I'm the lead engineer and founder of http://OfferLetter.io - We guide engineers (and designers and PMs) by helping them navigate the "last-mile" - that is, the offer selection/negotiation process - in exchange for a fee from the candidates. (We got brief shoutout in the article along with Dave and our friends at HackMatch)
I want to specifically address 1) Sam Altman and 2) Chris Fry's respective points about the problems with regards to models that align with the candidate more directly (like ours):
1) Much respect for Sam, but he's dead wrong with respect to the 'negative selection' problem - yes, good people have no problem finding work, but the key problem is that the opportunity cost remains phenomenally high for suboptimal decision making. We have actually worked with outstanding engineers who are at YC portfolio companies, simply because they wouldn't have known how to get what they're worth otherwise and push for more. And Sam is missing the point entirely with regards to worth - people in the industry are not getting paid based on their merit - not at all. The gender wage gap is perhaps the most stark example of this, but we see it, starkly, along many other demographic slices as well.
2) With respect to Chris Fry's comments - I was actually in Twitter's eng org when Chris raised the internal engineering referral bonus from 2.5k to 10k because the company wasn't getting the volume of quality people it wanted. Chris is a really great guy, but I find his point about "[at] Twitter, you get the best résumés on your desk already [via recruiting department, referrals, etc]" somewhat misleading - there's no way he would have raised the referral bonus as sharply as he did if he really felt that. In fact, there wouldn't have to be an referral bonus structure at all. Twitter is wonderful, and I loved my time there, but even there we weren't getting all the high-quality people we wanted.
I'm one of the developers Mr. Altman is talking about and have recently rejected an offer from 10x. I have to agree with Mr. Altman's point of view: I'm making 1.5 - 2.0 times the average developer's salary already. Speaking with 10x, they told me that their average project was just 1 - 2 months long and that I should treat their service as a supplement to my income rather than relying on them to keep me booked.
The problem is they charge 15% of ALL of my income for that privilege and don't make any guarantees. Why should I pay them over $2k a month for them to possibly make me new sales when I'm already capable of keeping myself booked the majority of the time?
The whole thing reeked of predation to me. If they're really able to provide more value than they take from me, then they should only be charging me a commission on the sales they bring in.
From my experience in the entertainment industry I always wish I could hire a manager to represent myself in negotiations with employers/bosses/etc - even if this would mean having to pay a 15-20% management fee on my salary. But I just can't convince my boss to negotiate with my agent...
You can train and optimize your negotiation skills all you want, but in my opinion it is extremely valuable to separate the "talent" from the "money". Top performers, no matter in what industry, are usually extremely passionated about their craft and undervalue the monetary value they can bring to the table.
Having a third party represent them puts a "neutral" monetary evaluation on them. Good management allows a much more strategic long-term development that focuses on value building and not just opportunity hopping.
A portion of these jobs that are very left out are the security world jobs. Yes twitter is a great company and has many interesting challenges. Yes it will garner a subset of 10xish people. Yes, they have a lot of great resumes.
But the DoE, CIA, and NSA will always pay better, have greater challenges, and have a much wider net to cast than twitter, The Zuck, or Google ever will. Why? Capitalism doesn't work at the end of tank barrels.
It not google that twitter is really competing with, its the Air Force and DoD.
Also, thank you very much for pointing out the gender wage gaps here. It is an obvious and clear example of sexism distorting market capitalism.
I hope you guys are working with recruiters to find out compensation ranges. I had a friend who once responded to a recruiter "hey, how about you come work for me". It's a lot easier to ask for more salary, stock, or benefits when you have inside information on what each company is willing to offer for each position!
While I don't disagree with you, I did want to point out you've given some bad information. [In the tech industry there is no clear case for a gender wage gap when we're talking about merit based salary.](http://www.forbes.com/sites/susanadams/2013/03/20/women-are-...)
Many companies claim that hiring is a top priority, but do little more than put up a JD in a couple places. They then complain about shortages.
You need to actively recruit talent, which means understanding what you're looking for. Building nginx modules? Go through github and see who's built an nginx module before. Do a google search for "nginx module development" and see where that leads. Then send out brief but targeted emails to people you sincerely want to join your team.
There's a ton of developers who aren't actively looking, but presented with the opportunity, they'll jump. I don't know a single developer who isn't flattered and intrigued by a sincere cold call for employment from an actual company (they're pretty easy to filter from agencies)
Second, money and location are a big deal. "We can't find developers" really means "We can't find developers who want to work for this salary and/or at this location." I remember not too long ago, our startup had a budget for 10 new developers, which we just couldn't fill. Our CTO and CEO 100% refused to get 5 developers and pay them 2x. So instead we stayed 10 people short, for over a year, while "hiring remains a top priority."
TL;DR - If hiring is important, spend the necessary time on it, don't just pay it lip service.
Google, in their growth days, had some interesting methods. One day I was looking up a topic in proof of correctness with Google, and there was a Google recruiting ad on it. I was once contacted by a Google recruiter because I'd been posting on "comp.lang.c++".
The heavy filters companies apply is too harsh. The vast majority of software jobs really don't require a great (or even good) developer - I'm looking at you, standard CRUD jobs. Yet, a large majority of software positions require going through an interview process which is heavy on algorithmic knowledge, on the spot thinking, high end problem solving, etc.
The problem worsens when one considers that many people realize this issue, but then says, "Oh sure, but we are one of the 5% that really needs these people!" - but if you add up how many folks make that claim, clearly that's not always the case.
If people actually filtered for only what was actually necessary to perform their open positions, I think they'd find that the developer shortage isn't as bad as they believe.
> You need to actively recruit talent, which means
> understanding what you're looking for. Building
> nginx modules?
With such specific task in mind you are ignoring other people's expertise and could end up hiring someone willing to do anything without questioning and voicing concerns. Like in this building nginx modules case, which is a bad idea almost every time.
Those rates really don't seem all that high. I mean 250 hour * 40 hours/week * 50 weeks year = $500,000. That's kind of a lot. Except then the article itself mentions employees getting a few million a year in stock from Facebook or Google.
I feel like there exists a market for getting start-ups launched on the right foot. Twelve weeks (480 hours) for $1,000,000 with a bonafide rockstar to get your concept not only up and running but well designed to be carried forward. Do you guys think people would pay that? If no, how much do you think people would spend?
If your idea is good and the work is good it would easily be worth it. Of course proving that you can deliver ahead of time is more than a little difficult.
Playing the devil's advocate here, but why is the concept of free-agent developers who (a) command huge premiums, and (b) prefer working on short, intense sprints instead of with one employer, still not here yet?
I'm not saying 10X Management is an example, but why can't individual programming be valued like, say, acting/singing etc.?
I've never been a freelance developer so I don't know what my rate would be...but I would really like to get some insight on what $200+/hr web-development is like. I mean, what are the expectations versus a $50-developer?
For example, I could probably build in 10 hours a customized, nice-looking Twitter bootstrap Rails site with Stripe integration and deploy it onto EC2 and set up Capistrano to integrate with whatever existing Github flow they have...but then when it comes to building the admin...um...developing the admin from a technical standpoint is non-trivial, but developing it in such a way that it is hassle free from the client...How exactly does the developer do that, without extensive consultation time with the client? And what if their in-house developer (let's pretend they have one who is competent) doesn't have a workflow like I imagine a good workflow should be?
In other words, I'm having a hard time imagining what a rockstar developer could singlehandedly create that would be spectacular and would be something that that mortals can use and maintain on their own...but obviously that's why I'm not a $200+/hr freelance developer.
Your problem is that you're thinking in terms of 'what do I have to type'. Most programmers can just type out the software to do something if somebody else tells them what that 'something' should be. That's not hard, and the path to learning it is straight-forward and well-defined. The value in a consultant is not in 'programming'. It's in translating whatever problem somebody has into a solution. Nobody cares about a 'Twitter bootstrap Rails Stripe EC2' whatever. If you find yourself even saying those words to the person who'll be signing your cheques (as opposed to the tech staff you might be working with, but those you'll only talk to when you got the job), it's game over - you're now a $50/hour commodity.
"How exactly does the developer do that, without extensive consultation time with the client?"
Well yes you answer your question yourself - top 10% rates are for those who can make the customer happy with the result without having to drag exact specifications, kicking and screaming, from somebody who doesn't want to deal with all those details.
(also, here is the first hint: somebody who thinks about '200$/hour' has the wrong mentality. I do projects where my rate is that, but I never ever (ever) put it that way. Sell services based on benefits or value for the customer, not on how many hours you're going to spend. Nobody cares whether you've spend 6 weeks working 100 hours a week, or if you send 5 emails with the right words to a few people and wrote 100 lines of software on a lazy sunday afternoon. Effort: irrelevant, make customer happy: only thing that matters.)
$200/hr is like a buffer, or insurance if you will. When you're working with a client, most of whom are non-technical, you have to invest A LOT of time explaining things or re-doing things because it doesn't work the way they imagined it in their head.
You don't want to charge $50/hr then end up doing 2-3 hours extra work because the client uses IE7 and that was never part of the spec, but now you have to make it work with IE7. If you decide to charge them for the 2-3 hours of extra work, they are going to think you're nickel and dimeing them. But if you charge them $200/hr upfront, you now have a buffer, so you just take it care, and it will be like you're a wizard.
If it turns out the task was super easy, and the client is happy with the first revision, then you always have the option of reducing their bill. That is always better than increasing it.
Partly, my rate as a freelance developer is to cover four things that generally would be paid by an employer, but which I (personally) don't consider directly billable when free lancing:
1. Times I'm not working, the effort of finding clients, etc. A standard job ensures that I have work next week (at least, in general) and comes with much longer lead-ins to periods that I'm not working for them, so I don't have to charge (as much of) a regular employer to cover that situation.
2. Training and research. Keeping my skills up-to-date is something I've insisted from employers and just silently charge for when free lancing. Things like covering books or other training materials, sending me to conferences, etc. (In essence, you're paying my 20% time and reading materials during the hours I bill for rather than during the hours I'm 20%-ing or reading.)
3. Most employers will provide some kind of benefits, which I have to cover personally and which cost more as a freelancer. This causes not only my hourly rate to sound higher, but the employer to actually have to pay more, because generally companies get discounts on group insurance. (I'm rolling the differences in dealing with taxes in here.)
4. This one varies by person, but I don't charge for certain kinds of short communications, directly. My rule is generally that synchronous communications always cost money, and asynchronous communications with <15 min of my time invested don't. I find it's easier to just charge more on the core work hours than try to bill for the 30 ~2min emails you sent me over the course of the project.
Together, these make the free-lancing price sound higher, but actually comes out pretty close to what the cost-to-employer is, which is normally higher than the pay rate of the employee, once benefits, training, etc are factored in.
You're number one mission whenever you get a contract is to understand the business and figure out how you can get them making more money.
That's the secret; you should always be framing your services as an investment. Demonstrate how you're going to raise their revenues (and do it!) so that it when it comes time for contract renewal, your worth is easily demonstrable (you paid X in exchange for Y millions).
but I would really like to get some insight on what $200+/hr web-development is like. I mean, what are the expectations versus a $50-developer?
I've done a number of projects for $200 per hour. To me, the biggest differences are:
1) Business knowledge. I work full time at an investment bank but I also do side work. I spent 350 hours per test studying for the three CFA (Chartered Financial Analyst) tests. They have nothing to do with technology obviously - they are widely considered the hardest tests in finance. The years I took the tests, I took them with multiple business people from my firm where I ended up passing and the business people ended up failing. Business knowledge is the single largest thing that will gain you respect (and a higher rate) from a company.
2) Full stack knowledge. When a client's website is down, he doesn't want to hear, "OK then. I've checked all my code and it is just fine. This is a database problem. I'll forward this to the DBAs." They want you to fix the problem no matter where it lies.
For example, I could probably build in 10 hours a customized, nice-looking Twitter bootstrap Rails site with Stripe integration and deploy it onto EC2 and set up Capistrano to integrate with whatever existing Github flow they have
You're obviously new and sincerely inquiring, but I'll tell you - writing what you wrote here shows just how new you are. Anyone can build an app with a lot of moving parts "in 10 hours". Ya know what that's called? A prototype. It doesn't have proper error handling in it, it doesn't have proper logging, it doesn't have proper monitoring, it doesn't have proper business logic, it doesn't have proper features, etc. The 10 hour prototype you built is probably 10% of the actual project. A $200 per hour software engineer with business knowledge and full stack skills knows that.
I've seen a few $200/hr freelance guys work, and here is what I observered - they resell the same solution over and over. They have canned solutions for most existing problems.
You need a full blown add-hoc reporting system customized to your system, in two weeks? No problem! The system already exists, it's just a matter of integrating it. And then they go looking for another company that needs a reporting system. The good ones will have more than one trick up their sleeve, but it will be basically the same thing over and over. That's how it gets done so fast. It's easy to integrate OAuth2 into somebody's site when you've done it a hundred times before.
> I could probably build in 10 hours a customized, nice-looking Twitter bootstrap Rails site with Stripe integration and deploy it onto EC2 and set up Capistrano to integrate with whatever existing Github flow they have
In my 15+ year career I've not met a single person who could do this. Not even close.
I'm not doubting your abilities as a developer, just pointing out the typical oversimplification of scope and underestimation of effort that happens in software development. This is why software projects are always 'late' and 'over-budget'
As others mentioned, this is a buffer number, it's less about technology, etc. There's already some good answers here, but another aspect of this level of price should be respect. It's easier to command a bit of respect from clients at this rate (whether it's hourly, or daily or weekly).
But the respect should flow both ways here too. Treat your client and project professionally - answer calls, answer emails, show up to meetings when you say you will, etc. It's amazing how many people don't do those sorts of things. Really. I'm forever amazed at how low the professionalism bar is in our industry.
Having a higher bill rate allows you a bit of negotiating room if you need it - easier to come down from $150/hour to, say, $125/hour if need be. It's easier to comp a meeting to someone, or not always invoice for travel time. I've got colleagues billing $40/hr, and asking "should I bill for travel time to the meeting? How about the drive back home?" The idea of getting on a plane and flying to a client meeting, and getting a hotel, on their own dime, is outside their experience. If you're charing $150/hr, it's not unreasonable thing to do, ime. Even if you get reimbursed later, you've got cushion to float that for a few weeks - you're not living check to check.
IMO, the $200/hr dev is far more adept at servicing the non-technical aspects of the project - professionalism, people skills, project management, setting expectations, etc - or they hire people who are (agents, like in this article).
I don't think the $200/hr developers are building greenfield apps with simple models, but building quite complex logic or dealing with extending the functionality or fixing very large and brittle apps. At least, that's where I'd spend my $200/hr.
1. The average developer is bad. Really bad. You can easily work 4 times as fast and produce code that's much shorter and more maintainable.
2. The $200/hr developer gets paid according to the value he provides. It's not hard to provide that value if you work on the right stuff, even for an average developer. Remember that Apple has $460000 in profits per employee per year (and that includes all employees), which already translates into $200+/hr. When you provide a service that costs $200 but makes the company $1000, they'll happily accept that. If you frame it without that reference $1000 then you just sound like a very expensive code monkey.
An excellent question - and one that depends heavily on quality of management and perceived value.
Perceived value is the most common - no-one gets promoted on their past performance only on their expected performance. And so the difference between 50/hr and 200/hr is
Please note that 200/hr is not 10x 50/hr. Either we are comparing top coders to minimum wage coders - of which I suspect there are few if any (in each "locale" not globally)
or we are actually capping top coders - this is very likely the explanation - to get to 500/hr or 5000/day or ~1million/year you need to be looking at equity level compensation. And that's a different issue.
Anyway where was I ? Yeah perceived value - this can always go up - but at a certain point you are no longer discussing per hour rates but project total rates and soon after the value becomes equity (I guess at around 1% o total perceived value)
And the time to have that conversation between hourly rate, project and equity? That depends on the cluefulness of management
I will suggest that climbing that compensation ladder from hourly rate to weekly rate to project rate to equity is a focus on understandin business problems, and how tech can solve them, understanding team and coordination problems and selling the business solution.
It's about time that high-end coders are getting the prices that they deserve. Many skilled coders aren't skilled in the art of negotiation, and that ends up bringing down the market price for everyone. I've seen far too many highly-talented people getting roped into five-figure salaries, when they'd be more appropriately priced in the six or even seven figures.
10X client (freelancer) here. I'm the guy living in Thailand mentioned in the article. Let me add to a few of the comments here. I am not writing on behalf of 10X, these are my own opinions.
I would think that people hiring would like potential hires to be unrepresented. An un-represented developer is going to be cheaper. (chrisbennet)
Price is just one factor. If I charge twice as much as someone else but I can solve the customer's problem in one-fourth the time, the customer saves money. Customers are usually focused on solving business problems within their budget and schedule, not just on hourly rates.
It's not about the technology. It never has been. You're number one mission whenever you get a contract is to understand the business and figure out how you can get them making more money. (aantix)
Almost exactly right. It's not always about making more money, though; it may just be to figure out how to make their software do what it is supposed to do. Too many job postings and too many résumés list technologies without addressing business needs or experience. For me, 10X has been good at getting both sides to talk about and describe business requirements and setting clear deliverables and goals.
Boy. As someone who actually runs a contracting + project agency, that looks to be of an approximately similar size as 10x (at least before this was published), this was lifting-cars-painful to read - not just because they have PR and I don't, but because they (Solomon and Blumberg) _are the inefficiencies they are pretending to eliminate_. (scottru)
The New Yorker article was not an exhaustive description of how 10X works or who does what. Most of my interaction with 10X is with Michael Solomon, so to say he isn't adding any value is just not understanding what he does. Everyone at 10X is adding value for me, and the several 10X customers I work for or have worked for have without exception said only good things about 10X Management. In my experience most projects go wrong due to miscommunication and conflicting expectations. 10X, and specifically Michael, are good at heading those things off before they become problems, and working out solutions that are acceptable to both sides.
Yes, 10X has had some great PR. No, they aren't the only good freelancer agency or consulting firm. I've worked for quite a few placement/consulting firms and with many recruiters in my career (35+ years) and for the work I do now and the life I want to live 10X is a great fit. It may not be the right fit for every client (freelancer) or customer, and it may not be the way to go if you want to try to make millions at a startup.
A few years ago I decided to concentrate on stalled projects and broken code, the almost-working or somewhat broken stuff left behind when developers fall out with their customer and stop answering their emails. My customers are mostly smaller businesses and non-profits, without the need or resources for their own IT staff, and without the sex appeal of Facebook or Twitter. They have real business problems to solve, they can't throw everything away and start over, and they aren't qualified to recruit and hire technical staff. I found plenty of this work on my own, but when I decided to travel and freelance remotely I worried about finding customers and easing their fears about hiring someone living overseas. 10X has been a good fit for me -- they bring in plenty of customers, they have clients with every technical skill you can think of when I need help, and they are a real US-based company that can assure customers I will deliver no matter where I happen to be. They have also negotiated better rates and more useful contracts that I was doing on my own.
The thing that shocked me from the article was when they said:
you’re talking a hundred and fifty to two hundred and fifty dollars an hour
Do "rockstar programmers" really work so cheaply? Crappy attorneys make that much and good attorneys generally start their billing around $350 per hour.
I don't have an agent and even though I work full time at an investment bank, I find all the side programming work I want @ $150-$200 per hour. In the past four years I've averaged 18 hours per week from side work.
Even I'm moving away from hourly pricing to value based pricing though. I would think this is where an agent would provide the most value. Evaluate the project, determine a the project's NPV and then base the pricing on a percentage of the NPV.
Envisioning agents like outlined in the article - they seem little different than high-end technology shops that provide bodies.
"I would think that people hiring would like potential hires to be unrepresented. An un-represented developer is going to be cheaper. (chrisbennet)
Price is just one factor. If I charge twice as much as someone else but I can solve the customer's problem in one-fourth the time, the customer saves money. Customers are usually focused on solving business problems within their budget and schedule, not just on hourly rates."
True, and as a freelancer this is an argument I make as well. But something I've noticed is that the client doesn't talk/work/think any faster. It still takes them an hour in a meeting to get their points across. It still takes us 3 hours to review key issues together. Anything that is synchronous time is throttled to the slowest person, so the "I'm 5x faster than someone else" isn't the slam dunk it should be.
And there's still a stigma with some people about high priced consultants, when they know they can get it 'cheaper' somewhere else.
A friend of mine is managing a project on behalf of his client. He's been dealing with offshore (India I think, not sure) devs for months. I built a prototype of a tool, based on chatting with him, in under 30 minutes. The tool did more than his offshore people were able to do after days of talking to them, and days of trying. He was a bit ... taken aback. He went to his client and said "we need to bring this guy on to the project to handle some of this stuff". My hourly rate is 8x when they're paying the offshore people, the client balked, and it didn't happen.
Ignorant short-sighted client? Probably, but this still happens.
My friend was more than a bit shocked, but I wasn't. The project owners essentially have a cheap team of playthings to keep building whatever ideas pop in to their head, whim changes, etc., and the cost of changing their mind and changing ideas is low. At least, they think it's low. When you've not worked with developers who've actually built the core plumbing of all the stuff you're trying to build before, you really have no idea if "functionality x" should take 2 hours, 2 days or 2 weeks.
>A few years ago I decided to concentrate on stalled projects and broken code
That sounds like a good niche, but I've been cautious about taking these kinds of projects. Often, there's a good reason that goes beyond just "bad developers" that explains why the project is unfinished: abusive customers, grossly unrealistic expectations, unpaid bills.
For this reason (and after a couple of very bad experiences), I've avoided this kind of client categorically.
So is 10X able to screen out these kinds of disaster clients for you?
So I've got a similar idea for a niche as you - I really like increasing performance of web applications from existing applications. I know I can take a slow web app and make it fast (really fast). Are you making significantly more than you were as a salaried employee?
Every time I see one of these articles and subsequent comments, I feel terrible about myself. As a salaried employee I (thought I was, at least) doing well, but then I read things like this and I'm wondering what the hell I'm doing wrong not making $500k/year. I mean is the difference really that stark? Are all of us salaried employees just suckers? I seriously can't tell if a $50-75+/hr salaried employee is doing a lot better/worse than the $150-200/hr freelancers.
Thanks for the endorsement, Greg! Makes me incredibly happy to hear that you've had a positive experience with 10x.
Re: the praise for Michael Solomon, for the record, I (the technical partner at 10x) was originally very wary about starting this company with non-technical cofounders... but, at this point, the value they add to our clients and to our business is absolutely undeniable. Michael and Rishon are world-class advocates for talent.
Do think a company like 10x would be more helpful for freelancers vs people looking for salaried employment? In the latter case I can easily see an experienced and talented person interviewing at multiple places and choosing the best fit.
Seen in this light, the comments from Chris Fry and Sam Altman make sense. If you're looking for employment, have a very good resume and a good network you might not need an agent. However, they don't seem to be considering the case of freelancers who need to spend a large amount of time finding clients.
Given that I haven't worked as a freelancer this is something I know little to nothing about. Hence the question.
Slightly off-topic, but: I'm currently working as a remote contractor for a company and am able to travel wherever I please (And have done so). Actually planning to move to Thailand, rent an apartment from Airbnb, and camp out there for a few months come February. I'd love to talk with you about your experience if you could spare time for a few emails. My contact information is in my profile.
This conversation about agents has come up here several times. The 'agent' model referred to in this article is not so different from what run-of-the-mill recruiters do for their clients. Client calls saying they need to hire someone, and the recruiter provides a candidate (often an independent consultant). If candidate is hired, recruiter marks up consultant's rate and makes a margin. That margin is the agent/recruiter's take - so the consultant is paying for the broker's service regardless of whether that broker calls itself an agent or recruiter.
This isn't new, but using the term 'agent' makes it sound more appealing to all sides. The consultant can say "I have an agent", and the hiring company feels that the level of talent should be higher from an agency than from your everyday recruiting firm. If the talent is vetted better, it could be.
Where the concept of agents gets much more interesting is when discussing those in salaried/permanent hire situations. Consultants are generally willing to cede 15% or so of rate in order to use a broker/agent/recruiter's services to find gigs. But will someone seeking a salaried employment role (a 150K software engineering job) pay an agent 5%/10%/15% of their salary in order to find a permanent position?
Because most of the tech population works in salaried positions, this is the real question. Independent consultants make up a relatively small portion of the industry, yet this 'agent' conversation really only applies to them at this point.
I like the agent concept as it aligns the incentives of the recruiter/agent and candidate much more clearly, as opposed to the current recruiter model where the recruiter is typically considered to be more aligned with the hiring firm. (The real estate agent argument comes up here).
In this case, the 'agent' model is mostly just a rebranding of what we currently have in place. If this ever hit the permanent/salaried job market, that will be a bigger story.
>>"Enter the agents. Solomon describes himself as an equalizer. In creative industries, he told me, 'there’s always this pattern that the creatives start out at the bottom of the food chain and are exploited.'"
Even recognizing that the current hiring model has major inefficiencies, it's hard to not see this as awfully ironic.
>>"part of our goal is to de-risk freelancing and make it more viable. [...] She also appreciated that they had been vetted for interpersonal skills. At one point, they had to speak directly with the health-care company’s New York offices. 'They were good,' she said. 'And it wasn’t embarrassing to let them out of their cave.'"
The value proposition of the agent, pushing both technical and personal professionalism of candidates, should be addressable through a reputational system that doesn't take 15% and require ad hoc negotiations. It would, however, have to be complex enough to address how well certain talent is at addressing specific projects. How much of that is a lack of proper metrics and how much is the hiring party's inability to frame their needs?
I find this agency model for hiring to be troubling because it's turning software into a hit-driven industry like Music, Movies, or Video Games.
Hire a few rockstars, belt out a hit with hockey stick growth, watch it flame out or lose interest over time, and then watch the rockstars move onto their next project.
What about the founders who put their heart and souls into building a real sustainable business?
What about the customers who took the chance on an unknown solution and may have become dependent on it?
What about the developers that might have worked with the rockstars, but are less interested in moving on and more interested in continuing to build great products?
I can see why a lot of talented folks got jaded by this industry in the last bubble. And I think it's clearly happening again.
Boy. As someone who actually runs a contracting + project agency, that looks to be of an approximately similar size as 10x (at least before this was published), this was lifting-cars-painful to read - not just because they have PR and I don't, but because they (Solomon and Blumberg) _are the inefficiencies they are pretending to eliminate_.
Let's take a few parts of the article:
>>"The three partners have separate roles. Blumberg handles his and Solomon’s eleven remaining music and entertainment clients, and takes care of back-office matters: “Accounting, invoicing, collection, payouts. Everything that’s the bane of most people’s existence.” Guvench vets new talent. Potential clients have to fill out a questionnaire that one programmer compared to “the most complicated dating Web site ever.” Then Guvench and Solomon conduct interviews, to screen for communication skills. (I heard one potential client say, during a meeting in Solomon’s office, “We don’t want people who just write code and drool.”) Guvench also does code reviews—testing Web sites that aspiring clients have built, and reviewing the programs they’ve written."
So...
--Blumberg isn't working on the business at all;
--Solomon's work isn't even described (except "conducting interviews for communication skills").
So there's one person, Guvench, an ex-engineer, who's actually doing the technical vetting - i.e. 100% of the value so far is coming from one guy.
OK, then maybe the others are selling? Nope.
>>"10x technologists are working with a variety of customers: Live Nation, a virtual-reality startup, and an N.B.A. player who has an idea for a social-messaging app. Solomon admitted, however, that this list is somewhat random—it consists mostly of people who found 10x through Google, or whom he or his clients know personally. He has hired a salesman, to pitch 10x to companies."
OK, so you're closing PR-driven leads and your friends in the entertainment business? That's your sales pipeline?
I know a number of agencies with two or three partners running the organization. I don't know a single one of those where there isn't somebody pounding the pavement, hustling, finding clients - and who know the difference between a long-term partner and a sports star with an "idea for a social-messaging app." (We _all_ hear about those.)
The other value they're talking about is in the negotiation process. Hey, I'm totally willing to believe that a many-year entertainment agent is a better negotiator than I am, at least in the first-principles department. But this is not some magic skill in what is generally a well-defined and competitive market, and of course you're better at it when you deeply understand the technology and market, the BATNA for the client, etc. Those of us who actually understand the very small markets that one job description might meet are, in fact, pretty darned good at it too. For that matter, I've never told an engineer that you should work with us because we can get you a better deal than you can get for yourself, and if you're dealing with a client who understands the market (which said NBA player may not), that's pure hokum. (P.S. plenty of people on HN provide that coaching for free all day long.)
It's ok that the author doesn't really understand this market, and so the competitors she mentions aren't really competitors at all - they're all focused on full-time hiring. I guess it's also OK that the New Yorker's fact-checking department didn't discover that there's no such programming language as "THP" - that should be "PHP." (Maybe it's just a typo.)
But to let the reader believe that this approach represents the best this market has to offer - well, I guess that's just really, really great PR. Back to work.
(Added later: I realized I commented on these folks 1.5 years ago at https://news.ycombinator.com/item?id=5527610. I was feeling nicer then? Maybe? It looks like the participant in that HN thread was the partner who's clearly adding value.)
The rockstar metaphor always strikes me as unprofessional because it seems so incompatible with team work. Why aren’t there any rockstars in other areas of engineering?
When you read the examples given of super programming prowess such as making a function for repetitive tasks and bunching calls to db it gives the illusion that that is all it takes.
Hey I do all these best practices, doesn't everybody else?
Then you return back to reality of being a lazy 0.1xer and realize that there is a great deal unwritten and glossed over in these kind of general interest pieces.
We are embarking on a reverse negotiation model for startups as well. Feel free to signup http://250ksalary.com
There are lots of areas in life where the cost of acquiring a quality product/service is clearly communicated.
Salaries haven't been one of them, which might change.
Don't confuse upfront salary negotiations with lack of motivation etc. This just brings more quality candidates to job markets, saves everyone a lot of time and lets you focus on other important parts of hiring process.
[+] [-] mallyvai|11 years ago|reply
I want to specifically address 1) Sam Altman and 2) Chris Fry's respective points about the problems with regards to models that align with the candidate more directly (like ours):
1) Much respect for Sam, but he's dead wrong with respect to the 'negative selection' problem - yes, good people have no problem finding work, but the key problem is that the opportunity cost remains phenomenally high for suboptimal decision making. We have actually worked with outstanding engineers who are at YC portfolio companies, simply because they wouldn't have known how to get what they're worth otherwise and push for more. And Sam is missing the point entirely with regards to worth - people in the industry are not getting paid based on their merit - not at all. The gender wage gap is perhaps the most stark example of this, but we see it, starkly, along many other demographic slices as well.
2) With respect to Chris Fry's comments - I was actually in Twitter's eng org when Chris raised the internal engineering referral bonus from 2.5k to 10k because the company wasn't getting the volume of quality people it wanted. Chris is a really great guy, but I find his point about "[at] Twitter, you get the best résumés on your desk already [via recruiting department, referrals, etc]" somewhat misleading - there's no way he would have raised the referral bonus as sharply as he did if he really felt that. In fact, there wouldn't have to be an referral bonus structure at all. Twitter is wonderful, and I loved my time there, but even there we weren't getting all the high-quality people we wanted.
[#plug: check out http://OfferLetter.io - we all deserve to get what we're worth]
[+] [-] anonymous30x|11 years ago|reply
The problem is they charge 15% of ALL of my income for that privilege and don't make any guarantees. Why should I pay them over $2k a month for them to possibly make me new sales when I'm already capable of keeping myself booked the majority of the time?
The whole thing reeked of predation to me. If they're really able to provide more value than they take from me, then they should only be charging me a commission on the sales they bring in.
[+] [-] 1337biz|11 years ago|reply
You can train and optimize your negotiation skills all you want, but in my opinion it is extremely valuable to separate the "talent" from the "money". Top performers, no matter in what industry, are usually extremely passionated about their craft and undervalue the monetary value they can bring to the table.
Having a third party represent them puts a "neutral" monetary evaluation on them. Good management allows a much more strategic long-term development that focuses on value building and not just opportunity hopping.
[+] [-] Balgair|11 years ago|reply
But the DoE, CIA, and NSA will always pay better, have greater challenges, and have a much wider net to cast than twitter, The Zuck, or Google ever will. Why? Capitalism doesn't work at the end of tank barrels.
It not google that twitter is really competing with, its the Air Force and DoD.
Also, thank you very much for pointing out the gender wage gaps here. It is an obvious and clear example of sexism distorting market capitalism.
[+] [-] forrestthewoods|11 years ago|reply
[+] [-] toolz|11 years ago|reply
[+] [-] chrisbennet|11 years ago|reply
[+] [-] spacecowboy_lon|11 years ago|reply
[+] [-] latch|11 years ago|reply
You need to actively recruit talent, which means understanding what you're looking for. Building nginx modules? Go through github and see who's built an nginx module before. Do a google search for "nginx module development" and see where that leads. Then send out brief but targeted emails to people you sincerely want to join your team.
There's a ton of developers who aren't actively looking, but presented with the opportunity, they'll jump. I don't know a single developer who isn't flattered and intrigued by a sincere cold call for employment from an actual company (they're pretty easy to filter from agencies)
Second, money and location are a big deal. "We can't find developers" really means "We can't find developers who want to work for this salary and/or at this location." I remember not too long ago, our startup had a budget for 10 new developers, which we just couldn't fill. Our CTO and CEO 100% refused to get 5 developers and pay them 2x. So instead we stayed 10 people short, for over a year, while "hiring remains a top priority."
TL;DR - If hiring is important, spend the necessary time on it, don't just pay it lip service.
[+] [-] Animats|11 years ago|reply
[+] [-] jghn|11 years ago|reply
The problem worsens when one considers that many people realize this issue, but then says, "Oh sure, but we are one of the 5% that really needs these people!" - but if you add up how many folks make that claim, clearly that's not always the case.
If people actually filtered for only what was actually necessary to perform their open positions, I think they'd find that the developer shortage isn't as bad as they believe.
[+] [-] zzzcpan|11 years ago|reply
[+] [-] forrestthewoods|11 years ago|reply
I feel like there exists a market for getting start-ups launched on the right foot. Twelve weeks (480 hours) for $1,000,000 with a bonafide rockstar to get your concept not only up and running but well designed to be carried forward. Do you guys think people would pay that? If no, how much do you think people would spend?
If your idea is good and the work is good it would easily be worth it. Of course proving that you can deliver ahead of time is more than a little difficult.
[+] [-] r0h1n|11 years ago|reply
I'm not saying 10X Management is an example, but why can't individual programming be valued like, say, acting/singing etc.?
[+] [-] danso|11 years ago|reply
For example, I could probably build in 10 hours a customized, nice-looking Twitter bootstrap Rails site with Stripe integration and deploy it onto EC2 and set up Capistrano to integrate with whatever existing Github flow they have...but then when it comes to building the admin...um...developing the admin from a technical standpoint is non-trivial, but developing it in such a way that it is hassle free from the client...How exactly does the developer do that, without extensive consultation time with the client? And what if their in-house developer (let's pretend they have one who is competent) doesn't have a workflow like I imagine a good workflow should be?
In other words, I'm having a hard time imagining what a rockstar developer could singlehandedly create that would be spectacular and would be something that that mortals can use and maintain on their own...but obviously that's why I'm not a $200+/hr freelance developer.
[+] [-] roel_v|11 years ago|reply
"How exactly does the developer do that, without extensive consultation time with the client?"
Well yes you answer your question yourself - top 10% rates are for those who can make the customer happy with the result without having to drag exact specifications, kicking and screaming, from somebody who doesn't want to deal with all those details.
(also, here is the first hint: somebody who thinks about '200$/hour' has the wrong mentality. I do projects where my rate is that, but I never ever (ever) put it that way. Sell services based on benefits or value for the customer, not on how many hours you're going to spend. Nobody cares whether you've spend 6 weeks working 100 hours a week, or if you send 5 emails with the right words to a few people and wrote 100 lines of software on a lazy sunday afternoon. Effort: irrelevant, make customer happy: only thing that matters.)
[+] [-] vinhboy|11 years ago|reply
You don't want to charge $50/hr then end up doing 2-3 hours extra work because the client uses IE7 and that was never part of the spec, but now you have to make it work with IE7. If you decide to charge them for the 2-3 hours of extra work, they are going to think you're nickel and dimeing them. But if you charge them $200/hr upfront, you now have a buffer, so you just take it care, and it will be like you're a wizard.
If it turns out the task was super easy, and the client is happy with the first revision, then you always have the option of reducing their bill. That is always better than increasing it.
[+] [-] ObviousScience|11 years ago|reply
1. Times I'm not working, the effort of finding clients, etc. A standard job ensures that I have work next week (at least, in general) and comes with much longer lead-ins to periods that I'm not working for them, so I don't have to charge (as much of) a regular employer to cover that situation.
2. Training and research. Keeping my skills up-to-date is something I've insisted from employers and just silently charge for when free lancing. Things like covering books or other training materials, sending me to conferences, etc. (In essence, you're paying my 20% time and reading materials during the hours I bill for rather than during the hours I'm 20%-ing or reading.)
3. Most employers will provide some kind of benefits, which I have to cover personally and which cost more as a freelancer. This causes not only my hourly rate to sound higher, but the employer to actually have to pay more, because generally companies get discounts on group insurance. (I'm rolling the differences in dealing with taxes in here.)
4. This one varies by person, but I don't charge for certain kinds of short communications, directly. My rule is generally that synchronous communications always cost money, and asynchronous communications with <15 min of my time invested don't. I find it's easier to just charge more on the core work hours than try to bill for the 30 ~2min emails you sent me over the course of the project.
Together, these make the free-lancing price sound higher, but actually comes out pretty close to what the cost-to-employer is, which is normally higher than the pay rate of the employee, once benefits, training, etc are factored in.
[+] [-] aantix|11 years ago|reply
You're number one mission whenever you get a contract is to understand the business and figure out how you can get them making more money.
That's the secret; you should always be framing your services as an investment. Demonstrate how you're going to raise their revenues (and do it!) so that it when it comes time for contract renewal, your worth is easily demonstrable (you paid X in exchange for Y millions).
[+] [-] 300bps|11 years ago|reply
I've done a number of projects for $200 per hour. To me, the biggest differences are:
1) Business knowledge. I work full time at an investment bank but I also do side work. I spent 350 hours per test studying for the three CFA (Chartered Financial Analyst) tests. They have nothing to do with technology obviously - they are widely considered the hardest tests in finance. The years I took the tests, I took them with multiple business people from my firm where I ended up passing and the business people ended up failing. Business knowledge is the single largest thing that will gain you respect (and a higher rate) from a company.
2) Full stack knowledge. When a client's website is down, he doesn't want to hear, "OK then. I've checked all my code and it is just fine. This is a database problem. I'll forward this to the DBAs." They want you to fix the problem no matter where it lies.
For example, I could probably build in 10 hours a customized, nice-looking Twitter bootstrap Rails site with Stripe integration and deploy it onto EC2 and set up Capistrano to integrate with whatever existing Github flow they have
You're obviously new and sincerely inquiring, but I'll tell you - writing what you wrote here shows just how new you are. Anyone can build an app with a lot of moving parts "in 10 hours". Ya know what that's called? A prototype. It doesn't have proper error handling in it, it doesn't have proper logging, it doesn't have proper monitoring, it doesn't have proper business logic, it doesn't have proper features, etc. The 10 hour prototype you built is probably 10% of the actual project. A $200 per hour software engineer with business knowledge and full stack skills knows that.
[+] [-] snarfy|11 years ago|reply
You need a full blown add-hoc reporting system customized to your system, in two weeks? No problem! The system already exists, it's just a matter of integrating it. And then they go looking for another company that needs a reporting system. The good ones will have more than one trick up their sleeve, but it will be basically the same thing over and over. That's how it gets done so fast. It's easy to integrate OAuth2 into somebody's site when you've done it a hundred times before.
[+] [-] OhHeyItsE|11 years ago|reply
In my 15+ year career I've not met a single person who could do this. Not even close.
I'm not doubting your abilities as a developer, just pointing out the typical oversimplification of scope and underestimation of effort that happens in software development. This is why software projects are always 'late' and 'over-budget'
[+] [-] mgkimsal|11 years ago|reply
But the respect should flow both ways here too. Treat your client and project professionally - answer calls, answer emails, show up to meetings when you say you will, etc. It's amazing how many people don't do those sorts of things. Really. I'm forever amazed at how low the professionalism bar is in our industry.
Having a higher bill rate allows you a bit of negotiating room if you need it - easier to come down from $150/hour to, say, $125/hour if need be. It's easier to comp a meeting to someone, or not always invoice for travel time. I've got colleagues billing $40/hr, and asking "should I bill for travel time to the meeting? How about the drive back home?" The idea of getting on a plane and flying to a client meeting, and getting a hotel, on their own dime, is outside their experience. If you're charing $150/hr, it's not unreasonable thing to do, ime. Even if you get reimbursed later, you've got cushion to float that for a few weeks - you're not living check to check.
IMO, the $200/hr dev is far more adept at servicing the non-technical aspects of the project - professionalism, people skills, project management, setting expectations, etc - or they hire people who are (agents, like in this article).
[+] [-] llamataboot|11 years ago|reply
[+] [-] jules|11 years ago|reply
1. The average developer is bad. Really bad. You can easily work 4 times as fast and produce code that's much shorter and more maintainable.
2. The $200/hr developer gets paid according to the value he provides. It's not hard to provide that value if you work on the right stuff, even for an average developer. Remember that Apple has $460000 in profits per employee per year (and that includes all employees), which already translates into $200+/hr. When you provide a service that costs $200 but makes the company $1000, they'll happily accept that. If you frame it without that reference $1000 then you just sound like a very expensive code monkey.
[+] [-] lifeisstillgood|11 years ago|reply
Perceived value is the most common - no-one gets promoted on their past performance only on their expected performance. And so the difference between 50/hr and 200/hr is
Please note that 200/hr is not 10x 50/hr. Either we are comparing top coders to minimum wage coders - of which I suspect there are few if any (in each "locale" not globally) or we are actually capping top coders - this is very likely the explanation - to get to 500/hr or 5000/day or ~1million/year you need to be looking at equity level compensation. And that's a different issue.
Anyway where was I ? Yeah perceived value - this can always go up - but at a certain point you are no longer discussing per hour rates but project total rates and soon after the value becomes equity (I guess at around 1% o total perceived value)
And the time to have that conversation between hourly rate, project and equity? That depends on the cluefulness of management
I will suggest that climbing that compensation ladder from hourly rate to weekly rate to project rate to equity is a focus on understandin business problems, and how tech can solve them, understanding team and coordination problems and selling the business solution.
[+] [-] tptacek|11 years ago|reply
So, standard market rate?
[+] [-] trose|11 years ago|reply
[+] [-] ap22213|11 years ago|reply
[+] [-] gregjor|11 years ago|reply
I would think that people hiring would like potential hires to be unrepresented. An un-represented developer is going to be cheaper. (chrisbennet)
Price is just one factor. If I charge twice as much as someone else but I can solve the customer's problem in one-fourth the time, the customer saves money. Customers are usually focused on solving business problems within their budget and schedule, not just on hourly rates.
It's not about the technology. It never has been. You're number one mission whenever you get a contract is to understand the business and figure out how you can get them making more money. (aantix)
Almost exactly right. It's not always about making more money, though; it may just be to figure out how to make their software do what it is supposed to do. Too many job postings and too many résumés list technologies without addressing business needs or experience. For me, 10X has been good at getting both sides to talk about and describe business requirements and setting clear deliverables and goals.
Boy. As someone who actually runs a contracting + project agency, that looks to be of an approximately similar size as 10x (at least before this was published), this was lifting-cars-painful to read - not just because they have PR and I don't, but because they (Solomon and Blumberg) _are the inefficiencies they are pretending to eliminate_. (scottru)
The New Yorker article was not an exhaustive description of how 10X works or who does what. Most of my interaction with 10X is with Michael Solomon, so to say he isn't adding any value is just not understanding what he does. Everyone at 10X is adding value for me, and the several 10X customers I work for or have worked for have without exception said only good things about 10X Management. In my experience most projects go wrong due to miscommunication and conflicting expectations. 10X, and specifically Michael, are good at heading those things off before they become problems, and working out solutions that are acceptable to both sides.
Yes, 10X has had some great PR. No, they aren't the only good freelancer agency or consulting firm. I've worked for quite a few placement/consulting firms and with many recruiters in my career (35+ years) and for the work I do now and the life I want to live 10X is a great fit. It may not be the right fit for every client (freelancer) or customer, and it may not be the way to go if you want to try to make millions at a startup.
A few years ago I decided to concentrate on stalled projects and broken code, the almost-working or somewhat broken stuff left behind when developers fall out with their customer and stop answering their emails. My customers are mostly smaller businesses and non-profits, without the need or resources for their own IT staff, and without the sex appeal of Facebook or Twitter. They have real business problems to solve, they can't throw everything away and start over, and they aren't qualified to recruit and hire technical staff. I found plenty of this work on my own, but when I decided to travel and freelance remotely I worried about finding customers and easing their fears about hiring someone living overseas. 10X has been a good fit for me -- they bring in plenty of customers, they have clients with every technical skill you can think of when I need help, and they are a real US-based company that can assure customers I will deliver no matter where I happen to be. They have also negotiated better rates and more useful contracts that I was doing on my own.
[+] [-] 300bps|11 years ago|reply
you’re talking a hundred and fifty to two hundred and fifty dollars an hour
Do "rockstar programmers" really work so cheaply? Crappy attorneys make that much and good attorneys generally start their billing around $350 per hour.
I don't have an agent and even though I work full time at an investment bank, I find all the side programming work I want @ $150-$200 per hour. In the past four years I've averaged 18 hours per week from side work.
Even I'm moving away from hourly pricing to value based pricing though. I would think this is where an agent would provide the most value. Evaluate the project, determine a the project's NPV and then base the pricing on a percentage of the NPV.
Envisioning agents like outlined in the article - they seem little different than high-end technology shops that provide bodies.
[+] [-] mgkimsal|11 years ago|reply
Price is just one factor. If I charge twice as much as someone else but I can solve the customer's problem in one-fourth the time, the customer saves money. Customers are usually focused on solving business problems within their budget and schedule, not just on hourly rates."
True, and as a freelancer this is an argument I make as well. But something I've noticed is that the client doesn't talk/work/think any faster. It still takes them an hour in a meeting to get their points across. It still takes us 3 hours to review key issues together. Anything that is synchronous time is throttled to the slowest person, so the "I'm 5x faster than someone else" isn't the slam dunk it should be.
And there's still a stigma with some people about high priced consultants, when they know they can get it 'cheaper' somewhere else.
A friend of mine is managing a project on behalf of his client. He's been dealing with offshore (India I think, not sure) devs for months. I built a prototype of a tool, based on chatting with him, in under 30 minutes. The tool did more than his offshore people were able to do after days of talking to them, and days of trying. He was a bit ... taken aback. He went to his client and said "we need to bring this guy on to the project to handle some of this stuff". My hourly rate is 8x when they're paying the offshore people, the client balked, and it didn't happen.
Ignorant short-sighted client? Probably, but this still happens.
My friend was more than a bit shocked, but I wasn't. The project owners essentially have a cheap team of playthings to keep building whatever ideas pop in to their head, whim changes, etc., and the cost of changing their mind and changing ideas is low. At least, they think it's low. When you've not worked with developers who've actually built the core plumbing of all the stuff you're trying to build before, you really have no idea if "functionality x" should take 2 hours, 2 days or 2 weeks.
[+] [-] jnbiche|11 years ago|reply
That sounds like a good niche, but I've been cautious about taking these kinds of projects. Often, there's a good reason that goes beyond just "bad developers" that explains why the project is unfinished: abusive customers, grossly unrealistic expectations, unpaid bills.
For this reason (and after a couple of very bad experiences), I've avoided this kind of client categorically.
So is 10X able to screen out these kinds of disaster clients for you?
[+] [-] acconrad|11 years ago|reply
Every time I see one of these articles and subsequent comments, I feel terrible about myself. As a salaried employee I (thought I was, at least) doing well, but then I read things like this and I'm wondering what the hell I'm doing wrong not making $500k/year. I mean is the difference really that stark? Are all of us salaried employees just suckers? I seriously can't tell if a $50-75+/hr salaried employee is doing a lot better/worse than the $150-200/hr freelancers.
What am I missing?
[+] [-] altay|11 years ago|reply
Re: the praise for Michael Solomon, for the record, I (the technical partner at 10x) was originally very wary about starting this company with non-technical cofounders... but, at this point, the value they add to our clients and to our business is absolutely undeniable. Michael and Rishon are world-class advocates for talent.
Btw, you all can learn more about Greg (the parent commenter) in last week's Mashable profile of nomadic coders -- http://mashable.com/2014/11/09/digital-nomads/ -- and at his excellent blog, http://typicalprogrammer.com !
[+] [-] vendakka|11 years ago|reply
Seen in this light, the comments from Chris Fry and Sam Altman make sense. If you're looking for employment, have a very good resume and a good network you might not need an agent. However, they don't seem to be considering the case of freelancers who need to spend a large amount of time finding clients.
Given that I haven't worked as a freelancer this is something I know little to nothing about. Hence the question.
Cheers and all the best with your work!
[+] [-] tjbiddle|11 years ago|reply
[+] [-] michaelochurch|11 years ago|reply
[+] [-] fecak|11 years ago|reply
This isn't new, but using the term 'agent' makes it sound more appealing to all sides. The consultant can say "I have an agent", and the hiring company feels that the level of talent should be higher from an agency than from your everyday recruiting firm. If the talent is vetted better, it could be.
Where the concept of agents gets much more interesting is when discussing those in salaried/permanent hire situations. Consultants are generally willing to cede 15% or so of rate in order to use a broker/agent/recruiter's services to find gigs. But will someone seeking a salaried employment role (a 150K software engineering job) pay an agent 5%/10%/15% of their salary in order to find a permanent position?
Because most of the tech population works in salaried positions, this is the real question. Independent consultants make up a relatively small portion of the industry, yet this 'agent' conversation really only applies to them at this point.
I like the agent concept as it aligns the incentives of the recruiter/agent and candidate much more clearly, as opposed to the current recruiter model where the recruiter is typically considered to be more aligned with the hiring firm. (The real estate agent argument comes up here).
In this case, the 'agent' model is mostly just a rebranding of what we currently have in place. If this ever hit the permanent/salaried job market, that will be a bigger story.
[+] [-] skrebbel|11 years ago|reply
[+] [-] eroo|11 years ago|reply
Even recognizing that the current hiring model has major inefficiencies, it's hard to not see this as awfully ironic.
>>"part of our goal is to de-risk freelancing and make it more viable. [...] She also appreciated that they had been vetted for interpersonal skills. At one point, they had to speak directly with the health-care company’s New York offices. 'They were good,' she said. 'And it wasn’t embarrassing to let them out of their cave.'"
The value proposition of the agent, pushing both technical and personal professionalism of candidates, should be addressable through a reputational system that doesn't take 15% and require ad hoc negotiations. It would, however, have to be complex enough to address how well certain talent is at addressing specific projects. How much of that is a lack of proper metrics and how much is the hiring party's inability to frame their needs?
[+] [-] _pmf_|11 years ago|reply
[+] [-] hkarthik|11 years ago|reply
Hire a few rockstars, belt out a hit with hockey stick growth, watch it flame out or lose interest over time, and then watch the rockstars move onto their next project.
What about the founders who put their heart and souls into building a real sustainable business?
What about the customers who took the chance on an unknown solution and may have become dependent on it?
What about the developers that might have worked with the rockstars, but are less interested in moving on and more interested in continuing to build great products?
I can see why a lot of talented folks got jaded by this industry in the last bubble. And I think it's clearly happening again.
[+] [-] scottru|11 years ago|reply
Let's take a few parts of the article:
>>"The three partners have separate roles. Blumberg handles his and Solomon’s eleven remaining music and entertainment clients, and takes care of back-office matters: “Accounting, invoicing, collection, payouts. Everything that’s the bane of most people’s existence.” Guvench vets new talent. Potential clients have to fill out a questionnaire that one programmer compared to “the most complicated dating Web site ever.” Then Guvench and Solomon conduct interviews, to screen for communication skills. (I heard one potential client say, during a meeting in Solomon’s office, “We don’t want people who just write code and drool.”) Guvench also does code reviews—testing Web sites that aspiring clients have built, and reviewing the programs they’ve written."
So... --Blumberg isn't working on the business at all; --Solomon's work isn't even described (except "conducting interviews for communication skills").
So there's one person, Guvench, an ex-engineer, who's actually doing the technical vetting - i.e. 100% of the value so far is coming from one guy.
OK, then maybe the others are selling? Nope.
>>"10x technologists are working with a variety of customers: Live Nation, a virtual-reality startup, and an N.B.A. player who has an idea for a social-messaging app. Solomon admitted, however, that this list is somewhat random—it consists mostly of people who found 10x through Google, or whom he or his clients know personally. He has hired a salesman, to pitch 10x to companies."
OK, so you're closing PR-driven leads and your friends in the entertainment business? That's your sales pipeline?
I know a number of agencies with two or three partners running the organization. I don't know a single one of those where there isn't somebody pounding the pavement, hustling, finding clients - and who know the difference between a long-term partner and a sports star with an "idea for a social-messaging app." (We _all_ hear about those.)
The other value they're talking about is in the negotiation process. Hey, I'm totally willing to believe that a many-year entertainment agent is a better negotiator than I am, at least in the first-principles department. But this is not some magic skill in what is generally a well-defined and competitive market, and of course you're better at it when you deeply understand the technology and market, the BATNA for the client, etc. Those of us who actually understand the very small markets that one job description might meet are, in fact, pretty darned good at it too. For that matter, I've never told an engineer that you should work with us because we can get you a better deal than you can get for yourself, and if you're dealing with a client who understands the market (which said NBA player may not), that's pure hokum. (P.S. plenty of people on HN provide that coaching for free all day long.)
It's ok that the author doesn't really understand this market, and so the competitors she mentions aren't really competitors at all - they're all focused on full-time hiring. I guess it's also OK that the New Yorker's fact-checking department didn't discover that there's no such programming language as "THP" - that should be "PHP." (Maybe it's just a typo.)
But to let the reader believe that this approach represents the best this market has to offer - well, I guess that's just really, really great PR. Back to work.
(Added later: I realized I commented on these folks 1.5 years ago at https://news.ycombinator.com/item?id=5527610. I was feeling nicer then? Maybe? It looks like the participant in that HN thread was the partner who's clearly adding value.)
[+] [-] mathattack|11 years ago|reply
How are these agents any different than other contracting firms, other than their supposed access to the best?
[+] [-] 3rd3|11 years ago|reply
[+] [-] sireat|11 years ago|reply
Hey I do all these best practices, doesn't everybody else?
Then you return back to reality of being a lazy 0.1xer and realize that there is a great deal unwritten and glossed over in these kind of general interest pieces.
[+] [-] hackdays|11 years ago|reply
There are lots of areas in life where the cost of acquiring a quality product/service is clearly communicated. Salaries haven't been one of them, which might change.
Don't confuse upfront salary negotiations with lack of motivation etc. This just brings more quality candidates to job markets, saves everyone a lot of time and lets you focus on other important parts of hiring process.
[+] [-] prairiedogg|11 years ago|reply
Relieved to hear that Todd!
[+] [-] ExpiredLink|11 years ago|reply
https://leanpub.com/leprechauns/read