Mike Lee on why he can charge $1,000/hr for iPhone development
le.mu.rs
le.mu.rs
Oh you’ve never heard of Brad Pitman? You’re not familiar with his work? But you are familiar with Brad Pitt’s work, right? After all, he’s an experienced actor and producer with not one, but two, Academy Award nominations and a portfolio full of household names.
Bzzzt. Horrible analogy. Brad Pitt isn't worth what he's worth because of his portfolio full of household names. He commands his rates because he is a household name. People will go see movies just because he's in them. He's not getting paid for talent, experience, or attractiveness. He's getting paid for his personal brand. That brand all but guarantees that the filmmakers will earn a handsome return on their investment.
You, however, are an iPhone app developer. App purchasers have never heard of you. They will not turn out in droves to buy an app just because you worked on it.
I think his conclusion is wrong but the analogy is good. It's unnecessary to be literal with the term "household." Most of the world's top scientists, lawyers, and bankers aren't household names, yet they can command extremely high levels of respect and, often, grants or income due to being a "household name" in their field.
I'm not arguing Mike is a "household name" amongst developers - he's not, IMHO - but there's no reason why a "household name" developer couldn't get the Brad Pitt treatment. John Carmack would have his arm bitten off if he were available at $1000/hr. Is Mike Lee the iPhone equivalent of John Carmack? No. If he were? His analogy seems OK to me.
Sidenote: It seems that people like this have to deal with a trough on their way up where a lot of judgment gets thrown their way for their outgoing manner. If they hit it big, though, that seems to be quickly forgotten and everyone loves them. We've seen it with all of the above. Those who fail to cross the trough, end up forgotten.
What a person says reveals aspects of who they are. The Internet is not some special place that is exempt from all normal expectations of conduct that otherwise hold in meatspace. Just as simply being part of a business enterprise does not exempt one from being judged as a human based on your behavior.
Also note I said "suspect" not "knew for certain" or anything as extreme or decisive as that. Important distinction, and one I chose intentionally when picking that word. :P :)
Indeed
(Especially since he wrote a few others about saving endangered species and homeless people.)
As long as no bunnies were made to cry during the production of a Tesla Roadster, I'm confident I wouldn't feel conflicted about driving one. :)
There are exceptions, of course - I guess if I was a surgeon and I would refuse to operate on somebody because they can't afford me, the ethics would be very questionable.
There's also the "all developers are the same, therefore commodity pricing is in effect" phenomenon which is annoying to encounter. And the "just tell me rate, because I know exactly how many hours this will take, and no other factor matters" phenomenon. Crazy stuff.
One good takeaway from the Lee article I had was that if you set a really high rate, even if you scare away a lot of people, all it takes is 1 client to agree to that, billing anywhere from 1 to a few hours in a given month, and you're in the holy "Ramen profitable" zone. Well, able to cover food and shelter anyway. But then you'll have tons of free time and energy leftover for other activities.
If Mike can just make one employer think that other people want to hire him, he can command these otherwise absurd rates. It's a sort-of mirror world.
Prestige, log-rolling, extended-Ponzi scheme. It's all representation chasing more representation.
Deleted comment
By claiming that he is charging a ridiculous per-hour rate, he is actually adding to this "stardom" :-).
Brad Pitt earns what he does because of the amount of money his movies bring in. If Mike Lee can bring in enough monies for his clients to recoup his exorbitant hourly rate, more power to him.
He should definitely tone down the ego and rhetoric a bit though.
If you are marketing to business people, it seems to be best to puff yourself up as much as possible. they eat that shit up, as far as I can tell. I bet his massive ego gets him some work.
When marketing to technical people, the opposite seems to be the case. In my experience, it's best to say "Oh, I'm nothing" and then proceed to show or do something pretty cool. Adding in a few words like 'perhaps' or "I believe" can make your message come across much more positively when dealing with the technically focused, and can do the opposite when dealing with the business focused.
(note, while "I think" or "some people believe" adds a touch of humility, "In my experience" can go either way. It can imply that you feel you have a great deal more experience in this area than the other people in the room, adding to confidence/arrogance, but it can also imply that what works for you might not work for others, making you seem less confrontational.)
This is one of the things I find interesting about hacker news; it seems to be populated by people who are halfway between those two worldviews.
Are you earning more / more successfully than him? No? Then why would you think your advice would be helpful?
You shouldn't conflate "what I like" with "what works."
Secondly, one need not be in a better position to make value judgements. I don't necessarily need to have ever played a game of basketball to tell you that Steve Nash is a better free throw shooter than Dennis Rodman. Just like I can tell you that being an asshole may discourage potential clients (i.e. readers).
If you think it's just me that feels this way, I invite you to read the rest of the comments in this thread.
Furthermore, I never qualified my statements to be indicative of what I like or what would work globally.
Troll better please.
There was some original core non-meta reason he became famous.
I suspect the reason had to do with some combination of the following: women find him attractive, men admire him and/or want to be as cool as him, PLUS arguably he's actually a pretty decent actor given the right role/script.
I believe so.
On the other hand, this is great PR for software engineers: a couple more posts like this, and I'll be able to double my rate and still seem like a deal by comparison :)
Engineers need to learn to be comfortable with business. Part of that is professionalism, which cuts against talking rates too loudly. Part of it is being uttetly unembarrassed to say that, yes, you are priced at what the market will bear and the market will bear an awful lot.
In other words, if you're a good iPhone developer, you can also raise your rates while still giving your customers a discount compared to that Mike Lee guy.
However, I'm not going to hire this guy not because he is too expensive, but because he has no problem branding himself as a douche.
Mike Lee's blog title is "motherfucker". From that alone you can derive what type of person you're about to do business with. Theres no question his experience and skills are incredible. Fact of the matter is there are other successful app developers who likely have a resume that is comparable.
Think of it like dating. Would you date the hottest girl if she had a shitty personality? Maybe :)
Seems pretty damned shallow to me.
Note that I'm not saying anything about what conclusion I draw from that fact, just that it's a fact.
It's like judging someone's character by how they dress (e.g. suit == good, dependable etc).
http://www.atomicwang.org/motherfucker/Index/Entries/2007/9/...
Don't be too quick to judge character based on what is clearly a marketing blog post.
* I have never met Zed * Like many others I have heard all sorts of stories about him * People are capable of change * In my recent experience Zed has always seemed civil, thoughtful and passionate about code
He may have been a jerk in the past, I can't speak to that, but he seems like a decent guy now.
Yours, the anti-pigeonholing squad
Zed, like so many other successful writers (e.g. Mark Twain, Churchill, every famous playwright people quote on their blogs) has made a career out of being a sharp-witted asshole in print.
I exchanged a few technical emails with him when he was just getting started on Mongrel (v1) and his replies were always friendly (as well as being relevant).
He's put a lot of code out there and the parts that I have used have been great.
Remember when Bear Stearns fell? He was leading some Rails project there at the time (IIRC) and he used his hacker media fame to get his team members new jobs before himself. No idea how that panned out, but that doesn't exactly sound like asshole behavior to me.
Yes I know he puts out rants from time to time. They make for fun and educational reading. As far as I'm concerned a good cathartic rant every now and again speaks for a person, though I wouldn't recommend everybody to go out and put it all online. (It seems to have worked wonders for Zed, though :).
You wanna know why? I know his rate without having to fill out a goddamn "contact me" form and his portfolio signals that he's worth the rate. Now, I have no idea how many hours it would take to build our app, but you're damn well sure I'm going to ask him to tell me.
You not making as much? You hurting for clients? Well, maybe you should publish a rate and have an up-to-date portfolio on your website, not on Carbonmade or Forrst or Dribbble or wherever the hell the cool kids are these days.
Cause I'll tell you: I've got cash to burn and I'm in the market for great developers and designers right now, and they're impossible to find, vet, and hire.
Anyway, I'm not denying Mike's claim to fame, and other than some of his nuttier blog posts/tweets he seems like a reasonable guy the few times I've met him in passing. But I'd want to do a little more research into a person's background before jumping on the bandwagon and assuming what he's done in the past is going to help you towards whatever goal you might have. And this is why I call his portfolio vague. While it might work for the kind of work he's looking to do right now because his expertise as being part of the teams behind so many hits is exactly what he's selling, I'm not about to work with/hire someone as an actual developer (and not just consulting on The Big Picture of things) without more info on what exactly he did on those apps. (Though I'm sure if he ever did consider doing that that he'll kindly provide it to interested parties.)
BTW, his $1k/hr rate blog post was originally about his plans to travel worldwide and to use limited consulting hours at that rate to help fund it. I don't think he's the one you're looking for to send your first email to if you need a talented developer to work longer term. If you are looking for long term work, @schwa, the guy that wrote that tweet that Mike screenshotted and included at the top of this blog post, maintains a list of experienced developers looking for work (http://toxicsoftware.com/i-wouldnt-hire-an-iphone-developer-...). Big Nerd Ranch, the company founded by Aaron Hillegass, the person that wrote the book on Cocoa Programming, also does consulting (http://www.bignerdranch.com/consulting). Iconfactory does UI/design work (http://iconfactory.com/design). The list goes on and on.
This is a signal from the market that you're not charging enough. What if you could get fewer emails and calls, work half as much, and make more money?
Interestingly enough, most of the criticism I've read about Mike and this whole thing from other iPhone devs and such is not focusing around the rate. They're more focused on whether or not he'd actually be able to deliver something worth justifying that rate. Alas, that question will only be answered by whether or not Mike is successful in securing enough hours with clients that will pay that.
This effect of price anchoring has been demonstrated a lot and it works, sadly.
What I've heard is Mike thought Tap Tap was too low brow and that by focusing on that app to the exclusion of their other apps at the time (Twitterific and FriendBook) they were betraying his vision for the company.
After he expressed his opinion about this he was asked to leave.
Still takes forever to load, but you can speed up the process using Readability.
You can write to my former coworkers in Apple’s
Developer Technical Support, and they will point you
toward a solution within three days. Or you can just
call me and have it ready to resubmit by morning.
Is there a scenario where I'm dinged for $24k in a day while he's mainlining coffee & trying to debug my app?
Until then, I imagine he's going to get four or five clients a year, bill them 50,000 each, and laugh his way around Costa Rica.
http://journal.neilgaiman.com/2010/05/political-football-in-...
Similarly, if Mike is entertaining a lot of contracting requests, a surefire way to filter out the wheat from the chaff is to set a high contracting fee rate.
I'd venture the guess the number is very small or perhaps even zero.
At that rate he'd burn through a reasonable budget for an iPhone app within weeks. And I mean the entire budget, which would normally include graphics design and backend work.
I have no doubts he could get an app off the ground faster than most teams - given he lives up to his bold claims, which is entirely possible.
But as with every software project that's only a very small part of the story. The elephant in the room is maintenance and ongoing development.
If you have $500k and were to launch a business around an iPhone app what would you rather do? Give most of that money to a single person, get your app in 8 weeks and call it a day?
Or would you rather hire a team, pay significantly less for the initial launch, get it in perhaps 16 weeks, but then still have money in the bank and a committed team for further steps?
Hiring this guy at that rate just seems like a bad business decision for pretty much any project. If anyone does then, well, kudos to him for parting the dumb from their money.
You hire him to give advice for an hour or two so you get pointed in the right direction, or review some code, or fix one bug your team is stuck on, or he can help you find the right cheaper person to hire.
I have worked with contractors from eastern europe that work an entire week for the amount he asks for an hour. And despite the cliches their performance was absolutely okay. Not mindblowing, but as solid as it gets within the constraints of the iPhone platform. It's not exactly rocket science.
I'm entirely okay with people charging what they're worth. But I don't believe someone can be worth an order of magnitude above average in iPhone-land.
(Note that "ten times as productive" depends a lot on what you are doing. I concur that one of these "wrap an RSS feed" apps probably does not significantly benefit from hiring a truly excellent coder versus a competent one.)
Here is Steve Jobs on designer Paul Rand, who Jobs wooed from IBM to have him design the NeXT logo: http://www.youtube.com/watch?v=xb8idEf-Iak
So ask yourself, would Steve Jobs think the guy who wrote this post was worth the money he was asking?
Apple has an approval process reminiscent of a third world beaurocracy, decisions are unpredictable, timelines unknown and the entire process is completely opaque to the outsider. Around such systems you often find people with good connections offering their services in ensuring proper treatment, for a handsome fee.
I'm surprised he didn't make that point in the article; it certainly is related to why he can charge so much...
It's a good argument to cut top marginal tax rate so that he has an incentive to take more work than he's willing to at $500/hr after taxes (assuming he's in the US).
In this economy we need more money being spent. When things are doing well again, you could try to make a case for the rich being richer, but it's a strange cause to take up.
That's just federal, not including state and city income taxes.
(Why they have to use "Macromedia Flash Paper " to show a list of numbers is beyond me.)
Economic activity is not economic productivity. Spending money doesn't make us richer. Producing does.
Encouraging people to work more would help the economy; encouraging to people to spend more would only help to the extent that it stimulates people to produce stuff for sale.
How are people to work more when there's not money to pay them?
It is your view that people can't produce things of value unless there's enough money being spent that is truly bizarre. New markets can be created. Value drives circulation of money, not vice versa. Money is just pieces of paper or numbers in a computer for the purpose of conveniently facilitating trade.
Ultimately I'm going to produce value in order to use it myself, for fun, or in some way get something useful for it (i.e., I don't want pieces of paper -- those are just temporary -- I want someone to make something useful for me like an iPhone. The more useful products there are, the more I will want to work hard, and the more money I will spend).
Libertarians are here, sure. However, I'd love to see how many people would really march in lockstep with doctrinaire libertarianism.
I'm not ignorant of libertarian views. Nor, am I unused to tantrums such as your own. I'll leave the vocabulary boot camps to you and Richard Stallman. I have that freedom.
>This is also why the Internet creates economic value, because it's able to more efficiently pair producers and consumers.
I would say that is one reason why but I whole heartily agree.
Sure it does. If I buy good A for $X, I must value having good A a least _slightly_ more than having $X in my pocket. Similarly, the seller values $X in his pocket more than having good A in his inventory.
Hence, we have completed a transaction where the wealth of both parties has increased. This is the essence of why capitalism works.
People who say "In this economy we need more money being spent" are not capitalists advocating efficient trade, they're Keynesians or something.
If someone thought he would benefit from a purchase, he would do it without encouragement. So what meaning can the encouragement to spend have...?
Conceivably it could mean (but this guy did not mean) that there's lower hanging fruit to be found by looking for more trades that should happen but aren't than by producing more. But it's far from obvious how/why that would be true "in this economy". In economic slowdowns, you need to make more stuff, not divvy up the too-little stuff more perfectly. It's when the economy is booming and production is very high that there might more plausibly be a neglect of the efficiency of trading.
Keynesians are capitalists and I've never heard of them being opposed to efficient trade.
One thing that inspires people to spend money is feeling that they won't be laid off. People do not have that feeling right now. Should we just wait for that to happen? Producing while people aren't buying leads to inventory gluts which leads to deflation.
Classic. Moral claims don't get you too far. I could start going on about gentiles eating shellfish, but I'm one of those gentiles.
>They do by producing
Sometimes. These things are complicated. But if you've already got it figured out, no need to discuss it I guess.
I think it's immoral to steal and kill etc., but that won't get me far arguing with you I guess?
> These things are complicated. But if you've already got it figured out, no need to discuss it I guess.
It's not just something I have figured out, there are economists that have thought about it. If you can explain how societies get wealthy by consuming more and producing less I would like to know.
These things are complicated. Wealth can be generated in a variety to ways. The Phoenicians were quite wealthy for their time for establishing a trade network in the Mediterranean.
Apple produces virtually nothing (okay they make software but lets pretend for a minute that we are talking about the hardware. People do rave about the aesthetics of the devices). However, they have plenty of 'wealth' to capture than the manufacturers do for their charging price. They having marketing savvy and they are able to get large numbers of people excited about what they think of.
Facilitating transactions and applying knowledge are not exactly producing but doing these tasks can provide a decent living. If you want to extend 'producing' to mean anything that makes people money, your statement could be a truism but it seems you are using produce in a more traditional sense.
"The Pie Fallacy
A surprising number of people retain from childhood the idea that there is a fixed amount of wealth in the world. There is, in any normal family, a fixed amount of money at any moment. But that's not the same thing.
When wealth is talked about in this context, it is often described as a pie. "You can't make the pie larger," say politicians. When you're talking about the amount of money in one family's bank account, or the amount available to a government from one year's tax revenue, this is true. If one person gets more, someone else has to get less.
I can remember believing, as a child, that if a few rich people had all the money, it left less for everyone else. Many people seem to continue to believe something like this well into adulthood. This fallacy is usually there in the background when you hear someone talking about how x percent of the population have y percent of the wealth. If you plan to start a startup, then whether you realize it or not, you're planning to disprove the Pie Fallacy.
What leads people astray here is the abstraction of money. Money is not wealth. It's just something we use to move wealth around. So although there may be, in certain specific moments (like your family, this month) a fixed amount of money available to trade with other people for things you want, there is not a fixed amount of wealth in the world. You can make more wealth. Wealth has been getting created and destroyed (but on balance, created) for all of human history.
Suppose you own a beat-up old car. Instead of sitting on your butt next summer, you could spend the time restoring your car to pristine condition. In doing so you create wealth. The world is-- and you specifically are-- one pristine old car the richer. And not just in some metaphorical way. If you sell your car, you'll get more for it.
In restoring your old car you have made yourself richer. You haven't made anyone else poorer. So there is obviously not a fixed pie. And in fact, when you look at it this way, you wonder why anyone would think there was. [5]
Kids know, without knowing they know, that they can create wealth. If you need to give someone a present and don't have any money, you make one. But kids are so bad at making things that they consider home-made presents to be a distinct, inferior, sort of thing to store-bought ones-- a mere expression of the proverbial thought that counts. And indeed, the lumpy ashtrays we made for our parents did not have much of a resale market."
http://www.paulgraham.com/wealth.html
Taxes on wealth creation discourages it. (It may still, at least in the short term, be good for revenue)*
This is a straw man. I cannot think of anyone (and I'd love to see you find a progressive or anyone) that would say that economics is a zero sum game.
A lot of this community did form around pg's essays. However, it's a little sickening to think that anyone would take them as gospel. Since the early days of reddit and hn these things have been vigorously debated. pg is at his best when talking about start ups and I think the way he conveys how founders should think is good stuff. However, please do not expect, or treat his writing, like he will win a nobel prize in economics.
Well, here's a somewhat relevant quote from someone who did win a Nobel Prize in economics:
"Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another." ~Milton Friedman
Sounds familiar, no? And while you might not be able to find someone who says that economics is a zero sum game, you can't throw a rock in any direction without hitting someone who is pushing an agenda or ideology that acts as if it is.
>Milton Friedman played three roles in the intellectual life of the twentieth century. There was Friedman the economist’s economist, who wrote technical, more or less apolitical analyses of consumer behavior and inflation. There was Friedman the policy entrepreneur, who spent decades campaigning on behalf of the policy known as monetarism—finally seeing the Federal Reserve and the Bank of England adopt his doctrine at the end of the 1970s, only to abandon it as unworkable a few years later. Finally, there was Friedman the ideologue, the great popularizer of free-market doctrine.
I'd have to suggest that this statement came from the 3rd Friedman. There is sort of an irony here. Friedman saw monetary policy as a zero sum game. I think that was a fallacy.
Once you figure out the math we can move on to psychology.
When some biz guy or PM has his back against the wall with a horrible, failing project that just won't work, calling in the 1k an hour iPhone guy won't sound like a bad idea.
I think the Dunning–Kruger effect/paper is one the most abusively reposted things on HN and Reddit.
adjective
1 courteous, kind, and pleasant : smiling and gracious in defeat.
* pleasantly indulgent, esp. toward an inferior.
* elegant and tasteful, esp. as exhibiting wealth or high social status
Instead, how about instead we start doing something like this:
summary: <whatever>
So can I, or so can any man; but will clients come when he advertises it?
But maybe his pricing is predicated on the desire to not work 40 hour weeks?
1. seek $1000/hour and actually end up billing 40+ hrs/week at that rate: WIN all the way to the bank
2. seek $1000/hour, but then end up billing a few hours/month at that rate: still WIN because you can cover your cost of living and still have lots of free time and energy for other things
huh?
if he has some experience other than coding that makes him so fit, he should mention it, but this is pure bravado, and that doesn't sit well with me
I can't see any technical reason or understand why one would penalize NoScript users (like me).
People, if you're here on HN, you spend a lot of time devoted to reading about the importance of confidence. That it's the entrepreneur's stock in trade. Hell, maybe you even write your own blog posts about the importance of confidence & post them here, hoping for attention.
But what do you do when the chips are down and you come across somebody who truly embodies them? Clatter your claws and try to pull them back in:
"HA HA" "Oh so he's like Brad Pitt now?" "Wow, 2 app store hits, whatever" "Hope he likes having no clients!" "I would never hire him" "DOUCHE!" "What a jerk" "I'm gonna judge him just by this essay and assume that he has none of the actual qualifications or experience he mentions"
The power of belief-action congruity at work. Or not.
If you want to be successful, and you believe having confidence is part of that, then you better figure out of your words and your deeds line up. Because if they don't, you are never going to get what _you_ want.
Now, I've never charged $1k/hr... but almost. And if you return true business value, that is totally a reasonable number. Remember - it's all about the value returned. That's another HN belief, isn't it?
When I returned to consulting after two years in traditional employment, after many years of lackluster freelancing, I raised my rates from $80 to $200 to $250 to $300 to $400 and beyond. My last project came damn close to $1k/hr after all said & done.
And you know what? My clients loved it. They kept coming back for more. They loved my work and thought the prices were reasonable, because there's nobody out there doing what I do in that price point.
(My only true competition in that space was Stamen - a mid-sized agency compared to little old me and my husband, an intimate 2-person team. Who competes with Mike Lee on what he offers in that blog post?)
I would keep raising my rates and I would have started talking about it, too, except that I don't want to consult any more. The more you charge, the more people need you, the harder it is to say no to projects that promise to put a quick $40k in your pocket.
The moral of the story is: most freelancers are lazy, unprofessional, with their interests completely divided, and have little to no real-life experience to back up their years spent coding in the basement. They undercharge, take on too much, and then produce merely mediocre work. They have no true value proposition other than a body that types the special arcane symbols, and asks the client the occasional question. They have no connections.
Believe it or not, there are many companies out there who will gladly pay for an experience that is entirely the opposite of that.