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I Charged $18k for a Static HTML Page (idiallo.com)
1144 points by firefoxd 8 days ago | hide | past | web | favorite | 439 comments





My parents had been running their own tailor shop in the 80's, barely making ends meet, pulling in less than $20K a year.

It wasn't for lack of business, father was a master tailor trained in Italy and capable of elite bespoke craftsmanship. They had as much business as they could handle. The problem was that they were charging what they thought the work was worth rather than what their customers were willing to pay.

At some point, during the Reagan years, my mother had an epiphany and jacked up the prices massively, far beyond what my father thought was remotely reasonable. The result? Even more business, more pressure, more return customers. That put me and my brother through an expensive college.

There's something about high rates that makes customers feel more important, it's a status-thing and it also propels them to take you more seriously even if they have you do low-value stuff.


This reminds me one of my favorite comments of patio11 https://news.ycombinator.com/item?id=4477088

>> Frew, who apprenticed with a Savile Row tailor, can — all by himself, and almost all by hand — create a pattern, cut fabric and expertly construct a suit that, for about $4,000, perfectly molds to its owner’s body. In a city filled with very rich people, he quickly had all the orders he could handle.

> You don't have to be Wall Street to figure out the bleedingly obvious solution to being a starving artist who has so much work they have to turn work away. Raise the prices. Then raise the prices. Then when you're done with that, raise the prices.

> At some point you'll be too expensive for the typical businessman, which will make you absolutely crack for a certain type of person common in New York, thus defeating all efforts at being less busy. So it goes. I guess you will have to raise prices.


I wonder if it's sustainable though. If you keep raising the prices and people buy what you're selling, and then eventually realize the quality isn't up to par of what they're paying for.

No matter what you think you are selling, you are always selling the buyer's experience. And for some work, framed the right way, high prices improve the experience.

I'd modify this statement to "you're selling the customer a story", but you're right. When trying to sell a customer an expensive wine, you don't say "This is a cherry-chocolate red wine with earthy undertones", you say "This is a 1787 Chateau Margaux, grown on the left bank of the Garonne estuary in the Médoc region, in the département of Gironde."

Nobody will follow that up with "but what does it taste like", they'll say "oh that's very interesting I'll take it", despite the fact that the whole point is the taste.

By the way, there's nothing wrong with this. Experience is HUGE in how you perceive something. Consider your favorite wine from your honeymoon.

Let's say you're at a restaurant on the beach in Greece, the sun is setting and the weather is perfect. There's a light breeze, and you can hear the waves gently breaking on the shore. You take a sip of the wine and it's wonderful, so you buy a bottle and take it home. You rave to your friends and when you finally crack it open, they're not nearly as impressed as you were. It's not an uncommon story, and it's because half of the enjoyment was the perfect day, the perfect weather, the perfect setting.


It absolutely does. Some expensive things aren't all that high quality. It's just expensive for the sake of being expensive.

Remember the "I'm Rich" app on the iPhone years ago? It was just a picture of a spinning diamond. I think it was like $1000 per download? The dude who made it had a bunch of sales before Apple took it down.

People will definitely buy stuff JUST because it's expensive.


In principle you are always selling access to your work. Raising prices reduces access and thus increases exclusivity.

It is question of marketing.


This is a fantastic quote

> then eventually realize the quality isn't up to par of what they're paying for

Will they?

https://www.washingtonpost.com/news/morning-mix/wp/2017/04/2...

> Nordstrom is selling “mud-stained” jeans to the tune of $425. They’re called the “Barracuda Straight Leg Jeans” and come with some sort of fake mud substance caked all over them. (It’s not clear what that substance is.) The knees, pockets and crotch of the jeans appear bear most of the faux brown muck.


If the fake mud is high quality and doesn't just flake off...

This is much like the relic electric guitar market. Fender Custom Shop sells guitars for a premium that look like they've been dragged behind a truck (distressed nitrocellulose finishes, scratches, dings, hardware patina, sanded necks, &c.)

or White Nike AF1s. People are obsessed with keeping theirs looking perfectly new. Dr Dre famously claims to never wear a pair more than once.

The other day I saw Nike started selling dirty looking ones new. There truly is something for everyone!


Wasn't this the whole designer ripped jeans of the 90s?

You mean the late 20-teens? They are being sold now...

I thought ripped jeans were a Grunge thing of the early and late 90s...

Eventually you become a Veblen good. Or you finally get to work less hours.

There were mentioned studies in the book "Influence: The Psychology of Persuasion" that mirrored what your parents experienced.

Long story short, a jeweler was trying to move some turquoise and told an assistant to sell them at half price while she was gone. The assistant accidentally doubled the price, but the stones still sold immediately.

Turns out there's a phenomenon where humans automatically associate price to quality. So getting charged more means we think we're getting better quality, regardless of the actual quality


Same for brown diamonds.

Honestly, you don't even need to specify 'brown', regular diamonds would apply. DeBeers has some awesome marketing, diamonds are one of the least beautiful gemstones.

Beauty depends entirely on the cut. (If you haven't seen diamonds with "old european" cuts - late 19th century, essentially - you should. They are so much more beautiful than the sterile modern cut ones)

s/brown/"chocolate"/

black pearls too no?

This is a classic example of a Veblen good [1].

"Veblen goods are types of luxury goods for which the quantity demanded increases as the price increases, an apparent contradiction of the law of demand, resulting in an upward-sloping demand curve. Some goods become more desirable because of their high prices."

The suits are expensive, so they must be good. It's also a status signal to others that you can afford such goods. (Edit minor typo).

[1] https://en.wikipedia.org/wiki/Veblen_good


As the Director of Technology at a non-profit organization, how am I supposed to staff software engineering resources when these pricing practices like these are commonplace in the for-profit world? How am I supposed to make an argument to the board that a single technology staff member, let alone a working team, is 5x-10x more valuable than the rest of the workforce? I'm going to admit it - it's hard to see stuff like this and not be extremely frustrated. Tech is already one of the largest cost centers in an enterprise, and it's proving to be nearly impossible to find any tech staff willing to work for, admittedly, crumbs.

Don't compete on the price then. Compete on something else, like the working conditions.

The author describes how they had to drive 50 miles every day, use the corporate laptop (or install shady software on their own one), not get a response for many days. Basically, their rate (and the total cost) covers not just the work they do, but all the frustration that comes with the work.

Now, if you treat your staff better than that — remove all the hurdles, answer their emails promptly etc. ­— then there will be many talented people who'd prefer it over a meaningless-but-highly-paid alternative.


If your tech function is being judged by cost, rather than value, you're always going to have problems.

Have you heard of freecodecamp? The idea is for non-profits to work with currently self-teaching devs.

Non-profits get free labor and the devs get real world experience.


Have you considered training internal people to do what you need?

As a freelance dev I've worked with a ngo where they paid me to get their junior to create an application. Then another. Then later just to help him with some new concept. I'm not freelance any more (yet) but if you just wanna chat about it, I'd be happy to relay my experience.

> it's hard to see stuff like this and not be extremely frustrated.

I guess you are frustrated because your company doesn't make much money on technology. If the company has a positive ROI on tech, then you wouldn't be frustrated, because more you invest, more you get out. Most companies doesn't need made-to-measure technology solutions.


My sister works for a non-profit, and we've discussed tech projects there a few times. I think the issue from a business perspective is on the demand side of things. The problem is that the market rate is set by the companies that are in a position to pay it. Everyone else has no say, they're just shut out. You're competing for staff with startups and enterprises that are capturing enormous value.

There's no easy solution, in market terms at least. Maybe you get lucky and catch someone who doesn't need the money and thinks your cause is good enough to put effort towards, but that's not reliable. I wish I had a better answer. Upskilling someone else is potentially viable, depending on what exactly you need. The problem is that things such as static sites and basic sysadmin stuff that are (relatively) easy to skill up in, are also quite cheap in the marketplace for that exact reason. So I'm guessing that's not exactly what you're talking about.

There's quite a bit of effort these days towards upskilling people into more web app developer roles. Lots of bootcamp graduates and a few self taughts floating around. And in my last hiring exercise I found there's quite a large pool (in my area, ymmv) of devs looking for their first real FE/BE job. There's probably some real good value there but the trick is in sifting through the mud. The quality varies wildly, and some of it is shocking. You could get lucky though. I think the go is university graduates, but I hear a lot about grads in the US going straight into high-ish paying jobs so that may be area-specific advice. I was on $45k my first job out, which I thought was fair at the time. But now that I understand the market better and can see just how sub-par a lot of the work out there is, it's obvious that that was a bargain.

The other problem with that is that you're at a big disadvantage when building a team from scratch. A lot of the new devs coming in that will accept lower wages will turn out to be great coders and deliver great value, but a much smaller subset is going to be able to do that on their own with no guidance. That's part of the reason I suggest looking for graduates. I know it's an unpopular opinion here but I think a strong theoretical understanding of software development will help a self-starter more than the equivalent practical knowledge, since without a lot of mentorship they're going to get much more of the practical side from working for you. My first job was straight in the deep end, full responsibility for everything and very little help (one back-end dev who was in the same position with only a tiny bit more experience). I'm super greatful for it, and I think it made me a far better dev than I would have been if I went with a different (bigger) company. Maybe that could be a selling point?

tl;dr if you can't compete with the market then you need an edge that gives you more value than you'd otherwise get. That means people that aren't in it for the money (needle in a haystack, as I'm sure you know, given your position), and people that will rapidly (and successfully) upskill above what the market expects.


Maybe, but not necessarily.

When I price out eg contractors, I know roughly what a senior SE should cost. Where I live, that's $150/hour.

If you come in at $75, I don't assume you're a bargain. I assume there's something wrong with you. Either you're not good, or are just starting out, or whatever the case may be.

In this case, just like I bet the tailor, the point isn't paying more for status. The point is that a service should cost X, so someone going way under cost worries the buyer.


For anyone interested, I highly recommend _Theory of the Leisure Class_, in which Veblen developed the notion:

http://moglen.law.columbia.edu/LCS/theoryleisureclass.pdf


It's worth asking if most of what society is doing is prestige-seeking?

Conspicuous consumption is undeniable when looking at some goods and services, but what about the ordinary, say university?


University is definitely a prestige good. Most people don’t go into the profession they trained in. Lots of people studied something there are either no jobs in or they never even intended to practice professionally. Most people forget most of every university class they ever took. People care enormously about the prestige of university attended even though what’s covered in an engineering or literature degree at Harvard and Directional State U will have huge overlap. Finally, look at credentialism; people need Master's to get jobs that used to require a. Bachelor’s and a Bachelor’s for ones that used to require a Master’s. The Case Against Education, Bryan Caplan, has much more but education is absolutely a positional good. People don’t just want it. They want to have more than other people do so that in a legible ranking they’re superior.

Conspicuous consumption and its ilk have a very poor status in sociology. Thus far, wealth inequality and displays of it are the only things actually shown, when all societies are considered, to always increase violent crime. Even poverty has no effect except in situations where it is juxtaposed with wealth. There, it irresistibly tends to violence. (Source: 'Nine Crazy Ideas in Science', chapter 1, which was actually about gun ownership rates and violent crime levels but which mentioned the finding about wealth inequality after dealing with the original issue)

Except that violent crime in the US has been falling for decades...

I've a friend who has run his own small IT business for a bit over a decade. When I talk to him and he mentions how much he charges, I always tell him it is far too low. He sees it as being easy for him, so he doesn't think he should charge much. I've tried to explain to him that when the plumber comes over, you're not loading that guy down with quantum physics work... he knows how to unclog your drain or run a new water line. That's easy for him. He charges a high amount because his services are valuable. And I, for one, am happy to pay that plumber the high amount. It saves me having to invest far larger amounts in learning and tooling up to do it myself.

I've worked alongside him a few times on projects that his clients had which required coding work alongside the hardware and sysadmin stuff, and each time I've had to badger him into charging double or more than what he wanted to charge. And of course the customers paid for it, because it was still a good deal and I could show them a conservative estimate that said the system would pay for itself in savings in under 2 years. When freelancing, those are my favorite contracts. Where you can show to the customer up-front that you will be saving them money in the long run. It's always much easier to sell them at that point, and I think the amount its going to save is a pretty good proxy for the value of the work.


Steer him to /r/msp or to Karl Palachuk's books.

If his prices are that low he could likely increase by 25% or more and not lose any clients - and even if he did lose some odds are good that they'd be his cheapest and worst ones.

If you double your rates and lose half your customers, congratulations! Now you have the same revenue plus available time to go find more customers fine with the higher rate.


Bravo, but the article was about being placed at a typical rate on a 20 hour job that became a 300 hour job. Here's an article about what you're talking about: https://hbr.org/2017/10/why-you-should-charge-clients-more-t...

I'm not sure this is totally applicable to say a tailor shop, but I do wish more craftspeople would try charging more money for quality work.

For example say I want some shelves built. If my shelf-builder charges $X that's fine, but what if I would happily pay $2X?

On the one hand, I might be personally miffed to know I'm paying 2X instead of the X someone else is paying. On the other hand, I'd probably be the more satisfied customer if I don't know (or have the discipline to ignore) the price gap, because the shelf-builder is probably going to give extra effort in hope of getting more jobs from the 2X clientele.

It would be interesting to explore what would make your 2X client feel good even if they know they are paying double. And would that scale to 4X or 40X clients?


There must also be the satisfaction derived from keeping a quality craftsperson in business, in face of the cheap-shot mass manufacture that seems to happen everywhere.

I met a welder who had hourly prices above work samples.

The $300h one looked like a piece of art. The $20h looked like sea gull crap landing randomly around the piece.


But also, charge accordingly, if you don't have to post your prices (as your parents probably did). A lawyer is likely willing to pay a lot more for the same website than a tailor shop, and I'll gladly take both of their money.

Yes, "charge accordingly" means different things to different customers.

My parents never advertised their tailor shop, it was all "word-of-mouth" business. After the pricing jack-up, every customer got charged what my mother felt they could pay (with a very loose regard for consistency and some allowance for negotiation).

I used to think that was sketchy. It wasn't until much later that I realized that B2B enterprise sales people do that stuff ALL THE TIME even with their onerous kpi's, forecasting and fiscal quarter expectations!


> I used to think that was sketchy. It wasn't until much later that I realized that B2B enterprise sales people do that stuff ALL THE TIME even with their onerous kpi's, forecasting and fiscal quarter expectations!

Depending on how it's done, it still is, and enterprise salesmen doing it doesn't make it less so. As a customer, I don't necessarily seek absolute minimum price, but I want it to be a fair price that I can agree on voluntarily - that means, I don't want to be subject of a bunch of manipulative sales techniques during pricing negotiations. Moreover, individual pricing used at scale makes it impossible to compare prices, or even develop a sense of what price is fair price. I actively prefer buying from vendors who list prices publicly, so by going the individual price route, you might be losing business of me and people like me.


I also prefer vendors that list prices, but when they do, it's important to remember that the list price is only the maximum price.

     > I don't want to be subject of a bunch of manipulative sales techniques...
If the sales techniques are sufficiently manipulative, you won't actually know you're being manipulated.

There's a reason why sales people in enterprise sales can pull in MM's per year, it's a different level than, say, retail or car sales.


How do you determine whether a price is targeted/individual? Do you check in different browsers / on different devices?

I think he means prices where the webpage just says "contact us for a consultation". Here they'd probably google your company and see how much they can get away with charging you.

I mean that if a webpage just says "contact us for a consultation", I'll first try to find a company that shows their prices publicly - and if I find such, I'll stick to them. I hate "contact us for a consultation".

As for dynamic pricing on-line, AFAIK only airlines do that to significant extent so far. Once other people start, I might start opening in different browsers or not keeping cookies or whatever.


That big business does something isn't and indicator of whether it's sketchy or not. I wouldn't even say the comparison maps 1:1 anyways.

You're right but whatever it is, that's what "brings in the bacon" for a lot of businesses.

pricing is an entire industry of it's own, with conferences and such

I see it like advertising - one part of the chain of value, and ensuring that a responsible and fair transaction occurs

Production: control of how something exists

Project management: control of when something

Advertising: control of how you become aware of something

Pricing: control of how you take ownership of something


> every customer got charged what my mother felt they could pay

I suspect with advertising profiles and amazon purchase histories (and possibly amazon visa card applications requiring household income)... this wonderful "service" previously only available to the rich will be democratized for everyone!


The term is price discrimination.

Offering coupons through the mail, online ad codes etc. You are reaching out to different demos using different marketing techniques and offering or not offering discounts accordingly.


Or just show different prices to different users. Iphone users usually pay more.

Where? This anecdote is oft repeated with little evidence. The only I example I remember is some place getting caught doing it and having to stop because of the bad press.

IIRC, it's very common for travel sites to charge higher prices for Apple users.

Any examples?

https://news.northeastern.edu/2014/10/23/ecommerce-study/

The actual paper: http://www.ccs.neu.edu/home/cbw/static/pdf/imc151-hannak.pdf...

"As shown in Figure 11, Travelocity alters hotel search results for users who browse from iOS devices." (In particular, alters the prices shown to the user).


I was shopping for flights last Christmas and got price X on every site. I started checking out and the price became X+50. I got angry and left and came back later to find the price, on all sites, was X+80. Since I had no choice but to travel I paid X+80. Then for kicks and self torture I checked the price on my Android phone and it was still around X.

Jacking up prices when revisiting the site from the same browser is a separate thing. It’s there to encourage you to buy ASAP as prices appear to be increasing rapidly.

That's why I always start with an incognito tab and let FF do sime magic with the fingerprinting.

I get most honest prices.


It is a rule of thumb in any client or contact work that the less you are charging them, the more difficult and demanding the customer will be.

One day randomly in the 80s IIRC, Rolex tripled their prices, and they haven't lowered them since. The same watch cost three times as much at retail one day than it did the day prior.

According to ABlogToWatch, you're completely incorrect.

https://www.ablogtowatch.com/rolex-prices-past-60-years-reve...

It's a pretty stable increase, and adjusting for inflation it's actually a fairly low increase for a product that has improved over time.


Thanks, my bad.

If you respect yourself, then you'll respect your work.

"I don't want some small-time amatuer working on my $5000 power suit!"

That's no amateur, that's an artisan. A craftsman. Your personal tailor.

Are there any examples of this but with virtual things? Sites, apps, digital goods? Some status thing?

I can understand when it comes to physical goods.


Its not the same customers.

Welcome to marketing!


If you want to be paid more: ask for more. It is astonishing how few people do.

A valuable lesson I learned at a young age from one of my first 'customers' when doing computer repair jobs for friends and neighbours was is that you don't get paid for what you can or do but for the value you add or time (money) you save someone.

Most of the time the problems I had to solve where easy ones. Install printer, update software, remove toolbars, email settings, etc. All 5 minute work jobs, seldom totalling to more than an hour or 2 an evening. Not even worth asking money for in my opinion, because it was so easy en quick for me to do. But my neighbour always insisted I accept his money. Because for him, having to solve these issues himself would cost him multiple evenings. So the money he was giving me, which felt like too much to me, was stil a bargain for him. Also in his words it was easy for me because I had spend years in training to acquire this knowledge, or as others might call it: wasting your time behind that computer playing video games.


That's lucky. When I sas 19, around the height of IE and 'every Windows box with malware,' I tried to start a similar business.

Probably my most wealthy client, with an oversized SUV in the driveway, had a home computer rendered unusable by malware--something I had fixed before. But she ended up asking me to leave. She decided she wanted "real professionals" working on her computer. She told me I didn't know what I was doing, saying 'are you really going to fix it for this much or do you actually need to just start searching the web for what you are doing? (she saw that I had performed a google search...).'

It took me way, way too long in life to learn most of it is just perception and learning how to manage dealing with less-than-ideal people.


This attitude to googling is poisonous. I once helped an elderly relative in my teens with his router and I got the same treatment after I googled the answer. Later we watched a court drama the entire family, with the same relative present, and there was a scene where the lawyers crack the books and review the legal paper work. Being the obnoxious teen I was I couldn't help myself from blurting out "Wow, what terrible lawyers, look at them doing research for their cases before they solve the problems. Wow, I figured they could recite every law and ruling ever by heart since they supposedly know what they're doing, now I question why the defendant doesn't just represent himself, I mean everyone can read a book, right? This movie is so unrealistic!"

I got scolded by my parents but at the end of the day: worth it.


Goosh.org

"You're not paying me to search Google, you're paying me to know what to search for and how the results apply or don't to your particular situation."


They should put a black background on this with green text to make it more realistic.

Right, you should have charged her more. If you pick a rate that seems reasonable for the amount of work involved then she'll wonder why she couldn't just do it herself. You also need to price in all the learning and experience you needed up to that point, otherwise the client will think you're doing a cheap/half-assed job.

The (probably apocryphal) Picasso napkin story:

Picasso is sitting in a Paris cafe when a fan approaches the artist and asks that he make a quick sketch on a paper napkin. Picasso acquiesces, draws his dove and promptly hands it back to his admirer along with an ask for a rather large sum of money. The fan is flummoxed. “How can you ask for so much? It took you only a minute to draw this.” To which Picasso replies, "No, it took me 40 years."


> “How can you ask for so much? It took you only a minute to draw this.”

translation: I expected to pay $5 for this napkin drawing, and later sell it for $10,000. Then you asked me $1000 for the drawing. That means you just tried to steal $995 from me. Outrageous! You are a thief, Mr. Picasso!


When I first read the story many years ago, Picasso's ask was $10,000.

You know, inflation...

Likely apocryphal [1], possibly inspired by a true story from 1878 about a court case involving well-known painter James McNeill Whistler [2]:

> "Oh, two days! The labour of two days, then, is that for which you ask two hundred guineas!"

> "No;-I ask it for the knowledge of a lifetime."

[1] https://quoteinvestigator.com/2018/01/14/time-art/

[2] https://quoteinvestigator.com/2018/01/12/lifetime/


> it was easy for me because I had spend years in training to acquire this knowledge

"knowing where to tap":

https://quoteinvestigator.com/2017/03/06/tap/


Not sure I quite understand the mechanics behind it as well, but I've been through a similar training program and it appears to be effective.

Entertaining story - although as advice to anyone reading it, running up the clock without proactively notifying people that you're going way beyond your original estimate is a very good way to make getting paid incredibly difficult.

I don't disagree, but it's worth noting that at the end of it all, he billed them for $18k and they decided it was too little.

I mean, if I’m not paying with my money. And I know the guy has just been there waiting for stuff to happen for weeks, I’d happily do the same thing.

It was my impression that that's what he did. Of course the whole situation still could've made it difficult to get paid, but I don't think there's anything else he could've done.

Specifically telling them that they had kept him over his initial estimate (and so his estimate was increasing) when he neared or passed that point. He didn't sound terribly proactive about bringing this up while talking to people, either. Lunches with the manager where they didn't talk any business, etc.

No, he clearly didn't. He only worked out the costs at the end.

Just to clarify, he got paid $21k for 7 weeks of time. He just so happened to only deliver a static HTML page, but was on prem as requested during the engagement.

Still, it's a quick way to get a reputation for running up the clock.


In fact, it's actually only about $50/hr.

Alternatively (or in addition): sending invoices periodically.

I thought no that's the reason why right answer. He could be as much in the right as possible, and but he still took significant risk that they might argue, delay and force him to go to court or negotiate to get them to pay.

Sometimes it might be worth it - maybe the plug would have been pulled sooner if he had invoiced regularly. But it's still a risk.


Precisely the oposite. People are usually willing to pay far more, if they are to blame for you beeing slow. If they only get the slightest hint of a feeling that you might be kicking the can down the road, they will blame it on you entirely.

This is, why you leave a paper/email trail.


According to the article he emailed them daily.

Yeah but not to let them know his estimate was off.

It sounds like he gave them an hourly rate, not a project rate, and emailed every day to let them know how many hours he'd worked and what he still needed, both before and after the estimated time frame was blown. It doesn't sound like he did anything irresponsible.

Yeah. Maybe it's just an omission in the story, but once the original scope was exceeded, an "I wanted to let you know that we've reached the number of hours I estimated for the task; let me know if I should continue on this project on an hourly/daily basis of $x" email was probably warranted.

What if you don't get any answer ? Shall you go on ? Leave unexpectedly? Apparently his staying on the job for his hourly rate wasn't an issue and was even expected.

It won't always work out like it did for OP, so it really depends on how much risk you're willing to take. $18k probably isn't enough to be worth a lengthy lawsuit over, so a more aggressive client might've cost OP significant unpaid time. For some, that's an acceptable risk. For others, not.

I know someone working as a contractor for a big company.

1 year contract.

6 months have gone by and they've done ... nothing. Their boss keeps saying "Don't worry we'll get to you, we're just swamped right now, you're good."

They're already talking about extending the contract.


Big companies (rather, people at big companies) WANT to spend money on this kind of stuff for all sorts of reasons.

-A team might have use-it-or-lose-it budget, so they have to spend it on something, and a contractor might be the lucky recipient!

-Tax purposes!

-Spending a lot on a contractor gives them someone to "fire" when they need to explain why something wasn't getting done or something went poorly!

The list goes on!

All that being said, as a consultant myself, I consider those types of projects windfall, as they tend to be the ones that end abruptly. It's kind of a scary feeling getting paid without actual work to do. I have found I 100% prefer the projects where there are clear tasks, goals, and results to report, if for nothing else than my own sanity.


I remember growing up and going to work with my Dad. There was like a 3 hour period where he had no work for me to do. He told me I'd only get half wages for the day (I was like 12) since the last few hours I did nothing. I felt betrayed. He empathized with me, saying 'It sometimes feels like more work to not have any work to do'. I completely agree.

In my current role, there is no real roadmap or trajectory for what I should be doing or how I should report on it, etc. I have felt at times that I was just collecting a check, and that felt really scary. I expected I would love to have a job where I could kind of just do whatever I wanted on my own time table. But I have learned it's actually very stressful, and at best very boring. Luckily I got a roadmap created and prioritized, so I feel better. But it is an odd experience.


Better yet, at an internship, create your own roadmap (complete with a timeline, too) and, with no external validation, so it.

so hard


One of my bosses was the recipient of one of these during a corporate merger, and I think it did a lot of damage to him. He has been mostly was coasting off of his reputation from before he slacked off for 3+ years in that role. But it doesn't look like he's able to last for more than a year anywhere. I suspect that he was one of those competent-but-lazy types whose skills rusted out to to just lazy.

Its stories (and personal experience) like this that make me laugh when people try and say that governments are inefficient and lacks accountability.

Big things are more likely to be inefficient and lack accountability. Governments are big, so are big corporations.

My experience working my way up from small companies didn't really bear this out. Budgets at my bigish company are strict and audited; having a contractor results in regular check-ins from managers to see if it can be cut off. The smallest companies I worked for were family slush funds.

Yes, this. It's worth emphasizing whenever someone trots out the inefficient-government dogma.

Interestingly enough there is also evidence, that a government structure with much smaller parts (decentralization) is even more inefficent, and especially prone to corruption.

Big corporations are inefficient and lack accountability. Governments are like big corporations in that manner, but also can't be held accountable by the market.

Corporate monstrosities can get away with being inefficient insofar as they can stay out of the red overall. Governments can get away with being inefficient insofar as we are forced to continue funding them via taxation. Note: giant, unaccountable, inefficient corporations usually became so large through monopolies created through government force (i.e. regulation).


Getting bigger any organization inevitably achieves a level of complexity where it becomes less, and less efficient by spending increasingly more resources on communication, and politics (in wider meaning of the word, not electoral). Do you think governments are small organizations? UPD: Apperently, I'm not the only one here who came to the same thought :-)

Right - the government is the world's largest employer, with all the inefficiencies that come with that title.

Which government? Which world?

I'd assume in almost every country, their federal government is the biggest employer, but that'd actually be interesting data to try and find.

The world's three largest employers are apparently the US DOD, the PLA of China, and ... Walmart.

Pretty much every government's budget is a significant fraction of a country's GDP. By significant I mean 30% or higher.

Governments lack accountability because there is no incentive to be sustainable. They just tax people more or run a higher deficit.

If Whole Foods wastes their money and goes out of business, I don’t care. I’m not being forced to pay them to make up for it.


yeah, more like any 'large organizations' without a dictator

At least private companies are losing their own earned money when they're inefficient, not someone else's.

Private companies are also dependent on a highly developed society to make everything they do possible.

There are many reasons that Google and Amazon didn't exist a thousand years ago, and it isn't solely due to the lack of computing technology.

And so it is entirely sensible that everyone should contribute towards keeping the highly developed society functioning as best as it can.


That has no relevance to whether google got money under the threat of violence (government taxation) or whether it’s money that was voluntarily given to them for goods/services.

Google wasting money is no different than my neighbor wasting money. The government wasting money is upsetting because it was taken from me supposedly to help the country.

Your perspective might be different if you pay very little in taxes.


How are dollars I have paid to the government any more mine than dollars I have paid to a company?

The government isn't supposed to run a profit. Therefore it becomes very difficult to know which part of it is wasteful and which isn't. Companies simply fail if they don't make a profit or have an outside funding source.

Not nearly quickly enough to be a curb on wasteful behaviour at large companies, and these are the ones that affect public policy.

Much faster than waste at a government is curbed, which is essentially not until the country’s currency collapses.

government has people with guns to force its income stream. corporations do not.

Corporations lobby the government to change laws to boost their profit. Those laws are enforced by guns.

It is a myth that corporations like free markets.


Which law forces me to pay google money?

There’s laws to make you buy insurance. (Not taking a side here pro or con)

a company is accountable for the dollars you pay to it, and has to provide a commensurate value, or you take your business elsewhere. dollars paid to the government keep coming in no matter how wasteful their practices

That's not how people choose which health insurance policy is offered by their employer, or which private company won the contract to deliver their electricity.

You're right, at least in the case of highly regulated markets and when the state creates artificial monopolies (e.g. electricity).

I'll correct my original comment then:

At least private companies that compete in a relatively free market are losing their own earned money when they're inefficient, not someone else's.


That claim assumes a free market with perfect information, which is more than even Adam Smith was willing to do.

It’s still not right.

Private companies are losing money on behalf of their owners or shareholders.


You could say that the owners/shareholders are losing it themselves, because they voluntarily invested in the company, as opposed to the state, which takes your money even if you don't want it to.

I think most VCs would have some thoughts on the idea that a start up they just pumped millions into has lost "the start-ups money" in some stupid experiment and not theirs.

a key difference is that the largest shareholders are proportionally affected by the waste, and have a proportionately large amount of power to do something about it.

Those are some of the most regulated industries in existence. Those companies are "private" in the sense that private individuals reap profits, but their funding is secured by proxy through force (legislation/forceful-taxation).

Move to a location with multiple electricity providers. They exist all over.

If you don’t like your employer healthcare, quit and find another or buy it on your own. There is choice there and you just don’t like it.


I think you’ve confused a discussion about how individuals make choices about their purchases for a complaint about the results of my personal choices?

One would think the use-it-or-lose-it problem would've been solved by now. It's so obviously dysfunctional. Is there really no better way to determine budget?

I think the issue is management unwilling to trust other levels of management to make the call when they need money / a strong desire some folks have to filter / make decisions for others.

I don't know what the fix is for that except to take a chance and trust folks but ... it doesn't seem to be a thing and instead they come up with easy systems to just make arbitrary decisions and there ya go.

It boggles my mind sometimes that "Like if you don't trust that guy to make decisions... why is he a director here?"

Sadly it filters down, I've been places where it was clear the director of my department couldn't do much at all... at that point why should I be there, it doesn't matter if he and I talk, agree, or anything then ....

Steve Jobs said something about it making no sense to hire people in decision making roles and not let them make decisions. Granted, Steve was also able to hire some fine people.


The problem is the further down you go the more narrow the focus. When I worked on MS Office I was always annoyed they were spending all the money on other products with few users and no revenue.

After all we were the ones taking in the dollars. Of course at an organizational level it was understood they need to invest in the next big thing even if it’s not making money right now.


I don't think that really addresses "use it or lose it" type policies though.

Use it or lose it is a blunt hammer to basically say "You get enough for subsistence but no more". Sure there are smarter ways but intelligence costs time and money too.

He also had some experience hiring terrible people.

Practice may not make perfect, but it sure damn helps. As long as we learn from our mistakes.


Some organization have this issue where you get a budget for your group, and if you don't use it then upper management will think you don't need more resources next year and will budget less or even cut from your department. If you don't use it, they reallocate it to a department that needs it and you never get it back.

Another part is where if you get a hiring budget they expect you to use it because if you aren't spending it on personnel then it means you aren't hiring the best available people at that time.

Non-profits usually spend out their budget.

Regulated utilities can charge a % + the cost of hiring you if it is a capitalized cost, i.e. hiring a contractor to implement a project.If a contractor works 100% on a capital project it's profits especially in a low inflation economy or when the profits are not going to be as good due to forecasting issues it can pump the books.

There are probably other reasons I can't think of.


You just restated the problem in more detail.

What I'm asking is, if the above system encourages managers to waste money, why hasn't anyone come up with a better system?


There are systems that encourage the opposite behavior, but they tend to be damaging in other ways. It all comes down to the metrics that you are responsible for as a manager.

I used to manage a grocery department at a well-regarded supermarket chain. In retail, one of the only inputs you can affect at the store level that impacts the bottom line is labor, so metrics are usually organized around labor optimization. Each week, you would be expected to exceed the previous year's Units Per Labor Hour (UPLH). This can only be accomplished two ways: increasing unit movement (which you really have no control over and is largely driven by consumer sentiment and population density) or cutting labor hours. In fact, even if volume is increasing, you can't even add hours even though labor needs scale with volume in a brick-and-mortar retail setting. To exacerbate things, the reductions in labor have already compounded yearly since the policy was put into place. They want you to squeeze water from a stone. "Well, So-and-So (who you've never met) was able to increase UPLH by 10% 5 years ago! Why can't you?"

I guess my point is that systems that discourage waste often lead to insane work environments rather than cleverness or innovation, whereas encouraging waste leads to bloat and inefficiency.


In my experience, it's rarely about flagrantly wasting money for the sake of running up expenses to a budget level. Rather, it's usually more about pulling in expenses, doing something you had wanted to do anyway but didn't think you had enough money for, etc.

Budgets are a pretty powerful and widely used tool for managing organizations. And there are other checks and balances. It's not like a manager can necessarily just decide to have a team off-site in Hawaii because there's room left in the budget.


Maybe I just put too much stock in that one episode of The Office.

I think the disconnect is that you are describing it as a system, when in reality it's just a bunch of misaligned incentives and plain old human nature. It's unfixable.

It might be both of those things at the same time. This book claims so https://en.wikipedia.org/wiki/Systemantics.

The money isn't wasted, it just goes somewhere else. Better that it go through you (and to the contractor), than through someone else at the company.

There is, but it’s hard—like, theoretically murky hard.

So the basic inefficiency is that you want to do top-down resource allocation, “I approve of this much budget going to that project.” We could call that bureaucracy, or The State, or whatever. There is a reason that every modern military in the world has this bureaucratic gene: you can track who is responsible for every dollar easily, which limits the scope of corruption. Corruption does not itself kill the other countries: it just places an upper bound on how much money, how many resources that military can effectively put to use. But the militaries who can inefficiently use unbelievable resources clobber the ones who efficiently use fewer, and you get a survival of the fittest thing.

So the basic problem is that bad actors exist within a sufficiently large organization, and the bureaucratic solution incurs the cost of making everybody into bad actors, but with the benefit of limiting the badness of their action by top-down accountability. It is also somewhat bounded in how much it wastes: non-bad-actors who really don’t need their big budgets do have a weak vested interest in allowing it to be cut, as it frees up resources for the organization as a whole and this can improve their job stability, year-end bonus, etc.; also business units that really are not pulling their weight can be reorganized over long time scales. That is bureaucracy in a nutshell, the natural top-down solution.

To solve the corruption problem with a bottom-up approach requires connecting individual interests to organization interests, so that in a game-theoretic sense there are no bad actors (albeit there may be irrational ones who want to hurt themselves in order to hurt society). This is a really hard problem in accounting. The basic thing that you want to do is to make sure that everyone gets paid some baseline amount, plus some proportion of “what they make for the company.” In cases where this is really easy to determine, nobody does it any other way. Salespeople get commissions, and they get them fairly universally. This solves any corruption problem bottom-up. [It is also 100% transparent: “Why did she earn more than you? Because she sold more than you”—top-down budgets are frequently confidential wherever possible due to the risk of one subunit (could be larger than an employee) discovering that another subunit which “does less” in whatever sense gets more of the pie.]

The problem is, we occupy complicated systems and it is not easy to determine how much the organization’s bottom line will be impacted by the loss of a particular individual. What is the “commission” that I should be paying to a janitor? Am I supposed to pay developers money for completing “story points?” And how do I do that without creating a toxic atmosphere where everybody wants to overestimate the number of story points in a task—how do I objectively measure those story points in terms of the hard cashy business value they create? What about managers or recruiters; how do I reward you for the business value of the people you managed/recruited?

Without solving this sort of hard problem, you can’t guarantee that when someone uses nepotism to the organization’s great loss, that they don’t feel the full brunt of that loss and therefore have a selfish incentive to be fair in the first place.


Budgeting is basically forecasting, and in most businesses it’s not much better than guesswork.

There are ways that are arguably better, like bottom-up budgeting, but they take a lot more work, and are arguably more subjective.

Internal information systems can be so poor that the best prediction of next years budget is last years budget.


In government (usa) it absolutely still exists. As the financial period ends each department spends hugely and really wastefully to ensure their full budget is spent. Its actually quite infuriating.

It’s the same in corporations.

There are, of course, better ways; the thing is that non-dysfunctional methodology is not evenly distributed.

This comes to mind:

https://en.wikipedia.org/wiki/Recurrent_laryngeal_nerve


I don't understand the relevance of that Wikipedia article

That nerve is a popular example of an optimization process that produced a local maximum which is highly sub-optimal.

For various evolutionary reasons, a nerve routing that was direct and sensible when the aorta passed to, say, the gills of a fish, now makes a silly, circuitous route in modern mammals from the brain, down under the aorta near the heart, and back up into the neck...close to the brain. Natural selection has proven incapable of fixing this tangle.

Similarly, organizational budgets that departments need to spend any way they can or suffer cuts next year seem silly. But they stem from reasonable policies, gradually changing and improving over time.

Just like an organism can't sever its aorta and have a better routing of the nerve, organizations are incapable of getting from the current budget situation to a better one.


Wow, that’s a great explanation, and I hadn’t even thought of it that way, myself.

My take was a much simpler “just because there is a better way that exists doesn’t make it practically relevant, because entrenched tradition is usually more popular/widespread than efficiency”... but your boiling the frog idea shows even better how the mess comes about in the first place.


Thanks for the context.

Unless you are getting taxed >100% I never understood why you'd want to throw away money for "tax reasons". Can someone please help me understand this, it always comes up and I feel dumb for not understanding.

They may have a tax rebate which requires them to "invest" $x each year and failure to do so will result in penalties, perhaps nullifying the agreement and requirement to reimburse previous rebates.

So the company hires a few contractors to help get them as close to $x as possible, but they don't really have any work for them to do.


Simple example:

My FSA card is pre-tax money to be used for healthcare expenses. Towards the end of the year, I ended up still having a balance that would go away if not used, so I bought things that I would not have otherwise purchased.


That's a bit different. You're effectively getting "taxed" 100% on whatever is left over so you might as well spend the money on anything that has non-zero value to you.

But if you, say, only lost 30% or 50% of the balance, it's not immediately obvious if you should spend the balance or not.

OT but this is such a weird aspect of FSAs. I can carry some amount over with my plan which makes things a lot easier.


From my experience, FSA's doing go away at the end of the year.

You have to spend X anyway, because the money is pre-tax or non-taxable, you can spend 1.5X-2X, so the extra money is 'free'.

I'm with peteradio, I also never understand this line of reasoning.

Let's say the company has earned 1,000$ and the tax rate is 50%. Your expenses X are 100$.

So 1,000$ - 100$ = 900$. Of which 50% (450$) are tax and 50% (450$) are profit.

Now double X to 200$:

Then 1,000$ - 200$ = 800$. Of which 50% (400$) are tax and 50% (400$) are profit.

That means your profit is 50$ lower (400$ instead of 450$) then if you hadn't increased your spending?

Clearly my thinking is wrong somehow, but where?


If you can "invest" the 1K into something that you don't get taxed, and, can give you some return then it is a win.

I remember being mentioned that the whole reason General Electrics bought a division of Alstom was to not bring the money back to US and get taxed, let's say it was 1 billion dollars and 50% tax.

Instead of getting net 500 million back to US they can keep that money abroad and invest 1 billion in another company that can net more than 500 million in the long term.

Above is likely the way of thinking for those sort of occasions.


It should be a choice between spending pre tax dollars or spending post tax dollars. I doubt many would argue in favor of “burning” money just for the sake of not paying some fraction tax on it.

Imagine that you must access $100 of labour/whatever somehow.

  $20000 - sales
  ($10000) - cost of sales
  ——————
  $10000 - gross profit
  ($100) - extra labour paid for with pre tax money
  ——————
  $9900 net
  ($4950) tax
  ——————
  $4950 ending sum (pay dividends or do whatever you feel like with this)
vs

  $20000 - sales
  $10000 - cost of sales
  —————
  $10000 - gross profit
  ($5000) - tax
  —————
  $5000 - after tax profit
  ($100) - extra labour, post tax money
  ————
  $4900 - ending sum
It’s a bit unrealistic because (1) labour should always be pre tax (2) there are rules about what goes where in an income statement and you can’t just decide to put stuff where you want but there is some flexibility.

In particular, the one easily controllable lever is how much interest you pay on debt (pre tax spending)


Think of it this way: the “cost” to realize a net profit of $450 is a tax expense of $450. What if you could reinvest that full $900 so that next year your revenue and income are higher? High-growth businesses will optimize for reinvesting because they expect the Return on investment to be higher than the return on realized profit going forward.

This is what Amazon has done for years - it generates a monstrous amount of cash (free cash flow) from retail and funnels it back into expanding current businesses and creating new ones such as AWS. AWS now generates its own surplus, so the cycle continues.

Edit to clarify: Amazon in the past has shown a relatively small net income vs large top line revenue because most cash is reinvested. It’s been a few years since I paid attention to their financials so things may be different now.


It doesn't make sense in terms of raw profit, I agree. But many expenses are paid pre-tax effectively making them cheaper than if you had paid for them with post-tax dollars.

aren't all expenses pre (income)tax, by definition?

Not really. A good example is business meals. You can only deduct 50% of a meal with a substantial business purpose.

What matters in your example is where that extra money is spent, you might try to invest it in the company by purchasing new machinery rather than just wasting it on a new luxury company car (or an overseas 'business meeting'). That way if you are making a 10% return on your company/investment each year it continues to grow.

I guess in some situations you can either pay $1 in taxes or burn $1. it's probably better to burn $1.

You paid $50 (the decrease in profit) to get $100 of value.

Under what situations does this happen? We use marginal tax rates...

In limited cicrumstances it can make sense. If you're investing in a multi-year project you may as well maximize your investment in one year and take the loss against other taxable income that year. Then, when the project is finished, you pay taxes on the income that year. Only you can take those funds and invest them into a new multi-year project...

Some companies get tax breaks for hiring X number of workers in certain locations. Which is why sometimes you get companies hiring a bunch of people at a data center who don't do anything related to the data center, but mostly exist as a way to get a tax break and good press.

Sometimes to get yourself in a lower bracket.

I was tempted to ask if you have any tips for finding such jobs ;) but actually the times when I’ve been most unfulfilled in my career have been when I’ve been bored at work. I’d much rather be working like crazy (within certain parameters), keeps things interesting!

That said I do know people who’ve been paid to turn up at an office and just work on their side projects. Could probably handle that!


Get going for a few of these simultaneously and you are set.

Happens all the time. We can hire only at certain times when budgets open, so you go ahead and hire but you have no time to deal with the person. It’s better to have the person sit around until you have time because the alternative is losing the contractor and not being able to hire when you really need someone.

Stupid but very real. I always find it funny that wasting 100k this way is perfectly fine but a 5k raise is almost impossible.


> I always find it funny that wasting 100k this way is perfectly fine but a 5k raise is almost impossible.

This is too real.

At my current job they are incapable of even small raises to keep up with inflation or even investing money in making a better product. Although the company has no problem redecorating the office, sending management to a useless international fair where they spend their time in bars getting drunk, or spending exorbitant amounts of money for sending someone to CNN and getting $0 ROI from that.


When I was out of the vendor side of the business doing consulting for a number of years, I always had to shake my head a bit when clients wouldn't use paid-for time with us or would apparently never make use of some materials like a whitepaper we did at their request.

But it's exactly like you say. People wouldn't get their act together sufficiently to have a team meet with us on some topic for a day or some marketing campaign would be canceled or changed so they no longer specifically needed what we had created for them. Easier to just forget about the whole thing and move on.


I've lived this. Myself and a very expensive team of EY kids were waiting eagerly every day for anyone in corp management to throw us any kind of tasks.

On the rare occasion that we were given a task, we would all descend upon one computer like vultures, group-solving the problem typically in 60minutes or less. Then it was back to doing nothing.

Diplomacy (the game) became our primary activity. It was fun, but such a terrible waste of time, talent, and money.


That's awesome. What group were you in?

I wasn't EY, I was in through a small local firm. And we billed much less :). So the weekends when the EY guys didn't fly home, they had a few hundred $ to burn. We lived well on the weekends!

What are EY kids?

Earnest and Young placed contractors?

Yes, billed at $120/hr for a recent college grad programmer, with per-diems and weekend travel allowances to go back home (fly cross-country). I should note that this was pre dot-com bust... late 1990s, so $120/hr was pretty good then.

But the client company had more cash-flow than they could burn, so they didn't care. Unsurprisingly, they hit serious financial difficulties within a few years.


I had a similar experience a few years ago.

I quit at a company I was contracting at because they kept dangling the whole, "We're going to convert you to an FTE next." in the meantime, I was working less than 20 hours a week. If you didn't have a project to bill hours to, you didn't get paid, period. I was floating between teams, fixing bugs and doing minor stuff, not being able to bill much of anything. Once I quit I was offered another contract role. I basically told the recruiter, "Listen, if I'm in the office, I'm getting paid for my time, period." Recruiter got it cleared with HR and the hiring manager.

My first day went like this:

Manager: "Ummm yeah, the two major projects we had you slated on, ummmm those got put on hold for the time being. Get your desk and PC setup and we'll have something for you soon."

I literally went 4 months and barely billed any real project work. My last two weeks I had 36 hours of non-billable time. I had two weeks where I actually billed a full weeks worth when a dev took off for his honeymoon and did exactly zero work he was assigned. The funny part is when I quit, the hiring manager told me he would hire me in a minute and to keep in contact.

In the meantime, I was able to learn AngularJS and some other stuff while I was sitting at my desk all day. In a sense, I was very productive when I was there.


> I was able to learn AngularJS and some other stuff

Yeah that's what I would hope to do too. Lots of time, let's dig in to that stuff there's never time to learn!


I've seen the same thing, off and on, for over 20 years.

Employee or contractor gets stuck somewhere with nothing much to do... speaks to manager about it repeatedly... gets the "just find something to do, we'll get to you" speech... fails (often despite good-faith effort) to find anything useful to do... and eventually gives up.

Worst case I personally witnessed was a quite talented dev going six months without any actual project, then another couple before quitting.

Another case was a guy who tried to use his abundant free time to learn other skills but mostly ended up playing Myst, which proves this phenomenon is as old as dirt. :-). (He ultimately gave up the Myst Gig and quit, I'm sure to the consternation of his manager who probably lost a head-count over it.)


That's why I offer a retainer package. Get paid for just being available when needed and work a non-conflicting contract elsewhere.

Do you keep those packages reasonable? Have you ever found yourself with too many retainers being called in at once?

Reasonable is relative to the situation.

No, I learned how to manage my work load (potential and actual) from clients for my physical/mental health.

The motivation is what determines the actions.

I know a guy who founded a software company and started contracting work overseas. He became too confident and over-committed to clients without managing expectations. For a couple of months he looked terrible. Thankfully, he found an escape path and closed the company. He's now employed full time in a dev role.

This path isn't for everyone.


Yeah a sort of

"Hey I'm already up to speed on this so if you want to pick it up again quickly ...." proposal probabbly would seem like a good idea to the company for a while at least.


i worked for lockheed martin 10 years ago (give or take) on a client site. I was W2 (although I wish i was 1099). Anyways, when the government changed from W -> Obama a lot of the DOD contracts were changing because everyone anticipated the Obama was going to cut defense spending (which he did). The project found out that the DOD was not going to be able to re-fund the project, but we had to continue to the end. I ended up forced to "work from home" for about six months until the contract ran out. I legally couldnt get another job, but I went on vacation for a month or two. So I calculate I got paid 1/2 my salary at the time + benefits for doing exactly nothing.

I worked for another large defense contractor auditing government IT systems. To do this, you needed a clearance and auditing certification designed by the gov. Well, they would just go ahead and hire people WHILE the clearance process went through (which can take months) and only schedule certain technology certification classes every few months. There were people sitting at home for 4-6 months getting paid in full while they waited for either a class or their clearance to go through. I sadly already had a clearance and "only" had to wait a month for my class.

i have a clearance for my job also, worked in a SCIFF all day ...

I left government work a while back for the private sector. The nice thing about SCIF work is the privacy and autonomy :)

not to mention you cant really be distracted by the internet ...

You can have unclass internet access in a SCIF - i can't imagine not having that while sitting there all day! Maybe it was a program requirement for your team?

not sure but we had to leave the SCIF to access the internet and it was very annoying.

Maybe a result of cost-plus?

Anywhere where employee hours are getting charged out, a company can increase profits by increasing headcount.

It also seems to happen more indirectly. A contracting company is often motivated to increase red-tape (such as complex and unnecessary health-and-safety, because everyone agrees safety is good). That has a double win: less competition (side effect of complex requirements) and more hours charged (each hour charged increases profits with little risk).


Yeah this happens more than you’d expect! Never had it myself but I’ve worked st places where it’s happened to colleagues (usually assigned unimportant BAU work than actually doing nothing but I do know of people who’ve basically had nothing to do!)

I sort of suspect all these people I've met that I've wondered why they like being a contractor .... are all on that system.

I kinda want to be a contractor now.


I have been in this situation and you have to strong nerves. You always expect to be sent home any time soon.

Yeah I would certianly feel like I had to be ready to move on unexpectedly.... but you know if I could work from home and clean the house a bit... worth it.

I've worked at pretty big companies and the only way I've ever gotten away with not producing any code was because I was going through onboarding hell. At the worst 2 weeks to get onboarded.

Were you an employee? I think the situation being described here is almost always with contractors and freelancers.

I was a contractor - as a general rule I find companies expect contractors to be productive really quickly because they are paying more for them then they are for employees.

In 5-ish years of consulting I only had this happen once. BigCo hired LittleCo to produce one piece of a very, very large system with many parts. I was consulting for LittleCo. Our part was on schedule, but no other parts were. They couldn't let us go because they needed support for initial roll out, but they didn't have anything for us to do.

We did some make-work projects, optimizations and stuff. We also picked a random technology stack per week and spent a day building "something" to learn those tools. Also, we played a lot of video games. This period lasted about 3-4 months.


I had a friend working on contract for the local city government. The contract was I believe for 2 years. A year in the project got cancelled but since his contract has already been signed they just kept paying him with no work for him to do. He just went in (because of course he still had to show up for some reason), and played games all day. Now I partially understand why so many government projects go over budget.

I know a couple of friends who worked at the major banks. They all started out as contractors. I remember one guy told me during their first year that all they did was browsing Reddit at work. He was a close friend and didn't want me to join their team because he knew I would display the level of work ethic that would make him look bad.

If that happens then you're definetly charging too little. In a lot of places you can't actually just work for just one client for an extended time as a consultant or freelancer as you then might just as well be an employee.

Sometimes having resources on standby, ready to start really is the fastest way to get through a project (sometimes it is just waste though)...

Yeah I know a guy who had that waiting gig for 1.5 years before he was finally assigned his first bit of work.

You should try working in an investment bank as a contractor. You need to find the right team, but a lot of them are massive collections of people doing virtually nothing but getting paid great daily rates. The trick is to look busy and wrap your team/yourself in a perceived sense of enigma and complexity. If you play your cards right, you can end up in a situation where no one will ask questions as long as you fire off an email now and again. You can keep getting paid for doing almost nothing for years.

The George Costanza way of doing business. The more I grow less young (I’m close to 40 now) the more I realize that the Costanza character is one of the closest approximations of daily life in a society like ours. Dilbert or “The Office” TV series are also very good fits but George Costanza is in a world of his own.

Ugh, but who wants to do nothing all day? You get one life; why waste your days?

Having nothing to do but being forced to look busy is a special kind of hell.

I work in energy trading, and understimulated traders over low-season periods like Summer are extremely dangerous.

So dangerous that a lot of events take place in Q2 and Q3 to emphasize networking over mindless bored trading.


I agree with you, but a lot of people are happy to take the money for doing nothing. Sometimes this is driven by lack of capability - if you're not good at much, not very driven but still want a great income and lifestyle, this sorta hits the sweet spot.

Also a lot of these people lie to themselves about their own importance, in order to have a (false) sense of self worth (but they're okay with it).


I'd assume you'd just double dip your time and work on something personal while doing nothing at work...

In my experience, most people just browse the internet.

It's very hard to summon the focus you need while playing fake busy.

Are your days any less "wasted" laboring away?

Labouring away can be hell, unless you're like me and doing what you love :)

Yep. I’ve got something to show for the time that has passed other than just a pay cheque.

I have a theory that in most large companies the 80/20 rule applies. 20% of the engineers do 80% of the work.

Sure, because the other 80% of engineers have to clean up after the 20%.

That doesn't mean the other 80% are useless. They generally work on less important things that are still bringing in more revenue than they cost in salaries.

It also feels like those same 80% of the engineers doing nothing are taking home 80% of the compensation

Because those other 80% are focused on posturing and tasks associated with getting higher pay.

This describes >80% of engineering departments at past large firms where I've worked. Ironically, these people are 'architects' and get paid handsomely.

The IT department in my company is full of “senior architects” and “principal architects” who are very pleasant talkers but don’t do anything from what I can tell. They have a ton of stories how they helped others but whenever I needed something from them nothing ever happened besides a lot of meetings.

This is precisely why corporations have so many meetings. Without them, there's whole divisions of people that would be doing nothing all day, every day. No code reviews, no specs, no code, no operational capacity, just taking the credit for other people's actual output.

The trouble with bank that I had - most of the websites were firewalled.

I was gardening various projects on GitHub and increasing my StackOverflow reputation.

I wasn't enjoying it.

At some level there is a need for accomplishment.

Poor work ethics become a virus, difficult to concentrate at home later.


I've got similar experiences working for corporate clients, but it was legal work, not tech stuff. It was a bit more complex than the equivalent of a static HTML, but something that anyone with an IQ of > 90 could learn in less than half a year.

There were days when I'd charge clients $15k... for a day's work. This wouldn't have been possible if I worked on-site. But I was essentially completing $15k of contracted work in a single day, which was sold as a fixed-fee in return for a legal report. The type of work that should cost maybe $200 in total.

Corporations get kind of crazy, there's extreme focus on some areas (mainly, those with KPIs and KPI owners attached), and extreme nonchalance on others. They're so big that there's just lots of insane things like this that slip through.


There was a time during the golden dotcom era when my manager scheduled a monthly management meeting across the Atlantic, which required me and 2 colleagues flying all the way over for a meeting that lasted about 4 hours.

Business class plane tickets, 2 nights in a nice hotel, rental car, dinner at very fancy restaurant.

Meanwhile, that same 100k+ employee company wasn't able to set up email fast enough for new employees, so some new hires had to use hotmail(!) for weeks before they were in the system.


I'm sure they also were very touchy about giving out raises too

> $15k of contracted work in a single day, which was sold as a fixed-fee in return for a legal report. The type of work that should cost maybe $200 in total.

This sounds like a SaaS waiting to happen.


I'd mostly disagree.

If you have an extremely high-margin service, e.g. perform bill $10k of work for $100 of salary, there's absolutely no incentive to automate things on the seller's side. It essentially means hiring someone to build out a (software) solution to squeeze the $100 into a dollar of payments on a cloud provider. All you're doing is raising your margin from 99% to 99.99%, it's meaningless, your profits increases by 1%, assuming the Capex for development was zero. And given this is typically a low-volume kind of transaction, with considerable development costs to build a Saas solution, this assumption is way too generous.

It's exactly these kinds of services which are completely fine to have humans perform.

It's the type of legal work where you bill $200 for a simple contract review and have to pay a paralegal say $100 for the work, which would be great to automate to a $1 of AWS payments. Here you're increasing margins from 50% to 99%, doubling profits. Any development costs can be averaged out to approach zero, as document review is a high-volume task in any organisation.



These types of gigs are more about who you know rather than the work that gets done. I'm guessing that you didn't just cold interview for this work, right?

$15k per day billable for legal work sounds exactly like biglaw, and you don't cold interview for that.

Indeed. My story isn't entirely comparable as I didn't do it as an independent. This was indeed billed as an employee of a fin/legal company with offices in ~100 countries.

For some background info for the person you're replying to... I can easily name a whole range of colleagues with whom I could easily complete $1m per person / annum of work (about $4k a day) in billable time.

The problem is you don't get the work without the company name.

Even having worked in this business, with clients trusting me on a personal level who'd love to grant me the work even if I worked as an independent contractor... my clients are other fortune 500 companies, sales goes through a process, which has all kinds of checks and balances in place. For example, if you have no certification for data security (i.e., audited on e.g. ISO2700-1/2), you don't stand a chance to say receive sensitive due diligence docs in order to perform legal work. Performing such an audit can easily cost hundreds of thousands a year, just to pay the auditor. Building an internal framework to comply with standards, regulations etc, costs way more. This makes it impossible for small firms or contractors to compete as they can't average out a $100k audit over $50m in revenues.

Not all work has these requirements of course. But in some fields, and some clients do. Building an internal software tool for a national seller of paint products, fine as an independent contractor. Trying to win a government tender for a tool that handles personal data, extremely likely you won't be considered without working for an organisation that has 10 certifications in place that cost >$1m a year to renew. In my line of work, it'd be very tricky to sell my work to clients as an independent.


I'd like to ask a couple of questions about this. My email is in my profile if you'd like to answer them.

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