Tag: Finances and Salaries

How we’ve built and evolved our habit of giving back at Buffer

In 2020, it was more important to us than ever to support small businesses and non-profit organizations.

There are so many organizations offering essential services to their communities, and we have felt so lucky to be able to support them while continuing to support our own customers. We always want to give back each year — the amount might change, depending on our profit, but we’ll always give back. It’s a habit worth building and continuing.

We’d love to highlight the organizations we supported in 2020 and the important work they’re doing, and how we came to support them.

An evolution of giving back and choosing flagship causes

Back in 2017, we committed to donating 20% of our profit each year to charitable organizations and, each year, we’ve chosen those non-profits in different ways.

The first year in 2017, we invited our team to nominate any organization they wanted and chose seven that got the most votes. It was a very open-ended prompt! In 2018, we focused our search a little bit, still taking in any team nominations but ultimately choosing one organization to represent each of our six company values.

In 2019, we put a stake in the ground and decided to focus our giving efforts on a core Buffer stakeholder — the environment. We worked to calculate our carbon footprint and found projects to fund that would prevent, remove or reduce carbon emissions of the same amount. Then, we asked our team to tell us their favorite organizations that produce clean energy, remove carbon from the atmosphere, support sustainable energy sources, or otherwise contribute toward the health of our planet, and ended up choosing five of them to support.

As we entered 2020, climate action was still a core cause we felt committed to supporting, but it became obvious that there was another area where there was significant work to be done. Combatting racial injustice and actively pursuing anti-racism became a priority for our company, and we worked to establish several programs to support BIPOC activists, as well as Black- or POC-owned or -led organizations engaged in anti-racism work.

When we started looking into our 2020 charitable donation, we decided we wanted to make a significant contribution to organizations tackling one of these two core causes — climate action and anti-racism — and that had a strong alignment with our vision: a world with more small businesses that do good while doing well.

The selection process

As we’ve always done, we invited our team to tell us about organizations that inspired them. Here’s what we shared about each cause and why it was important to Buffer’s vision:

“Without a habitable planet and the stability that provides, no small businesses will be able to thrive, including Buffer. Simultaneously, the climate challenge also creates tremendous opportunities for innovation and entrepreneurship, hence more startups and small businesses! It feels crucial to do our part in building a sustainable and healthy environment where small businesses can have long-term success.”

“Systemic racism is not only injustice, but it is also bad for business. Research ‘estimates that aggregate economic output would have been $16 trillion higher since 2000 if racial gaps had been closed.’ When it comes to a world with more small businesses, we'll also want to see more diversity in those businesses. By making our contribution to a more equitable and just future, we can create a world where more people from underrepresented groups can start small businesses and have the means to support small businesses within their communities.”

From these prompts, we collected team nominations and we learned about some amazing organizations. After a team-wide vote, we settled on four organizations to each receive $12,152.25 USD — an equal split of $48,609 USD, which was 20% of our profit share from 2020.

Our 2020 charities and the work they’re doing

We chose two organizations to represent our focus on anti-racism and two that represent climate action. We’re proud to support these organizations that are truly working toward a more equitable and sustainable world. Read on for more information about their work!

GiveDirectly
When we zoom out to the global level, there is huge inequality between people born and living in developed versus developing countries. The differences in wealth and access to opportunities remain massive. Currently, there is strong evidence that giving unconditional cash grants to people living in poverty is one of the most effective ways to drive positive change in their lives.

GiveDirectly gives cash grants that enable folks to invest in the projects, businesses, and items that are most impactful for them, instead of relying on organizations to choose for them. From their website: "We believe people living in poverty deserve the dignity to choose for themselves how best to improve their lives — cash enables that choice.”

We are excited about supporting GiveDirectly as a way to catalyze more small businesses — especially by folks from underrepresented groups — starting up all over the world.

digitalundivided
There is no doubt that the U.S. tech and startup scenes have long been homogenous in many ways — with race and gender in particular. We get really excited when we hear about organizations that are supporting underrepresented groups and lifting them up to get the same shot as other founders, and digitalundivided is doing just that.

At digitalundivided, they run training programs, pre-accelerator programs, and a fellowship to help Black and Latinx women founders get the resources and mentorship they need to develop their businesses. On top of that, we were excited to see that they conduct research about Black and Latinx women founders in the U.S and that they use their research as a catalyst for change and action. From their website: “At digitalundivided, we use original, proprietary research to develop a data-driven ecosystem that expands the current body of knowledge about entrepreneurship in emerging communities.”

Their mission is all about doing good while doing well — supporting Black and Latinx women in their entrepreneurship journeys, all while catalyzing economic growth in their communities.

Cool Earth
Trees are a powerhouse for our planet, constantly pulling carbon out of the atmosphere — so deforestation is a huge contributor to the climate crisis. Cool Earth works directly with rainforest communities to halt deforestation. They do this by meeting and learning from rainforest communities around the world, many of whom are indigenous communities that have intimate relationships and immense wisdom about their local forests.

Cool Earth partners with these communities to develop solutions that are unique to each location. In many situations, they support the local communities to develop sustainable incomes so they can be self-sustaining without causing harm to the rainforests. From their website: “Cool Earth supports local and indigenous knowledge to develop innovative ways to address threats to the forest while making communities stronger and more resilient.”

Cool Earth takes a tangible climate action while empowering and supporting indigenous communities, and it’s an approach we are honored to support.

VertueLab
Cleantech is a growing industry of companies working to support the environment through clean energy, the sustainable use of resources, carbon sequestration, and more. VertueLab works to tackle the climate crisis by providing funding and entrepreneurial support to early-stage cleantech startups whose products can deliver a measurable impact on reducing greenhouse gases. They also intentionally prioritize the growth of diversity, equity, and inclusion across cleantech industries.

In other words, VertueLab is directly nurturing small businesses that strive to make a difference in the climate space, and that shape a more sustainable and equitable world. From their website: “[Our mission is] to unleash innovation and entrepreneurship that will solve environmental challenges and catalyze shared economic prosperity.”

VertueLab actively fights against the climate crisis with a very similar vision to ours — to see a world with more startups that are doing great work for the planet and doing well in the process.

Additional donations to anti-racism organizations

In mid-2020, separately from our annual profit share donations, we also committed to donating $100,000 USD to organizations for and by Black people working to dismantle racism. After consulting with our Black teammates to determine the organizations they wanted to see the money go toward, we donated to three wonderful organizations:

The Marsha P. Johnson Institute, which protects and defends the human rights of Black transgender people.

The Marshall Project, a nonpartisan, nonprofit news organization that seeks to create and sustain a sense of national urgency about the U.S. criminal justice system.

Brave Space Alliance, a Black-led, trans-led LGBTQ center designed to create and provide affirming services for the LGBTQ community of Chicago.

We encourage you to read more about these organizations and the daily impactful work they do to support Black communities.

Learnings for next year

We’re a team that loves to give, though our approach up until now has been to “figure things out as we go.” That’s worked for us thus far, but now that we’ve established several charitable initiatives, we’re excited to think through a more holistic approach to charitable giving.

Having our two flagship causes is a great help with this, as is our annual choice to donate 20% of our profit. We’re committed to continuing our anti-racism programs, internally and externally, and working to be as carbon neutral as possible.

We’re honored to support these organizations and hope you’ll look into their work as well. We list even more anti-racist organizations worth supporting over here. There’s much more work to be done!

https://buffer.com/resources/giving-back/

2021 Pay Analysis: How We’ve Lowered Our Gender Pay Gap From 15% to 5.5%

2021 Pay Analysis: How We’ve Lowered Our Gender Pay Gap From 15% to 5.5%

Buffer has been built on the belief that transparency builds trust, holds us accountable, and can push our industry forward. Our salaries have been transparent since 2013, and for the fifth year in a row, we’re sharing our transparent pay analysis. In this report, we share the difference between what men and women earn at Buffer.

We have come a long way in the last five years. Far from the ratio of 70 percent men and 30 percent women on the team when I first wrote this report, this year, we are close to 50/50. And at the time of this report, our leadership team is eight people, five of whom are women.

Here are all of our numbers from our 2021 pay analysis, along with more on the positive impact that transparency has had on the gender pay gap for us.

2021 Pay Analysis

Here’s what the unadjusted gender pay gap looks like at Buffer as of March 2021:  

Buffer team: 83 people
Women: 39
Men: 44

Average salary for women: $123,707
Average salary for men: $131,923
Unadjusted percentage gap: 5.46%

Note: We specify an unadjusted pay gap as we are comparing earnings between all men and all women at Buffer, regardless of their role or experience level. An adjusted pay gap would be the earning gap between people who perform similar roles. We have no adjusted pay gap at Buffer as we use a salary formula for all of our salaries.

About the numbers

For the second year in a row, our gap has gone down, and this year it went down significantly compared to last year.

We’ve been tracking the unadjusted gender pay gap at Buffer monthly since 2019. Here, you can see our progress over the last year, where the gap has gradually gone from 12.5 percent down to 5.5 percent.

2021 Pay Analysis: How We’ve Lowered Our Gender Pay Gap From 15% to 5.5%

Compared to previous years
Here’s a comparison of all of the years we’ve been running this pay analysis. You can also read each full report at the following links: 2020, 2019, 2018, 2017.

2021 Pay Analysis: How We’ve Lowered Our Gender Pay Gap From 15% to 5.5%
2021 Pay Analysis: How We’ve Lowered Our Gender Pay Gap From 15% to 5.5%

Our gender pay gap has gone down from 15% to 5% in the last two years — how did that happen?

We’ve been paying close attention to the gender wage gap at Buffer since we first started sharing transparent pay analyses, and we’ve been committed to lowering our gap.

Transparency has been a critical factor in lowering our gender wage gap.

There have been many small shifts we’ve made along the way, but the most significant factor for us has been transparency. We believe that transparency creates accountability, and it’s clear from our example that transparency can have a powerful impact on closing the gender wage gap.

Transparency led to more learning.

Through being transparent, we’ve learned more about the gender pay gap and have been able to keep making changes and adjustments every year. In 2017, when we first ran the report, we didn’t know much about equal pay. We also had a smaller team size with fewer women and later realized that having one high-earning woman on the team made our gap lower in 2017, so our report wasn’t an accurate reflection of the year for us.

In 2019, we had our highest yet gender pay gap — 15 percent —, and that came the year that we also increased the number of women on our team.
The correlation we saw is that when we hired more women, and it made our gap larger because in some cases, those women may have been at lower experience levels, but over the years, we’ve seen that gap slowly decrease as having more women on the team led to more women getting promoted and earning more overall.

Transparency brought more attention to making this change.

The act of reporting the gender wage gap every year has also brought more teams together to focus on how we can improve equal pay at Buffer. It’s not fun to publish a report showing that our gender wage gap is getting worse every year, and several teams have been highly motivated to improve this number.

Our Finance team started tracking gender pay data monthly instead of annually, and it gave us a clearer picture of the impact that new hires and departures have on our overall gap.

Our People team also played a huge role in diversifying our hiring pipeline over the years to bring on more women in higher-earning positions. Our People team’s work is especially impressive considering that as a long-term focused company, we aren’t growing our team considerably year-over-year. Our team size was 72 teammates in 2017 and is 83 teammates now.

The ratio of men and women at Buffer has improved significantly.

When we first started reporting on equal pay, we were 70 percent men and 30 percent women at Buffer. That meant that any change to the women at Buffer had a significant impact on this number, and it was much more likely to fluctuate when women joined or left Buffer.
Since then, our gender split has become nearly 50/50 with 44 men and 39 women on the team, and at the time of this report, our leadership team at Buffer is eight people, five of whom are women.

We’re confident about this positive downwards trend.

Now, we can safely say that our five percent gap isn’t a result of one high-earning person on the Buffer team. This consistent decrease of our gap over the last two years is a result of many areas of work, and it isn’t going to change drastically in one month.

What’s next for equal pay at Buffer?

We’re proud that our gender pay gap is at 5.5 percent, much lower than the industry average. We’ll continue doing everything we’re doing and closely watching our gender pay gap throughout the year. We’ll continue working towards no unadjusted gender pay gap and focusing on diversity overall in our hiring. We’re also hoping that our journey can help others looking to tackle the gender wage gap.

If you know of other companies sharing their gender wage gap publicly, or if you’d like to share yours publicly, please reach out. We’d be happy to chat!

Want to work at a company with pay transparency? We’re hiring, check out our open roles!

https://buffer.com/resources/2021-pay-analysis/

How We Decide What To Pay Our Team: Our Salary Formula and Compensation Philosophy

How We Decide What To Pay Our Team: Our Salary Formula and Compensation Philosophy

Compensation is an important topic at any company. At a company like Buffer, where our salaries have been transparent since 2013, compensation is a transparent internal discussion where the whole Buffer team can share thoughts and feedback.

A lot has changed in our salary formula over the past few years. We took a very simple formula and made it more accurate to the labor market, and most recently, we’ve been focused on improving our formula to make it a true benchmark for a remote-first world.

In this post, we’ll share an overview of our compensation philosophy and a simple explanation of our salary formula. Transparency is an incredibly powerful tool, and we hope that sharing our approach to compensation can help others who are currently navigating this space.

How we think about compensation

Our approach to compensation has evolved over the years, and our salary formulas have taken various forms, but a few fundamental pillars of our overall compensation philosophy haven’t changed.

Ultimately, we view compensation and benefits as the set of tools that empower our teammates to bring their best to Buffer so that we can share that same generosity in service of our customers. We want every single customer interaction to be a delightful experience. By ensuring our team members are fulfilled and engaged with their work, we can build the solutions and tools that support our customers to achieve success and fulfillment in their personal and work lives.

These key principles guide all the decisions we make about our team’s compensation and benefits:

Transparency: We openly share our approach and all salaries to create trust, hold ourselves accountable, and serve as a resource for the industry.

Simplicity: We aim to maintain an easy-to-understand formula that allows anyone to easily see how we arrive at any individual salary.

Fairness: We ensure that those with the same role and responsibilities who are at the same experience level are paid equitably.

Generosity: We pay above market to attract the team we need, thrive as individuals, and avoid exceptions and inequity resulting from negotiation.

Our salary formula

Every base salary at Buffer is derived from our salary formula. The formulaic approach minimizes biased decisions about compensation. This has been a valuable tool to ensure our awareness of any gender wage gap since our salary formula is rooted in objective market factors applied consistently across the team. Read our latest pay analysis for more insights into equal pay at Buffer.

Our formula is your role x cost of living = your salary.

How we determine role compensation

We benchmark each role to data from Radford, a platform that gathers compensation and benefits data from companies participating in global surveys twice per year. The role benchmark is based on the software industry and the 50th percentile of San Francisco market data. We selected San Francisco as a part of our principle of generosity as it is a competitive labor market.

How we apply cost of living

After we’ve benchmarked for position and experience level, we multiply by a cost of living factor that objectively considers one of four geographical areas in comparison to San Francisco’s cost of living and property price index.

High cost of living
100% of the San Francisco market = multiply by 1.
Examples: San Francisco, CA & New York, NY

Intermediate cost of living
90% of the San Francisco market, multiply by 0.90
Examples: Singapore & Sydney, Australia

Average cost of living
85% of the San Francisco market, multiply by 0.85
Examples: Boulder, CO & Madrid, Spain

Low cost of living
75% of the San Francisco market, multiple by 0.75
Examples: Bangalore, India & Wroclaw, Poland

These cost of living multipliers take into account being a global team while closing the gap found in traditional compensation approaches.

To see this formula in action, check out our Salaries page with the whole Buffer team’s transparent salaries.

The future of our salary formula

For the past few years, we’ve had the goal to further simplify our formula and do away with the cost of living consideration as a component of the formula. In practice, this would mean we’d eliminate the low, average, and intermediate bands to pay everyone at the same level of San Francisco market salaries.

The result of this shift would be a $1.2 Million increase in operating expenses based on the team we have today (March 2021).  While this change remains a consideration, we’ve deliberately set a goal to do this incrementally rather than all at once. Investing in our team is important, though we must weigh trade-offs, and in this season for Buffer, we believe that expanding our team size is more in line with serving our customer’s needs.  

Meanwhile, we’re also seeing market shifts that are bound to impact global compensation. With more companies embracing remote work, access to talent is no longer dependent on the local talent pool. You don’t need to live in Silicon Valley or New York City to work for companies headquartered in those areas. You also don’t need to headquarter in those cities to access top talent! While we’ve never looked only at local market to benchmark our salaries, we recognize that cost of living will likely become more and more irrelevant as part of the movement towards supporting a global workforce.  

Want to work on a team that has transparent salaries? Check out our current job openings here.

https://buffer.com/resources/compensation-philosophy/

Shareholder Update: Q4, 2020 — 2020 Results and What’s Ahead

Shareholder Update: Q4, 2020 — 2020 Results and What's Ahead

Note: This is the quarterly update sent to Buffer shareholders, with a bit of added information for context. We share these updates transparently as a part of our default to transparency value. See all of our revenue on our public revenue dashboard and see all of our reports and updates here.


We’ve emerged from a challenging year, one that proved our resilience and gave us a renewed sense of optimism heading into 2021.

We spent much of the final quarter of 2020 leaning into the inspiration we gained from the adaptability and strength of our customer’s stories. We observed countless companies shift quickly to remote work, an evolution of work that we always thought would someday come. We reflected deeply on our purpose, questioning how we’d show up for our customers to help them expand their positive impact and grow their brands and businesses over the next decade. We invited the company’s first Chief Product Officer to join Buffer’s Executive team and we committed to refining the company’s purpose, vision, and mission. We established strong company-level OKRs, and set ambitious goals for 2021 and beyond.

For another reflection on 2020, check out this review of Buffer’s 2020 in Numbers.

With January just behind us, we’re already realizing the exponential impact of optimism, resilience, and a cohesive leadership team in service of the entire team’s execution of shared, ambitious goals. We’re moving quicker and raising our bar in support of small businesses. We’ve re-committed to being bold, increasing the value of the essential tools we offer, while maintaining our strong foundation of Buffer values and integrity.

This year already feels so different.  

We’ve just launched Buffer’s new engagement tool as the newest feature in our full stack of brand building tools and in response, saw the highest number of daily trial starts we’ve seen in awhile.

Along with Buffer’s engagement tool, we’re focused on adding value for customers, improving accessibility, and providing more opportunities for active engagement by leaps and bounds. We’re also hiring several roles this year.

We’re looking forward to what’s ahead in 2021.  Let’s take a look at our financial results for Q3 and end of year outlook.  

Financial results from Q4 2020

Q4 2020:

  • Total operating income: $400,471
  • EBITDA margin: 7.69%
  • MRR: $1,760,653

2020 end of year:

  • Net Revenue: $21,080,452
  • 2.30% YoY revenue growth
  • Operating Income: $3,318,234
  • EBITDA Margin: 15.74%
  • MRR: $1,760,653 (down slightly from end of Q3 MRR $1,761,962)
  • ARR: $21,127,836
  • ARR Growth Rate: -4.8%
Shareholder Update: Q4, 2020 — 2020 Results and What's Ahead

Metrics

Shareholder Update: Q4, 2020 — 2020 Results and What's Ahead
Shareholder Update: Q4, 2020 — 2020 Results and What's Ahead
Shareholder Update: Q4, 2020 — 2020 Results and What's Ahead

What else would you like to see?

This is the update that goes to Buffer shareholders, but I’d also love to hear from you. Are there other metrics or financials that you’d like to see from us? We’re working on building and delivering a new level of transparency this year and I’d love to hear what you’re most interested in, send me a tweet with your thoughts.

https://buffer.com/resources/shareholder-update-q4-2020/

Shareholder Update: Q3 2020

Shareholder Update: Q3 2020

Note: This is the quarterly update sent to Buffer shareholders, with a bit of added information for context. We share these updates transparently as a part of our ‘default to transparency’ value. See all of our revenue on our public revenue dashboard and see all of our reports and updates here.


Before I get into the numbers, please join me in celebrating a pretty big milestone this season — Buffer’s 10 year anniversary!

In late 2010, Joel launched the first version of Buffer and has led the company from that early twinkle of an idea to building a company that is now generating over $21,000,000 in annual revenue.

It’s wild to reflect on the different checkpoints, successes, and challenges that have been experienced over the past decade. The experiences, growth pains, and learnings have really shaped where we are today and where we’re headed next. We’ll be sharing more reflections in the very near future.

We have another piece of exciting news to share as well. As you may know, we’ve been looking for an experienced product leader to join Buffer for quite some time. We are thrilled to welcome our new Chief Product Officer, Maria Thomas, to our team. We look forward to partnering with Maria to expand on a unique strategy that helps us serve customers, differentiate Buffer, and continue to realize solid, sustainable growth over the next several years.

Let’s take a look at our financial results for Q3 and end of year outlook.  

Financial results from Q3 2020

Q3 2020

  • Total net income: $700,996
  • EBITDA margin: 16%
  • MRR: $1,761,962 (up slightly from $1,705,370 MRR at end of Q2)

We’re projecting an overall end of year ARR at just over $21.1M. This projection is an overall ARR downturn compared to 2019 ARR and we can attribute it to a few factors:

  1. Our Q1/Q2 decision to sunset Reply and focus those resources on building a product more complimentary to the overall Buffer experience for SMB customers.
  2. Our Q2 response of extending payment relief to customers struggling to adapt to the detrimental impacts of the pandemic on their businesses.
  3. The volatility of financial markets due to the economic effects of the pandemic on U.S. businesses and global businesses. Businesses represent a significant portion of our customer base and revenue. We’re all adapting to a new normal, experiencing uncertainty in this next wave, and this certainly impacts consumer behavior even in the social media space.

We have a number of initiatives in motion expected to have a positive impact on new business and retention metrics. We’ll share more about those product features in our Q4 report.

Shareholder Update: Q3 2020
Shareholder Update: Q3 2020
Shareholder Update: Q3 2020

*Our drop in bank balance is due to us paying off a bank line of credit balance.

Looking ahead

As we head into the final weeks of 2020, the senior leadership team is solidifying our company objectives for 2021 and setting down shorter term OKRs across all areas. We’re so happy to welcome Maria to the team and to continue to build on the endless learnings from the past decade.

https://buffer.com/resources/shareholder-update-q3-2020/