3 ms·

Tl;dr: I charge a fair amount (effectively well into $three digits/hr) and making what I have previously at a w2 is a real fight. Presuming you meant $150/hr:

by Arubis 7y ago

Tl;dr: I charge a fair amount (effectively well into $three digits/hr) and making what I have previously at a w2 is a real fight. Presuming you meant $150/hr: indeed, and if you’re freelancing, you almost certainly don’t have that high a proportion of billable time. Prospecting, marketing, deliberate learning, and other overhead are all necessary parts of the deal and can easily take half your available time. I tend to do all that in downtime between contracts, so it’ll look like 25-35 billable hours per week but with maybe 25-30 weeks/year utilization. Others just overlap everything; works well with longer contracts.

K0SM0S 7y ago
I'm wondering if it's also not heavily dependent on the business structure that you set up for yourself, as a freelancer. It's a one-man company (for the most successful), a self-employed job (for the majority, or so I hear). The former eventually makes "products", while the latter may entertain a permanent rat race, wheel spin. Difference in point: how much of what you do leads to higher value at fixed cost (notably in time, how long does it take you to deliver), or same value for lower cost (same idea). I'd wager that, for the one-man company mindset, you tend to think not task but process, automating progressively etc. (need-to-basis optimization, ad hoc 'frameworks' that speed up your particular niche projects, heck just taking work from client A and refactoring it for client B and building an informal "product" eventually from there, that's the story of all freelancers who've been at it for 5+ years as I see it) How much of the past work (self and tooling improvements) is factored in present value? Can we decorrelate X years of history of a company and estimate its cost/value production simply YOY? I think not. I think the greatest (companies, freelancers) incrementally raise the bar— making the threshold for competition much too high for a newcomer, hence commanding much higher value. [At the highest end of that spectrum, meet Apple. Even tech giants struggle to meet that bar, whatever goes in it (tech genius? marketing? craftsmanship? whatever. $ at the end of the day)] Doing the [work hours × $rate × utilization] equation only says so much about what actually goes into your rate (years of being more efficient at "it", those things you do). Say you begin at $75 in the US after a ramp up of 3-6 months to establish yourself on the market. You survive for 2 years like that, reach ~$100. You realize it's only $50 real, and your newfound expertise is priced higher in the salary job market. So you either raise your rates or go get that money elsewhere. That's why IMHO an "expert freelancer" market only makes sense north of $100-150 in the US (adapt numbers for any country, minus perhaps the "tech not sexy" effect e.g. in Europe where it's not better paid that other intellectual activities). Right now, you are worth much more than whatever you did this year, and presumably (hopefully for market sanity) it shows in how much you earn.
- Arubis 7y ago
  I'm constitutionally incapable of not commenting on threads like this :) So, yes, your description is accurate, though putting scare-quotes around "products" is necessary here. As folks grow in this profession, as I see it, there's three paths to success without ending up back in a W2: * make _actual_ products (which is my own eventual goal), or * find a way to productize their service (re-usable code blocks or processes, customized per client at a very high effective rate), or * get really good at prospecting new contracts and end up hiring more individual contributors, eventually building an agency. Of course, you could potentially mix and match, and service productiziation is a good step on the way to building products. What's most in-common across those three options is that none of them reward you, the freelancer with aspirations towards growth, for billing by the hour. And I think that plays directly into your point of task vs. process: for a _task_ you'll need to consider _how long it will take, while for a _process_ your primary concern is _what it will achieve_. So all this discussion of hourly rates is actually presupposing an arrangement that runs counter to the best interests of everyone involved--including, frankly, those of your client, because it incentivizes you to take as long as possible to deliver your work product. IMHO once you've crossed the line of "I am making enough money to not think about money when buying a non-special meal", it's time to think about your billing structure, even if you end up losing money short-term. Otherwise you really are signing up to use a very high-value skillset to live paycheck-to-paycheck. (My prior description of my hourly rate is hand-wavey for two reasons: first, this, that I tend not to charge hourly--and second, that no freelancer in the process of frequently hitting their rates with a multiplier benefits from making a hard rate commitment in public.) Another comment in this discussion described freelance senior software engineer rates as running $100-300/hr. I believe that, and higher--on an _effective_ basis. But I'd wager the higher end of that scale is day-, week-, or fixed-bid rates. On a personal note: a lot of the struggle/low utilization on my end owes to having a baby in the home. A W2 keeps paying you the same when you don't sleep for six months, but that has real consequences when you have to find your own customers!
  - blaser-waffle 7y ago
    > find a way to productize their service (re-usable code blocks or processes, customized per client at a very high effective rate), or Anecdote incoming: One of my short-term roommates was a programmer who did mostly SCADA-type stuff. He'd previously had a gig working for a utility contractor designing water/plumbing control systems, but for unrelated political reasons the project died he was able to retain the code (no idea if that was legal or permitted... but he had it). Flash forward to when I was living with him and he was doing freelancing work for a few counties and their related utilities, essentially implementing the same code for new clients. He eventually admitted he was only doing 30-40% new code, and mostly reviewing the existing systems. Didn't seem to lack for work though, and had a few stacked clients / contracts going at once. Don't know his hourly rate but I'd assume he was going for at least $50/hr.

by Arubis 7y ago

K0SM0S 7y ago

I'm wondering if it's also not heavily dependent on the business structure that you set up for yourself, as a freelancer. It's a one-man company (for the most successful), a self-employed job (for the majority, or so I hear). The former eventually makes "products", while the latter may entertain a permanent rat race, wheel spin. Difference in point: how much of what you do leads to higher value at fixed cost (notably in time, how long does it take you to deliver), or same value for lower cost (same idea). I'd wager that, for the one-man company mindset, you tend to think not task but process, automating progressively etc. (need-to-basis optimization, ad hoc 'frameworks' that speed up your particular niche projects, heck just taking work from client A and refactoring it for client B and building an informal "product" eventually from there, that's the story of all freelancers who've been at it for 5+ years as I see it) How much of the past work (self and tooling improvements) is factored in present value? Can we decorrelate X years of history of a company and estimate its cost/value production simply YOY? I think not. I think the greatest (companies, freelancers) incrementally raise the bar— making the threshold for competition much too high for a newcomer, hence commanding much higher value. [At the highest end of that spectrum, meet Apple. Even tech giants struggle to meet that bar, whatever goes in it (tech genius? marketing? craftsmanship? whatever. $ at the end of the day)] Doing the [work hours × $rate × utilization] equation only says so much about what actually goes into your rate (years of being more efficient at "it", those things you do). Say you begin at $75 in the US after a ramp up of 3-6 months to establish yourself on the market. You survive for 2 years like that, reach ~$100. You realize it's only $50 real, and your newfound expertise is priced higher in the salary job market. So you either raise your rates or go get that money elsewhere. That's why IMHO an "expert freelancer" market only makes sense north of $100-150 in the US (adapt numbers for any country, minus perhaps the "tech not sexy" effect e.g. in Europe where it's not better paid that other intellectual activities). Right now, you are worth much more than whatever you did this year, and presumably (hopefully for market sanity) it shows in how much you earn.

Arubis 7y ago
I'm constitutionally incapable of not commenting on threads like this :) So, yes, your description is accurate, though putting scare-quotes around "products" is necessary here. As folks grow in this profession, as I see it, there's three paths to success without ending up back in a W2: * make _actual_ products (which is my own eventual goal), or * find a way to productize their service (re-usable code blocks or processes, customized per client at a very high effective rate), or * get really good at prospecting new contracts and end up hiring more individual contributors, eventually building an agency. Of course, you could potentially mix and match, and service productiziation is a good step on the way to building products. What's most in-common across those three options is that none of them reward you, the freelancer with aspirations towards growth, for billing by the hour. And I think that plays directly into your point of task vs. process: for a _task_ you'll need to consider _how long it will take, while for a _process_ your primary concern is _what it will achieve_. So all this discussion of hourly rates is actually presupposing an arrangement that runs counter to the best interests of everyone involved--including, frankly, those of your client, because it incentivizes you to take as long as possible to deliver your work product. IMHO once you've crossed the line of "I am making enough money to not think about money when buying a non-special meal", it's time to think about your billing structure, even if you end up losing money short-term. Otherwise you really are signing up to use a very high-value skillset to live paycheck-to-paycheck. (My prior description of my hourly rate is hand-wavey for two reasons: first, this, that I tend not to charge hourly--and second, that no freelancer in the process of frequently hitting their rates with a multiplier benefits from making a hard rate commitment in public.) Another comment in this discussion described freelance senior software engineer rates as running $100-300/hr. I believe that, and higher--on an _effective_ basis. But I'd wager the higher end of that scale is day-, week-, or fixed-bid rates. On a personal note: a lot of the struggle/low utilization on my end owes to having a baby in the home. A W2 keeps paying you the same when you don't sleep for six months, but that has real consequences when you have to find your own customers!
- blaser-waffle 7y ago
  > find a way to productize their service (re-usable code blocks or processes, customized per client at a very high effective rate), or Anecdote incoming: One of my short-term roommates was a programmer who did mostly SCADA-type stuff. He'd previously had a gig working for a utility contractor designing water/plumbing control systems, but for unrelated political reasons the project died he was able to retain the code (no idea if that was legal or permitted... but he had it). Flash forward to when I was living with him and he was doing freelancing work for a few counties and their related utilities, essentially implementing the same code for new clients. He eventually admitted he was only doing 30-40% new code, and mostly reviewing the existing systems. Didn't seem to lack for work though, and had a few stacked clients / contracts going at once. Don't know his hourly rate but I'd assume he was going for at least $50/hr.