Compensation · Freelancing

What's a fair hourly payment for a freelance software developer?

Anonymous

May 23rd, 2016

Trying to figure out how much is it fair to pay a freelance developer per hour.
The developer has about 5 years of relevant full stack experience, a strong record of building products and good credentials. Job is either remote or in SF or NYC.

The only relevant discussion I found here is the helpful http://members.founderdating.com/discuss/1121/Best-sites-for-finding-out-appropriate-rates-to-pay-contractors-comparables. However, it's been more than 2 years since these answers were written and I wonder how much do you / would you pay today?

Rob Mallery VP of Talent at Originate

May 23rd, 2016

Unfortunately, your post doesn't have the necessary detail to give a reasonable guess. The rate could be anywhere from $60-$175/hr and it would all be based on how strong an engineer he/she is. What's the stack? How long will the contract last? Are they performing other duties, or just engineering. Bottom line is that you shouldn't ask what a fair rate is, you should make sure you have a good person and then ask that person what they're looking for... then negotiate so that it's something that makes sense for both parties. Sent from my iPhone

Evan Dorn

May 24th, 2016

When I was last freelancing (which is not right now), my rate was $175/hr, with discounts for bulk purchases and long engagements.

In reply to Larry's comment, I personally would not accept work paid "by the job" rather than time-based.  The reason is that in 25 years I've not yet met even one client who can provide a truly clear requirements spec for a fixed scope and stick to it. I'm not sure it's even possible: few people can imagine everything they want out of a system before it's built, and software projects need to be agile and respond to a rapidly changing landscape anyway.

When attempting "by the job" pricing, scope inevitably creeps. In my experience the client usually isn't even aware that they're asking for more than what's contractually agreed. This always results in arguments over whether a feature request is included in the contract or not, and those arguments are catastrophic for the client/contractor relationship.

Larry PE Focused results driven creative thinker with a very diverse background able to propose novel solutions to new problems

May 24th, 2016

Get a bullet proof software requirements spec and pay by the job never by the hour.

Joe PhD Using the business of entrepreneurialism to turn ideas into products and products into sustainable businesses.

May 24th, 2016

Like so many of the conversations that have gone before this one, we wind up in the time-for-money vs. value-for-money standoff. 

As a programmer, if you can find someone who will reliably pay you an hourly rate that you feel comfortable with - and it's comfort that you seek - they you should take the money, do what you're contacted for, and (for extra points) add value anyplace you can. On the other hand, I see a tension between a demand for good programmers and a lot of people looking for work. I make no predictions about how that is going to play out.

I was working with a startup team where the technical co-founder stated that it would take something like $500k to buy him out - of a pre-revenue company. He based this valuation on "what I could have made based on similar people working for big companies doing similar work."  If you want a job with a big company -- and can get one -- TAKE THE JOB, but stop comparing apples to tractors. 

As a founder/client, if you don't have a clear specification of what is required and what kind of time, money, and expertise will be required to get it, it's quite likely that your costs are going to spiral out of control. There are good tools for incremental design and development (lean, agile, and other buzzwords). Remember that these are just tools and that your job as a founder includes managing the money and building a revenue stream. 

Since this is Founder Dating, I'm going to assume that most of the people here are interested in getting new ventures off the ground. At the risk of pointing out the obvious: 
  • New ventures are risky - there is a high likelihood that people won't get paid what they are worth.

  • The goal is to build a viable venture - in which case the payoff can be greater than a traditional "job" - but the big paydays are few and far between.

  • Startups are not a get rich quick (or even a reliable get rich slow) endeavour - you should get involved only if you you see an opportunity (based on how you personally define opportunity) that exceeds the risk. 

  • Pre-revenue funding options are getting harder to find ... so there is not a lot of money to pay anyone. A big part of making a startup successful is making sure that everyone has a enough resources to live - and realistic expectations about what that means. It's a difficult conversation and almost no one wants to have it as early in the process as they really should. 
So - if you want to START a company (as a non-technical person, coder, money person, whatever) be prepared to act like a founder. If you want to buy services in the marketplace, be prepared to pay market prices (which many early stage companies can't afford). If you are offering goods and services based in the marketplace and you've got a cart full of $10 apples that are rotting in place, maybe your apples aren't worth $10 ... even if the cart next to you is selling out at $15. 

The emerging economy is not business-as-usual ... founding a startup is even more (less?) so. It takes both creativity and a willingness to be creative. But that makes people uncomfortable so maybe it's just easier to complain about how "The other guy just doesn't understand how this industry works". 

K. Robbins Head Moose at Moose WorldWide Digital

May 24th, 2016

Hello Joe
As the guy the startups reach out too regularly - I could not agree more with your points.

We regularly encounter people who have a budget for development that is far too small - and zero budget for an acquisition strategy.  Aquisition/Dev budget ratio needs to be 50/50 at a minimum.

If someone pitches us an idea that we believe has legs - and they have a real budget - we'll take the dev work at or near cost, as we know if they are successful the dev spend never stops.  Very few software entrepreneurs make it past this first gate.  

The saddest stories we hear are those entrepreneurs who got suckered by some unscrupulous dev house who are now being held hostage.  In some cases they borrowed money from their friends, or parents, and are left with nothing, and no recourse.

VC's need positive cash flow before they will listen today, it wasn't that way five or ten years ago but those days are gone.

Regards

Alan

Greg Davydov Founder at Artium Gallery

May 26th, 2016

My experience suggest to stay away from Indian developers $8-$12 per hour and get 100 hours for Worpress customization.  Also you will be plagued by bugs till end of the world.It takes about 3 hours for the $50-$60 developer to do the same thing minus bugs.

Recently I had English-speaking Eastern European developer with full-stack JAVA/JS (jQuery an angular)/Spring/surf, ECM, postgresql, etc for about $400 per month. Also he is not charging for the time but for delivery. And the best thing, that if he does not know something, he will learn it in a day or two.
My advice is to go with Eastern Europeans.

Graeme Lewis [LION]

May 26th, 2016

If you're worried about IP protection then inhouse development is the only way I'd go. That said, I hired Asian Developers in their B degree studies who worked part time, did amazing work and are way cheaper than Uk and USA devs. The one caveat on this is you have to give extremely detailed specs. But, that is something you should do anyway because if you cant be bothered to think your business process through very carefully then you are looking for trouble. If you use freelancers, slice the project up into small projects. I did a full Mobile Wallet, to produce its MVP that is good enough to launch with, and did it one page at a time.

Philip Basile Coder: Unreal Engine, C++, HTML, CSS, SASS, JavaScript, ReactJS, AngularJS. Portrait & Studio Photographer. Owner: @Basilecom, @PKPhotoStudio

May 24th, 2016

85-125hr. Depending on experience.

K. Robbins Head Moose at Moose WorldWide Digital

May 24th, 2016

Hello
This is what my company does - provide remote developers as well as act as a solution provider.  Here is the current state of the Market:

The India guys will tell you $8-$12 an hour for a "senior" PHP guy and then it's 100 hours for a WordPress theme customization web site and you get juniors.  They don't all do this, of course, but be advised that hourly rates mean nothing without an estimate of effort.

In Eastern Europe (Which in our experience is where the best developers for the U.S. market can be found) "You Drive" rate for an English speaking developer with 5 years honest experience ranges between $30 and $50 depending on the skill set.  PHP runs $30 to $40, .net runs $40-$50.  If you have a U.S. based project manager you pay between $50 and $70.  If you've never done offshore, you need a US based project manager.

If you buy full time guys, .vs. fractional resources, the price is lower.

The websites that claim to give you accurate pricing give you inflated prices.

Freelancer rates are all across the board, as is the quality/experience.  We hear a lot of horror stories about freelancers that get 2/3 of the way through a project and vanish off the face of the earth.

I hope this helps guide you in your efforts.  I've been doing this for 30+ years and happily give away free advice if you want to discuss further, we've helped many startups.

Alan


Graeme Lewis [LION]

May 24th, 2016

I agree with Larry Tichauer