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Ask HN: What do you do and what's your consulting rate?

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Re: Ask HN: What do you do and what's your consulting rate?

#91

Post by acrooks »

throwaway81523 wrote: post #46
acrooks wrote: post #17

I’ve shifted to bidding fixed rate on projects around a defined scope. It’s a lot more work upfront to define a clear statement of work, but it has allowed me to stay above USD$200/hr without customers batting an eye - whereas my rate was consistently a sticking point in negotiations. My consulting mostly focuses around IT/digital strategy and the work product usually involves connecting together incumbent systems, a…

I've never seen a project where the customer knew what they wanted clearly enough to have a SOW with a fixed scope. The work always expands. Maybe I've been doing something wrong. How are you doing during the pandemic, which makes in-person meetings and on-site work difficult?

Well, there are a couple components to that:

- Because of my focus in particular industries, I tend to start projects already having a baseline of understanding of what my customers need.

- You can write a fixed price contract that leaves room for a customer to change their mind / not know what they want. If you articulate very clearly in the SOW what you will deliver for the fixed price, then you leave yourself open to issue change orders as the scope evolves. Of course, you need to be careful how militant you are here, because issuing a change order for every minor thing won't help you get repeat business. To hedge against this, I tend to include a bucket of hours for arbitrary changes. This gives the customer some room to change their mind still without allowing them to derive and negotiate against an hourly rate.

- In my experience, fixed price allows me to 2x or more the hourly rate I would otherwise be able to charge, so if I do a bad job at writing an SOW then I have a lot of breathing room between what I'm getting paid and what I likely would have gotten paid had I billed hourly.

RE: Pandemic: I don't develop the work product on customer sites, so I'm only really there for meetings (so a lot during discovery and a lot during delivery). I've found that it's been pretty easy to migrate this to Zoom/Meet albeit with a bit more friction. It's a lot more difficult doing discovery remotely, but I find running workshops in Miro has been invaluable to ensure I'm capturing everybody's voice.

Re: Ask HN: What do you do and what's your consulting rate?

#92

Post by tptacek »

ethbr0 wrote: post #88
tptacek wrote: post #55

Earlier quoted context omitted.

If I had cryptography work, I would! My strategy is to go way out of my way to make sure I don't have cryptography work to bid out. :) The fact that you're not booked wall-to-wall while underbidding the market for the expertise you're selling to this extent should be a lesson to everyone about price competition. You're happy! I'm not criticizing you. I'm literally just saying that your rate is a steal. It is way, way…

Reading between the lines here too, but worth emphasizing "anything which particularly piques my interest" & "would also be spending some of my time making sure I had a full pipeline of gigs lined up." Correct me if I'm wrong Colin, but I'm assuming some of the discount between max_rate and your rate is the value you see in not having to spend time on boring projects and hustling a constant stream of gigs. Aka discou…

Colin and I have both spent a very long time doing this kind of work. I promise, I'm factoring in the hustle premium when I say that he's significantly under-bidding the market.

Re: Ask HN: What do you do and what's your consulting rate?

#93

Post by tptacek »

gfd wrote: post #72
cperciva wrote: post #34

Earlier quoted context omitted.

Feel free to steal from me. ;-) As a practical matter: If I were a full time consultant I probably would charge more, but I would also be spending some of my time making sure I had a full pipeline of gigs lined up. The fact that my marketing process is about as lean as it gets -- people send me emails from time to time -- means I don't have to cover that sort of overhead.

To give a reference point, you get the equivalent of $300/hr starting around L6 at a FAANG: https://www.levels.fyi I don't think most people realize they can hire a putnam winner and world class crypto expert for the price of a staff engineer.

Remember that your rack rate as a consultant should be way more than your FTE salary, often more than 2x as much.

Re: Ask HN: What do you do and what's your consulting rate?

#94

Post by ethbr0 »

tptacek wrote: post #92
ethbr0 wrote: post #88

Earlier quoted context omitted.

Reading between the lines here too, but worth emphasizing "anything which particularly piques my interest" & "would also be spending some of my time making sure I had a full pipeline of gigs lined up." Correct me if I'm wrong Colin, but I'm assuming some of the discount between max_rate and your rate is the value you see in not having to spend time on boring projects and hustling a constant stream of gigs. Aka discou…

Colin and I have both spent a very long time doing this kind of work. I promise, I'm factoring in the hustle premium when I say that he's significantly under-bidding the market.

Curious question re: your personal experience, is there a relationship (direct or inverse) between max_rate and interesting work? Or are they independent?

At your level, and with your specific focus, I've no idea what the market looks like. I.e. Big Boring Corp pays best? Cutting edge startup? Or effectively random?

Re: Ask HN: What do you do and what's your consulting rate?

#95

Post by tptacek »

ethbr0 wrote: post #94
tptacek wrote: post #92

Earlier quoted context omitted.

Colin and I have both spent a very long time doing this kind of work. I promise, I'm factoring in the hustle premium when I say that he's significantly under-bidding the market.

Curious question re: your personal experience, is there a relationship (direct or inverse) between max_rate and interesting work? Or are they independent? At your level, and with your specific focus, I've no idea what the market looks like. I.e. Big Boring Corp pays best? Cutting edge startup? Or effectively random?

Yes: the higher your rate, the more interesting the work you're likely to get, because higher rates filter the most tedious clients. Routine security work from big companies gets bid through procurement departments that won't pay high rates, so if a big company is paying the market rate for cryptography work, there's a really good chance the group paying for it really knows what they're doing and why they're engaging you.

Re: Ask HN: What do you do and what's your consulting rate?

#96

Post by GauntletWizard »

ensemblehq wrote: post #54
GauntletWizard wrote: post #22

I'm a Site Reliability engineer. I help startups figure out how to deploy to the cloud. My rate is $250, though I'm wondering if I should raise it again due to inflation.

Definitely raise if possible :) Generally, how do you find clients and startups to help?

I've had a bunch of success from the Monthly Freelancer thread, and a little from networking and going to local meetups and such.

Re: Ask HN: What do you do and what's your consulting rate?

#97

Post by seanwilson »

ethbr0 wrote: post #85
seanwilson wrote: post #64

Earlier quoted context omitted.

> I've never seen a project where the customer knew what they wanted clearly enough to have a SOW with a fixed scope. Not sure if you do this but that's why you really should charge for helping with the requirements gathering and solution design, it's really valuable to pin down what the problem is and know that what you're going to build will fix it properly. It also means you're not in a rush to throw out an estima…

The "when to throw out an estimate" is something I've evolved on a lot in my career. Initially, naive happy path. After that, happy path + some overly-large fuzzy padding number. Now, I push back on PMs who ask for an estimate at an unknowable point in the project. The problem is not estimating work. The problem is estimating work volume risk (the range of work the project might take). And the only thing that can dec…

> Sometimes, the right answer to "How long will this take?" is "It will take this long to get an answer to that question."

Yep, or sometimes "no idea, let me work on it for a day and get back to you". You can't expect an estimate for something with many unknowns to be very accurate so best to reduce the unknowns first.

Real world projects have too many factors out of your control as well (e.g. decision making and schedules of stakeholders, combinations of software/people/requirements you've never worked with before, evolving requirements) so this idea that you can guess the total number of hours with high accuracy as you get more experienced doesn't make a lot of sense to me.

Fixed price projects are also a way of saying "we genuinely don't know how long it's going to take, but we'll take on that risk instead of you".

Re: Ask HN: What do you do and what's your consulting rate?

#98

Post by kemistri »

Working with Microsoft products Dynamics 365 for Sales + Power Apps + PowerBI. Started at 0 knowledge and 0 customers 7 years ago. Have few customers, am fully booked months ahead, quality over money, that's how I do it atm. Currently going at 90EUR/h (103USD/h). Each time I get a new major client my rate goes up 10EUR/h. That's not even a pricing strategy or anything, just how I do it, like a bonus to myself for being a cool dude.

Re: Ask HN: What do you do and what's your consulting rate?

#99

Post by seanwilson »

acrooks wrote: post #91
throwaway81523 wrote: post #46

Earlier quoted context omitted.

I've never seen a project where the customer knew what they wanted clearly enough to have a SOW with a fixed scope. The work always expands. Maybe I've been doing something wrong. How are you doing during the pandemic, which makes in-person meetings and on-site work difficult?

Well, there are a couple components to that: - Because of my focus in particular industries, I tend to start projects already having a baseline of understanding of what my customers need. - You can write a fixed price contract that leaves room for a customer to change their mind / not know what they want. If you articulate very clearly in the SOW what you will deliver for the fixed price, then you leave yourself open…

> Of course, you need to be careful how militant you are here, because issuing a change order for every minor thing won't help you get repeat business.

Yep, I also find people don't notice the changes usually go both ways as well, where it's common that some requirements change a little or get dropped in a way that makes your life easier. It's great when both sides can be reasonable and non-adversarial about it all. A deadline with a well-defined goal helps a lot too, over a rigid list of requirements.

> To hedge against this, I tend to include a bucket of hours for arbitrary changes.

Can you explain this part more? How do you explain what gets charged against the bucket of hours and how many hours for each change? At what stage do you issue change orders?

Small thing I don't hear people mention but with the SOW I always add a list of "not in scope" items too (e.g. "web app works in latest version of Chrome only" + "Internet Explorer and mobile support is out of scope"). I find this help uncover ambiguities like the client saying later "I assumed it would have worked on mobile Chrome and desktop Edge too", and makes it much easier to say "we agreed that's out of scope".

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