Those are some expensive employees, me and my friends don't cost anywhere remotely near that. I make 34k a year after 13 years on the job. A company doesn't have to hire in one of the highest COL cities in the country.
As an answer to your original question, Gusto's CTO responded in the question above yours. His answer below:
Co-founder and CTO of Gusto here. This is a REALLY good question and something that’s hard to appreciate until you actually to build a payroll system. I think a common misnomer is that if you’re not doing ML/AI/AR/blockchain/[insert latest technology here], you’re not doing R&D. The domain of Payroll turns out to be an incredible complex business domain. I think Ron Jeffries says it best in his post: http://wiki.c2.com/?WhyIsPayrollHard The software design of such a complex business domain at scale turns out to be an incredibly hard engineering challenge, and something that is often overlooked when we think about big engineering challenges. A little known fact is XP and Agile were developed by Kent Beck while working on a Payroll system for Chrysler (In fact, Kent now works at Gusto to help us with our payroll system).
Yes it does, because I and many many many many other people are doing fine on one amount outside of the Bay Area. My job equates to effectively any non-coding job that they have, someone was trying to claim that every employee costs 100-200k, I pointed out that is patently false and gave my income as an example.
When I pointed that out then it changed to "oh yeah but rent costs 200 million!"
No.
I've still seen exactly zero sensible explanation in this entire thread as to why a payroll company felt he need to raise 200 million in funding, and why any sane investor would provide such an amount.
Let's say an employee DID cost 150k after salary, benefits, and a year of their share of the building rent though, 200 million dollars gets you:
- 1333 employees for 1 year
Pretty sure that a payroll company doesn't need 1,333 costing 150k just to grow/become profitable.
Pretty sure they don't need 100 employees costing 150k each to do so, even if they do that's 13 years of money, er sorry 'runway'. I highly doubt they're going to hire 100 software engineers.
But hey, I'm not a VC so I guess my question is silly to everyone here.
So I'll point out that the people investing the money, that some of them are also scratching their heads and concerned about such:
https://www.inc.com/business-insider/sam-altman-thinks-start...
The median household income in my state (Indiana) was $54,181 in 2017.
It's my experience many people on HN generally have no clue what most of the country makes.
>The costs to this point (basic salary, employment taxes and benefits) are typically in the 1.25 to 1.4 times base salary range
https://web.mit.edu/e-club/hadzima/how-much-does-an-employee...
So when management says the overhead is only 1.25, they clearly missed out on a lot of things.
Commercial real estate is pretty cheap in most of the country, we have 3 shifts in my building and are open almost 6 days a week, sharing desks with another shift, my company isn't paying thousands of dollars per person per year for this building.
Not every place is the bay area with insanely expensive rent and insanely expensive cost of living.
I've still seen exactly no one even attempt to explain to me why a payroll company needed to raise 200 million dollars.
You've been significantly undervaluing yourself for a long time
Assuming a consistent 40hr workweek, $16.34/hr from the annual pay posted. Which reinforces rather than contradicts your point.
I never said this, not everyone on HN is a coder...
I'm making 62% of my state's -household- median income. This is the problem with HN, everyone thinks that everyone in America makes 100-200k. Minimum wage is 7.25 and there are TONS of minimum wage workers.
No one assumes everyone makes 100-200k, but since most people here work in tech of some sort, 34k is unheard of.
