How much should I charge for fixed-price software contract?

Discussion in 'Java' started by Robert Maas, see http://tinyurl.com/uh3t, Jul 9, 2005.

  1. In recent years I've been unable to find anyone willing to pay me an
    hourly rate for my fine work writing computer software. Apparently no
    company is willing to hire anyone who has been out of work, for fear of
    paying even minimum wage and getting somebody nobody else wanted and
    now they know it's because they can't get any software working within a
    reasonble time (hence for a reasonable amount of wages given hourly
    pay). I have been offering to do trial work first, then get paid if
    they like my work, but no company is willing to do even that because of
    problems getting me covered under their liability insurance policy if
    I'm not a legal employee yet I'm on their premises a lot. And of course
    Stanford University (*SU*) was the only place that ever allowed me to
    work remotely and keep track of my own hours worked, so working off
    premises now is not an option. Telecommuting is a fantasy, an urban
    legend.

    *SU* (where I used to work before the Loma Prieta earthquake absorbed all
    their university funding for damage repair, while their president
    Donald Kennedy used governent research funds for his personal
    pleasures such as yacht and summer home so we lost all our grants as
    soon as the 1990-91 fiscal year grants expired, and a recession hit
    about the same time so IBM and other companies which had been funding
    us until then cut off their funding.)

    A while back some people on the net suggested I work for a fixed-price
    contract instead of an hourly wage. That way the company can tell me
    what they need, and I can do all the work on my own time, and then when
    I have something fully working I present it to them and they pay me
    that fixed amount, and they don't have to worry I'll bill lots of hours
    without getting the job done. But I never did that before, so I had no
    idea how much to charge for any given program. I would like to get at
    least Federal minimum wage, just as if I had an hourly job, but I have
    no idea how many hours a project should cost hence no idea how much
    would be a fair asking price.

    During the 2005.Spring school term I took a course in distributed java.
    One thing the instructor emphasized was writing up "Use Cases", and
    agreeing to them with the customer, before starting any of the rest of
    the design. After doing this (*UC*) for a few class homework
    assignments, it occurred to me that given each Use Case specification,
    I might be able to easily brainstorm with my customer (*RC*) and we
    could agree to a specific list of methods needed to implement that
    single Use Case in a nicely structured manner (*SP*), and I'd write up
    that two-level list of use cases with methods of each. From my
    experience with the homework assignments, I had an idea how long each
    method took to write and unit-test (about one hour), so if I charge a
    flat rate of ten dollars per method that would be fair. So putting this
    all togethe, as soon as I write up the methods for each Use Case, I
    could then immediately state my fixed price for each Use Case, and
    hopefully the customer would be pleased at my resonable prices and
    agree to the contract.

    *UC* (just on my own, the instructor playing the role of "customer"
    never had time to really look at my Use Case document much less
    discuss it with me)

    *RC* (a *real* customer, who actually *wanted* my software, and would
    be paying money for it, so he/she would be willing to spend the
    time necessary to make sure we were in agreement about what I'd
    be implementing)

    *SP* (no method that does more than one primary task, rather a bunch of
    single-task methods and a bunch of task-controller methods that
    merely call the various single-task methods without doing any
    significant algorithm themselves)

    I have found anyone anywhere around here who wants any software work
    done, and all the job ads have required skills or experience I don't
    have, making it a shot in the dark to send a resume to any of them, and
    precluding getting any fixed-price contracts or even interviews about
    such possibilities so-far.

    Recently I've been working on a software project that is so large that
    I couldn't keep track of it all without breaking it into modules in a
    nice organized way. Each module implements all the software for
    handling one kind of data, and typically provides what I call a "weak
    enumeration" (*WE*), and related software (such as getting a whole list
    of elements per some range specification i.e. sub-sequence, or doing
    the whole process of constructing a new enumerator and getting one
    element if any and discarding the enumeration within a single call,
    etc.).

    *WE* (instead of one method to say whether there is another element of
    the collection available later, which requires look-ahead to make
    that determination, the lookahead needing to actually calculate
    the new element in a way that changes the state of an inner
    enumeration, so the element must be cached or lost forever, and a
    second method to actually retrieve the next element of the
    collection, which was already cached during the lookahead,
    there's just a single method which returns either the next
    element if it finds any or an EOF value if it ran off the end
    before finding any new element. By the way, what I'm doing in
    many cases is having the outer enumeration be a "filter wrapper"
    or just a reference wrapper (*RW*) around the inner enumeration,
    and in some cases there are several levels of one enumeration
    acting as a filter for the next lower enumeration, and shortly
    when I'm nearly finished I'll have recursive loops in these
    enumeration wrappers)

    *RW* (Whereas a "filter enumeration" simply returns the same elements
    that the inner enumeration returns, but filtering, i.e. passing
    some but nullfiling others, a reference wrapper builds a whole
    new kind of enumeration but requires some inner enumeration to
    feed it data to process to make that outer enumeration. If you
    like the word "continuation" instead of "enumeration" that's
    fine. An enumeration is nothing more than a particular kind of
    continuation, namely something that successively returns the
    elements of some collection, virtual or real, whereas a general
    continuation might return something else such as successively
    more narrow ranges around a single approximately-computed value.
    In my particular application, the dynamic nesting of reference
    wrappers will be recursive! I.e. there will be reference loops,
    where one large enumeration is defined to include a smaller
    enumeration of the same class, possibly going around the
    reference loop several times, and possibly branching in a tree
    structure of references, until the leaves of that kind of
    enumeration get small enough to use a more basic class of
    enumeration instead, finally bottoming the recursion).

    Now that I've broken the program (so-far) into separate files for each
    class of data being processed and the one or more enumerations dealing
    with that kind of data, I can step back for a moment and see what I
    have so-far, sorted by size:

    8 -rw------- 1 rem user 6591 Jul 8 18:27 2005-7-ranpri-gpsq.lisp
    12 -rw------- 1 rem user 11310 Jul 8 18:31 2005-7-ranpri-gp.lisp
    14 -rw------- 1 rem user 13319 Jul 7 18:10 2005-7-ranpri-mf2.lisp
    16 -rw------- 1 rem user 14910 Jul 7 20:43 2005-7-mbbt.lisp
    16 -rw------- 1 rem user 15653 Jul 8 18:35 2005-7-ranpri-mf1.lisp

    (Those sizes include: code, per-method and per-enumeration
    documentation, and unit-test rigs.)

    I notice the modules range from 6591 to 15653 bytes, a factor of
    2.3[7..8] (*II*), which is not very wide. After seeing this, it occurs
    that I could offer a fixed price per class that I write, estimating
    near the high end of 15k bytes, and if it turns out that the class
    wasn't as hard as I estimated so the file didn't turn out as large as I
    estimated, I could offer the customer two choices:
    - Get a discount from the originally quoted price.
    - Think of additional features to include in the class or in any other
    class within the same billing cycle, covered under the original
    price quote.

    *II* (Hmm, as long as I keep talking about my proposals for Interval
    Arithmetic, and my proposed notation to represent known digits
    and range of unknown digits for output, I might as well use the
    same notation whenever I post an approximate real-number value in
    a newsgroup, and here (above) is my first such usage!)

    So why am I posting this? Please anybody who has ever billed software
    via fixed-price contracts, if you produced Java classes or Lisp modules
    of approximately that size range I cited above, how much did you charge
    for each such appx.-fixed-size class/module? I need your advice how
    much I should state as my going price for fully working code with
    unit-test and software documentation included. What's the going rate
    for professional fixed-price software contracts of approximately the
    size cited above.

    P.S. If anybody has looked at the filenames listed above, and it
    whetted your curiosity to know what big project I'm working on, just
    ask and I'll tell. But if you read what I was posting about this topic
    in sci.math a few weeks, you can probably guess, and I encourage to
    post a followup making your guess public.
    Robert Maas, see http://tinyurl.com/uh3t, Jul 9, 2005
    #1
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  2. Robert Maas, see http://tinyurl.com/uh3t

    Phlip Guest

    Phlip, Jul 9, 2005
    #2
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  3. Robert Maas, see http://tinyurl.com/uh3t

    Roedy Green Guest

    On Fri, 08 Jul 2005 21:31:26 -0700, (Robert Maas,
    see http://tinyurl.com/uh3t) wrote or quoted :

    > I would like to get at
    >least Federal minimum wage, just as if I had an hourly job, but I have
    >no idea how many hours a project should cost hence no idea how much
    >would be a fair asking price.


    There are websites where people offer contracts and bid on them.
    check these out to get an idea the going rates.

    --
    Bush crime family lost/embezzled $3 trillion from Pentagon.
    Complicit Bush-friendly media keeps mum. Rumsfeld confesses on video.
    http://www.infowars.com/articles/us/mckinney_grills_rumsfeld.htm

    Canadian Mind Products, Roedy Green.
    See http://mindprod.com/iraq.html photos of Bush's war crimes
    Roedy Green, Jul 9, 2005
    #3
  4. Robert Maas, see http://tinyurl.com/uh3t

    Tim X Guest

    Nobody nowhere on the planet is going to pay for software based on the
    number of bytes in the source files! Software is not like potatos, you
    don't get more money for providing more. Besides, most of the time,
    the better you understand the problem domain and the higher your skill
    and experience, the more you achieve with less.

    If you are going to write software for a fixed price contract, the
    only way to determine the right price is to have an accurate idea of
    how long it will take you to do the work. The only way you can know
    this is through a combination of knowledge/understanding regarding the
    problem area and an accurate and honest estimate of your level of
    productivity. It is also very important to have a clear and agreed
    scope which not only includes specific deliverables, but also what is
    not to be delivered and what the costs would be for changing the
    scope.

    To work out how much to charge for some software you write, you need
    to know -

    1. How many hours it will take you to complete the job. A useful trick
    is to make your estimate and then multiply it by pi.
    This often gives a more accurate figure once unexpected factors
    come into play.

    2. Determine how much you want to earn a year

    3. Work out how many hours you can work a year. A useful formula is

    (52 - holidays) * workdays_in_week * hours_in_workday = year_hours

    Note that this is meant to be hours you can charge for, so you
    cannot have 7 wordays in a week because there are lots of things
    you need to do which you cannot charge for (chase down work,
    marketing, taxes, general office admin etc). I've found that if
    you are doing long term type contracts, you can generally work 3
    days out of every 7, but if your doing short term contracts, you
    need to do more admin and therefore can only work 2 days per
    week. Its also important to put a real number on the hours you are
    prepared to work in a day - don't put 16, put 8 or maybe 9. Note
    that I'm assuming a 5 day working week with two day weekends.

    4. Calculate your hourly rate by dividing your year_hours into your
    targeted income for the year. Then multiple that rate by the number
    of hours it will take to do the job and you have a figure you
    should charge. Simple.


    --
    Tim Cross
    The e-mail address on this message is FALSE (obviously!). My real e-mail is
    to a company in Australia called rapttech and my login is tcross - if you
    really need to send mail, you should be able to work it out!
    Tim X, Jul 9, 2005
    #4
  5. (Robert Maas, see http://tinyurl.com/uh3t) writes:
    > A while back some people on the net suggested I work for a fixed-price
    > contract instead of an hourly wage. That way the company can tell me
    > what they need, and I can do all the work on my own time, and then when
    > I have something fully working I present it to them and they pay me
    > that fixed amount, and they don't have to worry I'll bill lots of hours
    > without getting the job done. But I never did that before, so I had no
    > idea how much to charge for any given program. I would like to get at
    > least Federal minimum wage, just as if I had an hourly job, but I have
    > no idea how many hours a project should cost hence no idea how much
    > would be a fair asking price.


    This is rather easy.

    If the target business process earns the corporation X dollar/year
    without your software, but earns X+Y dollar/year with your software,
    then you can sell them at a price that depends on the time to ROI they
    will accept:

    P/Y = TTROI

    P = TTROI * Y

    For example, if their business practice on investing is to expect a
    TTROI of 0.25 year, and your software will allow them to earn 1 more
    dollar/year/customer and they have 100,000 customers, that is, your
    software will earn them 100,000 more dollar/year, then you can quote
    it for P = 0.25*100,000 = $25,000.

    Note the software might allow them either to increase their income,
    or to decrease their costs; it doesn't matter, what counts is that it
    increases their benefice.

    Also it's possible that the software allow them only to increase the
    number of customer even at the cost of a decreased earned
    $/year/customer: it's better to have 100,000 customers/year earning $1
    each, than only $10,000 customers/year earning $2 each. Your Y will
    still be positive: $100,000 - $20,000 = $80,000.


    It might be profitable to target businesses that accept longer TTROI,
    or businesses with a greater number of customers (or with a greater
    potential increase in customer number)
    or software that give greater improvments in productivity ($/year/customer),
    or both.

    --
    __Pascal Bourguignon__ http://www.informatimago.com/
    The rule for today:
    Touch my tail, I shred your hand.
    New rule tomorrow.
    Pascal Bourguignon, Jul 9, 2005
    #5
  6. Robert Maas, see http://tinyurl.com/uh3t

    IchBin Guest

    Roedy Green wrote:
    > On Fri, 08 Jul 2005 21:31:26 -0700, (Robert Maas,
    > see http://tinyurl.com/uh3t) wrote or quoted :
    >
    >> I would like to get at
    >> least Federal minimum wage, just as if I had an hourly job, but I have
    >> no idea how many hours a project should cost hence no idea how much
    >> would be a fair asking price.

    >
    > There are websites where people offer contracts and bid on them.
    > check these out to get an idea the going rates.
    >

    Example would be http://www.getafreelancer.com

    --


    Thanks in Advance...
    IchBin, Pocono Lake, Pa, USA
    __________________________________________________________________________

    ' If there is one, Knowledge is the "Fountain of Youth"'
    -William E. Taylor, Regular Guy (1952-)
    IchBin, Jul 9, 2005
    #6
  7. Robert Maas, see http://tinyurl.com/uh3t

    jonathon Guest

    Pascal Bourguignon wrote:
    > For example, if their business practice on investing is to expect a
    > TTROI of 0.25 year, and your software will allow them to earn 1 more
    > dollar/year/customer and they have 100,000 customers, that is, your
    > software will earn them 100,000 more dollar/year, then you can quote
    > it for P = 0.25*100,000 = $25,000.


    So what would be the rationale for charging double for the same product
    simply because they are willing to wait six months rather than three
    for ROI?
    jonathon, Jul 11, 2005
    #7
  8. Robert Maas, see http://tinyurl.com/uh3t writes:

    > Telecommuting is a fantasy, an urban legend.


    Hmmm...apparently I, and several folks I know, are living, or more
    correctly: working, in a fantasy world.

    Cool! (-:

    --
    |_ CJSonnack <> _____________| How's my programming? |
    |_ http://www.Sonnack.com/ ___________________| Call: 1-800-DEV-NULL |
    |_____________________________________________|_______________________|
    Chris Sonnack, Jul 11, 2005
    #8
  9. "jonathon" <> writes:

    > Pascal Bourguignon wrote:
    >> For example, if their business practice on investing is to expect a
    >> TTROI of 0.25 year, and your software will allow them to earn 1 more
    >> dollar/year/customer and they have 100,000 customers, that is, your
    >> software will earn them 100,000 more dollar/year, then you can quote
    >> it for P = 0.25*100,000 = $25,000.

    >
    > So what would be the rationale for charging double for the same product
    > simply because they are willing to wait six months rather than three
    > for ROI?


    Who told anything about reason? It's psychology. You approach the
    "decider" with this argument: "Hey, with my product, in six months
    you'll be earning twice the dollars you earn now.". While you don't
    have a competitor bidding a TTROI of three months, you don't need to
    bid less. If you good at it (you approach the decider in the right
    context with the right adornments), you can even bid a TTROI of one
    year.


    --
    __Pascal Bourguignon__ http://www.informatimago.com/
    Our enemies are innovative and resourceful, and so are we. They never
    stop thinking about new ways to harm our country and our people, and
    neither do we. -- Georges W. Bush
    Pascal Bourguignon, Jul 11, 2005
    #9
  10. jonathon <> wrote:

    > Pascal Bourguignon wrote:
    > > For example, if their business practice on investing is to expect a
    > > TTROI of 0.25 year, and your software will allow them to earn 1 more
    > > dollar/year/customer and they have 100,000 customers, that is, your
    > > software will earn them 100,000 more dollar/year, then you can quote
    > > it for P = 0.25*100,000 = $25,000.

    >
    > So what would be the rationale for charging double for the same product
    > simply because they are willing to wait six months rather than three
    > for ROI?


    That they will pay for it. You don't need to have a rationale -- you
    figure out what term ROI they will accept and then price your product
    accordingly. If other people are out there who can and will do the same
    job for a lot less, then you can't use that idea. But if you are the
    only one who is calling on them (or whom they know) who can implement
    the idea in question, then you should be able to get whatever the cost
    savings merit from an investment standpoint.

    There's a problem with Pascal's analysis though -- it doesn't allow for
    uncertainty, and uncertainty is a very hard sell. You can do the math
    to allow for it, but if the person you are talking to doesn't understand
    things like Expected value, utility of money and other speculation (or
    gambling) principles, they are going to tend to be much more risk averse
    than they "should" be depending on the decision maker's personality.



    Michael
    Michael Sullivan, Jul 11, 2005
    #10
  11. Robert Maas, see http://tinyurl.com/uh3t <> wrote:

    > In recent years I've been unable to find anyone willing to pay me an
    > hourly rate for my fine work writing computer software. Apparently no
    > company is willing to hire anyone who has been out of work, for fear of
    > paying even minimum wage and getting somebody nobody else wanted and
    > now they know it's because they can't get any software working within a
    > reasonble time (hence for a reasonable amount of wages given hourly
    > pay).


    Robert, I think you should pretend that everything you think you know
    about work and what companies are willing to do is incorrect. Flush it
    all out. Empty your mind. Then do some reading.

    You have so many *huge* misconceptions, and you filter all your
    experiences to match your map of the economic world as a brutally hard
    place where no-one ever hires anyone for a living wage, and nothing you
    can do will ever result in getting back the kind of career you had 15
    years ago.

    Programmers can't ask for minimum wage, because professional programmers
    *don't* *get* *paid* *minimum* *wage*. If you walk into my company and
    claim you are a software developer and expect me to pay $7 an hour for
    your labor, and I don't know you, and I can't watch you do real
    programming work in front of me -- I'm going to assume you are a
    *crank*, and not a developer.

    Competent developers in *any* language, even baby scripters make at
    *least* $30K a year just about anywhere in the US or other rich
    countries. Probably much more in the bay area. Competent *secretaries*
    make at least $30K a year, as do competent graphic artists and any
    number of other office workers. Do you think software development is
    easier than that? Is what you are doing less valuable to your potential
    customer than those jobs would be to an appropriate enterprise? Do you
    think the pool of competent programmers is bigger relative to the
    demand?

    If you think your skills are worthless, why would anyone else think they
    are worth anything?

    > So why am I posting this? Please anybody who has ever billed software
    > via fixed-price contracts, if you produced Java classes or Lisp modules
    > of approximately that size range I cited above, how much did you charge
    > for each such appx.-fixed-size class/module?


    Are you kidding me? The price per byte of source code is exactly zero.
    Nobody cares how much source you write. They care about what your
    program *does*. They care about how much money or time it saves them,
    or how much profit they will make on new business it allows them to get.
    If you can't come up with a way to estimate those numbers and it is not
    self-evident to the potential customer, then they will not pay you a
    dime for any amount of code.

    Secondly, if you are not charging an amount that will equate to at
    *least* $30 per billable hour, nobody will take you seriously. There is
    almost no profession or trade that doesn't bill at that rate or more.
    Car mechanics, house painters, and small job handymen bill at least that
    much. If you aren't asking for that much on a contract basis
    (especially short term contracts), it will be assumed that you don't
    have that much skill.


    Michael
    Michael Sullivan, Jul 11, 2005
    #11
  12. Robert Maas, see http://tinyurl.com/uh3t

    Phlip Guest

    Michael Sullivan wrote:

    > You have so many *huge* misconceptions, and you filter all your
    > experiences to match your map of the economic world as a brutally hard
    > place where no-one ever hires anyone for a living wage, and nothing you
    > can do will ever result in getting back the kind of career you had 15
    > years ago.


    Thank you. This is a "beliefs create reality" thing, not even a career
    thing. Robert is advised to read both /What Color is my Parachute/, AND /The
    Nature of Personal Reality/ by Jane Roberts.

    Repeatedly asking this newsgroup for advice, then not following it, is bad
    karma.

    --
    Phlip
    http://www.c2.com/cgi/wiki?ZeekLand
    Phlip, Jul 11, 2005
    #12
  13. > From: (Michael Sullivan)
    > Programmers can't ask for minimum wage, because professional
    > programmers *don't* *get* *paid* *minimum* *wage*.


    Your comment is irrelevant because I don't ask for money from anyone,
    not minimum wage, not any amount whatsoever. It makes no sense to ask
    money from somebody who has never indicated any willingness to pay me
    whatsoever. If and when anybody expresses an interest in paying me to
    do work for them, *then* the amount they offer or the amount I ask or
    the amount we agree upon would become relevant. Right now what I need
    most of all is simply interviews. I haven't even one employment
    interview since 1994. (Somebody at a job faire who is standing in a
    booth and has everyone who walks up show their resume and he spends 10
    seconds looking at my resume to declare they don't have any openings
    that I'd qualify for, doesn't count as an interview.) That last
    interview was on Miranda street in Palo Alto just off Foothill
    Expressway. I remember that street because that's my daughter's name
    (named after a character in the StarTrek-TOS series). The next-to-last
    interview was about four hours long, 45 minutes with each of five
    interviewers, for a company on Middlefield near 237, in 1993.Dec. When
    I got back home from that totally exhausting interview, my wife accused
    me of being out with another woman the whole time, and refused to let
    me call the company on the phone to have her talk to them to convince
    her it was a job interview that took so long. That company strung me
    along more than two months before they finally told me they hadn't
    decided to hire me. The third-from-last job interview I can't remember
    whether it was for RSA data security or the company in Concord or what.
    That second-to-last-interview was so horribly exhausting it tended to
    erase my memory of the sequence leading up to it.

    > If you walk into my company and claim you are a software developer
    > and expect me to pay $7 an hour for your labor, and I don't know you,
    > and I can't watch you do real programming work in front of me -- I'm
    > going to assume you are a *crank*, and not a developer.


    And that whole diatribe of yours is a strawman, because I *never* walk
    into any company *expecting* them to hire me, at any price, whatsoever.
    I hope they'll hire me, but I would never *expect* you to hire me.

    Also, I've offered to do trial work for free just to prove I can do
    something useful very quickly, get it up and running in a few hours one
    day, but nobody has been willing to let me demonstrate. So your remark
    about "can't watch me do real programming..." is bullshit. Come here
    right now (well not now at midnight, but tomorrow when it's legal
    visiting hours in this subsidized housing complex) and I'll work for
    you right in front of your eyes, and then I still won't *expect* you to
    proceed to hire me, but I *will* expect to post to the net that I did
    what I said I could do. So I've made the offer to contest your
    bullshit. The ball is in your court. Put up or shut up. I can
    demonstrate either Lisp (CMUCL) or Java (J2SE 1.3.1), your choice.

    > Competent *secretaries* make at least $30K a year,


    Competant *employed* secretaries only. Unemployed secretaries don't
    make $30K/yr or anything even close.

    > Do you think software development is easier than that?


    For me, yes. I have no idea how to do, or I'm incapable of doing, the
    kinds of tasks that secretaries usually do: schedule meetings, deal
    with office politics, schedule airline flights, type 125 WPM (I can
    type about 60 WPM, after deducting 5*errors, during a short test, but
    then I'm exhausted for an hour or so), understanding strange foreign
    accents over the phone, hearing five people talk at the same time
    without spacing out, understanding somebody in high-background-noise
    environment, switch back and forth between multiple tasks every 2-3
    minutes without getting confused, read or type or think at the same
    time as listening to somebody talk to me, make coffee, remember names
    and faces of new people I've just seen for the first time.

    Designing and implementing computer software to solve specific problems
    that are well-defined, in a quiet environment with nobody interrupting
    me or talking in the same room, is a lot easier for me than what a
    secretary does.

    > Do you think the pool of competent programmers is bigger relative to
    > the demand?


    If you're referring to people capable of designing and implementing new
    software, yes, there are hardly any jobs available, but lots of
    unemployed people begging for such jobs.

    If you mean people with exactly the skill sets required according to
    typical job ads, no, there's probably not one person in the world with
    all those skills simultaneously in one person.

    > If you think your skills are worthless ...


    From a false premise like that, anything you say next is worthless.
    (If you don't believe that "a implies b" has the same truth-table as
    "not-a or b", you have some urgent homework to do.)

    > They care about what your program *does*.


    No they don't. They *should* care that I have produced lots of good
    working software and I can make more even now, but nobody ever cares
    what I can do. Not one person (other than myself) has expressed any
    interest in any software I've written in the past 15 years. I've been
    begging people to look at my software I've already done, but they say
    they don't have the time or interest. The closest I ever came to
    somebody showing an interest was when I drove around to *all* the
    employment agencies/recruiters in Mountain View trying to show them my
    CGI/CMUCL demo, and only one would look at, a guy at Volt, and he said
    he liked it, but he recruit only for MicroSoft and they haven't been
    hiring since the recession started in early 2001 and show no prospect
    of hiring any time soon. When I called back another year he said they
    still weren't hiring, haven't been hiring the whole time from 2001.Jan
    to last time I asked. But after I left his office, as far as I know he
    never again looked at my program, so I don't count him as showing
    interest in it, and he didn't want to see any other of my software
    whatsoever.

    > They care about how much money or time it saves them, or how much
    > profit they will make on new business it allows them to get. If you
    > can't come up with a way to estimate those numbers and it is not
    > self-evident to the potential customer, then they will not pay you a
    > dime for any amount of code.


    I have not the foggiest idea how much money some company will make in
    the upcoming years. Even their Chief Financial Officer can't say that,
    although at least he is privy to inside information that would give him
    a Sahara-snowball's chance of making a halfway decent guess. Me, I have
    *no* inside information, I'm not privy to their confidential business
    plan or internal projects etc. so how do you expect me to do better
    than their CFO at predicting their upcoming profit with and without my
    new software?

    > if you are not charging an amount that will equate to at *least* $30
    > per billable hour, nobody will take you seriously.


    What, you expect me to send a bill to somebody who has never given me
    any reason whatsoever to expect them to ever hire me or pay me
    anything?? Wake up, idiot! I can't charge somebody until and unless
    that person agrees to hire me.

    Should I start charging you $60/hr for the time it takes me to rebut
    your stupid newsgroup postings?? Can I quote your remarks as evidence
    that you offered to enter into a binding contract with me for more than
    $30/hr for my services, and now you owe me for my time, at my stated
    rate of $60/hr which is the going rate for consultants who have 22+
    years experience as I do, whereupon if you don't pay I can send your
    account to a collection agency and expect to collect on it?

    P.S. I'm still pissed that RSA Data Security didn't hire me even though
    I was fully qualified for the opening they had. That's the one job
    where I got interviewed and they were impressed with me and I really was
    fully qualified and I should have gotten the job.
    Robert Maas, see http://tinyurl.com/uh3t, Jul 12, 2005
    #13
  14. Robert Maas, see http://tinyurl.com/uh3t

    Tim X Guest

    Pascal Bourguignon <> writes:

    > "jonathon" <> writes:
    >
    > > Pascal Bourguignon wrote:
    > >> For example, if their business practice on investing is to expect a
    > >> TTROI of 0.25 year, and your software will allow them to earn 1 more
    > >> dollar/year/customer and they have 100,000 customers, that is, your
    > >> software will earn them 100,000 more dollar/year, then you can quote
    > >> it for P = 0.25*100,000 = $25,000.

    > >
    > > So what would be the rationale for charging double for the same product
    > > simply because they are willing to wait six months rather than three
    > > for ROI?

    >
    > Who told anything about reason? It's psychology. You approach the
    > "decider" with this argument: "Hey, with my product, in six months
    > you'll be earning twice the dollars you earn now.". While you don't
    > have a competitor bidding a TTROI of three months, you don't need to
    > bid less. If you good at it (you approach the decider in the right
    > context with the right adornments), you can even bid a TTROI of one
    > year.
    >

    A lot of people overlook the psychology aspect when first starting
    out. I lost a few initial contracts because I was too cheap and
    prospective clients thought I was either an amateur or didn't do a
    good job. When I increased by rate, I began to get more jobs. At the
    time, I felt uncomfortable asking for what seemed to be far in excess
    to what the work was worth - then I realised if the market would
    handle it, why not get what I could - especially if doing so gave me
    more choice.

    Tim
    --
    Tim Cross
    The e-mail address on this message is FALSE (obviously!). My real e-mail is
    to a company in Australia called rapttech and my login is tcross - if you
    really need to send mail, you should be able to work it out!
    Tim X, Jul 12, 2005
    #14
  15. Robert Maas, see http://tinyurl.com/uh3t

    Tim X Guest

    Chris Sonnack <> writes:

    > Robert Maas, see http://tinyurl.com/uh3t writes:
    >
    > > Telecommuting is a fantasy, an urban legend.

    >
    > Hmmm...apparently I, and several folks I know, are living, or more
    > correctly: working, in a fantasy world.
    >
    > Cool! (-:
    >

    Me too. I telecommuted for over 6 years. Then the company was bought
    and I was made to work in the office - 3 months later, they asked if
    I'd like to telecommute again. I like to think it was because I was
    more productive working from home, but it could have been my
    personality or body odor!

    Actually, when I ceased telecommuting, I actually realised I'd missed
    workinig with others and I doubt I'd do it again - unless I was
    semi-retired and doing it part-time.

    Tim

    --
    Tim Cross
    The e-mail address on this message is FALSE (obviously!). My real e-mail is
    to a company in Australia called rapttech and my login is tcross - if you
    really need to send mail, you should be able to work it out!
    Tim X, Jul 12, 2005
    #15
  16. Robert Maas, see http://tinyurl.com/uh3t

    Coby Beck Guest

    "Chris Sonnack" <> wrote in message
    news:...
    > Robert Maas, see http://tinyurl.com/uh3t writes:
    >
    >> Telecommuting is a fantasy, an urban legend.

    >
    > Hmmm...apparently I, and several folks I know, are living, or more
    > correctly: working, in a fantasy world.


    I prefer the term "virtual reality" ;)

    I sometimes worry how well I will handle having to have my butt in the
    office every day again (after almost 4 years with only a few months here and
    there not telecommuting) if/when I change jobs next...

    --
    Coby Beck
    (remove #\Space "coby 101 @ bigpond . com")
    Coby Beck, Jul 12, 2005
    #16
  17. Michael Sullivan writes:

    > Are you kidding me? The price per byte of source code is exactly zero.
    > Nobody cares how much source you write. They care about what your
    > program *does*.


    It's like the old joke about the ocean-going vessel that broke down
    at sea. The ship's engineer--no slouch--just couldn't identify the
    problem, so they had to call for help.

    Guy arrives on a helo, spends some time walking around the ship, takes
    out a large wooden mallet and bangs on one particular pipe a few times.

    Ship starts working, and the guy gives the Captain a bill for $10K.

    "Ten thousand dollars," exclaims the Captain! But all you did was
    pound on a pipe.

    "Ah," replies the guy, "it's knowing where to pound."

    --
    |_ CJSonnack <> _____________| How's my programming? |
    |_ http://www.Sonnack.com/ ___________________| Call: 1-800-DEV-NULL |
    |_____________________________________________|_______________________|
    Chris Sonnack, Jul 12, 2005
    #17
  18. In article <>,
    (Robert Maas, see http://tinyurl.com/uh3t) wrote:

    > > From: (Michael Sullivan)
    > > Programmers can't ask for minimum wage, because professional
    > > programmers *don't* *get* *paid* *minimum* *wage*.

    >
    > Your comment is irrelevant because I don't ask for money from anyone,
    > not minimum wage, not any amount whatsoever. It makes no sense to ask
    > money from somebody who has never indicated any willingness to pay me
    > whatsoever.


    Having read your initial post, and this one, I have what may sound like
    a hostile suggestion. I really do not mean it to be, but I have not
    found a comforting way to say this.

    Your attitude, from the outside, _appears_ to be one that will offend
    many potential employeers. I am not saying it is, just that it sure
    sounds somewhat combative and angry. Employers want to see eagerness to
    do the work, combined with an awareness of how what you do will make
    them more money, or will let them accomplish their goals.

    You are implicitly asking them for money, even if you are not holding
    out your hand the moment you walk in the door. Part of your task is to
    convince them that you are someone they want to give money to, in return
    for what you offer them. That you are someone that they want to spend
    time with, really. For me, a big part of that is showing such a
    potential client that they will make more money, more sales, more
    science, whatever, by having me help them, and that the time they spend
    will be pleasant, rather than combative.

    I am consultant. I solve problems for people, so they can get more
    done. If someone calls, I may well go out on spec, with no written
    contract. I may spend a day or two talking to them, building a
    proposal, and other good stuff like that. Even though I do not quote a
    rate, or a point at which I will stop, they know that this work is
    supported by the eventual contract we hope to sign. Thus, if we do not
    seem, in my opinion, to be making progress, I may stop talking to them.
    Not in anger, just because I eventually have to do work that earns money.

    Consulting groups like ours charge between $100 and $150 an hour,
    depending on the exact skill set of the person at the client. To earn
    that, a consultant has to earn them roughly $4000-$7500 a week, and we
    always keep that number in the back of our minds. We earn them that,
    because we have done this before, and we know what works for the markets
    we are familiar with. We may spend a month on the beach getting a new
    technology to the point where we can charge those rates, perhaps in the
    context of an open source project.

    If you do not have a good track record, you still need to be charging
    enough to justify their time. If the person you interact with earns $50
    an hour, then one marathon meeting can cost the company more than your
    weekly salary or bill. I would not go below $15 an hour, and something
    in the $30-$50 sounds a lot closer to what I would expect for a
    reasonably experienced and competent software guy.

    The true rate, of course, really depends on what you can do for a
    potential employer. As an salaried employee, you should only half to
    two thirds of that hourly rate goes to you - the rest goes to benefits,
    overhead, and the like. Look at how much the work you propose to do
    would be worth to them, then charge accordingly. You do not get all the
    money you save them, but you should get a reasonable fraction, and
    should be able to explain why that is a reasonable fraction.

    If you do not know what your skills are worth, find an open source or a
    volunteer non profit, and do some work for them. Then watch really
    carefully for chances to get more done, or to save money by providing a
    decent service. This is how you know what that dollar figure is.

    I am not trying to be flippant, nor am I trying to be mean. The above
    touchy-feely stuff is the best way I know to explain how you justify a
    potential wage to someone, and even if you want to do the work for free,
    you still should know what that work is worth.

    Scott
    --

    Java and Database consulting for the life sciences

    --
    Scott Ellsworth

    Java and database consulting for the life sciences
    Scott Ellsworth, Jul 12, 2005
    #18
  19. Robert Maas, see http://tinyurl.com/uh3t writes:

    > Should I start charging you $60/hr for the time it takes me to rebut
    > your stupid newsgroup postings??


    Only if we can re-charge you back $120/hr for your whining Eeyore.

    --
    |_ CJSonnack <> _____________| How's my programming? |
    |_ http://www.Sonnack.com/ ___________________| Call: 1-800-DEV-NULL |
    |_____________________________________________|_______________________|
    Chris Sonnack, Jul 12, 2005
    #19
  20. Robert Maas, see http://tinyurl.com/uh3t

    David Golden Guest

    Robert Maas, see http://tinyurl.com/uh3t wrote:

    >> From: (Michael Sullivan)
    >> Programmers can't ask for minimum wage, because professional
    >> programmers *don't* *get* *paid* *minimum* *wage*.

    >
    > Your comment is irrelevant because I don't ask for money from anyone,
    > not minimum wage, not any amount whatsoever. It makes no sense


    Do you think normal humans are sensible, logical?
    (or at least naively logical like a programmer expects a computer to be
    by default - often there is some sort of twisted logical system
    governed by discernable rules that the terran scum <sorry> humans, are
    acting within or marketing wouldn't work.)

    There's your problem. A theory of computer-mind you might have for
    dealing with computers won't work well with most humans without
    significant rewriting.

    You might want to read through the http://www.consumerpsychologist.com
    pages.

    e.g. from http://www.consumerpsychologist.com/price_response.htm
    """
    Note that consumers often have few indicators of quality, so price may
    be perceived as one of the better available cues.
    """

    If you set your initial price too low you risk being perceived as low
    quality. Prior to a sale, and even if your labour is the product for
    sale, those perceptions really matter!
    David Golden, Jul 12, 2005
    #20
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