Ask HN: How to price yourself?
Philippines
Background:
I quit college because it was expensive for me. I entered the company with 1 year experience basic programming(C, C#, etc.). They have given me a book ruby "Programming Ruby" and started to work there as a web developer/tech support/call center for 3 years. I was just earning $550/month and as the company and people grow it goes down to $250 due to failed pricing and small clients.
I was still staying there due to clients that used the product. Also the relationship with clients that I have build because we worked on it side by side.
Current Situation: I have exposed my resume online. I wanted to do remote or relocation overseas.
I'd like to ask what is there regular per hour rate of ruby on rails programmer. And how skill is based on the pricing. I was also hoping if $15-$20/ hour.
175 comments
[ 4.5 ms ] story [ 222 ms ] threadCaveat: being a successful contractor requires more than good programming skills. You also need to be an effective communicator, find clients, plan and manage projects, etc.
I suggest starting by setting a bare minimum for yourself – the rate you need to charge to survive. Freelancing should probably be about double the rate of full-time employment, as you have a lot of unchargeable (or just plain idle) time, so you have to allow for that.
Then, it's really just a matter of looking around and trying to figure out what other people are earning for similar work. It also helps if you have some idea of the value you're providing for your clients, as your rate should be roughly proportional to that.
For instance, I know one of my main clients charges out (both my time and theirs) at a flat rate of NZ$150/hr, and a bunch of their time is unbilled, so the NZ$80 they pay me is in the "reasonable" zone (especially for pretty solid guarantees of ongoing work). My "survival" base rate would be about NZ$60/hr (NZ$40/hr at the kind of hours I manage to bill wouldn't really provide me a living.)
But like I say, you're in entirely different circumstances to me, so the details don't really translate at all. It's a matter of (for all of us) figuring it out for yourself, really.
That gives you loads of capacity to try increasing your rate (ie, you won't be desperate for work) as well as holidays etc.
So if you need $40,000/yr to survive, your hourly rate is ($40,000/50 weeks /16 hours) = $50/hour.
Reading the other answers, it sounds like $100/hour is the US market rate. So you have plenty of opportunity to grow from $50 to $100/hour, as quickly as you can. Good luck!
I've been working on the assumption that I'd get 20 hours a week here in the UK and set my hourly rate at £26 accordingly.
In the UK I'd also not be liable to make National Insurance contributions which would save £2,200 per year.
Then comes another common question - self employed or limited liability company?
So perhaps plan 35-40 hours over 35 weeks. Then set your rate at or above the market rate for your speciality. Don't set it on your cost of living.
If the market rate is too low to live, you'll need a plan on how to upgrade your stature or find a more in-demand speciality.
Patio11, whose judgement I will defer to in all things regarding freelancing, just tweeted this, earlier today:
>Far too many freelancers have an internal script where you have to start your biz in poverty and claw your way out of it. Eff that.
And:
>Professional work commands a professional rate, on day one. That's what professional means.
Also his general remark regarding rates: Charge more.
Also check out his blogs, his book goes exactly through how to figure out all your questions, like how much shouldnyou charge, how to find clients, etc While you probably won't be charging 100+$/hour at thr beggining you can work your way up to that eventually.
gdiocarez: First and foremost, thank you for breaking the silence on this.
As for an answer: So, the world is weird. I generally bill $185 an hour as a spot rate. I have fairly little problem finding steady work at $100 or so on a steady basis. I tell you this because I think it's fairly typical for someone living in a major city in the US.
My hope, and I hope everyone's hope, is that the world will generally equalize around this range, or even higher. I have observed again and again that, each time I or a colleague makes a contribution of value, we create a dozen or so opportunities for like contributions.
Unlike the fossil fuel economy that characterized the industrial era, I surmise that the information age is somewhat sustainable as an exponential curve of economic possibility. This is a radical viewpoint I'll warn; many of my (otherwise seemingly reasonable) friends fear that "the music will stop" unexpectedly and that today will be one of "the good old days."
The truth is: nobody that I know knows the answer to your question. Price yourself aggressively and work hard. I can tongue-in-cheekly advise you to try to be lucky. So far, being born in an economic powerhouse (and in an economic, racial, and social position of privilege) has worked for me.
Good luck!
Ask somebody who works remote or pay an accountant. Heck failing that ask the company how they would prefer to pay you (this has the potential downside that the method they prefer is not likely to the the most optimal method from your perspective, but it is likely superior to not getting paid at all, i.e your current situation).
There were lots of talk about a new type of economy then, too...
The computer job market has bubbles too, but not necessarily in phase with the general economy. And if there is a good job market with software while the general economy is in the toilet, lots of people will study computer science and you'll have a bloodbath like 12-14 years ago when the bubble burst.
TL;DR: Winter is coming. :-) :-(
I had an insight the other day (while watching one of Hans Roslings videos): it is mathematically impossible to distinquish an S-curve from exponential growth until/unless that growth flatterns, just from the shape of the growth alone.
The good news in case this is an S-curve and not exponential growth: we just stop widely growing, we don't peak and crash.
With a logistic (S) curve, the ratio of the change to the current value will decrease. By the time you get to around 25% of the maximum value, the difference should be visible.
The software world is also still (and always will be) dependent on the "real world", where fossil fuel is still key and will be for a long, long time.
I have to say that you live in a bubble slightly above ~95% of the world, you are indeed very lucky - hopefully for the rest of your life.
Now, are they just siphoning profits (and wages) from the older businesses in order to create these jobs? In my opinion, it's more the case that the older business had a high price initially to offset their upfront software costs, and by the time sufficient free software appears they are just riding it without having ever had to distinguish themselves as the 'premium' option, even though it's a fact they aren't even trying to develop to the non-premium market with lower prices. So the new folks come, they have lower prices, and a lot of people that would have never used that service start using it. And unless the older businesses fail to justify their premiums, this should grow the market enough to preserve high wages.
Eventually the new business will (should) develop their own in-house solutions beyond the free software, and you'll have the cycle repeat itself.
Iron ore is "free" you just have to go dig it up. How can steel companies create jobs?
Ok, let's take Linux as a specific example. Take a gander at this: http://lwn.net/Articles/547073/
So major companies (Oracle, Red Hat, Google, IBM, Intel, Samsung, Fujitsu, Texas Instruments, etc) are contributing to Linux. That creates jobs for all the kernel hackers who probably started before kernel knowledge was a hot commodity.
But that effect is minor compared to what people are building WITH Linux: - Red Hat (a 1B company!) wouldn't even exist if it weren't for Linux. They don't "sell Linux", they sell services around Linux. - IBM invested a billion dollars in Linux, and it paid off. They recently decided to invest another billion. Their support for Linux sells Mainframes and their expertise sells services. - Google wouldn't be able to give away their search engine (over 10 million servers) if they had to pay Microsoft for every server. - Companies like TI and Intel can add Linux support for their chips (a tiny expense compared to creating a new CPU), which will enable new devices to be created easily. Some of those new devices (TiVo, Android, Tomato WRT, RPi) will be successful and cause their companies to hire more people.
Giving away software doesn't compete with programmers -- it only competes with companies that sell software. Only a tiny fraction (maybe 5%?) of programmers work for companies that sell software directly. The vast majority of programmers write internal line-of-business software, or sell their software indirectly (SaaS).
So any Open Source software (Drupal, Apache, etc) is far more likely to help lots of companies save money (therefore have money left over to create jobs).
> In fact, for every programming job there may be manual jobs becoming obsolete.
That will make programming jobs be more "in demand" compared to regular jobs, therefore command higher salaries.
> So what can sustain high hourly rates and create new jobs?
You are thinking about it from the wrong end. The question is "can a bit of software be worth millions/billions to a company?" The answer is clearly "yes", since we've seen tiny teams create billions in value over and over.
Search around for the writings of patio11 on HN. He will open your eyes. People charging $200/hr are playing a different ball game than people charging $20/hr. They are not 10x better, just better at demonstrating the value of their software to the client.
> not everyone can become a specialist.
Just the opposite. There are so many new technologies and branches of science coming out that everyone will be a specialist in the future. In fact, programmers are already highly specialized. No matter what technology you pick (COBOL, Java, .NET, Linux, Microsoft, nodejs, Ruby, Python), you will find that some subset of programmers will refuse to work on it because they refuse to learn it.
Linux is certainly the shining example of free software. But how many other projects have the same potential to create jobs? Even with Linux, it's not enough to have an average understanding. Large companies may have a few positions for mediocre sysadmins, but competition will squeeze them out.
Probably the answer is not in software itself, but in the creation of small businesses that rely on free software. Sites like eBay and Alibaba have enabled countless people to work from home selling things around the globe. There are also countless data entry and Mechanical Turk-style jobs. And of course electronics manufactuing. So the trend is that even at the bottom technology becomes a requirement. I guess the good news is that with all the increased productivity the standard of living rises and people will have more time to learn new technologies.
1. http://www.economist.com/news/special-report/21621237-digita...
Yes, that is what I was trying to say.
Not using Open Source on principle is like creating "make work" just so people can keep their jobs. But all "make work" does is allocates resources inefficiently.
> over-education is a problem because of a failure to create enough suitable jobs.
I think we've wandered off the topic (my original reply about Open Source.).
> technology fails to boost wages
I find it odd they wrote a whole article on that, when the converse ("Lack of technology fails to boost wages") is equally true.
Even if wages are the same, what we can DO with those wages has already changed for the better. Even poor people in America have TVs, Air Conditioning, and the Internet (even if it's only at work or in a library). Anyone can call up a satellite map of the world, or have an entire encyclopedia at their fingertips. Only rich people could do that a generation ago.
Oh sure, computers and televisions are better and cheaper than ever, but you can't support a family of 4 if the dad is a grocery store bag-boy and the mom babysits, which is what my family was able to do 50 years ago, with a house (mortgage), car, motorcycle, and a boat. I doubt if a bag boy today can even afford gas, car insurance, rent, and food without struggling.
Oh sure, computers and televisions are better and cheaper than ever, but you can't support a family of 4 if the dad is a grocery store bag-boy and the mom babysits, which is what my family was able to do 50 years ago, with a house (mortgage), car, motorcycle, and a boat. I doubt if a bag boy today can even afford gas, car insurance, rent, and food without struggling.
Sure, I can still find small developer collectives in Bangalore or Hyderabad selling Java coders at $15/hour ... But thats the lower end of junior developers.
Long term certainly there remains a lot of transition from paper to bits and then require really skilled developers to maintain and grow after the transition. There should also be a lot more programmers then.
Communication skills & who is employing you matter a lot. A mediocre developer can charge a lot when they are working alone on a project for a non-technical company. That isn't going to work when placed in a position where its obvious your work is crap.
Of course inflation means wages will go hell above $100, but what that means is entirely relative. That said, it is nice to be in an area where your wages are not neck and neck with robots. Increasing minimum wages + almost zero % interest rates are converging on unskilled labor very quickly.
music
movies
microcode (software)
high-speed pizza delivery"
cheers.
I managed to go from (I've converted these from GBP) $23k to $56k by doing that in one jump and three jumps later I'm earning $110k sitting on my butt at home. Just requires some balls and outward confidence which I will admit was slightly alcohol fuelled when I was on the phone choke hmm.
Plus I know what I'm doing but that's a case of two decades of hard work and is entirely separate to the job market and salary expectations unfortunately which is all about knocking people's salary down.
just have some balls when negotiating and prepare to walk away. Get some practice in on jobs that you don't really want, negotiate hard for them and get used to the negotiation to and fro.
Some of these managers/biz people get paid $200+/hr and so don't battle an eyelid when you have some balls. Infact your image goes up in their eyes.
I've found remote work hard to come by in the UK.
Remote work is easy to find in the UK, but through word of mouth. You'll get nothing through the agents.
There's also HN discussion of it if you search
I had someone demand my salary expectations in an email two days ago, and I answered with a question about whom I would be reporting to. I haven't heard back yet. Maybe they flushed me for "not following the rules." Fair enough. You do not want to deal with people like that. Bad clients are worse than no clients.
And I'm saying that as someone who currently doesn't have full-time work, and is looking for it, and has a family to raise.
Now, sometimes I have found that their maximum salary was beneath my minimum accepted value. They can stop wasting their time if they announce their salary upfront, but for some reason they won't do that. Their loss.
Self-assess honestly on whether you're there yet. If you are, your new rate is $100 an hour, and you should spend the next several weeks pitching clients on why they should have you build a system for them. Where to get seed clients? I'd start by working your pre-existing clients, either for direct work (if allowed under your contract with the ex-employer and local norms) or for introductions to similarly-situated firms, if they were good clients. If not, skip it, find good clients.
Relocation is not necessary and, short term, will neither sell engagements nor immediately improve your situation.
I believe StackOverflow did a similar thing when they hired developers all over the world. The salaries of the developers were based on the local economy. Not on NYC or SF economies.
Yes he will spend far less on basic living - but paying for his sons medical treatment will be far more worrying (more expensive in US but also more likely to work)
There is a reason Mexicans cross a border instead of remote cardless working.
I remember reading something you wrote a while back about tying the pricing of your appointment software to the costs of one missed appointment a month
I don't have experience freelancing but it seems like that s sort of what he should be doing here too, try to dollarize the value of what he's building and then justify prices based off that, not what it takes for him to survive
What about knowing enough about security when writing the code to be able to avoid obvious and non obvious pitfalls? How does someone with little experience even know what they don't know about that?
1. Determine how much time are you willing to allocate for work.
2. Set whatever the price that will fill up that time with client work.
3. Once you have more clients than allocated time, increase your price.
(bonus) 4. Client pool and time permitting, target projects that will further evolution/creation of skills you want to improve/develop, not the ones that you've already good enough at.
To be able to do that, you should have some form of rudimentary tracking of your time/price/value performance. No need for overkill here, a simple regulary updated spreadsheet or even just a text file will do. The accent is on "regulary updated".
You're in quite an enviable position - your in a location where your cost of living is relatively quite cheap to the west, but the potential to earn western type wages - enjoy :)
Learning a common tool (say Rails) that you will have to use for the project? Learning a very specific tool (say a function-specific library for some particular part of the project) that you have not previously claimed prior knowledge of? Studying the clients own existing code?
What about negotiations? Research into the required work needed for particular functionality?
- Learning core software/skills is not billable. "Core" is "any decent dev in this niche already knows this stuff." That's the stuff you read up on in your evenings. (One way my main client works around this is to have a senior dev always quote the tech side. Even if a junior dev does the work, they only get paid the quote, so they effectively self-adjust their hourly rate according to their skill level.)
- I would charge (and have charged) reading the docs, figuring out how to compile, and integrating a third-party payment lib I'd never seen before. So, specific tools/libs outside of the norm, I consider chargeable.
- Research for what I do is usually a write-off, but I can sometimes work a couple hours into the quote for a prototype if there are big unknowns. Or, before quoting, I say "give me a couple of hours to prototype, with the understanding that if we go ahead it's a component of the quote, if we don't go ahead you'll pay me anyway." Sometimes I don't charge the prototype, but it's instrumental in convincing the client to go ahead at all, so it's still a win.
- Tangent of a tangent, but kinda related to your 'research' point – quoting is really hard, mainly because quoting thoroughly approaches the complexity of doing the work for real. So a lot of my quotes are "if things go how I hope they will this will take 1 hour. If things go badly I'll come back and talk to you because we could be looking at days." Unknowns are really hard to quote without just doing the work.
From my experience, you have better chances of getting a better pay AND work-life balance at a full-time job than in freelance sites (Elance, oDesk, Freelancer.com). There's barely any decent clients there who are willing to pay us $30/hr. However, you have the experience, and I'm very well aware that RoR developers here can easily command a salary of PHP150k-200k every month... perhaps even more. All you have to do is find the right company, and ask.
If you check out Jobstreet and JobsDB and set the salary filter to a minimum of 100k, you'll still find plenty of openings for Ruby devs.
It is about future-proofing. And for this, the actual university doesn't matter much.
A college degree is required for pretty much any medium to large company. This is especially so for international companies in developing countries. Think long term: 5 to 10 years down the road all kinds of opportunities can open up, don't exclude yourself from them.
A college degree is (amongst other things) a document, a passport, and without one you will have incredible obstacles to overcome.
Not very true in my experience. Just last year my friend landed a job in Samsung without even BSc and he's now flying to Korea on a monthly basis. Last month he got an offer from Fujitsu. And the funniest part: he's a self-taught JavaScript programmer. This is not a proof, just an anecdote - but one not entirely uncommon in our industry.
Sure, there are useful things you'd learn in a university, but you can also learn them by yourself. I did. It's so much cheaper that way and just as effective. It's completely irrelevant where does your knowledge and skill come from as long as you have them and can prove it.
During the last decade of my professional software development work there were perhaps two times where not having "a passport" was a bit of a problem. But never a deal breaker, much less "incredible obstacles".
Nowadays it's easier than ever, with online courses everywhere, some free and others infinitely cheaper than university fees. My advice is pretty generic here: have a github account with lots of fun stuff, have a blog documenting interesting projects you do (even failures), answer SO questions, go to conferences, build a decent portfolio and so on.
Odesk and Freelance.com are good places to start looking for remote work.
God talks to me.
Until you understand God talks to me, you are completely stupid and not worth talking to. We cannot get past square one. God talks to me. What does that imply I should do? I don't think it means get a job. God wants me to make His fucken temple.
God talks to me. I am not a nigger. I am His chosen programmer.
You're looking for an absolute answer to a problem that doesn't work by that kind of logic. There's no big price sheet in the sky that says that guys with your experience level should get $X per hour.
Think of yourself like a priceless painting at an auction. Nobody knows how much you're worth until someone digs deep into their wallet and pays $X million dollars for you. And the reason that caused him to do that could be as much about his art-hungry, gold-digging spouse as it does about anything to do with the painting.
So get used to bargaining. There's a bunch of negotiating tips you can use to get better compensated, they're scattered all over the web. A big one is to never drop your price. Have the chutzpah to stand firm. People will use dirty tricks to get you to drop your price. You have to get wise to them, or you'll never be able to really do well.
If you have a very clear backend specification, it's very easy to find a good RoR freelancer to code it. Or, if you have an exact and thoughtful wireframe, practically any UI person could do a good job. And html? There are thousands of freelancer on Elance/Odesk that will charge 5$/hour. Will they all be the same quality? Of course not. But the point is it's very hard to differentiate yourself for a prospective client.
Now, taking on the whole project is much harder and requires more experience but it pays off because there's less competition. More specifically, if you can gather the requirements and really understand the problem, finding the best technology for it, coding it and managing other freelancers as well as delivering a high quality project with amazing documentation.. that's gold.
It's so much better to charge for a whole project than bill per hour.
For someone who can meet in person in the US, on site, with a legal ability to work and then works remotely you can do double that. For someone on site rates easily reach $200/hour and above. My Dad used to bill $213/hour doing neural network programming for credit card companies. Generally you spend Monday-Thursday on site consulting, often expensing a hotel, then head home for the weekend.
One of the books that has really helped me and the one which I refer to constantly is "thefreelancery" by walt kania [1] Give it a read. I am sure you will find it useful.
There is another book that focuses more on the "survival" part of your freelance journey. The freelancer's survival guide[2] by Kristine Kathryn Rusch.
My experience has been that
a) your rate usually depends upon your perceived ability to successfully deliver. Prove to your prospects that you can and they will be more willing to give what you ask
b)Don't mention where you are from (unless you are okay with your prospects discriminating on price based on your location, it's sad but it's true)
c) If you have trouble finding >$50/hr jobs then what you do instead is quote a fixed price (non refundable 1/4 in advance) and finish the job in fewer hrs it takes some practise to identify high income and low effort projects though
All the best :)
[1]http://thefreelancery.com/portable-wisdom/ [2]http://kriswrites.com/freelancers-survival-guide-table-of-co...
Actually we're (ROHQ) trying to hire a junior .NET dev in Makati city, here's the link if you want to apply: http://jobs.jobstreet.com/ph/jobs/5088558?fr=21&src=12
If you'd rather contract and work remote, best of luck to you! I have no idea what that market is like. If you're not in the city, it seems like your internet's not going to be stable enough for reliable work, and if you are, maybe it's easier to brave the traffic as you get your feet under you career-wise.
E.G. if living in Manila is 50% cheaper than living in SF (http://www.expatistan.com/cost-of-living/comparison/manila/s...) (and my apologies to gdiocarez if they don't live in Manila!) you probably shouldn't price yourself at 50% of the wage of a US remote worker. But what about, say, 5% cheaper than the competition so that you can compete on price (or indeed earn more, relatively speaking) without devaluing your skills?
I think current advice here does a good job of giving you some algorithms for taking your cost-of-living and working upwards to a reasonable wage from there.
(Full Disclosure: I've worked in Waterloo, Canada and currently in London UK, so I'm used to a generally lower salary than comparable jobs in the US and currently pay similar living costs to SF and NYC. :P)