Ask HN: Why can't I make as much as I make?
1. Assume a hacker can make a good wage working for someone else.
2. Assume a hacker can in turn be significantly more productive working for themselves.
3. All things being equal, a hacker should be able to make significantly more money by working for themselves (albeit at the cost of increased risk and stress).
The relevant quote: "If a fairly good hacker is worth $80,000 a year at a big company, then a smart hacker working very hard ... should be able to do work worth about $3 million a year."
My question to HN is as follows:
Excluding outliers such as Gates/Zuckerberg, is the inference that a good hacker can make more from the market directly actually valid?
If so, why does it seem most hackers struggle to capture even half their regular wage from the market directly?
All advice/experiences appreciated.
120 comments
[ 2.1 ms ] story [ 220 ms ] threadI do think part of it has to do with 'thinking small'. If you are shooting to make $100k, you'll be looking for activities to engage in to make $8k/month. But there's a lot of time and effort involved in getting anything started, and as such, the net result of shooting for $8k/month may be significantly less.
Many people are looking to replace a wage rather than start a business, which would almost necessarily entail growing beyond a one person org, even if only by using freelance help as needed. The effort involved in creating reproducible systems (market research, customer acquisition, product development, support, etc), as oppposed to just hacking on code, is far greater than most people realize. Not that it can't be done, of course.
That $3 million sounds random and high. The notion of wages and income and such all relate to 'what value can I bring to someone else?'. Our income is related to how much value we bring to others (and how much they value that value). It's quite possible that in my brain there's info and skills worth $3 million to someone (more likely many someones) but figuring out how to deliver that value is a problem I'm still working on, I suspect others are too - for themselves, not for me!
PS: An average programmer doing government consultant for for 40h/week at a large company can be billed at over 1,100$ / day and pull home ~80-100k / year.
http://37signals.com/svn/posts/2283-ranking-tech-companies-b...
Note that these figures include admins, HR, finance, warehouse staff, etc. and not just hackers. Taking that into account, $3m annually per programmer isn't outlandish according to these figures. Remember that each programmer is offset by n support staff, who will often not contribute directly to revenue.
You can calculate the analogous numbers for any company that is publicly traded in the US and some other exchanges that require employee counts to be published. There are also other aggregates posted on the web.
So if you're aiming to create $60k of value for yourself, you're aiming at a far lower number than anyone who would hire you.
If you're 37 Signals you're providing a SaaS product, which means that people are paying exactly because you have a level of support that goes beyond mere development. Also, there is a certain "economies of scale" going on where by adding less and less people you can make a product more useful to a larger segment of the market (because you can include many of the little featurettes that are deal-breakers for many businesses).
Number one is that it is an uneven distribution. Some hackers might make millions, some will make nothing.
Number two is that hackers may focus too much on doing the work they understand and enjoy, when all parts of a business need attention (like sales and networking).
Number three is that 3 million just sounds a bit on the high side.
I have a brilliant friend who is helping his friends work on a potentially dead end project because "I don't have anything else to work on" you also forget these outliers have other factors helping them: solving common problems, existing connections (gates + IBM connection), etc.
No, it is not.
It makes a huge number of assumptions without bothering to mention them: that the hacker is equally skilled at public relations, marketing, business management, financial management, and on and on. Running a business -- even a relatively simple one -- requires much more than, "sit down and write great code for 12 hours a day, six days a week."
As the business grows towards that $3 million / year figure, the number of business-y things that have to be successfully managed also grows.
Yes, there are stories of people who have done it (e.g., Minecraft) -- and yet, on further investigation, you often find that there's a lot more to the story than there appears to be (Angry Birds). Still, these are the exceptions, the breakout successes, and it's as foolish to go into business for yourself expecting this kind of outcome as it is to walk into a casino and expect to walk out as the big winner of the month.
I think that trying to distill the entire process down into whether or not you're a "good hacker" ignores all of the other talents and luck that are required, and also really diminishes the perception that any business acumen is required for that kind of success.
The assumption made is that skill (and determination) alone can lead to success. It can, but you need the determination in all other areas outside of hacking alone.
BUT what I want to say is non of these people made a billion dollar business because they want to make billion dollar business. No, they did it because they found finally something they thought people on earth do need. Some of them were wrong (like most of the weekend projects on HN will die because of monthly costs ect.) but a few of them were right and did it.
If you want to play this coke game then you should it and you should do it with a fun project, with a project you think the world needs, with a project you would love and whole bunch people too.
BUT make sure that you know that you don't have to play this game. There is also a way to make great money (not billions tough). If you want to go into the million dollar business you could dig into cooperate e-business stuff. These may not be fun and you can't program in Haskell but if do it big you will get your money. There is a lot of room for smart people you just need to say what they want you to say and make them happy. This will let you make so much money you wouldn't have thought about.
Just find out what you want.
I'm not saying some hackers can't make more than their salary's worth by going alone, but the argument is way too simplified to account for the real world.
When starting a startup, you need to build that structure from scratch - from the marketing, to the sales process, to the scalability, support, hiring, etc. The reason why most employees think they're more than they're worth is because they don't see all the things that happened before they were hired, and all the things that happens behind the scenes that makes their specific tasks valuable to the company.
(developing + x + y + z + brand + existing clients + ...) = $$$
If you leave that company, and develop 3 times more efficiently, you'll still be missing those other activities and you might not make any money.
(developing x 3) = :(
Related is the observation that, in most large companies that I've observed, a large amount of people do "work" that actually contributes almost nothing, and if you take into account their salary, has a negative contribution. Still, those companies are profitable.
(developing + x + y + z - a - b) = $$$
In the B2B world, there is a stunning demand for good software everywhere I go. Two and three year project queues are the norm. They have trouble finding anyone to get the work done, whether it's employees, contractors, or vendors, either for services or products.
Perfect example right now: I know of two large companies whose customers are demanding that they be able to enter their orders on the internet. Imagine, in 2011, large companies struggling to find people to get e-commerce working!
OTOH, I read about what other programmers are doing here on hn, and 90% of the time, my first thought is, "Why? Who would pay for that?"
To make it on your own, you have to stop building what you think people will pay for and start building what they actually will pay for. Huge difference.
Aside: I remember talking about something very simliar a few weeks ago here:
http://news.ycombinator.com/item?id=2363723
That's right. How hard is it to find such a niche? I'm looking for a niche where I can make $5K/month only. Here are the criteria:
- Be able to launch the SaaS in 3 months work.
- A small customer base (200-300) with monthly subscription.
- Requires 30 hours/week for support.
- Doesn't require physical stuff, or lot of expenses.
Any one who can think of such a service? I'm looking to build one this summer.
Spend time studying OpenERP because it's succesful and you'll have to compete against it. Their platform is a great case study: it's powerful and modular while being difficult to take over. Their code base is a mess and yet they have developer's traction. There's a huge market, no matter what you plan (a platform or a solution).
If you go for a platform, avoid small projects.
I don't see ANY mention of marketing in there. I can't tell you the number of SaaS-on-the-side startups that I've seen launch to nothing but crickets.
If you launch a SaaS offering, understand that you'll be competing in your on-the-side marketing efforts with people who are spending lots of time/money to grow their business. Going to try SEO? Your competition has going full steam with SEO-- how are you going to compete? Adwords? Most SMB SaaS can't afford adwords. Facebook ads? Bit of a minefield, but possible. Word of mouth? There's a lot of noise out there
In other words, have a customer acquisition plan and be prepared for that to be your fulltime job. 37Signals, with their early fame and following, took 12 months before they could afford to set aside consulting. It's a longer road than you think.
What I like about it: You're focused on building something that supplies an actual demand. Good!
What concerns me about it: You're still too focused on yourself. Every one of your bullets was about what you want your business to look like.
I think you're focusing too much inward when you need to be focusing on your prospective customer and how they will benefit from the value you provide them.
Examples are everywhere, just a few off the top of my head:
Get out of your office and find people like this first. Ask them, not us, what they want. Then figure out how to provide them with what they crave. (Once you find one niche and get going, you'll be surprised how much fun it is and how well it works out.)The rest (your bullets) will take care of itself. The shape of your business will be the byproduct of doing whatever you must to satisfy your customers' needs.
One great resource that will probably help you:
http://www.amazon.com/Start-Small-Stay-Developers-Launching/...
It reminds me of the saying "Working for youself means you don't have a boss. It means you have customers, which are much less forgiving and demanding than a boss would be."
You make it sound much easier than it is. Getting out of the office: easy enough. Finding the right people who can tell you the right things at the right time: difficult. Very difficult.
Indeed. In business, u comes before i.
And the niche you choose does make quite a difference in what the resulting business will look like, what demands it makes on your time, what kinds of customers and partners you will be interacting with, etc..
Unfortunately, if you're looking for "a niche, any niche" that happens to meet criteria completely unrelated to what the need actually is, who the people actually are, etc., it seems unlikely to work out well.
I suppose this depends on personality, but... it's hard to build a business. If you find the perfect niche but you actually have no past domain experience, don't have any personal connection to the "pain" you're fixing, etc., what will carry you through? I imagine you'd be much more likely to throw in the towel when things got tough (and I suspect investors would worry about that as well).
You could also look at them as constraints that need to be satisfied for things to function: it needs to look like that if it's going to work for him. I think it's worth filtering things like that if you're aiming for a "lifestyle" business. You're correct that you also have to filter by "what can I do to help people", but you're going to have to run both filters sooner or later.
I agree completely about the Start Small Stay Small book. I think it's one of the better ones I've read in a while. There's nothing earth shattering, but it's full of concrete advice and is aimed at "the rest of us" who don't live in Silicon Valley and aren't aiming to "change the world".
nopassrecover, edw is 100% on target about looking outward. However actors, salons, and teachers are all good examples of people with little money to spend, who would not capture significant extra margins by adding software.
In my estimation, nopassrecover, you would do better to think deeper in the B2B value chain, particularly if you can flex relationships you've made in previous industries you've worked in. Imagine how many more people you could touch writing software that hooks into a shoe factory's shoe machines than making a web store -- and how much less of a customer's attention that would require.
Two consejos that I think are good (but not necessary) for entrepreneurs to follow:
1. Do a part-time job while you work on your own thing.
2. Use knowledge & relationships from businesses you have worked in directly.
And (3) for hackers specifically: spend some time thinking about and researching how the commercial world fits together. Who made the plastic fibres in the salon's brush? How does the aesthetic layout of the salon enable them to charge more? What other construction materials could they have used? What catalogs are thrust in the face of new salon owners and how does that affect the way they see their choices? What's the price history of the real estate they own vis-à-vis the other places they could have set up shop? And more generally: What companies in the world do the most revenue and why? What companies have the most profits?
The salon scheduling example is particularly naïve, because scheduling software would not add much value to either salon owners or customers.
But edw519, I very much agree with you about looking outward (both to meet business minded people and to meet people who don't have iPhones).
Interestingly, someone told me recently that his sister, who runs a salon, spends a ridiculous amount of money on precisely this: scheduling software! He's a hacker and couldn't quite work out why she would pay $thousands (sic) for some crappy semi-customised calendar when Google Calendar works just fine: in the end it came down to, "because all the other beauty salons use this software".
Not that I'm recommending this particular niche, mind you...
Whenever you meet someone ask them what they hate about their job or what takes the most time at work. That can often give you a good idea on what areas have potential.
I'm practicing this at the company I work for, and I have many ideas. Be cautious about legality, here, and don't get too specific with how your employer solved the problem, just use the tactic to identify the problems.
Like Ed said, companies large and small have pipelines of ideas and projects they can't get to.
You'll make much more than $5K / month if you can pull that off. Heck, I'll send about 5 companies your way on Day 1.
Personally my advice would be to quit your job and go and work in an existing industry you think you might be able to disrupt with software, it's the only way you'll learn the real problems.
I did this the other way around by working as a hardware engineer for 10 years then getting into web dev. I spent some time thinking I'd wasted the start of my career but now realise it's the best thing I ever did.
If anybody is looking for a problem to solve I've got one so get in touch. This isn't the next Twitter for Groupon, I'm working through some hard problems so please dont waste our time ;-)
Build one this summer? And then what are your expectations? That it will be making $5000 a month from then forward with no further input?
If you want to make $60k a year by the end of next year, advertise $30/hr computer fixing services, advertise locally, and schedule 60 hrs a week of work. (The extra is to cover advertising overhead.)
If you want to build a product or service bringing in more than $100/month, you need to spend 5-10 years building it up to the quality where it can compete with the others who have spent that much time.
Anything you can throw together with "3 months work" that can bring in $60,000 indefinitely is going to be cloned right after release by 10 other people, all of whom will deliver a cheaper better product.
It's not really all that reasonable to expect to create something that will support you indefinitely with only 3 months work unless you are a blond bombshell that targets sick elderly men for marriage.
There are probably a fair amount of people here who work with less sexy things, that just don't really talk about it since integration with enterprise resource planners isn't as much fun to hear about as a 12-minute reddit clone getting millions in funding. I know I rarely post.
My experience is that supply and demand only explains/models pricing when you have an efficient market. When there are information asymmetries or actors attempting to impose inefficiencies in a market, supply and demand breaks badly.
To quote one of Joel's best posts:
Software is priced three ways: free, cheap, and dear.
1. Free. Open source, etc. Not relevant to the current discussion. Nothing to see here. Move along.
2. Cheap. $10 - $1000, sold to a very large number of people at a low price without a salesforce. Most shrinkwrapped consumer and small business software falls into this category.
3. Dear. $75,000 - $1,000,000, sold to a handful of rich big companies using a team of slick salespeople that do six months of intense PowerPoint just to get one goddamn sale. The Oracle model.
All three methods work fine.
Notice the gap? There's no software priced between $1000 and $75,000. I'll tell you why. The minute you charge more than $1000 you need to get serious corporate signoffs. You need a line item in their budget. You need purchasing managers and CEO approval and competitive bids and paperwork. So you need to send a salesperson out to the customer to do PowerPoint, with his airfare, golf course memberships, and $19.95 porn movies at the Ritz Carlton. And with all this, the cost of making one successful sale is going to average about $50,000. If you're sending salespeople out to customers and charging less than $75,000, you're losing money.
http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...
With behaviour like that, supply and demand is absolutely the least important factor in making certain B2B sales. Doubling the supply of "dearly priced" software can't drive the price below $75,000 because it costs $50,000 to make a sale. What's interesting is the opportunity to innovate to make the jump from "dear" to "cheap." That's a business model problem, not a supply problem. In my uninformed and inexpert opinion.
Also, I explicitly said "certain" B2B sales. Joel's conjectures about pricing and purchasing behaviour do not apply to everyone, just to those organizations that have a certain behaviour around making purchasing decisions.
Time to do some reality checks.. ^_^
Another way. Start a relationship cheaply or for free, and then afterwards it's much cheaper to sell to your customers. No $50k salesperson then.
There are lots of other ways to do it. You just need to be inventive.
The vast majority of our deals fall smack in the "$1000-$75000" range.
now tell me your birthday so I can explain to you that its another day entirely.
Yes, most of these people never actually build successful companies. But if you're just working on another straightforward B2B e-commerce platform marketed at the 10% of companies left who don't yet have a web presence, although you might have a greater chance of getting rich, you're not chasing the dream. And the people who see nothing wrong with this never become entrepreneurs, they just avoid the risk altogether and make a good living working at a big company.
It obviously doesn't happen in all cases (and I certainly don't mean to imply that there is nothing interesting and game-changing to be done in B2B businesses), but I think this could be part of the reason why entrepreneurs are always building things they hope people will pay for rather than things people already do pay for.
I think this is true of only a small subset of entrepreneurs. In my town I, the auto body shop guy, the boat trim guy, several bar & restaurant owners, the disposal business guy are just DOers - not dreamers. One of the guys who started a vinyard, a guy who bought a brewery, and the guy who bought a $1mm Titan waterjet might be classified as dreamers.
Walt Disney was much, much more than an entrepreneur. Do you think of Sam Walton as a dreamer?
If he is going to hack only (considering he has found someone who is going to pay based on his output), then he should be able to make what he actually worths.
If he is going to start a business, then he is going to become an Entrepreneur. And that means, he requires a hell lot more of skills like Copywriting, Sales, Customer care, Networking, SEO... (just to name a few)
If the hacker does not have those two things, it is quite likely that he will generate significantly less than 3 million dollars of value.
The trick is to be more than just a general-purpose "hacker". You have to be a "Security expert" or an "iPhone SEO expert" or an "Oracle DBA"... The trick is, you have to know a market segment, and have a good understanding of what the business value of your skill/work is, and then you can charge based on that.
And of course good networking, good people skills, good self-management skills, etc. Stuff that "hackers" usually don't care about.
In my experience, I charge more (than I made when salaried), but only bill the 4-7 hours a day really, actually working. I'm much more productive, work less hours, and make more money doing it.
Specialties are certainly a lucrative way to go, but not necessarily essential. An all-rounder is more likely to have a long-term relationship with a client (depending on the industry of course).
Probably more about the liquidity of the arrangement than those things. Not always easy to hire and fire as needed whereas with a contractor/freelancer you can take someone on board for a particular job and then not use them again.
In life, you never get what you deserve, you get what you negotiate.
This book helped me learn something about it; despite its name. http://www.amazon.com/Secrets-Power-Negotiating-Inside-Negot...
"His central insight was that firms exist because going to the market all the time can impose heavy transaction costs. You need to hire workers, negotiate prices and enforce contracts, to name but three time-consuming activities. A firm is essentially a device for creating long-term contracts when short-term contracts are too bothersome."
EDIT: link: http://www.economist.com/node/17730360
Oliver Williamson's 2009 Bank of Sweden prize updated Coase's theories. Speed read: http://nobelprize.org/nobel_prizes/economics/laureates/2009/...
If you divide total revenue of the company amongst all of its employees, Google still makes say 1-2M per employee, and Nintendo has been reported to earn in revenue 2-3M per employee during the heyday of the Wii.
The key to making this work though is being able to have a product market fit. Or in the HN religion, 'make things people want'.
Secondly I think there are a great number of inefficiencies that can occur if say a product could earn you $3M per engineer/ hacker and you are able to get at-least $40k per engineer/ hacker, as you work to narrow that delta you will refine your nitch, and craft.
If however the revenue does not scale, meaning, it's not easy enough to grab something for your poor/ unskilled efforts, I think it's hard to wiggle your way to the top and reach $3M per person.
I think this is why HN/ VCs tends to fund people in strong existing markets which are begging for an update.
It's too expensive to educate someone on your value, and to build the market, even though there are some entrepreneurs that are really good at that.
http://www.merriam-webster.com/dictionary/niche
Just because a word has a French origin, doesn't mean the French pronunciation is preferred in English.
Source: http://www.talktalk.co.uk/reference/dictionaries/english/dat...
http://www.wolframalpha.com/input/?i=google+revenue+%2F+goog...
http://www.wolframalpha.com/input/?i=google+profit+%2F+googl...
Revenue = total corporate income. Profit = revenue minus costs, with costs including compensation.
For the social justice analysis, focusing on "How much money is available for employees and shareholders?", you want revenue minus costs excluding compensation. Costs to buy materials (except in the rare case the company overpays because the vendor is the CEO's brother) are generally fixed and therefore not part of the analysis; overpaid executives are.
For the record, most of the criminality in corporate capitalism is not based on profit but on executive markup. If a company's only crime is making "too much" profit, then the solution is to buy their damn stock. (No, I'm not an HN libertarian. I'm a socialist, but also a realist.)
Anyways, as thought experiments, I have been toying with the idea of limiting company size to 150 people, based on dunbar's number, which would guarantee distributed ownership and accountability. By keeping group size small i think it's harder to cheat and waste social capitol.
And secondly, I have been thinking of requiring companies to distribute a certain percentage of revenue to employees for a tax break. Since 60+% of federal income is via earned income, it makes sense for the government to encourage this sort of income anyways. I also think this might align executive interest with their employees and help us make earned income more attractive. I am not really sure it's fair that capital income, like dividends and sale of property should be flat taxed at 15-20%, while hard working people are effectively taxed at 30-60%. ( don't forget about the employment/ SS tax which your employer pays, or in the case of a consultant they pay entirely. )
I can relate to this. I had a socialist and a capitalist phase-- more than one of each, actually. In truth, I'm a pragmatist, a syncretist, and I'd include "libertarian" had that word not been stolen from us by right-wing idiots.
Both "socialism" and "capitalism" encompass two centuries' worth of economic innovations, and it's idiotic to think either column has all of, or none of, the answers. We need enough socialism to prevent economic degeneracy (e.g. an outcome where people become so rich or so poor that fail deals become impossible and the system devolves) and we need enough capitalism to remain innovative, to reward hard work, to put the talented and skilled people (who, for statistical reasons, usually are not born into well-connected elites) into decision-making roles, and to allow people to try out new ideas without having to answer to (government or corporate) bureaucrats.
I hate American-style corporate "capitalism" with a passion, though. It's a horrible system that exists to give a socially insular elite (~0.5%) the best of both systems (socialism and capitalism) and leave everyone else with the worst of both worlds.
He especially isn't talking about lone hackers working for themselves, but ones working at startups - the very first line of the essay is "If you wanted to get rich, how would you do it? I think your best bet would be to start or join a startup".
The difference between a lone hacker working for a per-day rate and a startup is the lone hacker doesn't have a value "multiplier", where 1 days work can be resold many times, whether through product sales or something else.
And for the lone hacker who is building a product, well, most hackers are really bad at doing a sales job...
World is built of cash pipes and 99% people just tap into them (salary) or builds their own thin pipes (lifestyle business?). 1% of clever people from time to time manages to build new fat pipe but who and when it's almost due to sheer luck. Experience and smarts don't help you win the lottery, they just buy you a ticket.
When you work for yourself you make an attempt at building new pipe but all you can usually do is build thin pipe and even if you are draining 100% of it it's still less than what you could get if you just tapped to someone else's fat pipe, even if your work doesn't do anything to make the pipe fatter or even harms it. It's most apparent for people in financial sector but I believe it's true for everybody.
That's why most people have salary and try to build something own after hours. This way they are getting a shot at building own cash pipe while still not passing on opportunity at draining someone else's fat pipe.
Oh and it's much easier to widen already fat pipe that to build your own as fat as the amount of the widening. That's probably the answer to your question.
Closed mouths don't get fed.
They never ask for or seek market wages. And the business people they seems to fall into the hands of get wide eyed and/or start slick talking (because to them they've found a sucker) and next thing you know they're working crazy hours and taking a low wage because "they're just coding" "some else's" "big idea (TM)"
Many say things like "I don't really care about money." or "I can wait a couple of years."
And those things can be true but if they were a bit braver and spoke up or found employment with a group who appreciates their talents they would get paid better.
Second, there's risk. Capitalist society always allocates most of the reward to those who take the monetary risk, not those who do the work. From a humanist perspective, it's unfair because you are taking more risk with every job you take-- you're risking your career and health, they're just risking money, which they have in abundance-- but that's how the game works. If you don't like it, become politically active and try to change it.
Third, "business people" are better at capturing surplus value. It's about leverage, negotiation, and putting oneself in the right chair.
All that said, I don't think an unproven programmer is worth anything near $3 million per year, or even 1/20 of that. The worst programmers are not very skilled and are a liability-- negatively productive. I would say that base salaries are about right-- $50,000 for an unproven beginner, $80,000 for a top beginner, $120,000 at the mid-range, and $200,000 for experts-- but that companies should extend much, much more in the way of employee profit-sharing and creative control. Where programmers get stiffed is not in their compensation (which is quite fair) but in their lack of autonomy and "say" in how they do their jobs; often they are held back and prevented from unlocking their talents by meddling "executives" of mediocre intellect and vision. That is what should change, not base salaries per se.
This assumes that having a paying job at all is not itself much of a reward, and that the programmer's take-home pay constitutes no profit for the programmer. But this is wrong, because the programmer would rather have the money than his free time, so the transaction is highly profitable to him. (It's also invalid to suppose that the main human motivation is only to make so many dollars while ignoring all the other relevant context.) Who is it that said "the maintenance of life and the pursuit of happiness are not separate issues?"
Another problem with your way of looking at it is that it ignores non-financial rewards. Doing a good job causes an increase in self-esteem (the real kind that results in the creation of value, not the fake thing we call by the same name, where your teacher gives you and everyone else a gold star), and that is a reward. No one else can ever give you genuine self-esteem.
It doesn't bother me that there are other people out there with a great deal of money, while I don't have very much at the moment. All I care about is myself, and how I'm going to make the most of my life. The only thing I think about when I hear about people with lots of money is, "if they let them keep their money, we're doing great as a society. If and when I earn lots of money by creating and trading value voluntarily with other people, I'll be able to keep what I've earned by the same principle enjoyed by others who have earned their wealth, and that's good for my flourishing life."
This gets back to PG's second assumption: "Assume a hacker can in turn be significantly more productive working for themselves."
Most hackers are not more productive working for themselves for a multitude of reasons, some of which have been discussed (i.e. lack of marketing focus) but I think that most hackers who work for someone else hone very specific skills that are suited to the task at hand, which build value for the companies they are working for, but those skills arent necessarily valued in the marketplace.
You see software units once the first one created has zero cost of duplication as far as producing that next unit to sell to someone..so that economic bias is the assumption that the smart hacker is able to produce a desirable product or service that one can monetize..
Let me give you an example:
The average right now for 2d games on android market is 20k in downloads over 3 months. At $1.99 that works out to about $10,000 net every 3 months from one game. And that is recurring income. Most 2d games take one month to code, thus realistically doing 5 games could net over $100,000 per year after taxes!
Simple as that.
Tech - Normal liaisons will (hopefully) be a growing market in coming times. I'm being selfish in saying that :)
How maintainable, readable, understandable, and extendable is their code? It's well within possibility that changes and enhancements could take 30x longer to develop and test and deploy for a mediocre hacker on a disorganized platform than for a smart hacker on a well-factored codebase. Architecture astronauting is a valid and legitimate criticism, but it's also quite possible to make an application extensible without going overboard.
Marketing and selling is hard. And programmers have varying degrees of build-it-and-they-will-come syndrome.
I'm trying to help solve that problem with my new project. Please consider signing up if you want to sell more - http://laughingcomputer.com.