Tailscale has raised $160M

When I saw the new round, I was instantly worried about change in direction that will most likely come with this, and effectively drive away regular users from a tool that seems universally loved.

Similar sentiment can be seen in the discussion from three years ago [1] when they raised $100M.

[1] https://news.ycombinator.com/item?id=31259950

When they raised the 100M three years ago, I'm pretty sure they said they didn't need it and were saving it for a rainy day (or words to that effect), always seemed very odd at the time. Two q's for anyone who cares to speculate: have they burnt the original investment already? And if not, why would they need more funding? AFAICS there's no real competition in the market place for their product today, the only thing I can conceive is that they have a secret 'tailscale 2' project in the wings which is massively developer or capital intensive. Let's hope it is nothing related to AI band wagoning :-)

Hm OK well thinking out loud, $100M / 3 is $33M / year?

I don't know much about Tailscale, nor about how much it costs to run a company, but I thought it was mostly a software company?

I would imagine that salaries are the main cost, and revenue could cover salaries? (seems like they have a solid model - https://tailscale.com/pricing)

I'm sure they have some cloud fees, but I thought it was mostly "control plane" and not data plane, so it should be cheap?

I could be massively misunderstanding what Tailscale is ...

Did the product change a lot in the last 3 years?

> I don't know much about Tailscale, nor about how much it costs to run a company

$33m/year is only 33 fully loaded software developers including all overhead like HR and managers and office space, and also a cloud hosting bill.

33 really isn't that many.

I'd be surprised if the average package for SWE is $1M/year (fully loaded).

Generally package is around half of what company spends per extra engineer. And $500k average for a tech heavy product company doesn't sound too far off.

This is just wrong. What exactly do think companies are spending 500k on per engineer beyond the TC package?

HR, marketing, sales, management, office space, servers, licenses, insurance, etc.

It seems on the high end, but not too unrealistic.

It’s wildly and hugely unrealistic.

The rule of thumb that employees actually cost a business roughly twice their salary is based on two things:

1. Retention. Hiring costs are “huge”, and so if you have a higher or lower average retention, may make up a disproportionate cost compared to salary. Ramp up time and institutional knowledge loss is no joke either.

2. A spread of average wages. 500k is not average, and a huge number of the costs are relatively fixed. $1,000 a month worth of software licensing isn’t an uncommon number and is fully 1/3 of the salary of a $3k a month or $36k/year junior clerk. It’s peanuts when you look at it next to a $500k/year salary. It may be that the clerk is, all in, costing the company 3x their salary after indemnity insurance and so on. The dev will never reach 10%.