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Pricing Programmers

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Re: Pricing Programmers

#21

Post by username223 »

gizi wrote: post #20

Google and Facebook are factor-11 dollar values (11-zero decimals, aka, hundreds of billions of dollars). The typical programmer will make a 6-zero revenue in his life time. You can create 11-digit value, only if you pick the subject by yourself. A non-programmer has never in history been able to pick an 11-digit subject. Only programmers can create half a trillion dollars in value.

> A non-programmer has never in history been able to pick an 11-digit subject.

Yeah, no:

    https://en.wikipedia.org/wiki/Standard_Oil

Re: Pricing Programmers

#22

Post by mruniverse »

rgbrgb wrote: post #8
ketralnis wrote: post #6

Earlier quoted context omitted.

If you need someone with programming skills and are willing to pay them, and someone with those skills will work for that amount, that's the price of a programmer. Asserting that the skill is worthless doesn't make sense as long as people will pay for it. Even if you just consider it a form of literacy, scribes absolutely were paid to do their work before literacy was as widespread

People don't pay for "programmers" they pay for people to make products.

People don't pay for people to make products, they pay for people to make them money.

People don't pay for people to them to make money, they pay for people to build wealth.

People don't... wait I have to throw up. Will be back.

Re: Pricing Programmers

#23

Post by gizi »

Dwolb wrote: post #13

People write a lot about how much programmers should make. I think there's a couple of sides to the discussion which the author mixes together instead of separating out by stakeholder. (i.e. he discusses opportunity costs for all stakeholders instead of discussing a specific stakeholder then talking about her opportunity cost). Someone could probably come up with a pretty robust framework or model for individual comp…

All of this assumes that you will work for someone else who will monetize the platform that you build. That's not how you create Google or Facebook valuations. The first rule is that you must decide by yourself what platform to build. Someone without hands-on knowledge of what exactly technology allows to build, cannot do that properly. The second rule is that you must monetize the platform by yourself. If you break these rules, you will never make serious money.

Re: Pricing Programmers

#24

Post by jzwinck »

I've seen two competing philosophies of how to determine pay.

First, you can find a large pool of candidates, learn the typical wages in your market, and make offers pegged to the average (with some offset). You will learn what fraction of your offers are likely to be accepted (maybe shoot for 60%), and adjust accordingly. This works if you want to hire a dozen or more people over the course of some months.

Alternatively, ignore price, look for candidates, and when you find the right one, open a negotiation where you determine what price they are willing to take. If you need to hire a small number of specialists, this may be the best way.

I have also experienced failed recruitment schemes, such as ignoring price until the end but then pitching a "fixed budget" (which sometimes means "political limitations").

You can choose which method to use every time you hire. Great candidates may also be choosing, and you know which model they will cater to.

Re: Pricing Programmers

#25

Post by sl8r »

The labor market for programers in the tech industry has two features (anecdotally observed) that are interesting to me:

1. Labor does not receive (or insist on) percent-of-value or percent-of-transaction compensation. This is in contrast to some other professional disciplines (e.g., salespeople often get paid on a percentage or commission, bankers often take a % cut, pe / vc / hf has 2% and 20%, real estate is on a %, lawyers may get paid on a % ("contingent fees"), etc.)

2. Initial salaries are good, but there is wage stagnation. Just-out-of-college salaries for programming are often better than virtually everything else (notably, banking and consulting); but after ten years, the opposite is relationship is reversed (considerably so). The difference between a newgrad salary and a 10-yearer salary for tech-industry programmers is often (in my anecdotal experience) less than 2x. In contrast, 5x or more is not unusual in other fields.

Re: Pricing Programmers

#26

Post by gizi »

sl8r wrote: post #25

The labor market for programers in the tech industry has two features (anecdotally observed) that are interesting to me: 1. Labor does not receive (or insist on) percent-of-value or percent-of-transaction compensation. This is in contrast to some other professional disciplines (e.g., salespeople often get paid on a percentage or commission, bankers often take a % cut, pe / vc / hf has 2% and 20%, real estate is on a…

You can never make good money as a programmer, if you let non-programmers pick the subject, or let non-programmers monetize the platform in your stead. Google and Facebook are worth hundreds of billions of dollars exactly because there is not one non-programmer with a say in them.

Re: Pricing Programmers

#27

Post by uptownfunk »

sl8r wrote: post #25

The labor market for programers in the tech industry has two features (anecdotally observed) that are interesting to me: 1. Labor does not receive (or insist on) percent-of-value or percent-of-transaction compensation. This is in contrast to some other professional disciplines (e.g., salespeople often get paid on a percentage or commission, bankers often take a % cut, pe / vc / hf has 2% and 20%, real estate is on a…

This is interesting, I would be more bold and call these problems instead of features, as I think programmers deserve better. (Then again I may be biased!)

Problem 1 is more systemic and harder to solve.

For Problem 2 I feel there may be a way to strategize around it. Specifically, wondering if there is a point where salaries increase, and then after a certain point, rate of salary increase drops off at which point it may be beneficial to do a masters, phd, MBA or some professional work to refresh the resume. Either that, or perhaps dedicate some time (in lieu of higher ed) to some interesting open source project. Thinking more about economy of time here than education, education is just a way to make this concrete.

Re: Pricing Programmers

#28

Post by modarts »

Alex3917 wrote: post #2

Programmers are worth $0 because programming isn't a job. It's not even a skill; rather, it's more of an active literacy. Asking how much you should pay a programmer is like asking how much you should pay a telephone user, or how much you should pay a pencil user.

> programming isn't a job

Hmm, interesting. Wonder what i'm actually doing from 10-7 every day in that case.

Re: Pricing Programmers

#29

Post by gizi »

RussianCow wrote: post #5
Alex3917 wrote: post #2

Programmers are worth $0 because programming isn't a job. It's not even a skill; rather, it's more of an active literacy. Asking how much you should pay a programmer is like asking how much you should pay a telephone user, or how much you should pay a pencil user.

At one point in history, knowing how to use a typewriter was itself a marketable skill, because few actually had access to one and knew how to use it. These days, most people in the developed world know how to type, but still only a small portion know how to write programs . Saying that this is worthless is silly at best; someone is willing to pay someone else to turn their ideas into code, so it must be worth someth…

It does not matter whether programming is marketable or not. What matter is that the results of programming, such as Google Search or Facebook, are highly marketable. Mistake number one: never sell yourself. Only sell the result of your efforts, and preferable not to middlemen, but directly to the real buyer. That is how you create hundreds of billions of dollars in value.

Re: Pricing Programmers

#30

Post by sl8r »

gizi wrote: post #20

Google and Facebook are factor-11 dollar values (11-zero decimals, aka, hundreds of billions of dollars). The typical programmer will make a 6-zero revenue in his life time. You can create 11-digit value, only if you pick the subject by yourself. A non-programmer has never in history been able to pick an 11-digit subject. Only programmers can create half a trillion dollars in value.

Yeah, piling on: While some tech companies have huge market caps, there are plenty of non-tech companies above the $100B mark. Current top ten includes Exxon Mobil, Berkshire Hathaway, Petro China, Wells Fargo, Johnson & Johnson, ICBC, and Novartis alongside Apple, Google, and Microsoft. (https://en.wikipedia.org/wiki/List_of_public_corporations_by...)
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