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There seem to be a lot of comments centered on “wow, this sounds great – I wish I could charge more” or “how do I find these high paying contracts”? Here’s one

• daemon13 14y ago
  It depends... Although focusing on growing revenue is psychologically more comforting, economically saving on expenses is more beneficial. When you save 1 dollar, your profit increases by 1 dollar. When you sell 1 more dollar, your profit increases by 0.1-0.9 dollars (depending on your margins). To put it differently, if a client is a mature company that is growing 3% annually and which gross margin is 10%, probably saving expenses is a better value proposition. If a client is growing 100% annually and has gross margin of 90%, then, obviously, increasing revenue would be perceived a better value by the client.
  • raverbashing 14y ago
    Yes, but Savings are naturally limited, growth is potentially unlimited Let's say your company sells a product and it costs $10 to make it. You can go and maybe make it cost $9 to make it, but not much less. So you improved their profit by $1 (hopefully) Instead, if you can make it sell 10x more product (which could be feasible), hence having a better effect than savings.
    • daemon13 14y ago
      Let me put my finance hat on :-) >> Savings are naturally limited, growth is potentially unlimited That's in theory - check annual revenue growth rates of most big companies in mature [developed] markets - if you increase it from 3% to 5% you are hero. >> Let's say your company sells a product and it costs $10 to make it. You can go and maybe make it cost $9 to make it, but not much less. So you improved their profit by $1 (hopefully) If you reduce cost or expenses by $1, you improved profit by $1. There is no hopefully, this is how things work. Also, most of the savings are in operating expenses, not in cost of goods sold. >> Instead, if you can make it sell 10x more product (which could be feasible), hence having a better effect than savings. Exactly as I said, it depends on the company. Probably, you are using a start-up as an example, which is another Google, which annual revenue is growing 150% month-on-month and which margins are 70-80%. I highly doubt how anyone can make it sell 10x more product for a traditional multinational company - FMCG, Farma, Financial Services, etc. Let's be kind of realistic ;-)
      • raverbashing 14y ago
        Oh sure, sometimes in saturated markets it's easier to increase profits by cutting costs. "There is no hopefully, this is how things work." Of course. But with your new unit cost you may want to cut the sales price of the product, expecting to sell more, or something like that. You may also cut your costs and then it backfires. That's where the 'hopefully' part comes from
• Terry_B 14y ago
  This is a great point. I've been trying to think of as many things programmers can do that increase revenue as possible. A/B Testing and sales funnel optimization is definitely a winner. - Optimizing how a company utilises it's resources - Optimizing the speed and performance of a critical business function. - Increasing marketing reach - Generating more sales leads What else guys?
  • pav3l 14y ago
    I actually think of your first two points (optimizing...) as cost cutting services, while the other two are good examples.
    • Terry_B 14y ago
      Yeah, should have been more specific. If they result in the company getting more sales done with the available time/resources then they add to revenue. The company could of course treat it as "doing more with less" and therefore use it for cost cutting instead. Depends on the situation.
      • mnutt 14y ago
        I guess that depends on if they could hire twice as many people in sales and double their revenue. If there are diminishing returns, then it could be a revenue generator.
  • davemel37 14y ago
    The obvious thing to do is to find ways to incorporate Growth Hacks into the product. One such formula would be to browse API's on programmableweb, and other places looking for opportunities to leverage other sites audience as a platform. Another thing you can do is profile an audience and crunch big data to help find new opportunities...
• nandemo 14y ago
  > There seem to be a lot of comments centered on “wow, this sounds great – I wish I could charge more” or “how do I find these high paying contracts”? Actually, I'm wondering how can I get gigs that pay $100/hour in Japan.
  • Sarien 14y ago
    I can't agree more. 8k as a Rails dev? Converted to USD at current rates I make about 4.9k as a C++ dev. I feel like I am doing something seriously wrong. :/
    • sequoia 14y ago
      It all depends on where you live. When I lived in the Southeast US in a non-tech-center people were offering one third of that 96/yr number for an intermediate rails developer (this was considered by the community to be a low offer http://whatyoupayfor.pen.io/ http://whatyoupayfor.pen.io/ ), so you probably couldn't get a full time gig for that no matter how good you were. Now I live near Boston and that number sounds perfectly reasonable.
  • new299 14y ago
    As someone who is currently living in Japan, but only working remotely for companies in the US/UK I'm kind of interested to know how you find work here? Is it hard to get contract work? Where do you look? What is the pay like?
    • nandemo 14y ago
      Personal contacts, recruiting agencies, job boards (but not craigslist). You're probably better off working for companies in the US/UK. Freelancing is not as common as it is in the US, large and mid-sized companies much prefer to deal with other companies rather than individual freelancers. But you seem to specialize in relatively rare skills, so you might have better luck freelancing than the average web developer. Feel free to shoot me an email (I'm out of work at the moment so probably not the best person to give this sort of advice, but on the other hand I've been in this country for a long time).
• nazgulnarsil 14y ago
  So your advice is isomorphic to the time-tested "get close to the money"?
• davemel37 14y ago
  I humbly disagree with your theory that making money for a company is more valuable than saving them money. As a marketer/rainmaker, I can assure you that I get much further with clients when I can cut their advertising and marketing costs, or cost per acquisition, than when I find them more profitable traffic and revenues. My clients never scream, bring me the rain... They demand, "Bring Me More Rain For Less Money." I think the dynamic going on is that people hate losing money, and when you find them wasted money they can save, they view it as "their rightful money,not something you got for them." In fact, saving them money that they were wasting can really rattle their ego, and make them feel like they were taken advantage of, and who wants to be the bearer of bad news?! Making money for companies though is just not powerful enough to be the end all solution to rake in the dough. Being able to find cheaper traffic and revenues to generate proportionately less traffic or revenue is a much bigger win. (i.e. if you make them $1000 at a cpa of $100 a customer... you are better off generating for them $800 for a $75 cpa... even though the rain is less, the cpa is better, which makes them look really good, and is a defensible place to be...
  • Terry_B 14y ago
    You're still way up the pointy end of the business though. You are directly involved in acquiring customers. I think the OP was making the contrast more with people who try and reduce the companies admin overhead slightly by automating parts of the accounting system. That type of thing is easy for a company to put off and involves getting through cultural change and threatening people's turf to implement. A harder path.
    • davemel37 14y ago
      Agreed. My point was simply being a rainmaker isn't enough. You need to give your boss or client a defensible position to take about hiring you. One that makes them look good to their bosses, boards, etc... (i.e. lowering a CPA sells a much stronger fantasy than acquiring customers at a higher but acceptable rate.)
  • SatvikBeri 14y ago
    Thanks for sharing. It's interesting to note that within a profit center (marketing), cost cutting is useful. I think it depends a lot on your audience. If you're selling an IT system to an IT director, you can emphasize the cost savings. But if you're selling the IT system to a CEO you might emphasize how it helps the company's customers and leads to more revenue in the long run.
• philwelch 14y ago
  > If you are looking for consulting contracts that pay really well, focus on providing a service that helps companies make money rather than save money. In other words, help grow revenues rather than reduce expenses – people pay much more for that. But decreasing costs by $1 is mathematically the same as increasing revenue by $1--it increases profitability by $1. Which means any process or mentality that prefers one to another is biased in a bad, purely self-destructive way.
  • orwens 14y ago
    It depends on how you add $1 to revenue. If you do that by increasing prices, you are right. If you add $1 by extra sales, you have to take the cost of delivering the service/product to the client into account, and there is often a marginal element to that. In other words, your cost base is not totally fixed. So some of that dollar is eaten up in delivering the service
  • shin_lao 14y ago
    Except there is a limit to how much you can reduce costs, not to how much you can increase revenue.
  • m0nty 14y ago
    It's about the psychology. One thing I've learned from consulting gigs etc is that clients are irrational and you have to learn to deal with it. If you can do the same amount of work but get more kudos for it, why waste energy on the low-rewards activities (i.e. saving money rather than "making money"). So you're right from a programmer's perspective, and about the unhealthy bias. But most people don't think like that.
  • nfm 14y ago
    The problem is that reducing costs doesn't typically scale. If you want to grow a businesses profit significantly, you need to increase sales. It's entirely reasonable to double your sales. It's pretty difficult to halve your costs.
    • baruch 14y ago
• flyinRyan 14y ago
  Also, if you're pitching money savings then you're moving the client into a money saver mindset which might make them think your rates are too high.