I've twice owned fully remote startups. Both were bootstrapped and ran at a profit, because I prefer making money from customers to raising capital.

1 view: All tech companies are in the exact same business. All of them. That business is turning Eng talent into free cash flow. https://twitter.com/Carnage4Life/status/1264382125089845249

More crude, dirty modeling:
How much FCF is a factor of many things, including how effective your company is, and how much margin is available in your industry, how large your industry is, and how much market share you have.

I had relatively small businesses (bootstrapped).

So I intentionally bullied larger, slow businesses (inefficiency), where I could create greater margin, without needing to capture a market leading position.

For Eng businesses, employee compensation is a large budget line item, but is not nearly as important as *supply*.

Each employee generates a multiplier of revenue above their compensation, that can be 2X, to as high as 20X.

As long as you can keep generating demand for your business, you'll keep taking any deal above 1X, and sometimes lower if you want to buy growth with debt / cash / margin

You are *sometimes* competing with your competitors for market share in your little niche, but you are *always* competing with *everyone* over that engineering talent. Always.

That's another reason why I say all tech companies are in the same business. All of us.

When I had my businesses:

Hardware generally had slim margins, (unless you're Apple). Huge growing market.

Ads had large margins. Huge growing market.

Commerce had a wide range of margins (which Amazon was buying down to grow). Huge, growing market.

VC funded businesses all had negative margins. But they had wheelbarrows of cash to burn, chasing gigantic markets.

So, even if you're not in those businesses for *customers*, you are in those businesses for *talent*. That 20X multiplier affects you and your tiny business!

So if your business is located in the Bay area, you must compete with Bay area businesses on compensation.

For our little businesses, this was the primary driver of market rate, not cost of living.

In fact, this comp difference contributes to the delta in cost of living.

My businesses were remote, but most employees were located in Texas for the second business, because we had a small office there, and the top CS students out of UTD were under compensated, because there were few large-multiplier employers in the region at the time.

Monaco has a higher cost of living than New York, but if you were to hire 1,000 software engineers in Monaco, you wouldn't need to pay as much as in NYC.

Because no one is offering 10% of your Staff Engineers 7 figures in stock and a giant signing bonus just to drive across town

Very non-business-y, I was super transparent about these dynamics with all of my employees. I took some of my maxed out employees (read: most profitable!), and encouraged them to quit!

..and move to a company where they would learn more, and where comp is almost unbounded.

All this to say, long term, it almost doesn't matter if your company says it will reduce comp if you go remote based on market rate, or if they say they will pay the same.

Because they are competing for you with other companies. Their remote package will need to be competitive.

Another impact of this, is that small businesses like my 2 will now have to compete with larger, more efficient businesses for remote talent.

I'm in the "competing for labor is good!" camp, and the "talent is everywhere, opportunity is not" camp, so I'm cautiously optimistic.