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(I loved phrasing this as "You could certainly have your engineering team do this, if you want to write a $10,000 payroll check with the memo 'Reading free info
by bdunn 13y ago
(I loved phrasing this as "You could certainly have your engineering team do this, if you want to write a $10,000 payroll check with the memo 'Reading free information on the Internet'.")
This is probably one of the best arguments for niche specialization that you'll find. Say you're a Ruby developer, but you know a lot about CPA, ARPU, LTV, churn, and other terms SaaS types care a lot about.
Yes, you might cost significantly more per week than a peer Ruby developer who might be employed by a prospective client of yours, but the cost of getting that employee's knowledge to around where yours is outweighs the difference.
Additionally, clients want to lower the risk that a project will fail (note: this doesn't mean technically fail, as in the code doesn't work.) By "leveling up" in a niche specialty, you'll lower the risk that you'll fail when a project in that niche comes your way. (Clients also have a tendency to reach deeper into their pockets when the risk of failure is lower.)
- patio11 13y agoClients also have a tendency to reach deeper into their pockets when the risk of failure is lower Yep. Basically, it's an expected value calculation: your project actually costs the sticker price divided by chance of success. (If you quote $20k and the customer's experience is that 20% of projects fail the "true cost" is $25k after they self-insure for risk of project failure.) Decreasing their estimate of project risk thus lets you justify higher rates. Also, as your client has lower perception of project risk and execution risk, their perception of the probable magnitude of the success for your engagement will likely increase. (The logic of that goes something like "He's clearly a pro at this, as demonstrated by his execution ability, therefore if this were not likely to be a major win he'd already know that and we wouldn't be having this conversation.")
- paul_f 13y agoBeware that some companies calculate the cost of existing employees at zero. If someone else is paying the employee, but you come out of their budget. Find out how the money flows.
- lifeisstillgood 13y agoThen you are talking to someone too low down the tree. The person who signs the cheques as big as you want them to be will be the person with P&L for employees and contractors Possibly across IT and marketing or accounts or ...