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

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

#151

Post by tibbon » Mon, Nov 19, 2012, 11:13 PM UTC

flyinglizard wrote: post #145

Here are my lessons after 6 years running a consulting firm in a pretty specialized business (high end ARM/embedded stuff), from the top of my head: 1. Avoid billing by hours, exactly for the reasons listed here. You can only lose like this; it carries more administration overhead, more friction with the customer and at the end there's a max budget allocated on the customer's end anyway - it's not like you can bill i…

Also, I always keep in mind that at some positions; there are people who want to spend more money if they can. Spending more this year might mean a bigger budget next year. Sometimes power at the company is somewhat stacked by who manages a larger spend each year. And sometimes perception of quality has to do with what you spend. A $60k consultant must be better than a $6k consultant right?

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

#152

Post by flyinglizard » Mon, Nov 19, 2012, 11:14 PM UTC

alinajaf wrote: post #147

flyinglizard wrote: post #145

Here are my lessons after 6 years running a consulting firm in a pretty specialized business (high end ARM/embedded stuff), from the top of my head: 1. Avoid billing by hours, exactly for the reasons listed here. You can only lose like this; it carries more administration overhead, more friction with the customer and at the end there's a max budget allocated on the customer's end anyway - it's not like you can bill i…

Hi flyinglizard, I'd love to pick your brain about consulting on ARM/embedded stuff as it's a field I'm interested in. Do you have an email address that I can send a few specific questions to (that I promise won't take more than a few minutes to answer)? Thanks in advance.

YHM

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

#153

Post by flyinglizard » Mon, Nov 19, 2012, 11:22 PM UTC

tibbon wrote: post #151

flyinglizard wrote: post #145

Here are my lessons after 6 years running a consulting firm in a pretty specialized business (high end ARM/embedded stuff), from the top of my head: 1. Avoid billing by hours, exactly for the reasons listed here. You can only lose like this; it carries more administration overhead, more friction with the customer and at the end there's a max budget allocated on the customer's end anyway - it's not like you can bill i…

Also, I always keep in mind that at some positions; there are people who want to spend more money if they can. Spending more this year might mean a bigger budget next year. Sometimes power at the company is somewhat stacked by who manages a larger spend each year. And sometimes perception of quality has to do with what you spend. A $60k consultant must be better than a $6k consultant right?

Charging more and being proud about it does add to your aura, in their eyes. They'll appreciate you more (given that you deliver).

About the budget allocation cooking - this behavior is usually observed - perhaps even common - at very large/government organizations. I'm more inclined to work with medium businesses and down to startups, so I've rarely encountered it myself.

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

#154

Post by ahoyhere » Mon, Nov 19, 2012, 11:30 PM UTC

tptacek wrote: post #146

ahoyhere wrote: post #143

Earlier quoted context omitted.

As someone who has both been and hired a lot of freelancers/contractors, I would say that there is a genuine difference in game level between freelancers and consultants. It's a matter of professionalism and willingness (and ability) to steer the project/engagement. Consultants are experts who come in and figure out how to achieve a goal, who investigate the clients' needs, who tell the client "these are the steps we…

I admire people who can execute this consultative approach (and, it should go without saying, I admire Amy Hoy's work in particular). If you can make $500/hr/person for talking sessions, I think you should do that. But I want to take yet another opportunity to stab wildly at the idea that only people who can execute at this level are "consultants", and the rest "freelancers". Though I find the terminology a little si…

I don't think we're disagreeing here about pricing at all!

Lots of very good freelancers are undercharging and everybody should price on value delivered. (Especially those freelancers who disappear and only get work done when yelled at. If only!)

That's why a lot of the educational content I've used to promote Freckle is about delivering, understanding & capturing value… for freelancers. (Which includes understanding & identifying your ideal clients because if you use a hammer to break a window and steal $1 million in diamonds, it's worth a lot more to you than if you use it to hang your kindergartener's fingerpaintings.)

Any freelancer can become a consultant, though, by changing the way they work. Read a few books, take personal responsibility, experiment with being more than a tool for executing the client's vision. If you ask your client questions and debate features, that's already a good start.

This kind of consulting — consulting, as in the dictionary definition -- is a huge value and therefore hourly rate multiplier. Anyone who improves their management skills can vastly increase their rates.

If you only provide execution, and not the other stuff I described, you will hit a ceiling a lot sooner… and suffer more price comparisons. Not as many problems as a person who just says "I code in Ruby" rather than "I help your biz make more money," but more problems than somebody who approaches the biz like I did!

BTW - I rarely did just-talk engagements. All the stuff I described above was as part of design-dev projects. The process I came up with is as follows: We would meet the client, give them a fixed price quote ($5-10K) for these meetings and guidance and the report. They would pay 100% up front. The report, then, was a deliverable they could take to use with any other (cheaper) service provider to implement. Which, naturally, never happened, because as soon as the client saw how we ran our projects, they would never dream of hiring anyone else.

That's the power of being a consultant!

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

#155

Post by nhangen » Mon, Nov 19, 2012, 11:32 PM UTC

monkey_slap wrote: post #133

nhangen wrote: post #118

Earlier quoted context omitted.

It was our crowdfunding plugin for WordPress - http://ignitiondeck.com

I'm working a lot on my open source projects, building a good portfolio. I'm hoping I can get to a point where I find something worth charging for, but for now I'm building tools on weekends and using a large and well-received portfolio to garnish some attention. Great idea you've got there. I wish you only success!

Thanks! Oddly enough, we started building this to raise money for a personal project and only later did we decide to sell it. Turns out that was a smart move.

I can sympathize with your weekend pace. We worked on this for a year before it started getting any attention, and it's still not nearly as polished as we'd like it to be.

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

#156

Post by clebio » Mon, Nov 19, 2012, 11:48 PM UTC

patio11 wrote: post #96

polyfractal wrote: post #81

I feel like every post by Patrick should be printed out and taped to the wall. So many great lessons in his writing. Thanks patio! Question of my own: if you are breaking into consultancy, how do you go about cold-calling potential clients? Say you've identified a few clients that you think you could help. What kind of email do you send them? Go the honest route and say "Hey, I'm new but I want to help your business…

So there's some sort of difference in the neurological makeup of developers and business owners around the phrase "you don't have to pay me." Developers think that proposition decreases risk. Business owners think exactly the opposite . It suggests that there's such significant project risk associated with employing you that the market forces you to self-indemnify for that risk upfront, which virtually no other servi…

Everything you mention rings true with my experience in the business world (such as the difference in mindset of engineers versus management types). In construction, variable payout can be managed by meet-versus-exceed of customer want date. Have you seen that used in your area, or have an opinion for or against? Thanks for such excellent free advice.

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

#157

Post by ana_hilinsky » Mon, Nov 19, 2012, 11:49 PM UTC

Thank you for writing this. It's too often that I feel alone in the world of dev consultancy! I've been running my company for 3 1/2 years, I started it straight out of college in 2008 when I realized job opportunities were slim to none and I'd have to figure out how to pay my rent regardless.

The most important lesson I learned all these years: find a reputable client, do good by them and watch word of mouth spread. Our biggest asset is the great referrals we get from our clients.

It's all too often that we end up taking over a project that was done by some previous consultant/freelancer where they obviously didn't care about the client relationship and let the work get sloppy. It's a shame! (Also, I'm not talking about tiny projects for no name brands, I'm talking about major retailers, musicians and sometimes fortune 500's).

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

#158

Post by Terry_B » Mon, Nov 19, 2012, 11:55 PM UTC

F_J_H wrote: post #106

There seem to be a lot of comments centered on “wow, this sounds great – I wish I could charge more” or “how do I find these high paying contracts”? Here’s one way. It may seem obvious to many, but I think it bears stating. If you are looking for consulting contracts that pay really well, focus on providing a service that helps companies make money rather than save money. In other words, help grow revenues rather tha…

This is a great point. I've been trying to think of as many things programmers can do that increase revenue as possible.

A/B Testing and sales funnel optimization is definitely a winner.

- Optimizing how a company utilises it's resources

- Optimizing the speed and performance of a critical business function.

- Increasing marketing reach

- Generating more sales leads

What else guys?

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

#159

Post by wpietri » Mon, Nov 19, 2012, 11:56 PM UTC

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 how many messes I've cleaned up (likely left by people charging a hell of a lot more than me) for really low rates.

Sorry to say it, but almost nobody hiring consultants gives a shit about cleaning up messes. If they did, they wouldn't need to hire consultants to clean up messes.

Don't clean up messes, or at least not the things that you perceive as messes but they don't. Just like the article says, solve problems that people with money know that they have. If somebody with a clusterfuck of a system is paying $30k/month for hosting and you can cut it in half with a month's work, then charge them $30k. They'll balk, but tell them they'll get paid back in 2 months. If they are too dumb to take that deal, fuck 'em.

I know it's painful to leave people with all the other messes they have. But if you're going to do charity work just because it makes you happy to tidy things, then do it for actual charities.

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

#160

Post by wpietri » Mon, Nov 19, 2012, 11:58 PM UTC

lambda wrote: post #132

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…

Protip: don't ever reply to ads that ask for a "ninja" or "rockstar." Look for the more boring sounding jobs; they will have fewer people competing for the job, so you can probably make relatively better rates. Also, why do you only do remote work? Is there no one near you who needs a sysadmin? Could you travel? People value face-to-face interaction a lot more than online; if you only do remote work, then some guy in…

> Protip: don't ever reply to ads that ask for a "ninja" or "rockstar."

No, please do reply. Then go in wearing leather pants, with white powder on your upper lip and reeking of Jack Daniels. Use a pawn-shop electric guitar to smash the fuck out of their interview room. Then stab somebody with a katana on your way out.

It's the only way these people will learn.