12 ms·

New to freelancing, and while I get the hustle and pricing according to the value for the client, it's still hard to wrap my head around people charging 500$/h+

New to freelancing, and while I get the hustle and pricing according to the value for the client, it's still hard to wrap my head around people charging 500$/h+. Like, what is the value an AI contractor can deliver in ~50h that easily justifies spending 25k (and without much prior knowledge about the product, systems in place, etc.). Honest question, trying to understand the game.

bitL 6y ago
Automating away 100 people in some repetitive cognitive task for example.
twomoretime 6y ago
Cutting edge applied ML can do things that previously could only be done by humans. You're generating potentially unprecedented insights into your data because neural networks pick up on what I call "nonlinear" correlations - stuff that is missed with typical first order statistics like averages and skews and such. So basically ML when done right is enormously valuable because it horizontally extends the reach of computation into previously humanlike domains. But the caveat is that it's hard to do ML right. You need very much to be a generalist, an autodidact (to quickly learn the nature of the domain you're operating in) and I think a background in math and/or physics, or at least some other quantitative field is indispensable. You can do a hell of a lot more with neural networks than sort cat pictures or target ads.
cambalache 6y ago
That is about 1 month cost of an average Engineer at a big company. So as longs as the freelancer provide as much as value as your average employee in 1 monh the company is doing a good decision. It is even better because the expertise of the freelancer tends to be high.
- jorvi 6y ago
  $500 per hour, 8 hours a day, 5 days a week gives $20k a week, $80k a month or (let's be charitable and say you earn a $40k bonus) $1 million a year. I don't know what the split between benefits and pure salary is in America, but let's put it at 2/3. Does the average engineer at a big corp really pull in $666.000 a year..?
  - TomMarius 6y ago
    Yes, if you include stock options
    - why_only_15 6y ago
      The average engineer doesn't pull this much. Maybe ~300-400k/yr but not 600k/yr, even with RSUs.
      - ska 6y ago
        For what it's worth the average engineer doesn't get anywhere near 300k/yr. SV rates in some sectors have really distorted peoples view of what is actually being paid across the industry.
      - exdsq 6y ago
        The average engineer doesn't pull in 300-400k either
        why_only_15 6y ago
        at a faang in the bay area? if not that pretty close to it
        exdsq 6y ago
        The average salary of an engineer at one of five companies in a single geographic area is _very_ different to "an average engineer", even just in the State let alone in the US or further afield.
        TomMarius 6y ago
        So what exaxtly "big corp" means?
  - blackrock 6y ago
    What is $666.000 a year? Is this $666 per year? I think you’re missing a comma somewhere. ;-)
woah 6y ago
Having a PhD likely helps. Whatever the value delivered, it will be easy to justify to higher-ups
- ganstyles 6y ago
  This seems to be less and less the case. The ML industry changes so much and so quickly that a PhD in some specific subject is obsolete quickly. Of course there are ancillary benefits to having a PhD, and certainly the more stogey "higher ups" of certain mentalities might be convinced, but largely it doesn't move the needle. In fact, most of the really respected people in the industry have told me that one shouldn't get a PhD for ML anymore unless they have very specific goals and it is a tip top program.
analyst74 6y ago
The last projects I worked on with about 10 other people doing some not-cutting-edge tech to make things more efficient increased the company's yearly revenue by over 500mil. I imagine a consulting team can probably negotiate a fee exceeding $500/hr delivering that kind of returns. The company is not that special, I don't even know if we make it to Fortune 500. The point being, technology is a force multiplier, and when applied at the right lever for companies above certain size, the returns can be enormous.
ska 6y ago
This has nothing to do with AI specifically. Basically if you are hiring a contractor/consultant you are doing one of two things - bringing on capacity, or bringing on capability. Sometime a mix of both. The former category buys you a little bit of flexibility in hiring, etc., so you should be willing to pay a little more than you would fully loaded (e.g. 1.25.x - 2x salary, depending on a bunch of factors) with no complaint, but that's about it. The great thing about capacity freelancers is you can turn them on and off easily as your needs change. That capability category is a vastly different space though. Imagine I'm a specialized skill/experience sort of consultant or freelancer. If you hire me to show you how to do something you don't know how to do, how much is that worth? Or what if bringing me on for 3 months can pull your time-to-market ahead by a year? Maybe you would love to hire me full time but can't afford it (or I just don't want full time with you) - or maybe you just don't have enough of this sort of work to justify an expensive hire. It all comes down to value. If 50k worth of my time will save you 3 million dollars, why do you care how much time that is? Sometimes a 2 hour conversation can save you from a 300k mistake. Should I be charging you for the time, or the impact?
- ganstyles 6y ago
  Just responded to the person you were responding to, but well put. In my case it was very much the latter, and we don't know the true results yet, but will potentially allow us to get operational significantly faster, with fewer mistakes, with a better product. Win win win.
ganstyles 6y ago
Imagine developing a core competency for your company where it's complicated enough that you're not sure what route to take. Also assume you have a team of maybe 8-10 ML engineers who all make what ML engineers make. It makes so much more sense to pay $25k to get direct knowledge of systems and techniques versus your team spending a bunch of time exploring different products/methods/algos to find something that might work in the end, or might fail in a few months. $25k is like 5 MacBooks, hardly worth thinking about versus being able to get experienced direction from someone who has done what you're trying to do and saving your team literally hundreds of hours of exploratory work. It's not really a game, it's good sense. Yeah given the covo here I probably could have negotiated them down, but that's my time doing that and then things have to be vetted with outside counsel and the CFO, also time wasted, versus just telling them this is what the person charges, we need them for 50 hours, "authorize the charges please." And at what cost, saving a few thousand dollars?
- mlthoughts2018 6y ago
  How do you develop a business connection and market your service as being more valuable that the wide abundance of free materials, engineering blogs, research papers, etc., in this space? Just for example, I run a team of 10 machine learning engineers at a large ecommerce company. We mostly do NLP and computer vision, some time series forecasting. I cannot imagine ever paying anything close to $25k for consulting advice, that’s just bananas to me. We recently purchased licenses to use the data annotation tool prodigy from the spaCy creators at explosion.ai. That was ~$4000 and the decision whether to build our own data annotation system or not was excruciating, involved all kinds of business documentation, RFCs, approvals, NDA processes, etc. It was deeply non-trivial to procure that, and building our own was a very serious option we pursued with tech specs and prototypes and everything. Spending 6x that amount for _advice_ about NLP, which practically grows on trees today, is just totally unrealistic. It makes me suspect the real target customer for you is not companies with actual ML engineering teams or ambitious data-driven projects, but more like someone looking for McKinsey-lite. Some place that has no serious ML use case beyond drop-in pretrained models and sees $25k as the cheaper path to rubber stamp certification that dissolves internal political feuds. Most likely just selling super cookie cutter NLP models as if they are advanced and represent some sexy leap forward for a company with a couple junior data scientists. Algolia or just some drop-in Elastic tfidf search is more than enough for these companies. Spend the $25k on an intern who can tell you anything you need to know about neural network frameworks. In reality, the 4-5 ML engineers you already hired are very likely more knowledgeable than the freelance consultant you might hire. They can tell you much more about state of the art and simultaneously know the specific integration path in your company’s web service and data ecosystem. Those folks won’t be wasting time prototyping - they would be pursuing a more efficient way to get the answers you need than advice from a freelancer, even if that freelancer was Bengio for pete’s sake. I just cannot see the value prop here except for the usual story of paying for consulting as a virtue signal / credential / politics kind of thing.
esoterica 6y ago
Plenty of lawyers charge $500/hour or more, why shouldn't engineers? Having a PhD and domain expertise in a niche field seems at least as valuable as a law degree. If you're working on a project that's driving $1 billion / year in revenue even a 0.01% increase is $100k/year. It's pretty easy to justify $25k on a contractor if they can demonstrate even a very modest impact on your project.

bitL 6y ago

Automating away 100 people in some repetitive cognitive task for example.

twomoretime 6y ago

Cutting edge applied ML can do things that previously could only be done by humans. You're generating potentially unprecedented insights into your data because neural networks pick up on what I call "nonlinear" correlations - stuff that is missed with typical first order statistics like averages and skews and such. So basically ML when done right is enormously valuable because it horizontally extends the reach of computation into previously humanlike domains. But the caveat is that it's hard to do ML right. You need very much to be a generalist, an autodidact (to quickly learn the nature of the domain you're operating in) and I think a background in math and/or physics, or at least some other quantitative field is indispensable. You can do a hell of a lot more with neural networks than sort cat pictures or target ads.

cambalache 6y ago

That is about 1 month cost of an average Engineer at a big company. So as longs as the freelancer provide as much as value as your average employee in 1 monh the company is doing a good decision. It is even better because the expertise of the freelancer tends to be high.

jorvi 6y ago
$500 per hour, 8 hours a day, 5 days a week gives $20k a week, $80k a month or (let's be charitable and say you earn a $40k bonus) $1 million a year. I don't know what the split between benefits and pure salary is in America, but let's put it at 2/3. Does the average engineer at a big corp really pull in $666.000 a year..?
- TomMarius 6y ago
  Yes, if you include stock options
  - why_only_15 6y ago
    The average engineer doesn't pull this much. Maybe ~300-400k/yr but not 600k/yr, even with RSUs.
    - ska 6y ago
      For what it's worth the average engineer doesn't get anywhere near 300k/yr. SV rates in some sectors have really distorted peoples view of what is actually being paid across the industry.
    - exdsq 6y ago
      The average engineer doesn't pull in 300-400k either
      - why_only_15 6y ago
        at a faang in the bay area? if not that pretty close to it
        exdsq 6y ago
        The average salary of an engineer at one of five companies in a single geographic area is _very_ different to "an average engineer", even just in the State let alone in the US or further afield.
        TomMarius 6y ago
        So what exaxtly "big corp" means?
- blackrock 6y ago
  What is $666.000 a year? Is this $666 per year? I think you’re missing a comma somewhere. ;-)

woah 6y ago

Having a PhD likely helps. Whatever the value delivered, it will be easy to justify to higher-ups

ganstyles 6y ago
This seems to be less and less the case. The ML industry changes so much and so quickly that a PhD in some specific subject is obsolete quickly. Of course there are ancillary benefits to having a PhD, and certainly the more stogey "higher ups" of certain mentalities might be convinced, but largely it doesn't move the needle. In fact, most of the really respected people in the industry have told me that one shouldn't get a PhD for ML anymore unless they have very specific goals and it is a tip top program.

analyst74 6y ago

The last projects I worked on with about 10 other people doing some not-cutting-edge tech to make things more efficient increased the company's yearly revenue by over 500mil. I imagine a consulting team can probably negotiate a fee exceeding $500/hr delivering that kind of returns. The company is not that special, I don't even know if we make it to Fortune 500. The point being, technology is a force multiplier, and when applied at the right lever for companies above certain size, the returns can be enormous.

ska 6y ago

This has nothing to do with AI specifically. Basically if you are hiring a contractor/consultant you are doing one of two things - bringing on capacity, or bringing on capability. Sometime a mix of both. The former category buys you a little bit of flexibility in hiring, etc., so you should be willing to pay a little more than you would fully loaded (e.g. 1.25.x - 2x salary, depending on a bunch of factors) with no complaint, but that's about it. The great thing about capacity freelancers is you can turn them on and off easily as your needs change. That capability category is a vastly different space though. Imagine I'm a specialized skill/experience sort of consultant or freelancer. If you hire me to show you how to do something you don't know how to do, how much is that worth? Or what if bringing me on for 3 months can pull your time-to-market ahead by a year? Maybe you would love to hire me full time but can't afford it (or I just don't want full time with you) - or maybe you just don't have enough of this sort of work to justify an expensive hire. It all comes down to value. If 50k worth of my time will save you 3 million dollars, why do you care how much time that is? Sometimes a 2 hour conversation can save you from a 300k mistake. Should I be charging you for the time, or the impact?

ganstyles 6y ago
Just responded to the person you were responding to, but well put. In my case it was very much the latter, and we don't know the true results yet, but will potentially allow us to get operational significantly faster, with fewer mistakes, with a better product. Win win win.

ganstyles 6y ago

Imagine developing a core competency for your company where it's complicated enough that you're not sure what route to take. Also assume you have a team of maybe 8-10 ML engineers who all make what ML engineers make. It makes so much more sense to pay $25k to get direct knowledge of systems and techniques versus your team spending a bunch of time exploring different products/methods/algos to find something that might work in the end, or might fail in a few months. $25k is like 5 MacBooks, hardly worth thinking about versus being able to get experienced direction from someone who has done what you're trying to do and saving your team literally hundreds of hours of exploratory work. It's not really a game, it's good sense. Yeah given the covo here I probably could have negotiated them down, but that's my time doing that and then things have to be vetted with outside counsel and the CFO, also time wasted, versus just telling them this is what the person charges, we need them for 50 hours, "authorize the charges please." And at what cost, saving a few thousand dollars?

mlthoughts2018 6y ago
How do you develop a business connection and market your service as being more valuable that the wide abundance of free materials, engineering blogs, research papers, etc., in this space? Just for example, I run a team of 10 machine learning engineers at a large ecommerce company. We mostly do NLP and computer vision, some time series forecasting. I cannot imagine ever paying anything close to $25k for consulting advice, that’s just bananas to me. We recently purchased licenses to use the data annotation tool prodigy from the spaCy creators at explosion.ai. That was ~$4000 and the decision whether to build our own data annotation system or not was excruciating, involved all kinds of business documentation, RFCs, approvals, NDA processes, etc. It was deeply non-trivial to procure that, and building our own was a very serious option we pursued with tech specs and prototypes and everything. Spending 6x that amount for _advice_ about NLP, which practically grows on trees today, is just totally unrealistic. It makes me suspect the real target customer for you is not companies with actual ML engineering teams or ambitious data-driven projects, but more like someone looking for McKinsey-lite. Some place that has no serious ML use case beyond drop-in pretrained models and sees $25k as the cheaper path to rubber stamp certification that dissolves internal political feuds. Most likely just selling super cookie cutter NLP models as if they are advanced and represent some sexy leap forward for a company with a couple junior data scientists. Algolia or just some drop-in Elastic tfidf search is more than enough for these companies. Spend the $25k on an intern who can tell you anything you need to know about neural network frameworks. In reality, the 4-5 ML engineers you already hired are very likely more knowledgeable than the freelance consultant you might hire. They can tell you much more about state of the art and simultaneously know the specific integration path in your company’s web service and data ecosystem. Those folks won’t be wasting time prototyping - they would be pursuing a more efficient way to get the answers you need than advice from a freelancer, even if that freelancer was Bengio for pete’s sake. I just cannot see the value prop here except for the usual story of paying for consulting as a virtue signal / credential / politics kind of thing.

esoterica 6y ago

Plenty of lawyers charge $500/hour or more, why shouldn't engineers? Having a PhD and domain expertise in a niche field seems at least as valuable as a law degree. If you're working on a project that's driving $1 billion / year in revenue even a 0.01% increase is $100k/year. It's pretty easy to justify $25k on a contractor if they can demonstrate even a very modest impact on your project.