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I'd like to spin this conversation around a bit. Here is where I would be concerned if I ever wanted to work with you: You are a contractor who normally charge

I'd like to spin this conversation around a bit. Here is where I would be concerned if I ever wanted to work with you: You are a contractor who normally charges $150 an hour. You have an inside lead into a potential contract for a company in distress on a project and you know how to complete the work. You believe that your time in this case is actually worth way more than $150 (66% more) and you would like help in getting additional money for your services. First, you assume there is no risk in writing the software up front and then charging for it. I have had many contracts "in the bag" that turned out to be not so sure after all. You are taking on the risk of writing the software before talking to the client (read: the person who actually pays you a check). This is troublesome, especially for something as short as a 100 hour contract. Second, this is a 100 hour contract, or so you estimate. Is that really worth the upfront risk of writing it early? I guess you could argue that "it's only 100 hours! Not 10,000, so it's no risk at all." Well, to me that's a $15,000 risk at your rate. Third, you say that the additional value associated with charging $250 instead of $150 is in the fact that your solution will save them money on operations costs for years to come. While you are probably very right, it will save them money for years to come, isn't that what we all strive for? To make the most efficient running code possible that ultimately saves the client time and money? Would you ever say something like this "Well for $250 an hour I can write code that runs more efficiently, but for $150 an hour I will only write code that squeaks by on the most expensive hardware possible"? So, if I were in your spot I would not write the solution up front. I would definitely go in and sell them on your solution at your normal, $150/hr, rate with a pleasant but straight forward presentation and good reference. I would explain to them that you are charging your normal rate because it is fair and that others might charge them more because of there situation and that you will be fair and honest with your time and their money. I would estimate the time needed to complete the project then I would get it done and deliver it on time. 100 hours is about 2.5 weeks. Then you will get paid $15,000 AND you will get something more. You will get a really happy client who will need more work, improvements on what you just made, and be a fantastic reference for your other clients. If all goes well, your name will be passed around to their clients all over the place. That is worth way more than a few $1000 extra in fees.

anona-mouse 12y ago
Risk: Part of my motivation is learning something new so the risk to me isn't is big as might seem - I would get to apply my expertise in the embedded world instead of just desktop applications. The stuff I learn on this project will be applicable to future projects. But agree, speculative work is risky. The flip side of risk is that the last thing I want to do is take this contract without absolutely knowing that I can solve their problem. The only way to do that is to actually solve the problem. These guys really can't afford to miss their deadline. The last thing I want to do is be in the position of being blamed for them missing their deadline. Delivering a solution that saves their big project, saves them money and helps me put food on the table is win-win by my calculus. I truly consider myself a partner with my clients. I sincerely want them to be successful. I also see nothing wrong with capturing some of the value I generate. If you partnered up with someone, would you tell them "Nah, you keep the equity. Just tell your friends what a good job I did."? I know if I leave money on the table they are not going to turn around and pass the savings on to their customer or donate it to charity. Instead they will simply add my "gift" to their bottom line. (And there is nothing wrong with that.) I think a lot of people are conditioned to be "workers" who sell hours of labor. A business sells value and I'm a businessman.
- trcollinson 12y ago
  I understand where you are going and I have thought the same way but my experience has said to treat it otherwise. Absolutely you want to provide a solution to solve their problem which they created and which puts food on your table, no doubt. That is what all contract or consulting work is for though, this is not innovative, this is the nature of the business. To answer your question, yes I do tell them to keep the equity and to tell their friends. Now, of course, as my book of business grew so did my ability to increase my rate, for everyone. This is also why I can charge such a phenomenal rate and turn down business. For example, in 2013 I did a contact for a very large, well known organization. I made a tiny fraction of revenue that they made on the software I wrote for them. They could have easily paid me many orders of magnitude above my normal rate. But, I charged them by standard rate, completed the work, was paid on time, and definitely put food on my table. Now they call me constantly to add more functionality. Their partners call me. I speak at conferences about that particular project and people contact me. It has paid dividends. I guess you could say I sell hours of labor. I see it more as my business sells solutions at a fair market value for the work put into them. Now, I have also built products which I have sold or licensed to businesses. But that is a different beast entirely. I always tell myself "if you are building it for a single business, it's contracting. If you sell the same thing to multiple independent business's, it's a product."

anona-mouse 12y ago

Risk: Part of my motivation is learning something new so the risk to me isn't is big as might seem - I would get to apply my expertise in the embedded world instead of just desktop applications. The stuff I learn on this project will be applicable to future projects. But agree, speculative work is risky. The flip side of risk is that the last thing I want to do is take this contract without absolutely knowing that I can solve their problem. The only way to do that is to actually solve the problem. These guys really can't afford to miss their deadline. The last thing I want to do is be in the position of being blamed for them missing their deadline. Delivering a solution that saves their big project, saves them money and helps me put food on the table is win-win by my calculus. I truly consider myself a partner with my clients. I sincerely want them to be successful. I also see nothing wrong with capturing some of the value I generate. If you partnered up with someone, would you tell them "Nah, you keep the equity. Just tell your friends what a good job I did."? I know if I leave money on the table they are not going to turn around and pass the savings on to their customer or donate it to charity. Instead they will simply add my "gift" to their bottom line. (And there is nothing wrong with that.) I think a lot of people are conditioned to be "workers" who sell hours of labor. A business sells value and I'm a businessman.

trcollinson 12y ago
I understand where you are going and I have thought the same way but my experience has said to treat it otherwise. Absolutely you want to provide a solution to solve their problem which they created and which puts food on your table, no doubt. That is what all contract or consulting work is for though, this is not innovative, this is the nature of the business. To answer your question, yes I do tell them to keep the equity and to tell their friends. Now, of course, as my book of business grew so did my ability to increase my rate, for everyone. This is also why I can charge such a phenomenal rate and turn down business. For example, in 2013 I did a contact for a very large, well known organization. I made a tiny fraction of revenue that they made on the software I wrote for them. They could have easily paid me many orders of magnitude above my normal rate. But, I charged them by standard rate, completed the work, was paid on time, and definitely put food on my table. Now they call me constantly to add more functionality. Their partners call me. I speak at conferences about that particular project and people contact me. It has paid dividends. I guess you could say I sell hours of labor. I see it more as my business sells solutions at a fair market value for the work put into them. Now, I have also built products which I have sold or licensed to businesses. But that is a different beast entirely. I always tell myself "if you are building it for a single business, it's contracting. If you sell the same thing to multiple independent business's, it's a product."