
Every freelancer starts out undervaluing their work - philipmorg
http://kenwestgaard.com/the-gurus-got-5-questions-set-rate/
======
jayshahtx
> pass on the cheap, low-value projects. Hold out for the clients that have
> budgets and value your time. Every second you spend with clients that don’t
> have money and don’t value your time is another second you have wasted.

I just finished my first 8 months of consulting work and while this is true,
it is so difficult to actualize. When we had zero projects, I would take any
meetings I could get. A part of me would hope that during the meeting, the
client would realize where I could add value and increase their willingness to
pay. In reality, however, it was the client who tried to push down our rate
time after time. A hard lesson for a novice, but I lost hundreds of hours to
clients that I knew, deep down, didn't have the budget.

With that being said, this is dangerous advice to internalize pre-maturely.
Without underpricing yourself in the beginning, it's difficult to derive self-
worth (IE: confidence) and increase your rate later on. And the last thing you
want is an early freelancer to turn down work because they think they are
worth more.

TLDR; Underpaid work might just be a rite of passage in freelancing. It was
for me.

~~~
sanderjd
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.

~~~
tertius
"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.

~~~
mcintyre1994
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?

~~~
mgkimsal
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.

~~~
sanderjd
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?

~~~
tertius
When you build your client base and you start off by charging a low price, any
referral work you get (and it gets to be a large portion of your work as the
base grows) will have a harder time with raised rates.

The underlying psychology shows us that we undervalue ourselves whereas other
people tend not to since they view us as experts. They are generally willing
to pay a lot more to have a solved problem than we would want to charge.

Start high and go higher until you meet resistance.

~~~
sanderjd
> any referral work you get … will have a harder time with raised rates.

This does not seem to mesh with the posted article where they interviewed lots
of successful people who started out charging on the low side and were able to
aggressively increase over time.

I get what you're saying in this thread, that people tend to not charge
enough. Sure, I'm right there with you. What bugs me is this meme that seems
to suggest that there's something wrong with doing whatever you can (like
charging less) to get your foot in the door. It's intimidating.

~~~
tertius
I agree with your sentiment, my point is that people too often believe that
low rates will get their foot in the door.

Many times what would happen is someone would get two or three bids and avoid
the lowballer because quality is associated with higher pricing. So you're
shooting yourself in the foot.

Now this doesn't always happen but I would suggest to stick on the side of
trying to charge more than you're comfortable with. You'll be surprised what
you can get your foot in the door with.

------
lordnacho
I don't get why people are so keen on the per-hour model. This puts a lot of
pressure on you to be fully productive and count hours like a lawyer. It also
makes you think you're losing money when you're not billing, and the customer
likewise feels the time/money pressure.

I've negotiated fixed-price deals where I'm quite certain I can get the job
done in x number of weeks, based on having done something similar before. And
that's a quite leisurely x weeks, where I'm not really feeling any uncertainty
about any part of the project (ie I know what APIs will be used, business
logic seems simple, research is done already). At the same time setting a
leisurely schedule also means if there is something unexpected, you can spend
a bit more time solving it. Or take a break when you're ahead.

Regarding the customers, being choosy appears to be very important. Anyone who
mentions outsourcing to (somewhere cheap) is politely moved on. Anyone who
doesn't grasp what they're after (a social network, with an iOS and Android
app, and videos, and ...) is quoted a longer timeframe. Customers also need to
be made aware of the importance of feedback, as in the agile model. That way
they always get what they asked for, and you don't waste time on what didn't
come to mind.

~~~
maratd
> 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 to them, well, you're done.

If you have that sort of client and you're charging by the hour, you're an
idiot. Quote them a fixed price at something like 500 per hour for what you
estimate the work will take. They'll go for it, you make bank.

At some point in your freelancing career you're going to start feeling
jealous. Of the "normal" guy. They guy who wakes up every morning knowing he
has a full day of work and is working for the same person he worked for
yesterday. He knows what to expect, how things operate, etc. Everything is
_stable_.

Stability is an illusion, but it's a nice one.

At this point, you're going to start looking for clients who don't want x, y,
or z. You're going to look for clients who need x. And some more x. Then some
more x. They keep needing x and there's no end.

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.

It's alluring to you, because you get a ton of work, all the time and you're
still billing twice what you'd get working a regular job, and you still get to
work from home, set your own hours, specify your own tooling, etc.

At some point, you'll get tired of this and decide you want to be the middle
man. You start getting your own clients, hiring other guys to do the work ...
and guess what? You're going to pay them by the hour. Because that's how you
maximize your profit.

Now, I know there are one-man armies out there who have their own clients,
bill fixed price, do all the work themselves and are always busy. I know
they're out there because I used to do that. It's exhausting. You have to
constantly keep marketing yourself, keep working of course, and wear a bunch
of hats at the same time. At some point, you'll have the desire to "outsource"
the marketing portion of the equation and that's when you'll start billing by
the hour.

~~~
pbowyer
> 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 a fixed price _and
will laugh you out of the agency_ at the idea of paying hourly. They don't
want risk; they want you to take the risk for their project specification
('cause they've already quoted the client, so you'd better cost less than they
quoted...)

What kind of middle men are these who pay per hour?

Or are you talking about _contracting_ , not freelancing?

~~~
radio4fan
> 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.

------
soft_dev_person
> No one is paying you for your “time,” they are paying you for a result, so
> stop charging for your “time.”

I wish regular employers would adopt this more as well. My value is what I
do/produce, not how much time I spent doing it. Some days I produce massive
amounts of value, while others I barely get anything valuable done. I'd like a
work place that would encourage me to go home and enjoy myself on the bad days
and stay as long as I want on the good days, instead of expecting a regular 40
hour work week every week (I have flex, but on average...).

On the other hand, I guess my employer has this issue too. We usually have an
upper (money or time) limit on a contract but charge by the hour. And this is
pretty much the standard in my industry and a requirement from our clients.
How did we end up this way? It makes no sense!

~~~
Swizec
> Some days I produce massive amounts of value, while others I barely get
> anything valuable done. I'd like a work place that would encourage me to go
> home and enjoy myself on the bad days and stay as long as I want on the good
> days, instead of expecting a regular 40 hour work week every week (I have
> flex, but on average...).

In the words of Stephen King, "Amateurs sit and wait for inspiration, the rest
of us just get up and go to work."

Very often the value is in just showing up and doing the work. Even if the
work isn't your best work, it's still better than no work. You can always fix
bad work later. Even if you throw it away and start again, you've already
primed yourself on the problem.

~~~
lfowles
On the other hand, there's been a lot of value for me clearing the calendar on
weekends and just playing videogames for 48 hours. Really sets priorities
straight and freshens me up for the upcoming week. This is best used when I
can't even make the effort to do "bad work".

I can see where he's coming from.

~~~
Swizec
It's a fine line. Sometimes the best thing to do is to walk away and leave the
problem for another day. Other times you're just making excuses because you
don't know how to solve a problem.

Learning which is which comes from experience I would assume.

------
ThomPete
Every freelancer starts out not having a lot of experience being freelancers
and so they make the typical mistake of thinking about their clients as their
employer rather than as an investment in a relationship that needs to be
developed over time.

Many get too hung up in the value of the services they provide when what they
are really selling is trust.

The people that manage to make good money on freelancing aren't always the
best at what they do, but they are good at managing expectations and making
the client feel like they made the right hire.

~~~
weaksauce
Managing expectations is so important and you really should learn it early on
in your career. If you pad your expectation and then deliver it early you
delight. On time and you are still ahead of most freelancers/employees.

If you see problems ahead with the timeline, communicate and let them plan
around your delays otherwise you are surprising them in the worst way.

~~~
ThomPete
Exactly. I found that most clients care way less about "world class" quality
than they care about delivering on time since their job is rarely to deliver
quality but rather simply to deliver.

------
Svenstaro
Please don't fuck around with the scroll behavior.

~~~
mcdougle
What did they do? I don't notice anything different.

~~~
Svenstaro
Smooth scrolling but that interferes with my scroll rate and vimium which also
optionally does smooth scrolling.

Generally, web designers really shouldn't touch scroll behavior at all, it's
rather bad practice.

~~~
bshimmin
I noticed this and was instantly aggravated by it (it's especially obvious on
a Mac because it doesn't do the "rubber-band" bounce at the top and bottom).
What purpose does it even serve on this page?

------
jbhatab
"When I first started, I charged less than $100/hour."

Clearly some of them were on very different paths than me. I taught myself and
charging anything over $30/hour would have been deceitful. I couldn't imagine
delivering that much value when I was starting.

~~~
meric
We didn't know how much value our work provides and was worried about giving
our clients a raw deal. I think there's nothing wrong with starting with a low
rate until we are confident in our abilities.

------
WA
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 REALLY learn
from a post like this.

It's a bit like Amazon reviews of books: Half of them are for people who have
read the book and start to discuss things retrospectively.

~~~
gk1
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.

------
ShirsenduK
For every one good freelancer there are 100 crappy freelancers. The way you go
up is via reputation. No better way than working with clients. When you have
no reputation you start at zero when you have reputation you can command your
price. If you want to start at a high rate prove yourself on GitHub. The gurus
might not have been gurus when they started. 😊

~~~
danieltillett
This. I think good freelancers forget how many bad freelancer there are out
there poisoning the waters. Before you can charge like a professional you need
to be able to prove you are one.

------
mgkimsal
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.

------
zerr
One thing to remember - those who charge 30K per week (e.g. patio11) do so by
doing the work they don't enjoy, and this would be even more non-enjoyable for
more hardcore engineers here.

We love making money with programming, not by marketing/SEO/etc...

So the most interesting for us is how to make 30K/week by only pure
engineering.

~~~
gk1
> ..so by doing the work they don't enjoy

Hey, speak for yourself. :) I happen to enjoy it very much, and that's what
makes my consulting work very rewarding.

~~~
zerr
Yes, I generalized my thoughts and what patio11 said about quitting consulting
:)

------
camdenre
I had trouble remembering which question corresponded to which number as I
read the article. It would have been nice to include the question above each
person's answer (or maybe a hover over the number reveals the number, or
something similar).

~~~
asmosoinio
Had the very same idea. To be able to read this, I opened a TextEdit window
where I copy&pasted the questions.

------
einarvollset
I'm one of the "gurus" \- feel free to ask more questions here (see bio for
more background)

------
jmadsen
There are so many tangents to go off on, but let me pick this one thing to
comment on:

Read Justin Jackson's story about the Mayor vs. the Ad Agency

Whichever price model you chose, you must learn early which clients are just
wasting your time. There are no hard and fast rules, often it's just a gut
feeling, but here are the mistakes I used to make & how to try to avoid them:

1) People who want to discuss their site for an hour or more on skype are not
proper businessmen.

Look for people who's time is money - they have some key questions for you,
they don't just want to "chat" about their idea. People who just want to chat
- get your hourly rate mentioned early. If you tell them "I charge X" and they
still want to talk a bit, then go with your gut, but don't talk more than
15min. with anyone without giving some indication of the price.

2) Don't lower your price unless you are repeatedly being rejected at that
price level BY THE TYPE OF CLIENT YOU WANT.

That second part is important - your price will screen out the little projects
you aren't really after. Don't worry if it is doing that job. But others will
reflexively ask for a better deal, and won't push back hard if you don't
budge. $10/hr less at "full-time" costs you $20,000 year that you'll never
earn back.

What always seemed to happen to me was, the moment I agreed to a lower rate,
someone would come along who was willing to pay full rate, and now I'm
massively stressed trying to do everything.

3) Ask to see any specs and/or designs early - offer to sign an NDA right up
front

This is to let you see how prepared they are, how professional they are, and
if the work is defined well enough to be able to offer a weekly rate. Weekly
rates are great, but they can be a harder sell for certain types of work.

4) Weekly rates are NOT risky if you define the number of hours/amount of work
you can reasonable expect in a week.

Project rates are dangerous. Weekly rates just mean, "Of course I can do that!
You understand that will cost X, correct? Would you like to cut something else
out, or just approve the overrun?"

Weekly rates DO mean you need to be professional - you are promising 40-50hrs
of actual work. For that reason I often go hourly to keep my personal
flexibility.

4) Don't run out an "prepare yourself" for the techs you'll need for this
project before signing the contract.

This is for the younger folks starting out, mostly back-end developers. Create
a career learning plan of technologies you want to improve at, and use down
time to study those. Don't jump around to new languages/server tools/whatever
that a potential client mentions & never get good at anything.

To a point that's ok, when you really ARE new and need to get familiar with
what is out there & being used, but get away from that habit quickly. If it
looks useful, schedule it in your Career learning plan & visit at the
appropriate time.

I know there's plenty more, but I think those are solid enough that I feel
comfortable offering them to people.

Good luck!

------
discardorama
Tangential: if someone wants to get into freelancing, how does one go about
it? How do you find gigs? I'm into HPC, Hadoop, etc. and have been
contemplating freelancing, for a change.

~~~
maratd
It depends on what area you want to target. Big data would be a niche field.
You would need to know your market. Your market being any niche market where
big data is relevant. You then target players who are small enough to need
your services, but not large enough to need someone full-time doing what you
do.

A lot of people see freelancing as some sort of gateway to doing what you
enjoy on your terms. I suppose that's half true. The other half is marketing
yourself and building a client base. Both halves are necessary.

If you're willing to take a major haircut off your rate (both in terms of what
you bill and the service fees you'll pay), you can get low-end clients on the
freelancing sites. That should really be seen as training wheels though and
not a permanent solution. Low-end clients pay less, give you more grief, and
the projects are less interesting.

------
buckbova
Isn't the title "12 Gurus Got 5 Questions About How They Set Their Rate"?

~~~
pmjordan
HN has some form of "no numbers in titles" policy. I'm not even sure list
articles are allowed at all.

~~~
SilasX
Right, but not against the numbers per se (or else it could just be machine-
filtered), but about titles artificially framed in the listicle format:

>If the original title begins with a number or number + gratuitous adjective,
we'd appreciate it if you'd crop it. E.g. translate "10 Ways To Do X" to "How
To Do X," and "14 Amazing Ys" to "Ys." Exception: when the number is
meaningful, e.g. "The 5 Platonic Solids."

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

------
mdpopescu
Anyone else being asked for a user and password?

