
How to be a freelance web developer, part 2 - ryanwaggoner
http://ryanwaggoner.com/2010/10/how-to-be-a-freelance-web-developer-part-2/
======
Cushman
_Finally, keep this in mind: freelancing might seem overwhelming, but your
competition is terrible. Seriously, absolutely terrible._

This doesn't just apply to developing, or other stuff you're particularly good
at, either. In general, people suck at stuff.

My experience tends to be that if, as a hacker, you think you've got an okay
grasp of a subject, you're probably in the 90th percentile somewhere. If you
think you're pretty good at it, probably 99th.

The "keep raising your rates" advice is good for life in general. Never,
_never_ sell yourself short on _anything_.

~~~
mgkimsal
A sidenote to 'keep raising your rates'. At some point, for some sort of work,
you really _will_ be pricing yourself out of that market. I've had people
express that concern to me "I'll never get the job if I quote that much!",
etc.

My response years ago was to adjust the price down some (and I did it myself)
and sometimes you'd get the job.

My advice now, typically, is ... don't go for that type of work. Don't bid on
that project. If what you're bidding on is commoditized to the point where
anyone can do it for 5x less than you want to charge, find another type of
skill to enhance and sell that.

This approach isn't for everyone, obviously, but I'm finding it works. This
might just be a variation of "go where the competition isn't"?

~~~
edna_piranha
Also, rates depend on the work required by the client. If you are purely doing
some frontend/interface work, it is reasonable to adjust that rate differently
from backend work.

Another note is that rates should fluctuate depending on timelines from the
client, their budget and requirements. A healthy balance of determining all
those factors and your ability to estimate your abilities to complete work can
result in a wider range of price ranges - either fixed/hourly/weekly/monthly,
etc.

Most of this can only be figured out through lots of experience.

~~~
thibaut_barrere
I did this at first, but then realised that my brain and abilities didn't
change when I did PM related work or back-end related work.

So now I have only one rate for myself. One consequence is that billing is
easier and less error-prone :)

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marknutter
"Oh, I almost forgot: never work for equity. 99% of those projects will never
go anywhere. I tell my clients that they’re welcome to throw in some free
equity on top of my normal rates, but I get paid in cash for the work that I
do. I have plenty of entrepreneurial projects of my own, so why would I work
my ass off for 3% (or even 30%, though they never offer this much) of
someone’s Facebook clone?"

The most valuable paragraph in the whole article, IMO.

~~~
jacquesm
That very much depends. If the equity is a part of the payment and you're a
co-founder it is not rare to make out very well in the longer term. If a
company is already established then equity (usually in the form of options)
can be a substantial component of your compensation.

~~~
rwhitman
Has this ever worked for you in the longer term? I mean from experience have
you ever been paid out for taking an equity trade as a consultant?

I'd really like to hear from someone who's made this work to their benefit

~~~
marknutter
My money is on "no."

~~~
jacquesm
Well, you'd be wrong then.

Funny how you should know more about me than I do.

The company meanwhile has grown in to something _very_ respectable, and even
though I haven't been a shareholder for years (bought out many years ago) I
never regretted my decision one bit. It was an established business in a
different trade when I got there, they decided to pursue this crazy idea
(putting photographs on membership cards and print them with laser printers).

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ryanwaggoner
People seemed to find part 1 of this topic helpful, so I decided to elaborate
on a few points. You can find the original post and discussion here:
<http://news.ycombinator.com/item?id=1763634>

If you found either of these posts useful, please email me at
mail@ryanwaggoner.com. I have a couple questions about a related new venture
and I'd love some feedback.

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rcavezza
I never imagined how easy it would be to get started. After pitching a failed
startup in New York City, I received a random email asking if I knew any
software developers. I mentioned I was looking for freelance work, and that
was my first gig. I'm currently working four and the offers keep coming. All
you really need to do is go to startup events and tell them you're a
developer. 95% won't want to pay you, but there's always a few that will.

I keep track of hours using freshbooks, ask for 50% of estimated hourly fees
up front, and use paypal for payments. It's pretty easy, and I never even
built a website, lol.

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kls
_freelancing might seem overwhelming, but your competition is terrible.
Seriously, absolutely terrible. I think almost all of my clients have gone
through several programmers before me and their expectations are generally
pretty low._

This is sadly the case, I am worked on a project that was done by a developer
and abandoned half way through. The code was atrocious and you could tell that
this developer was in over their head.

The worst part about it is that this developer speaks at industry conferences
and blogs about the subject matter at hand. All of the developers on the team
for this company had very low opinions of the freelancer and the project was
put in significant jeopardy by this developers lack of real world
qualifications on the subject matter. When the freelancer was questioned about
their high ego-to-talent ratio they blamed it on the in-house development team
and abandoned the contract.

The worst part about it, is this person is friends with some of the best and
brightest in a particular segment of the tech industry. I though to myself if
this is the state of freelancing then no wonder I am beating away jobs. It
goes to show some people talk a good game, but when the rubber hits the road
they can't produce. The author hit this one spot on. If you are a consistent
performer, you should consider freelancing.

~~~
mattm
I've only done freelancing on and off yet I've been approached a number of
times exactly like this. Client hired someone that would work for cheap and
now the project is only half done, poking around for a few minutes reveals a
handful of bugs, there was no thought to the design of the code and the code
is extremely difficult to understand.

~~~
kls
The sad part about this one, is that it was for a huge tech firm, who hired
this person based on reputation and the circle of friends that this person
associates with, they paid top dollar for this person. The individuals
pedigree looks outstanding and they are a great speaker and advocate for the
industry. They just could not apply their trade to real world problems, and in
turn blamed the client due to their inflated arrogance due to being so
respected in the speaking and blogging industry, when in fact this client has
their act together, it is one of the better development houses I have seen.

------
hundredwatt
Another comment about looking for work: never act like you NEED work/some
specific contract.

Once you start feeling desperate, you'll make irrational decisions such as
quoting lower rates, accepting more difficult clients, and the worrying will
drive you crazy.

~~~
trustfundbaby
The truth, though, is that sometimes you might _have_ to lower your rate to
take work if you're going through a particularly dry spell and have bills to
pay.

Don't feel bad about it.

In that instance, try and get a retainer, so that you're getting paid every 2
or 4 weeks for a set number of hours no matter what.

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js2
Ryan - thank you. This is very well written and provides a good picture of
what it takes to freelance.

It seems to me that you really want to have to work for yourself to do this. A
decent programming job with benefits for someone of your experience is easily
$120 - $150k. Assuming you can bill $100/hr and work 2000 hrs/yr, it beats
that, but not by much, and frankly seems like a lot more work. So the
motivation to freelance isn't a monetary one. Would you agree?

~~~
ryanwaggoner
Completely agree. Benefit to me is freedom. Freedom to work where I want, when
I want, on what I want, with the tools I want. I can't imagine going back to a
job, but who knows. I'm always open to offers :)

~~~
brc
I haven't sat through a team meeting or buzzword filled death by powerpoint
for 5 years. I haven't had to attend corporate vibe sessions or listened to
compliance officers drone on about anything. I also, 5 years ago, looked at a
map and said 'where do I really want to live', then moved there. My whole life
philosophy was to create the lifestyle I wanted, and then work out how to pay
for it. It's a powerful motivator. Because most people first find a job, which
then locates them on the map, and they then try and fill in the rest of their
lifestyle based around those two parameters.

The thing that keeps me going is the thought : well, I can _always_ go and
grovel for a permanent job somewhere. But I think I'm pretty much unemployable
now, in the traditional 9-5 sense. I get 2-3 requests for work per day at the
moment, but pass on most because, like the blog post says, people aren't
serious or are expecting low prices.

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tocomment
Is there a way to form a certain kind of company and pay yourself a small
salary like 60K/year and only pay payroll taxes on that part? Have you looked
into anything like that?

~~~
SkyMarshal
Second this question. I'm also interested in all the business infrastructure
issues of freelancing - software stack for time tracking, invoicing, receiving
payments, calculating and paying taxes, LLC or not?, Nevada or Delaware?, how
to pay yourself, etc.

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felideon
Typo; Sales cycle, second paragraph: _[...] you'll find that only have one
project [...]_

Thank you for the two posts. The key thing for me, personally was (first
post): "If you don't have any sample work at all because you haven't built
anything, you're not ready to freelance."

Also, is there any reason "running a development agency" is not your goal? Do
you simply rather doing the work yourself, than managing people?

------
thierryd
_What skills to offer (and where to grow)_

I suck at UI design (for example making a good looking OK button in
photoshop), but I'm a pretty good programmer. How would you approach that? Do
you think subcontracting a UI designer would work? Or usually it's the other
way around (UI designer subcontract the programmer to build the web site
logic).

~~~
thibaut_barrere
When faced with the same situation (3 years ago), I decided to train myself to
at least be able to create decent looking UI.

It's not that hard, if you read a few books and practice a bit, to be able to
cover 80% of design needs (and you can stay in the code these days, ie: work
in CSS3 and take screenshots for instance - staying away from Photoshop).

You can also subcontract to a UI designer for the inspirational bits and do
the rest of the work yourself.

~~~
heyitsnick
Any specific book recommendations?

~~~
swaroop
I just started reading "Web Design for Developers" published by PragProg (
<http://pragprog.com/titles/bhgwad/web-design-for-developers> ) and would
recommend it.

------
bballant
Re: good vs. bad clients -- I commented on part 1, basically saying that being
friendly helps me find work, but it also means my clients are friendly/casual
which can lead to time wastage. It's like the opposite of the super-type-a
micromanager client.

When I feel a client is wasting my time, I try to gently remind them that, for
a freelancer, time is money. Also, as Ryan suggested, having two
clients/projects going on at once is the best scenario.

------
random42
Non american developer, working in full time job here. Can you explain a
little how/why income tax is higher for freelancers?

~~~
barrkel
I'm not an American, but in most countries, employers pay tax for employees
that employees don't see on their paychecks. In effect, it's income tax whose
value is hidden for political purposes: employees only see the headline salary
and the headline income tax, but in reality, the cost to the employer is
usually more than the headline rate, even without the value of benefits etc.

~~~
thierryd
On the other hand, in Canada you can put part of your mortgage paiement as
deductible if you work from home (same thing with you computer, phone, etc).
So that does lower your taxes compared with someone who work in a company. Is
it the same in the US?

~~~
sethg
In the US, things that you buy and use for your job are tax-deductible (no
doubt the IRS has a very detailed definition of “use for your job”). If your
employer buys them for you, then the employer gets to deduct them as a
business expense.

Mortgage _interest_ (up to a certain ceiling) is always deductible in the US,
whether or not you are working from home. If a certain part of your home is
set aside for business use, you can also deduct a proportional slice of your
real estate taxes, depreciation, and various other things, but not, it
appears, the principal.

------
simonista
I'm curious which sections of craigslist you look through. Web / Info design?
Software / qa / db? Internet engineers?

------
tocomment
Do you typically get 1099's from your clients or do they just pay you like
they would any other company?

If you don't get paid with a 1099 does that affect your taxes in any way? Are
you still responsible for payroll taxes if you don't get a 1099?

~~~
ryanwaggoner
Your choices are usually 1099 or W2 for longer-term contract gigs. If on W-2,
they pay you just like an employee, taking out taxes and all that. They also
have to pay half the FICA taxes in the US, so the rate is a little lower than
it would be on 1099.

~~~
kirktrue
There's a bit of caution to be given here. My tax person said that switching
between W2 and 1099 work throws up a red flag with regard to the IRS
willingness to consider you as truly independent.

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sgoranson
re: health insurance and pre-existing conditions:
[http://en.wikipedia.org/wiki/Pre-
existing_condition#Pending_...](http://en.wikipedia.org/wiki/Pre-
existing_condition#Pending_federal_pre-
existing_condition_exclusion_regulation)

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dmoney
What's the difference between freelancing and "consulting"?

