have the connections to start a company to make them, or have literal billions lying around, you don't have the resources to do anything but live middle class+.
Sure if you try to go up in quality you hit diminishing returns. Not quantity though. $80k and you're working for the rest of your life. $8m and you retire at the end of the year.
Respectfully - and I'm sure i'm just missing something - but I still don't actually understand what you do. The only thing I can see that makes you money is a subscription service to help people how make money on the Internet.
It really depends and I don't track my time all that well, though one of my 2021 things I'm doing is trying a bit of time tracking, just for my own sake / more visibility on how I spend my day.
their official deal is well known - it's a quarter time role so formally about 10 hours a week. of course, the time they end up actually putting in is up to them.
People don't realize that as a contractor, you can write off the room you're using for your office. As a remote employee you cannot. For people living in high rent areas, that's significant.
Where I live that office has to be a "proper office" in a sense, where you could have clients stopping by. Not just working from a room next to your exercise bike and laundry. Here the tax law is mostly written with hair stylists and others in mind, using a room for customers with its own entrance.
Countries like the Netherlands expect you to have a separate entrance and bathroom before you can claim it. Others allow you to claim a percentage of your living space and utilities. It varies around the world.
Sites like HN, reddit, Twitter etc are de facto US based, assume if no country or jurisdiction is specified that it's the US. Now, which state it is in the US is a different matter.
That's fine, some people are of course. But when you look at what people mean when they provide no jurisdiction, it always seems to mean the US. That's all I meant by de facto US based, because if it weren't, wouldn't people state the jurisdiction as "US"? They don't, so it must mean that the US is what is assumed.
You can in Australia. I am and have done so for many years. This was also the case prior to Covid. The tax office did make some changes last year to make it easier for people to write off certain expenses when working from home. [1]
These changes did not impact me though however, as the new "quick and efficent" method still provided me with a much smaller tax return than documenting all of my own costs. [2]
Not always. Highly dependent on country/state and actual usage of space (dedicated office space vs a desk/chair in the corner of the bedroom). Hire a CPA if you are unsure.
> In practice, we pay everyone hourly based on their role. The range varies from $50 (customer support) to $250 (Head of Product) an hour.
> Recently I standardized our rates world-wide
> We also have an “anti-overtime” rate: past twenty hours a week, people can continue to work at an hourly rate of 50 percent. This allows us to have a high hourly rate for the highest leverage work and also allows people to work more per week if they wish.
> Everyone at Gumroad is paid very well and should be able to afford the same.
Have you looked at how much decent health insurance coverage costs on the individual market without income-based ACA subsidies?
It's absolutely insane, and even more insane if you want family coverage. For a similar, but nowhere near equivalent, of an employer provided healthcare plan, I'm looking at spending more than $9,000 in premiums each year, a $3,000 deductible, a $8,000 out-of-pocket maximum and co-pays for doctor visits and medication.
If I add a spouse and one kid, for a plan similar to an employer provided plan, premiums sky rocket to over $30,000 a year, with a $5,000 deductible, a $17,000 out-of-pocket maximum, co-pays etc.
Bingo. Saying that the employees are paid well enough to buy their own health insurance is a red herring because it's not an apples-to-apples comparison, companies get far better rates on insurance products. Gumroad could probably save a significant amount of money by providing health insurance to their employees and just not paying as high of a salary.
Company provided health insurance creates incentives for employees to delay leaving and stay in jobs they don't like anymore. This lowers the quality of life for everyone involved.
That's a pretty weak arg all around. I'd wager this is a rare situation, compared to the number of good employees recruited and retained by offered quality benefits.
> Everyone at Gumroad is paid very well and should be able to afford the same.
I wrote a long and very emotional response to this. In the end I decided to simply say that, if I worked at Gumroad instead of at an employer who pays me about 10% less but pays even just part of the premium on mediocre health insurance, the events of the last six months would have killed my partner, bankrupted me, and left me widowed and homeless in the middle of a pandemic.
At best, I'd be six figures in medical debt.
At worst, I'd be seven figures in medical debt.
You all can go without insurance? Great. That's great _for you_. Congrats _to you_. Good luck _to you_.
Yes, the system is horrendously broken. But just acknowledge — just _acknowledge_! — that it's a massive, massive, massive privilege to be able to afford to work a job that doesn't offer health insurance in the United States as it exists right now.
Consider how many people absolutely cannot fathom working for Gumroad as a result. I don't want to hear you do it. Just think. Think about it. Please!
I work for a large SaaS company with hundreds of engineers and a very healthy revenue. It's widely acknowledged that the company would continue to function exactly as it is now for a very long time if they fired 95% of the staff. Heck stability and uptime would probably improve due to fewer deployments/no new feature adds. So the graph with declining expenses and increasing revenue isn't at all surprising.
The problem with this model is that you are coasting on the work done by your full time staff in the initial few years, whom you fired and replaced with part time contractors who get no benefits. Even putting the ethical issues with this aside, if a competitor takes interest in your space and has a large war chest, you'd be powerless to compete with them. And when your tech is dated and current/new customers want innovation, your low-price contracting firms working a few hours per week certainly aren't going to be able to offer that.
So while I'm happy things are working in this case, no new company that starts with the environment you are describing is going to be successful.
> if a competitor takes interest in your space and has a large war chest, you'd be powerless to compete with them
If that were true, every single company that had more money to spend would always win. But that's not what's observable. There seem to be other factors at play that don't always center around money.
> no new company that starts with the environment you are describing is going to be successful.
That would mean no upstart could ever compete in the same space any established player. But again, that's not what's observable.
It appears to be much more multi-faceted than just "he who has the most money always wins."
Not all companies desire to be acquired, even when offered. Not all deals go through, even when desired. We often hear of those that do get acquired, more rarely those that don't - Facebook has notably failed making attempts. Those companies are still going strong. Facebook didn't kill them.
Maybe it's not what you would prefer but the owners of those companies probably saw themselves as winners. Unless Zuckerberg forced them to sell at gunpoint?
no, because the point is that the company has fundamentally changed it's structure. So it would be hard to create new features when they lack a culture for doing that
If a competitor takes interest in your space, and you're already profitable, they're as likely to acquire you as compete with you.
A fully VC-funded SV unicorn is gonna demand a pretty high price tag. There's a lot of mouths to feed and liquidation preferences to payout. OTOH, $10 million is a pretty attractive payout for a single person, or even a handful.
Large companies are mostly looking for rapid growth and/or talent when they consider acquisitions, and this one has neither. Single-digit millions in revenue is inconsequential in the industry today.
You're missing IP acquisition which is the third well considered type of acquisition consideration. Not saying you're wrong here just wanted to add that.
A substantial potion of the part-timers could temporarily increase their working hours, possibly doubling or tripling the rate of progress overnight. The company of part-timers effectively has an additional prequalified workforce waiting in the wings for emergencies. The company would then have a period of time to put arrangements in place to bring each person's hours back to previous levels.
Assuming the part timers don't have double jobs (which is unlikely if they work about 30 h for you, at least then you're likely the more important one to them)
That's the price that's paid for such leverage. High employee count is better protection from competitors but more expensive. Leaner teams are cheaper but may be susceptible to competitors. Of course, caveats abound as many times leaner companies are the ones that can move faster, see startups.
This is all very similar to standing armies. The more people, the more expense but better protection. What countries do, therefore, is let other countries do part of their jobs, ie US protecting many other countries who don't have large militaries. I'm not sure what the analogue is in business, maybe partnerships?
In years to come we will look down on the 5 day working week in the same way we currently do with 15hr factory shifts during the industrial revolution.
It absolutely blows my mind that 99% of office roles are still 5 days / week, Monday to Friday - why is there basically no variation on this model? I'd be more than happy to work a job for 80% salary for 4 days per week...
So much so, I'm about to launch a website listing remote software jobs with a 4 day work week:
Some of it is a quirk of the American health care system. Your health care costs the same regardless of your work hours, and it's a significant fraction of compensation. If you were working 80% as much, they would probably only be able to pay 70% of your salary.
(Assuming you were linearly productive, which it's not, but it's the same assumption you were making and is good enough for this illustration.)
There are other fixed overheads, like your manager, human resources, the office itself, and even the cost of hiring you in the first place. It's possible that to make all things equal, they might have to change your salary to as much at 60%.
Of course all things are never equal, so these numbers have really wide error bars. And after all that, you might well decide that 60% salary for a 32 hour week would still be a good deal. I know I'd consider it. But it's important to note that it's going to be rare to find a job that will pay you 80% as much for 80% of the work.
I don't think that's a quirk. In Germany the public health insurance is based on your salary, but private insurance is not -- and independent contractors (such as everyone working for Gumroad) are required to use the private option.
From the private insurer's point of view, it would be crazy to charge more or less based on how much someone works or earns. The public insurance does so out of a solidarity imperative coming from the government, and is subsidized as needed to make that possible.
In the US, there is no public option. Feature working as designed, for better or worse.
Contractors can buy the public option are actively discouraged from doing so because they are on the hook for both the employer and employee contribution. Also ofc there is the "if you have ever been privatly insured you cannot simply go back to public". But for contractors with 2-3 kids public might still be cheaper than private.
It wouldn't have even occurred to me to switch over to private if I became self employed, just assumed you would price the employer contribution into the day rate. Is switching to private widely expected? I would've thought that Germans were more biased towards the social solution.
Since the day rate varies wildy I wouldn't say that you can't compete if you stay in the public system but your baseline cost will be 5-7% higher than someone who switched to private. Also private insurance is typically considered "better", at least wait times are often reduced.
All of this being said I think the German private/public hybrid is pretty bad. Sure, they make it harder to go back to public when you get older but you can always accept a part-time job for a while and be "forced" to buy public.
>If you were working 80% as much, they would probably only be able to pay 70% of your salary.
...why? Unless there's an implication that they'd need to hire more people, why would they need to pay you less? If you're generating the same amount of revenue, just working fewer hours, their fixed profit should be able to cover your fixed healthcare whether you work 80% of the time or 10% of the time. As long as they aren't incurring additional expense by hiring multiple people to do the same job to facilitate fewer hours.
A shorter work week obviously can't work for all businesses, but there are plenty that have tried it and found that workers spend more time working and less time socializing with a shorter work week (which would seem to be a win for everyone).
>Unless there's an implication that they'd need to hire more people
I think you hit the nail on the head. IF the company needs a someone M-F for 40 hours of Bug-fixed/widgets/ect, they will have to hire to fill the gap.
If the last 20% of the worker's time is truly non-productive, then the company is already over paying and the worker is wasting their time.
> If the last 20% of the worker's time is truly non-productive, then the company is already over paying and the worker is wasting their time.
I think it's a misconception about worker productivity: you need to optimize the overall system, which will require having slack in some places that are not a bottleneck. "The Goal" by Goldratt is a good explanation on why that's the case. Any attempt to locally optimize to keep everyone busy sooner or later kills the overall productivity of the system.
How this slack is used by the workers is a different question, but if someone wants to use it to improve the system, to improve themselves, or simply to recharge, I think it's up to the worker. The goal is not to keep everyone busy; the goal is to provide optimal results using available resources.
if you worked only 80% but is able to generate the same revenue as working at 100%, then surely one of the following must be true: you either slack off the 20% of the time, or the company is overpaying you for the work you do!
Therefore, it must be assumed that if you worked only 80% of the time, you're only 80% effective. So the fixed cost of an employee doesn't decrease when they work only 80% of the time - so it becomes more expensive than just cutting the salary by 20%.
> Therefore, it must be assumed that if you worked only 80% of the time, you're only 80% effective.
This is the exact logic that is causing the issue. I would posit that a statement like this could only be true in an environment such as a factory line, where the output of widgets is truly linear over time.
Study after study have shown that for information workers, there's a strong trend of diminishing returns as workers clock more time.
Modern offices are truly an exercise in Parkinson's Law.
Further, I would speculate that the way companies encourage employees to optimize for duration of time on task leads to an insidious effect of individuals adopting less efficient methods to complete work, as there is no incentive to finish tasks more quickly within a timeframe when any time saved isn't recovered to the individual.
Depends on the type of work you do and what the company pays you for. It is the means (your time)? Or the outcome?
Had quite a few clients and employers asking and haggling over trying to get it both ways.
If you consider a creative job where you only care about the output, then the more creative it is, the less (above an undetermined threshold) time spent working and output are correlated.
The means (again, time spent) not being an accurate predictor of the outcome, they don’t matter much, and there is no reason to tie the salary to them.
If you consider a non-creative (factory / fruits picking) or vaguely creative (low-level factory-style coding, data input) job, then the less creative it is, the more time spent working and output are correlated (up to a physical / mental exhaustion threshold).
Here, the means are a good predictor of the outcome, hence the salary being tied to the number of hours spent working.
And it really comes down to what most of the IT/Software people are. I have a feeling though most of them have are closer to fruit picker but a lot think of themselves penning great literature when writing 10 line comments on 2 line function summing a pair of integers.
I currently work in a pretty rote software job, and I personally feel that even the most basic things can be very taxing on the mind and requiring of excellent focus. There are very few systems one can engage with where small changes can't have large ramifications in these environments, and great care must be taken.
You are confusing time spent with productive work done. Those two are not necessarily related. You also don’t take into account skill demand and supply. There is a very limited pool of good software developers.
> If you were working 80% as much, they would probably only be able to pay 70% of your salary.
You mean they would only be WILLING to pay 70%. I'd wager the vast majority of people with salaried jobs don't spend 100% of their work time working. Many jobs can be done in a fraction of the time. I don't doubt that most people could lose a day and probably gain productivity on the other days.
No country is in a vacuum... popular movements spread across borders and as the population of one country achieves something, their neighbours start demanding the same and so on... according to Wikipedia, the huge decline in working hours seen in the 20th century was mostly due to unionisation and legislation in response to popular demand.
Today, the US and the UK seem to be pretty typical compared to other countries, which is to be expected:
In all honesty, I would have though reduction of hours was due to automation and the advent of machinery, but I found this quote interesting...
When a labourer,” said Mr. Ashworth, a cotton magnate, to Professor Nassau W. Senior, “lays down his spade, he renders useless, for that period, a capital worth eighteen-pence. When one of our people leaves the mill, he renders useless a capital that has cost £100,000.” Only fancy! making “useless” for a single moment, a capital that has cost £100,000! It is, in truth, monstrous, that a single one of our people should ever leave the factory! The increased use of machinery, as Senior after the instruction he received from Ashworth clearly perceives, makes a constantly increasing lengthening of the working-day “desirable.”
> There are other fixed overheads, like your manager, human resources
Are these fixed costs, or would these employees also be working 80% as much? I think only the healthcare / office space for these people are fixed costs, but that would be factored in calculating their new salary.
And more importantly above all, in my opinion, is the profit. A portion of the revenue generate by an employee becomes profit. Lower the revenue (since lower hours) means lower net profit. Giving up net profit is not somthing a business owner thinks about lightly.
But if you pay lower salaries, you can hire more people.
There is very little difference (imo) between 3 employees @ 40hrs per week vs 4 employees @ 30hrs per week. There will be more administration and onboarding admittedly, but this should be balanced by more productive employees (i.e. less burnout)
The bigger issue to me is that there's no diversification of risk. If your company goes under, you lose 100% of your income all at once. From that perspective, it'd be a lot more rational to work say ten jobs at a single time.
You're never at serious risk of losing more than 30% of your paycheck in any short period. You could even get smart and balance your portfolio of jobs between pro and counter-cyclical industries. Plus, it's a good way to let people gracefully transition between careers. Want to move into machine learning? Take a low-paying junior ML internship for one of your 1/10 jobs to build experience.
It'd also be good from a societal perspective, since jobs at small, fast-growing, but high-risk companies would become comparatively more attractive. It'd be harder to sustain toxic workplace environments, since any given employee would have plenty of other options. Managers would be less hesitant to shutdown money losing divisions or fire underperfomers, since you're not leaving the employee destitute.
Maybe it's just me, but I find it difficult working on more than 2 projects at one time. Lots of wasted time trying to remember what I was working on / how my code works.
For your example's sake, if the work for one job is just a tenth, then it means that for a 5 men job, a manager would need to hire 50 people. The manager would be overwhelmed and add cost to the company by asking for a colleague. It's not easy to manage 50 people. But maybe the manager wants to diversify himself, so instead of 2 manager for 50 people, you'll have... 20 managers for 50 people. You need a managers' manager. Where does it end? :)
I think they're implying that the majority of current working time isn't actually work, that those jobs could be done with 1/10th the current man hours and still be just as productive.
In that world you don't need to hire anyone else because all you've done is cut back all the bs idling time that we all know exists in many jobs while keeping output the same.
FWIW I'm not sure I agree on the 1/10th but like 1/3rd or 1/2 absolutely from my position.
We'd need to radically change the system with which education happens to make this real, otherwise teachers and the infrastructure of teachers (administrators, social workers, counselors, janitors, IT people, etc) would still need that workweek + parents who have to follow that workweek.
It doesn't mean that some companies shouldn't exist to fill the demand from people who want 4 day work weeks though. Not everyone has kids, plus, not everyone in the company needs to be employed on the same terms imo.
Also, given how difficult it is to recruit developers, offering roles on a 4 day week will ease this process as it's a "USP" that few other companies offer.
Totally agree. Due to COVID most of my company worked only 4 days per week last year. The improvement in quality of life was amazing and productivity didn’t drop noticeably.
There was a time when 6 days per week were normal. People thought the world would go under if people worked only 5 days but things were ok. The same will happen with 4 day weeks. Once people get used to it it will be hard to imagine working more.
Exactly - the productivity boost employees gain from not being burned out, combined with a slightly lower wage bill. I see it as a win / win for both parties tbh.
Ye, I've also heard that in the Netherlands there are laws which say a company must accept an employees request to work part time if they have been there for 1+ years.
Curious how being laid back in regards to work opens up opportunity from countries such as China that have some companies working 996 schedules (9-am - 9pm, 6 days a week) to overtake and make obsolete European global companies. I guess the only way EU can compete is protectionism, no?
Your underlying assumption is that companies where employees work more hours are more successful on the market place. I would say this is a deeply flawed assumption.
If two equally capable entities are competing, the one who puts in more time will almost always win. The Chinese may be lacking the (social and physical) infrastructure that the Europeans have a head start on for productivity, but they are catching up or have already caught up.
This probably applies less to big conglomerates who exist and will continue existing regardless of what happens (honestly most of their employees can just not show up and they will be fine), but more to technical innovation.
I can guarantee you that in general in software engineering, you will produce the same result, whether you work 30 or 40 or 60 hr a week. The productive hours will be the same as you just have so much focused hours inside of you.
Yep you are 100% correct. Most super productive software developers only really focus/work a few hours a day. Software development is about thinking not typing.
For building infrastructure or manufacturing, probably yes, but not for innovation.
Anyone being forced to work under the conditions you describe is probably too terrified to do anything more than iteratively replicate existing foreign designs.
You can't force innovation by locking people in a dungeon and screaming "INNOVATE!" at them until they succeed.
They even fail at protectionism. They try to take on American tech but get swatted away in the courts when they realize they need American tech to be remotely competitive again. There's a reason America is launching Teslas into space while the EU bickers in court
Right. So nobody in the US drive European cars like BMW, Mercedes, Porsche, Ferrari etc.? Really? And nobody in the US use mobile phones with European ARM chips in them? Really?
Nope. Number of hours worked have very limited impact on productivity when it comes to high-knowledge/tech work. Laying bricks and designing a high tech robot factory are two very different jobs.
Fair enough, it's not for everyone. After 10 years of being a developer in a country which is relatively cheap to live in, however, I'd be more than happy to take the financial hit.
A B2B business has two choices if they want to institute a 4-day week. They can be closed 20% of the week, when their competition is likely open, or they can be open 5 days and spread 4 days of work out among their staff. So now if your coworker takes off Tuesdays, and you take off Wednesdays, you better not have a question for him on Tuesday morning.
I think if managed correctly the second option is more than achievable for a software development team. I agree it doesn't work for all industries / jobs (e.g. support staff etc), but for the majority of technical positions, I think the gain in productivity and saving in salary will more than make up for these inconveniences. I also think it will make the recruitment of developers easier as you'll be offering a benefit rarely seen.
And ye, a few people have mentioned the point about 28hrs - I'm going to rebrand it as "4 day week".
I'm sure some people will disagree but working less for less money isn't seen as a benefit to me, especially in the US where there may be healthcare implications. And as others have said, given static overhead you're more likely to earn less per hour. You're likely better off going contract and having a higher hourly rate and just billing less, but that has its own set of difficulties.
The real benefit I've seen very few places implement is a 36-38 hour week, over 4 days, with no decrease in salary. Productivity is the same or slightly higher (quite a bit higher if it's a set schedule, e.g. everyone has the same day off so there's no communication latency). Satisfaction is through the roof because not only are people getting paid more per hour, but it's a benefit that they're extremely unlikely to find anywhere else, so retention goes up as well.
I both agree and disagree. Disagree as this implicitly assumes working 40 hours won't produce relatively more negative feedback on one's personal life than a 32 hour week would. Once you start accounting for that, the "net loss" story becomes a lot more vague.
Given if the requirement was "you really have to work this number of hours to get that total income", I would prefer longer days + fewer days over the 9-5 mentality most countries have. Unfortunately, the last time I requested 9x4, it got denied. Let alone more extreme variants, 4x10, 3x10 or 3x12. Ironic, since 4x10 would also have less overhead, despite still being a 40h workweek.
For all the companies I've worked at, the developers are all full-time so I envy your industry / location if part-time is common.
More generally though, I feel employees almost need an
"excuse" to work part time (i.e. some reason such as childcare). I wish for a time when a significant % of developer jobs are advertised as near-full time and that I'm not stereotyped as lazy for applying to them. There's more to life than reviewing pull requests...
Completely normal in most European jobs. And you don’t need to have an excuse, especially as a developer, which adapts perfectly to part-time work (harder for a PM or PjM or EM)
But don’t envy us too much, the counterpart is that our salaries are much much lower than the US (even at 100%).
Most want/need the full check. And the company wants full “value”/40 hours. So what you end up seeing more often is the 10x4 model or every other Friday off. It’s just a reallocation of time.
Sometimes, I read things by CEOs about how a company works on the inside and I wonder if it really looks like that, or if it is a view from the top that doesn't reflect what it's really like.
This article, with its discussions of the upsides and downsides, is accurate to my experience and my understanding of other people's experiences. For many people, Gumroad wouldn't be a great place to work, but for those of us who want to work like this, it is exactly what we need. Very glad to be working at Gumroad and working in the ways the article describes.
Edit: Following up with a few FAQs from posts in the thread:
* Health Insurance: I'm personally lucky enough to still be covered on my dad's health insurance until I turn 26, thanks to the ACA, though for supplementary (vision, dental) I make more than enough to afford proper health insurance on the open market. Everyone at Gumroad is paid very well and should be able to afford the same.
* Regarding overtime, benefits, etc: we make very competitive rates as contractors. I sincerely appreciate your concern, though.
* On the shift from full-time employees to contractors, the company declined and was rebuilt over a period of five years. I'm a relatively recent addition, so I only know Gumroad as it is now, I cannot comment on how it was. All I can say is that it's not like Sahil went out and fired everyone and then the next day it was a bunch of contractors.