I'm in the high-end web consulting biz and there is no shortage of customers looking for fork over millions for an end-to-end solution. Even at the low-end that he is bemoaning, the plethora of off-the-shelf tools is coupled with a massive explosion is the number of businesses requiring a web presence. Now they can all get a decent looking site up for cheap or even just a Facebook page for nothing, but the next frontier will be differentiating themselves from their competitors which will require professional services.
Margins on website development are shrinking
21–30 of 78 posts
Re: Margins on website development are shrinking
#22This overstates was the vast majority of clients are capable of. The very low-end is definitely eroding though and it's a good thing.
I've used a ton of CMSs and blogging engines and think Squarespace is the future of where this is headed.
Re: Margins on website development are shrinking
#23Here is the trick: All of the technologies that your customers supposedly now use to replace the services you used to offer them, can also be used by YOU... to replace the services you used to offer with better services in much less time. Proper use of today's tools will make your customers think you have somehow gained super powers as you deliver them better results, faster, and with much less effort than when you h…
This can work if you get in on the new tools and technologies quickly before everyone else.
Eventually the expectation of price will go down due to competition.
Re: Margins on website development are shrinking
#24I've had the same experience the past few years with car maintenance.
- I can find any owner's manual online.
- I can find detailed instructions for any type of repair in written form or in a Youtube video.
- There are free online courses for anything from changing a tire to becoming a full-fledged mechanic.
- I can find and order any part of my car at wholesale prices.
- The same diagnostic software that repair shops use can be downloaded for free. I can hook up my iPad to my car through a simple USB cable and find out exactly what's wrong with it.
And I still take my car to the local auto repair shop, because I'm not a mechanic.
Re: Margins on website development are shrinking
#25"Instead of having us create an administrative interface for updating your web content, you could just install Joomla, WordPress or Drupal and do it yourself."
hahaha who? Is your client Stephen Hawking?
Re: Margins on website development are shrinking
#26I've had the same experience the past few years with car maintenance. - I can find any owner's manual online. - I can find detailed instructions for any type of repair in written form or in a Youtube video. - There are free online courses for anything from changing a tire to becoming a full-fledged mechanic. - I can find and order any part of my car at wholesale prices. - The same diagnostic software that repair shop…
To be fair, if you have the time and the room, it really does make a lot of sense to learn some items in care repair. Similarly, being a fully trained plumber is a daunting task. Fixing most problems in your bathroom is actually straight forward.
Of course, some of this comes down to a value judgement. How much is it worth it to you, personally, to not have to mess with a broken toilette? :)
Re: Margins on website development are shrinking
#27This happens in every services industry, not just website development. A combination of new technology, experience, and the dispersion of knowledge drive down costs and margins. Nobody hires accountants to do their adding and subtracting, but there's still demand for experts in new regulations or the eccentricities of the tax code.
The same thing is happening in website development (and really, all sorts of technology related services businesses). Over time, the low hanging fruit gets automated, and margins get compressed.
As your firm evolves, you find margin in one of two ways. You either stay at the high end, and continuously learn new technologies and how to solve higher level problems for clients. You are continuously jettisoning your old bread-and-butter projects to work on the latest and greatest thing, solving new problems that didn't exist a short time ago.
Or you follow the work down-market and focus on scale and efficiency. You figure out that you can get profit from process and automation, you turn your toolkit into an offering that you can sell at a high margin.
Either approach works, but firms tend to get in trouble when they try to straddle the middle, and just sort of hope that clients will still pay big margins for work that's become routinized.
Re: Margins on website development are shrinking
#28lol I don't buy this, just take a look at pretty much every CMS (hosted or otherwise) and weep if you think as a complete amateur you're going to create a site with their wysiwyg content editable that actually looks half way decent.
Website design isn't just about being able to create a site without touching html, it's actually about it looking like a grown up made it. As soon as you're a few hours into your new creation you're going to want to tweak it (a lot), good luck sifting through the html soup the editor created for you.
Re: Margins on website development are shrinking
#29I've had the same experience the past few years with car maintenance. - I can find any owner's manual online. - I can find detailed instructions for any type of repair in written form or in a Youtube video. - There are free online courses for anything from changing a tire to becoming a full-fledged mechanic. - I can find and order any part of my car at wholesale prices. - The same diagnostic software that repair shop…
To be fair, if you have the time and the room, it really does make a lot of sense to learn some items in care repair. Similarly, being a fully trained plumber is a daunting task. Fixing most problems in your bathroom is actually straight forward. Of course, some of this comes down to a value judgement. How much is it worth it to you, personally, to not have to mess with a broken toilette? :)
One thing I don't see people talk about enough in the context of home or car repair is liability. Not only do I not want to mess with a broken toilet, but if I screw up and flood my bathroom, it is my fault. If the plumber does it (less likely because they know what they are doing) then they are on the hook. For some things the cost of failure is low, but for many, especially when being paid a programmers salary, the marginal savings (e.g. 15 bucks for an oil change) isn't worth the time and liability.
YMMV (literally :D).
Re: Margins on website development are shrinking
#30I've had the same experience the past few years with car maintenance. - I can find any owner's manual online. - I can find detailed instructions for any type of repair in written form or in a Youtube video. - There are free online courses for anything from changing a tire to becoming a full-fledged mechanic. - I can find and order any part of my car at wholesale prices. - The same diagnostic software that repair shop…
That metaphor doesn't work for two reasons. First, over time a car has grown MORE complex, while the tools to create a website have grown LESS complex. At the same time, improved quality in engines, motor oil, and service technology has made routine maintenance not only easier, but also less expensive. Second, auto repair, like most skilled trades, is a great example where specialization of workers gets involved. It's not that you can't spend the time to learn how to repair a car, it's that you consider your time worth more. But in many cases, the cost of building a website has come down so rapidly that it doesn't require a big time commitment for many people.
There will always be room at the high end to solve problems that are complicated, large, or rare. But at the low end, things that were new 20 years ago just aren't anymore. Website development is becoming less like a mechanic and more like pumping gas.