
The Army of the New Independents - alltakendamned
http://jacquesmattheij.com/the-army-of-the-new-independents
======
kfcm
Anyone who thinks $140/hr (or whatever per project rate is) is too high,
consider the following.

My CPA in a Midwest/Great Plains rural town of 10K people charges $175/hour.
Her firm has 5 other CPAs. The town has around 20 CPAs total.

My attorney charges $90/hour for advice only. Nothing else. $90/hour just to
discuss a problem (pro rated per minute) or BS. If there's real work to be
done (contract creation/review, legal issues, etc), it's more. He's in a town
of 2K people.

Auto dealers in towns/cities ranging from 5K to 200K population are charging
between $90-120/hour for mechanic's labor. Not including parts/supplies. Oil
changes at many dealerships range from $45 to $70. (Oil changes at mom and
pops run $25-30.)

Dentists? I just saw an ad for a newly opened dental office in a metro area.
Special for cleaning, x-rays and such was like $75 from a regular rate of
around $350.

Electricians? $80-100+/hr easily for a good journeyman or master. Not
including service call charge. That was in 2011. ( A good electrician rate
thread from 2009: [http://www.electriciantalk.com/f15/when-did-you-last-
raise-y...](http://www.electriciantalk.com/f15/when-did-you-last-raise-your-
labor-rate-6058/#post68826) )

$40-75 to mow your lawn. $40-50 to clean snow from your driveway.

Technologists make things which can bring in (or save) hundreds of thousands
to hundreds of millions of dollars in revenue, but seem to consistently
undervalue their worth.

~~~
markyc
none of those guys can be easily outsourced overseas though

~~~
deciplex
I'm pretty sure your comment was tongue-in-cheek, but I'm taking it at face
value for the hell of it:

Horror stories of outsourcing cheaply overseas, where doing it ended up
delaying the project and sending it way over budget, are so commonplace now
that you really need to define 'easily'. I would reword your statement:

> none of those guys can be recklessly outsourced overseas though

...but it no longer supports your point :-)

~~~
markyc
countless companies have remote employees or contractors and it seems to work
out great for them. there are horror stories about anything under the sun if
you look hard enough

my point was that the end client will always have more choice regarding
building their site than cleaning their pool. they can outsource to elance,
get a highschool kid to build on wordpress, use shopify, etc

all of them being orders of magnitute cheaper than hiring the local agency
with the fancy offices

~~~
deciplex
The downside to getting the wrong Elancer, or the wrong high school kid, in
terms of delays and wages paid, is potentially a lot higher than not having
your pool cleaned properly.

In my view, you're right about "choice" in the same way you'd be right about
the choice of apps on App Store or Google Play.

But, you are right that there is more choice, for sure.

------
thaumaturgy
This pretty well matches my personal experience, fwiw. I was pretty content as
a youth to have a full time job working for someone else, then I saw a couple
of really good, young, skilled people get unceremoniously "let go" one day. A
few years later it happened to me, and I ended up bouncing around from job to
job for a while before starting my own business.

I didn't start my business solely because of employment issues. I was still
employable, I could've gone and gotten another job. I wanted to be able to
provide something to lots of different businesses at the same time, and
striking out on my own seemed like the best way to do that.

But, seeing other people lose their job and losing my own at one point
completely destroyed any belief I had in job security. I naively believed at
first that only "bad" employees get fired; as long as you were valuable to
your employer, your employer took care of you.

So launching my own business seemed like better job security. Except, that was
naive too. I really didn't understand all of the benefits of employment: paid
time off, a schedule, mostly reliable income, all of the resources that a
larger business has, and most of all, the ability to leave work at work and go
home and live an entirely different life.

I think the social contract between employees and employers is pretty broken
in the U.S. at the moment. Employees are spending way too much time at work on
Facebook and Reddit and other things; employers largely aren't treating their
workers as anything other than human livestock. But I still wouldn't recommend
getting into business for yourself to most people. It's tremendously
difficult.

A little less than 10 years later, and I'm doing OK and my business now
employs other people and is still growing -- very, very slowly -- but I'm
still attracted to a stable, reasonably well paying job.

~~~
beachstartup
> destroyed any belief I had in job security

your story exactly parallels mine. living in cold, harsh reality for the past
few years has really opened my eyes to a lot of things, including many
philosophical questions about what society is, how it works, and how it's
broken. it has also taught me to respect a wide variety of professions that i
once thought were bullshit.

basically, a lot of these societal 'truths' (about jobs, marriage, school,
money, housing, government, etc.) that we accept as really just projected
ideals that dress up reality for mass easy living. these ideals (they're
myths, really) have worked for decades and are beginning to unravel. just look
at the state of employment, gender relations, inequality, debt, financial
shenanigans, civil liberties... it's a circus of epic proportions. yet people
are so afraid of breaking out of established tracks until they're forced
against a wall. it's a complete mind fuck.

kind of a dark take on it, but really it's just a transitional phase, it's not
the end of the world. i think a lot of people feel a general anxiety even if
they can't articulate the concern. this, even though the economy is ostensibly
recovering.

having said all that, i would never take another tech job ever again with
anything less than $10M in the bank, a very small (but real) possibility. my
tolerance for bullshit from any superior would be exactly zero. sorry, can't
do it.

and as i'm sure you know part of 'seeing the truth' is realizing that your
business could fail in a matter of weeks - you sound like the kind of guy that
is also mentally prepared for that. if everything were to go south for me
tomorrow, i would rather work as a bartender or whatever somewhere warm and
cheap and just live out my days being a beach bum. i don't need a company or
employer to work on my own hobbies. truth.

~~~
jqm
You would still take a job if you had 10M in the bank? I might.. but it
wouldn't be for the money. It would be out of interest (which is already what
I do).

~~~
beachstartup
i want a lot of money. if i had 10M, i'd want more.

------
Joeboy
The only way I'd ever make it past the "ballpark figure" requirement is by
working in finance in London, which I don't really want to do.

I mostly work for less than that, deliberately work maybe 50% of the time, and
consider myself embarrassingly well off compared to most of my peers. I don't
think my plumber friend earns as much as I do, but I'm not bothered by the
idea that he might.

I am down with the idea that we should avoid racing to the bottom, I don't
think "union" is a dirty word, and maybe there's even some kind of argument
that I have an ethical responsibility to work full time even though I don't
want to. But from where I stand this piece seems a little divorced from (my)
reality.

Maybe it's something to do with being called Joe.

~~~
dasmoth
I don't understand the idea of "...an ethical responsibility to work full
time" at all. Why shouldn't the amount of labour you want to sell be open to
negotiation?

The fact that it's relatively hard to find "normal jobs" in my field in
formats other than full time is one of the factors that makes me seriously
consider the jump to freelancing.

------
brudgers
The 50% rejection rate over pricing is reasonable given the degree to which
Jaques has established himself. For a newly minted independent, the percentage
of potential clients who will only pay ~$0 is much higher than for someone
with a strong reputation among people who have a strong sense of the business
value expertise adds.

The sorts of leads a new consultant gets are more along the lines of can-you-
do-me-a-favor personal connections. There's much more "You're a jerk for
expecting me to pay money" and "I didn't think a suspension bridge across the
Colorado Canyon would cost more than $500."

New independents deal with amateurs more frequently than is typical for
established consultants. The race to the bottom is a function of that, not
always ignorance. Pricing is a good way to get to "No" quickly.

For a newly minted independent, "no" is still better than bad projects which
end with not getting paid. The critical rejection rate for a newly minted
independent is the rejection rate over retainers. Sure with your former
company, so long as they are not downsizing because of a financial shortfall,
then payment down the road might be acceptable. But with amateurs, retainers
are critical both in terms of financial safety but for screening the amateurs
who will view you as a professional from those who will treat you as a rube.

------
mooreds
I think this is a great list of the costs of being independent. However, he
did skip over the benefits, which are:

Closer ties to the market--you are much more employable as a contractor,
because you have to be! You have to seek out and sell yourself far more than
an employee does, which means you know who is buying what.

The ability spread risk across several clients. This is not always possible in
the same week or month, but if you are a contractor and are only working for
one client for months at a time, you aren't a contractor, you're an employee
with no benefits. Seek out other clients and spread your risk.

The flexibility to work when you want to work. Both in the small (when you
want to start working each day) and in the large (when you want to spend down
some of your savings in vacation/tech exploration/etc and not work for a
while).

The ability to turn down work. Don't discount this as a benefit. If you are an
employee, your choices are 'do the work you are assigned', 'ask your manager
for different work' or 'walk'. If you are a contractor/independent, you have
much the same choices, but 'walking' is far less risky, due to the your
awareness of the market and your multiple clients (see above).

------
wheaties
I had this exact conversation with a friend over beers last week. It basically
went like this, "You're only charging X per hour? I make that now as a full
time dev with health insurance, a 401k and the expectation that I will have a
job next month. You're under pricing your risk." He then asked me to buy the
next round. Cheeky bastard.

~~~
jacquesm
> the expectation that I will have a job next month

That's an assumption on your side. Likely it will pan out for the near future
but be careful about relying too much on that assumption.

> He then asked me to buy the next round. Cheeky bastard.

Hehe. That should remind you not to brag ;) I hope he got something useful out
of it.

------
raintrees
Passing on costs is a long term pattern. Relatively recently (40 years or so -
I did say 'relatively') United States' Congress' changing of the defined
benefit (DB) plans to defined contributions (DC) was a prime example (ERISA -
think 401K here) and now some in the USA's House of Representatives are trying
to get out of bailing out State's shortfalls for State's DBs:
[http://www.gpo.gov/fdsys/pkg/BILLS-114hres41ih/pdf/BILLS-114...](http://www.gpo.gov/fdsys/pkg/BILLS-114hres41ih/pdf/BILLS-114hres41ih.pdf)

Not likely to pass, necessarily, but a sign of the times.

Citizens of countries with Central Banks live in debt-based economies, and
thanks to many of the recent gyrations to "correct" some of these economies,
more currency has been created. To me, this is another reason to consider
raising rates even higher, to offset the weakening currency.

------
wsc981
There's an acquaintance of mine working as a freelance (ZZP) C# or Java
developer for Bose in the Netherlands. I always try to encourage him to either
switch jobs or negotiate a higher tariff. He currently earns only 35 EUR an
hour (excl. VAT) but he thinks it's a decent income. I really think no
developer in The Netherlands should ask anything below 50 EUR an hour (excl.
VAT) and even that is quite low.

P.S.: I think one mistake many freelancers make is using the word 'wage'
instead of 'tariff' \- in my mind it has a very different meaning and to me I
feel less powerful / in control if I would talk about e.g. a 'fair wage' with
a prospective client.

~~~
dutchievandyk
I get to charge 75 euro per hour for php development. Java / C# should command
at least 100 euro per hour in the Netherlands.

~~~
jacquesm
Agreed. He should _at least_ triple his rates. And if Bose won't have him at
that rate then plenty of others will.

------
dognotdog
I'd like to add that engineers/developers can hardly do the jump to being
independent in the described situation, but there many lower paying jobs where
this is being done, too.

Also, I am compeletely amazed by how idiotically this is handled by management
with respect to software development, where the code can have negative net
worth without the guy who developed it, and knows its ins and outs. And people
put on contract work will eventually leave these untenable situations,
especially if they are competent.

Call be bitter, but I am quite disheartened when I see how much opportunity
and talend is squandered for some temporary short-term gain, like "reducing"
fixed costs by outsourcing.

------
noelwelsh
I don't know that under-charging small companies last all that long. When we
first started out we were greatly undercharging, and after a few years almost
went under. Luckily for us we figured it out just in time.

Nobody should aspire to be a replaceable unit in any case. If Joe down the
road can replace you, yeah, it is going to be tough being a small company.

There is another side to this that I think is worth exploring. For a long time
capital has had a significant advantage over labour (see rising inequality). I
think we might be at the inflection point where the capital costs of so many
businesses are dropping to the extent that capital's advantage is eroding. I'm
thinking of bootstrappers and so on. Obviously capital still helps, and the
relative advantage isn't uniform across all sectors or industries (if you want
to do something for consumers you probably need capital; likewise space
exploration or bio-tech), but I think a sizable number of people are in the
situation where they can own their output.

------
DanielBMarkham
_I aim for roughly 50% rejections based on the rate I’m charging,_

Shoot for 90%. As long as you keep pumping the funnel with more conversations,
a lot of "nos" are just noise on the way to a "yes"

One note here: in most cases, being a 1099 is a much more honest relationship
than being an employee. Some of the saddest folks I've seen in my IT career
were extremely smart people who thought they had security in an IT job. Such a
thing does not exist, no matter what they call you.

------
whoisthemachine
One of my first experiences out of college was with a company that did this.
It was pretty tough to watch a bunch of people I had worked with get laid off
and then ironically asked to work as contractors. Most of them did _not_ turn
around and start working for the company as contractors even though the offer
was made, mostly out of spite. Some of them did become independent
contractors, though.

~~~
mooreds
I left a company in the early 2000s (quit, not laid off, if it matters). Then
they needed help with something that I'd done. I was happy to help, at the
highest hourly rate I could imagine asking for (probably wasn't enough, I was
only a few years out of school)--paid up front, thank you very much.

I waited to start working until that check was in my hand.

I had friends who worked for that company as contractors who ended on a list
of creditors. I wanted to avoid that fate.

------
walshemj
What the article doesn't mention that the tax authorities in some country's
don't like some types of self employed contractors.

Ask a UK based contractor about IR35 and you will get an earful - though of
course lawyers and accountants are allowed to continue as before - got to keep
those greasy engineers in there place old chap.

~~~
jacquesm
I'm not familiar with the situation in the UK though I know some
freelancers/contractors there, can you explain a bit more about this?

~~~
walshemj
For certain types of self employment typically IT consultants HMRC unless you
pass a lot of hard to pass tests you treated as an employee for tax purposes.

Self employment can if done via a Limited company reduce your tax rate
drastically - but of course it was only selectively targeted self employed
accountants and lawyers can carry on as before.

[http://en.wikipedia.org/wiki/IR35](http://en.wikipedia.org/wiki/IR35)

Most IT consultants work through umbrella companies to get round some of the
disadvantages -but you cant make use of some of the tax advantages a re al elf
employed contractor can.

