Every freelancer starts out undervaluing their work • Hacker News Board

Re: Every freelancer starts out undervaluing their work

#41

Post by gk1 » Fri, May 08, 2015, 6:20 PM UTC

WA wrote: post #9

And yet, nobody answered question #2 ( What was your defining moment when you realized you were worth more than what you were charging ) like so: "I read a blog post or a book on how to charge more." This is not to say that a post like this doesn't have any value - or a book like Brennan Dunn's book. But sometimes, when I read stuff like that, I wonder how much is actually survivorship bias and how much one can REALL…

Before I quit my job to start consulting, I read all of (every... single... one) Patrick McKenzie's blog posts and podcasts. That gave me the knowledge that there is a market for results-oriented, bullshit-free consultants, and that clients in that market are willing to pay for results.

So when I quit and self-declared myself a consultant, I went straight to charging premium weekly and monthly rates, as Patrick and others have recommended.

It wasn't $30k/week, and it still took many months to stop feeling like a fraud, but two years later I'm earning a living by working with extremely interesting and successful clients. I altogether skipped the dreaded "cheap freelancer living week-to-week" stage, and I give a lot of credit to Patrick's articles for that.

Re: Every freelancer starts out undervaluing their work

#42

Post by mgkimsal » Fri, May 08, 2015, 6:21 PM UTC

mcintyre1994 wrote: post #33

tertius wrote: post #28

Earlier quoted context omitted.

"Your price at the beginning has to be lower because your profile is lower" This is the sentiment that makes you justify charging too little.

So what is the alternative? If you don't have any cheap clients (cheap labour) or portfolio (free labour), how do you convince clients what you're worth?

Arguably, you can invest some of your time in your own portfolio projects that demonstrate the particular skills and value you want to promote. It's not an exact science, and harder in some industries than others, but not impossible, and it's something that too many folks (me included) tend to gloss over or ignore.

Keeping a relevant industry-related blog won't necessarily convince every single client, but it's one of those things that can swing someone's mind to committing to you when there's not a lot of other obvious signals.

Re: Every freelancer starts out undervaluing their work

#43

Post by mgkimsal » Fri, May 08, 2015, 6:29 PM UTC

While I sympathize with the 'value pricing' sentiment, and do use in in some pricing situations, part of the 'value' measurement comes down to the other party's ability to execute and extract the value from whatever I (or my team) produce. Having a time factor in there (X hours, Y weeks, whatever) and having part of all of the price be affected by the time put in reduces that issue, but also generally will tie you to lower profits of any sort.

I've done 100 hours of work for company X, and they were easily able to recognize > $300k of value from that project. Another 100 hours of work for company Y, and they were struggling and complaining about a $7500 charge for that time, as they "didn't see the point" (the original sponsor did, but the rest of the team wasn't executing on the whole project, and nothing was getting done, hence little value arising from anyone's time).

Finding more projects like company X, and fewer like company Y, becomes it's own fun exercise.

Re: Every freelancer starts out undervaluing their work

#44

Post by maratd » Fri, May 08, 2015, 7:12 PM UTC

pbowyer wrote: post #38

maratd wrote: post #23

Earlier quoted context omitted.

> I don't get why people are so keen on the per-hour model. How many years have you been doing this? It doesn't sound like you've been at this for too long. > I've negotiated fixed-price deals where I'm quite certain I can get the job done in x number of weeks This works fine for a client who wants a very concrete x, y, or z. There's a problem with this sort of client. They only want x, y, or z and after you give it…

> These clients are professionals. They know the industry. They're not really clients, they're middle men. They're agencies, marketing guys, whatever. They have a constant stream of work. They know it. And they know the best way to maximize their profit is to pay you by the hour. They will only pay you by the hour. They will laugh if you suggest anything else. My experience of working for agencies is they want to pay…

> Or are you talking about contracting, not freelancing?

Those things mean different things to different people and there's a lot of gray in between the two. I can add another word to make things even murkier. Consultant.

But in the end, yes, I am.

As a freelancer, if you're charging by the hour, you're either making a horrible mistake or you're really contracting and don't have a choice in the matter.

That was kind of my point and also that it's not necessarily a bad thing.

Re: Every freelancer starts out undervaluing their work

#45

Post by radio4fan » Fri, May 08, 2015, 7:16 PM UTC

pbowyer wrote: post #38

maratd wrote: post #23

Earlier quoted context omitted.

> I don't get why people are so keen on the per-hour model. How many years have you been doing this? It doesn't sound like you've been at this for too long. > I've negotiated fixed-price deals where I'm quite certain I can get the job done in x number of weeks This works fine for a client who wants a very concrete x, y, or z. There's a problem with this sort of client. They only want x, y, or z and after you give it…

> These clients are professionals. They know the industry. They're not really clients, they're middle men. They're agencies, marketing guys, whatever. They have a constant stream of work. They know it. And they know the best way to maximize their profit is to pay you by the hour. They will only pay you by the hour. They will laugh if you suggest anything else. My experience of working for agencies is they want to pay…

> My experience of working for agencies is they want to pay a fixed price and will laugh you out of the agency at the idea of paying hourly

Mine too, and I've been at this game for 16 years.

In fact, my usual experience is agencies coming to me with no design or functional specs (even back-of-an-envelope stuff) and wanting a price.

The only time I ever charge by the hour is for maintenance programming.

Re: Every freelancer starts out undervaluing their work

#46

Post by gexla » Fri, May 08, 2015, 7:24 PM UTC

mcintyre1994 wrote: post #33

tertius wrote: post #28

Earlier quoted context omitted.

"Your price at the beginning has to be lower because your profile is lower" This is the sentiment that makes you justify charging too little.

So what is the alternative? If you don't have any cheap clients (cheap labour) or portfolio (free labour), how do you convince clients what you're worth?

Notice some say they started out at less than $25 an hour. Others started out at $50 or more. The difference isn't in profile, it's in what they were asking when they got that first client.

Re: Every freelancer starts out undervaluing their work

#47

Post by sanderjd » Fri, May 08, 2015, 7:36 PM UTC

tertius wrote: post #28

sanderjd wrote: post #27

Earlier quoted context omitted.

This is why the word "underpriced" always seems wrong to me in this context. Your price at the beginning has to be lower because your profile is lower, which means you have a weaker negotiating position. "Underpriced" only becomes the right word if your rates aren't rising in conjunction with your profile, which does happen for sure, but isn't the case right at the beginning.

"Your price at the beginning has to be lower because your profile is lower" This is the sentiment that makes you justify charging too little.

So, to relate this back to the original article – all these people interviewed started with low prices at the beginning and built up their profile, raising their rates along the way. I look at that and think, well that's a good and clearly proven model, and it makes sense why it works that way. I don't look at it and think, well they should have started out with higher prices right from the start, since clearly they were worth it all along!

Re: Every freelancer starts out undervaluing their work

#48

Post by sanderjd » Fri, May 08, 2015, 7:38 PM UTC

mgkimsal wrote: post #42

mcintyre1994 wrote: post #33

Earlier quoted context omitted.

So what is the alternative? If you don't have any cheap clients (cheap labour) or portfolio (free labour), how do you convince clients what you're worth?

Arguably, you can invest some of your time in your own portfolio projects that demonstrate the particular skills and value you want to promote. It's not an exact science, and harder in some industries than others, but not impossible, and it's something that too many folks (me included) tend to gloss over or ignore. Keeping a relevant industry-related blog won't necessarily convince every single client, but it's one o…

Why is it better to do free work to build a portfolio of non-professional work, rather than building it by starting with lower-paying engagements?

Re: Every freelancer starts out undervaluing their work

#49

Post by sanderjd » Fri, May 08, 2015, 7:41 PM UTC

gexla wrote: post #46

mcintyre1994 wrote: post #33

Earlier quoted context omitted.

So what is the alternative? If you don't have any cheap clients (cheap labour) or portfolio (free labour), how do you convince clients what you're worth?

Notice some say they started out at less than $25 an hour. Others started out at $50 or more. The difference isn't in profile, it's in what they were asking when they got that first client.

Definitely true, but also note that none of them started at anything we would consider to be "a lot".

Re: Every freelancer starts out undervaluing their work

#50

Post by sanderjd » Fri, May 08, 2015, 7:44 PM UTC

jayshahtx wrote: post #39

sanderjd wrote: post #27

Earlier quoted context omitted.

This is why the word "underpriced" always seems wrong to me in this context. Your price at the beginning has to be lower because your profile is lower, which means you have a weaker negotiating position. "Underpriced" only becomes the right word if your rates aren't rising in conjunction with your profile, which does happen for sure, but isn't the case right at the beginning.

I agree with you, but when we are discussing "price", we are not discussing it as a function of profile. We are discussing it as a function of raw skill. If two people (one experienced and one in-experienced) were asked for a proposal on the same specs, the experienced one would demand a much higher rate, even if the final output would be the exact same. Using the word "underpriced" from the lens of competency makes…

I guess I just don't think that's a very realistic view of "price". Nothing is priced based on innate value, but rather a complex interaction between value and the ability to market that value.