4 ms·

Weiss is a strong advocate of value-based pricing. Instead of pricing yourself on some per-hour basis, you quote prices based on the value you provide. I think

by ssharp 13y ago

Weiss is a strong advocate of value-based pricing. Instead of pricing yourself on some per-hour basis, you quote prices based on the value you provide. I think this makes a lot of sense, but Weiss is basing these ideas from management consulting, legal consulting, and other similar types of professional services. I couldn't comment on the tech market, but many companies may be unwilling to commit to this type of pricing out of irrational discomfort. I think Patio11 has advocated for longer period pricing (weekly, monthly) which might be a good medium between hourly billing and value-based. You're going to get better prices for yourself and your clients will be more comfortable with more familiar pricing. Personally, I wouldn't attempt to freelance without already establishing a real network outside of work farms like Elance / oDesk. You can still work on side projects and present at conferences while working another full-time job. You can build your presence and authority and if you do a good job, you'll get the type of industry recognition you need to get inbound requests, before you even start advertising your services.

napoleond 13y ago
I haven't read Weiss, but I work as a software consultant and while it's true that clients typically expect prices in the form of a money:time ratio (and also true that it is to the consultant's benefit to use a larger unit on the time side of that ratio) the only way to get paid the sort of wages Patrick talks about is to anchor that money:time ratio against value. In other words, the pitch is "I think I can generate $SIX_FIGURES of additional revenue for you over the next year with a project that will take my team $SINGLE_DIGIT weeks. It will cost you $FIVE_FIGURES." So the invoice will probably have a line item that includes units of time with a large price tag attached, but the sales conversation did not revolve around that ratio. (I want to include the unsolicited caveat that none of this is easy. A less experienced version of myself might have/did read someone else's version of this comment and thought "I should be a software consultant! Thousands of dollars a week! Wow!" when the reality is that you still need people to sell to, you still need to be able to deliver on your promises, and you probably need to offer some level of support and maintenance for whatever you end up developing for your clients. I really enjoy this line of work, far more than a "real job", but it's much more stressful at times and so far--one year in--I'm making less money than I otherwise would be. It's true that the potential upside is greater, but I don't recommend getting into consulting for that reason unless you already have a significant personal network of prospective clients.)

by ssharp 13y ago

napoleond 13y ago

I haven't read Weiss, but I work as a software consultant and while it's true that clients typically expect prices in the form of a money:time ratio (and also true that it is to the consultant's benefit to use a larger unit on the time side of that ratio) the only way to get paid the sort of wages Patrick talks about is to anchor that money:time ratio against value. In other words, the pitch is "I think I can generate $SIX_FIGURES of additional revenue for you over the next year with a project that will take my team $SINGLE_DIGIT weeks. It will cost you $FIVE_FIGURES." So the invoice will probably have a line item that includes units of time with a large price tag attached, but the sales conversation did not revolve around that ratio. (I want to include the unsolicited caveat that none of this is easy. A less experienced version of myself might have/did read someone else's version of this comment and thought "I should be a software consultant! Thousands of dollars a week! Wow!" when the reality is that you still need people to sell to, you still need to be able to deliver on your promises, and you probably need to offer some level of support and maintenance for whatever you end up developing for your clients. I really enjoy this line of work, far more than a "real job", but it's much more stressful at times and so far--one year in--I'm making less money than I otherwise would be. It's true that the potential upside is greater, but I don't recommend getting into consulting for that reason unless you already have a significant personal network of prospective clients.)