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How I went from $100-an-hour programming to $X0,000-a-week consulting

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Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#31

Post by mtrimpe »

SageRaven wrote: post #24

Damn, that sounds nice. I wonder if system admin/architecture can be modeled that way. I'd love to bill even a modest $2k/week, rather than trawl craigslist, responding to posts for "unix/linux ninjas" then having shops balk at anything over $20 an hour. I don't know how many messes I've cleaned up (likely left by people charging a hell of a lot more than me) for really low rates. I know, I know. Craiglist and other…

I don't know about sysadmin work, but I'm pretty sure DevOps could be.

I worked at a company that ended up spending probably several man-years worth of effort over a period of three years on puppetizing their environment and still doesn't have a one-click-deploy of their infrastructure and feels the pain of that acutely every few months when a new environment needs to be brought up by hand.

If someone'd been around offering 30, 50 or even 100k no-cure-no-pay work to get their environment into a one-click-deployable state in under a month or so I'm pretty sure I could've sold that internally at several occasions.

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#32

Post by loboman »

loceng wrote: post #9
pdog wrote: post #6

Earlier quoted context omitted.

Full-time programmers can be had for $50 to $100 per hour, but they can create millions of dollars of value, far in excess of what they're paid. Consultants are one of several groups of people who take a share of the difference.

This is why I work for myself, am building my own company(ies). I knew I would never get paid the value I can bring to the table, and I would never be motivated to do my best in that scenario.

If you do it right, you are never getting paid the value you provide. The model is always: generate value, get a slice of that, repeat. Think of a very rich person; if this person is so rich, it is because s/he provided much more value to others than the value it captured for him or herself. (Except for conmen)

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#33

Post by Jach »

elmuchoprez wrote: post #26
cdavid wrote: post #16

Earlier quoted context omitted.

If you mean in general, a consistent job at 100 $ /hour is completely different from being paid 100 $ / hour for consulting. The former is rather hard, the latter is indeed rather low. The end of Patrick's article gives one of the main reason why (scaling consulting is hard). I consistently meet people who earn > 200 $ / hour, without much programming experience (but know an open source project of interest very well)…

I consistently meet people who earn > 200 $ / hour, without much programming experience (but know an open source project of interest very well). I see this quite a bit as well. People can "luck into" something that gets hot and ride that wave into decent money in the short term. But a decent programming background is what keeps that ship floating because you always have to stay on top of the next thing if you want to…

On the other hand, if you can pull in $200/hr consistently (i.e. your yearly income isn't far from $400k before taxes) for at least half a decade, you can save up enough to retire early with a modest standard of living. But as has been said, consistency is harder for these things.

What open source projects have you seen people make good chunks of change from just knowing how to work them? http://www.pentaho.com/ is one I've seen. Also people who know the AWS stack can make a good chunk of change migrating someone's software to the Cloud.

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#34

Post by [deleted] »

patio11 wrote: post #18
sown wrote: post #11

So what do I do if I don't have a blog or any real friends to refer me? I don't know anyone at all here in SV and no one seems to want me anyways. On the flip side, I suppose that there are people that could use me but they don't know how to find consultants. The only time this has happened was when a potential employer and I didn't quite work so they let me name a price for the time I worked and they paid (rare in c…

Get a blog and start making new business acquaintances. (Being in the Valley should not exactly have you hurting for options on that score.)

[deleted]

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#35

Post by sown »

patio11 wrote: post #18
sown wrote: post #11

So what do I do if I don't have a blog or any real friends to refer me? I don't know anyone at all here in SV and no one seems to want me anyways. On the flip side, I suppose that there are people that could use me but they don't know how to find consultants. The only time this has happened was when a potential employer and I didn't quite work so they let me name a price for the time I worked and they paid (rare in c…

Get a blog and start making new business acquaintances. (Being in the Valley should not exactly have you hurting for options on that score.)

How do you make business acquaintances? I have a hard enough time leaving the house.

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#36

Post by bmelton »

debacle wrote: post #27
bmelton wrote: post #19

Earlier quoted context omitted.

SAAS? PAAS? I think it's fairly well known that Patrick consults to help fund his other projects, with the ultimate goal of becoming independent of consulting in favor of passive income. (Apologies if I'm mischaracterizing Patio's intent -- that's at least how it always seemed to me.) Alternately, you could raise your rates a bunch, save the difference and try to retire early.

It might just be me, but I don't see a market for consulting based on writing RESTful APIs. I could be very wrong about that, though.

Generally speaking, there's always a market for expertise. If that's your area of expertise and are markedly better at it than the next guy, there's a market for it. The key is in figuring out the niche

"I can train your people to build better APIs than you have now, and hence enable much better engagement from the customers of your API" -- that's a value proposition, and people are willing to pay for it.

"I can build your company's RESTful APIs to better engage your developer community" -- that's a totally different one in both feel and purpose, but one that you'd likely find customers for.

The only thing you need to do is be able to back up those claims, be personable, and ideally, be able to demonstrate how much value you can add to your customers, in dollar terms, how they would benefit from your services.

If you don't believe there to be value, then you just need to think about what your company is paying you for now (assuming employment), and how they're able to justify said employment and still make a profit.

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#37

Post by danso »

Excellent article.

1. I would be interested in learning more about what a programmer brings to the table in the consulting field. I mean, besides raw programming knowledge. The OP mentions Fog Creek as one of his first clients, a place that obviously is not short on programming insights. What does a consultant with programming chops bring that a non-programmer doesn't? Better ideas? Better tailored ideas?

2) Pedantic alert: "peek" is spelled as "peak" in the introduction.

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#38

Post by girasquid »

Jach wrote: post #28
girasquid wrote: post #15

Earlier quoted context omitted.

- Start a blog - Start going to meetups and make friends (no meetups? Organize one!)

"So what if I hate people and don't want to make friends?" (You tolerate it and with civility it's easy to make acquaintances!)

Took the words right out of my mouth. :)

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#39

Post by sidupadhyay »

lhnz wrote: post #22

How early can I start doing this? I'm young but confident and I do feel like I have something to offer people already. I guess it's getting the first client which will be tricky...

It's totally doable. You'll probably start off with a lower hourly at first, but you can quickly establish a higher rate and then eventually a consistent weekly as patio11 described. Early in college, I found the best way to find my true hourly rate was through project-based pricing with well defined scopes. The scope needs to be clear and you have to prevent any scope creep, as that will negatively affect your rate. Once you've gone through a project or two this way, you will have established a pretty good reputation with your clients, which would let you bill out at the real rate. After that you would be free to continue billing at an hourly or make the jump into weekly rates.

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#40

Post by tptacek »

enjo wrote: post #13
patio11 wrote: post #8

Earlier quoted context omitted.

In broad strokes, make businesses money. In a little more detail, I (personally) work mostly for B2B SaaS businesses and know a few things which tend to work for generating incremental growth in revenue. If you've followed my blog or HN posts they won't sound all that impressively new: write drip email campaigns, do A/B yet, redo pricing tiers, optimize conversion funnels, etc etc. There are many other consulting spe…

Just to be clear: This is different than "freelancing" or "contract development". This is more traditional business consulting. You're going in and changing processes and structures more than anything else. It might be around a specific goal like "make our signups more effective", but you're not just writing some code. You are going in an helping them to change their mindset by incorporating feedback (A/B testing) an…

This meme about there being "contractors/freelancers" and then "consultants" is toxic.

In the markets that Patrick and Jason Cohen and Brennan Dunn are talking about, almost the entire difference between "freelancer" and "consultant" is "how you price engagements".

It is true that consultants value-price engagements, so that they collect a percentage of the revenue or cost-savings derived from their code instead of a scaled hourly rate. And it's true that to do this, consultants have to think about the actual business context of their code, and be able to confidently propose the value of that code to a real business.

But that's where the differences end! Patrick is writing code on his engagements. He's using the same problem-solving methods you're using. On a day-to-day basis actually delivering for clients, he's writing code to generic metrics and then optimize them. The only thing he does differently from you is that he chooses to work on metrics where he knows he can make a case for revenue directly attributable to the metric.

It does not take a "big business win" or an Ivy education (WAT?) to "consult" for clients as opposed to "contracting" for them. You don't even have to be particularly attentive to your clients businesses, because so many people have built and written up methodologies for using code to make money for businesses; you can literally start by reading up on those, and offering them to clients who don't already do them. How many of your freelance gigs were for clients with sophisticated email marketing systems? How hard do you think it is to send triggered email updates to clients? Start there.

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