Hacker Trade - Applying YC's philosophy to freelance contracting | Hacker News Reader

Hacker Trade - Applying YC's philosophy to freelance contracting

hackertrade.com

79 pointsantoviaque41 comments

I don't see what this has to do with YC or how it is at all similar apart from trying to trade on the name.

What stops this turning into another oDesk type site?

Edit: I didn't read the part about the matchmaking.

Although if you are trying to appeal to a higher calibre of clients the website design probably needs to change, go with a more "prestige" feel rather than pictures of people slumped with laptops in coffeeshops.

Also ditch the "hacker" branding, this has too many wrong implications in the mainstream.

Definitely - this is actually on purpose for the first phase, where we would rather focus on a small number of clients and hackers for whom it goes well, rather than trying to attract everyone who has something to outsource.

But, agreed, if we want to go beyond the types of clients who aren't scared of the word "hacker", we'll probably have to create a separate site for them.

I have a feeling that 'types of clients who aren't scared of the word "hacker"' will be most of your clients.

I'd say that depends on whether you want to become another oDesk. Their clients are certainly afraid of hackers.

If pg were looking to contract out work, he'd say something like http://www.paulgraham.com/gh.html

I do agree that at some point entrepreneurial "hackers" and established software companies look at things differently, and should engage each other productively in finding the right balance.

tl;dr Hackers could do better at being socially adept.

It really depends how far you can go with redefining a word.

This will be especially difficult because I imagine if you asked 10 HN readers what their personal definition of a "hacker" was you would probably get 10 different definitions.

If you are trying to imply a "hacker" as somebody who is in someway superior to the average software dev then what criteria would you put in place?

What is to stop any kid who read a bunch of PHP tutorials and can put together a simple blog app from calling him/herself a hacker?

I don't know for sure, but I would suspect that Facebook's description of "The Hacker Way" when they filed their IPO helped a bit to give it a positive connotation.

I don't have many customers who'd want to pay good consulting money to get hacking / hackers / hacks, to put together work that was hacked together, a hacky job.

Unless this is a site where you get bleeding edge proof of concepts built?

The word hack for a wider audience means someone who can't cut it.

Where am I coming from? Dictionary.com seems to sum up this one angle.

hack

1. a person, as an artist or writer, who exploits, for money, his or her creative ability or training in the production of dull, unimaginative, and trite work; one who produces banal and mediocre work in the hope of gaining commercial success in the arts: As a painter, he was little more than a hack.

2. a professional who renounces or surrenders individual independence, integrity, belief, etc., in return for money or other reward in the performance of a task normally thought of as involving a strong personal commitment: a political hack.

3. a writer who works on the staff of a publisher at a dull or routine task; someone who works as a literary drudge: He was one among the many hacks on Grub Street.

The other, less known, positive, meaning of hack* is only, largely known to the tech scene. Unless they are your market exclusively..

0.02 :)

The feedback we've got around us and the posts on this thread, seem to agree on the fact that this is a clear branding issue, so we may reconsider our take on that one.

We preferred to start with something that would only try to appeal to clients who understand the meaning of "Hacker", as a sort of filter. And only introduce a different branding for clients later on, when we would want to extend the target audience. But it may be interesting to do some AB testing here, and see if we can get good clients without the Hacker branding too, from the start.

That could definitely be one way to go.

I'm not sure why you'd want to put effort into branding twice, though. Consulting is about a clear image and track record, it's hard enough to build and keep.

How will billing work for this on a practical level?

Let's say I've done a week's work, and I charge by the day. Do I sent an invoice to you guys, or directly to the client? Do you bill me for your 10% cut, or is that factored in to the price you quote to the client? Will, in fact, I end up with an invoice to pay to you guys?

UPDATE: I somehow missed the bit about payment guarantee on your website, but would still like to know how this works as far as the forms my company needs to send :)

You also need to consider the nightmare that is charging VAT in Europe. I'm based in Poland, and anyone I bill who is also based in Poland, consumer or business, gets charged VAT at 23%. If the client is based in another EU country, but is VAT registered, they're zero-rated. If the client is in the EU but is NOT VAT registered, I have to charge the 23% tax. Finally, for everyone else, it's zero-rated.

Now, I have no idea of the tax implications - if any - of the above when going through a third-party site such as Hacker Trade. Based of snippets I've read elsewhere (such as FastSpring's EU tax explanations on their website), I'm guessing that you might have to do some EU tax registration yourselves... but only if you're the one collecting money.

Interesting idea though, I've finally returned to full-time consulting and am building up my network, so this could be a real win for the likes of me :-)

We're still ironing out the details on that one, so take my answer with a grain of salt - it still needs to get confirmed by the accountant & the lawyer.

But, basically, it would likely be very similar to what you get on vworker for example - the client transfers the money into escrow, and get an invoice for it. The % cut of the platform is deducted from the amount put in escrow and transferred to the freelance. The % is taken into account for the quote, so that it's shared between the coder and the client.

And, yes, we've had to deal with European taxes too, so we're familiar with the tax mess. : ) I don't have all the details on that yet, but I'll post an update when we do.

In any case, if you're selected, we'll figure out the specifics of your situation, to make sure everything is by the book.

If you are calling yourself a freelancer, then you have the wrong mind-set. Treat your work like a real business. Brand your services. Whatever you do, don't call yourself a freelancer. You are missing out on the opportunity to present a much better image to your prospective clients.

Freelancer is bad, hacker is even worse. You might as well have thrown rock star and ninja on the front page as well.

Quote from the front page...

"Hackers can focus on code, and clients get peace of mind."

Sure, because these are the sorts of problems people who refer to themselves as freelancers or hackers have. If this service isn't taking care of marketing, accounting, budgeting, business strategy, etc. then the hackers can't just focus on code. If you need a service like this to give your clients peace of mind, then you probably shouldn't be doing client work.

If you guys really want to help connect people, then you should probably start by helping them get into the correct mind-set. Prospective clients aren't looking for hackers, they are looking for professionals.

ETA: This was a bit of a rant. So, I suppose I should offer something constructive. I think the service is fine, but I would change the message. I could see clients being turned off by the choice of wording. Also, you may want to provide different portals for clients and hackers / freelancers / ninja's / rock stars. The client doesn't care about all the benefits to the developer and doesn't need to see those details. Maybe a more simple "find talent" and "find work" page (like Elance) would be better?

Agreed on the message/positioning, as discussed in previous comments - we'll see if we can find a better branding, at least for the client side.

About learning to get the right mindset, we would definitely like to include people who are new to freelancing in the first batch - you're right in the fact that this is probably one of the most valuable aspects of our help for them, besides the matchmaking itself.

I'd like to hear more about your strategy for beating the cold-start problem. You'll need to ramp up both sides of your two-sided market to be of value to either side.

Yep, that one is tricky.

Our approach is to start really small - we only need a small number of hackers and clients to get started. This allows to be in a similar situation as an small agency - we don't need to match the audience of elance/vworker to make it work. The human/case by case approach requires more work for us, for a lower cut than what an agency would take, but with a different goal in mind for scaling.

We could actually have done the first batch by ourselves, with just clients and hackers that we know and are interested. But we thought it would work as a better validation to give a chance to HN readers to join - we're more likely to get a more diverse set of situations this way.

The advantage for those who will be in the first batch is the extra care and attention we'll dedicate on making it work for them. We'll all be learning from the experience - aside from guaranteeing a place on Hacker Trade in the future, it's also a good opportunity to shape what Hacker Trade will be, and ensure that you get what you need from it.

The biggest issue I have had with hiring freelance developers is cost.

Everyone, regardless of location and skill and type of request all seems to want ~$100/ hour.

From a tutor that I looked into to off shore developers.

I just am amazed that it seems like everyone thinks they should be making $200K per year.

The tutor though, at 100 per hour to be teach development really blew me away.

Deliverable-based consultants always have a high hourly rate, because they are rarely fully booked. A freelancer is often 50% or less utilized, especially if they do short engagements. So in reality, they are making ($100k-taxes-insurance-overhead) per year.

The whole point of hiring a consultant is to get someone who knows what he is doing to do specific work and leave. The alternative is paying an employee $40/hr to learn, do work and take care of overhead activities, and keep that employee around for an extended period.

Offshoring has overhead costs too -- depending on what you are doing, the "total cost of ownership" for an offshore developer may or may not justify taking that route.

Oddly, I've had exactly the opposite problem. It's difficult to find contracts in the $100-200 per day range. If I could find consistent, rewarding, challenging work, then I would gladly do it for standard pay. Unfortunately, I spend so much time finding contracts or getting burned by expanding scope or nonpayment, that I have to charge more just to survive.

Freelancing should pay at least the overtime rate of a typical developer. If someone is contemplating freelance work and makes $50,000 per year, than he or she should probably charge at least $37 per hour or else it makes more sense to work out an overtime arrangement with his or her current boss.

When we account for all of the downtime and having to eat so many losses (that are normally handled by an employer), I think that's how so many developers arrive at numbers of $75-125 per hour or more.

Hey Zack - freelancer here; if you want to chat about what you describe, get in touch (thibaut.barrere@gmail.com)!

There's no reason to get burned, maybe I can help you out a bit.

The tricky part is developer's qualification.

Task XXX

Noob at $50/hr * 20 hrs = $1'000

Pro at $150/hr * 2 hrs = $ 300

How do you guys plan to tackle deveoper's creds?

We look at past work publicly available - one of the first links we visit is the GitHub profile. We then take into account the demonstrated skills to evaluate the price asked.

Then, when we do the matching with clients, we take the qualification into account - does the project require high skills? What kind of developer does the client seem to be looking for? Would it work?

The key here is to acknowledge the difference between acquired skill, and ability to deliver - it's ok to be learning, as long as you're in habit of delivering.

"Our approach is to start really small"

Indeed. Starting in the beginning is a fine place to start. ;-)

So, 'b' is really small in y = mx + b. Now tell me about 'm'.

In other words, how will you grow?

Traditionally, there have been two types of organizations through which freelancers work when they can't find their own clients: (1) Body shops place "qualified" resources and take a cut of their rate. (2) Higher-end consulting organizations do project management and take on project-level delivery responsibilities.

Body shops tend to be easier to grow and cheaper. Project-managing groups tend to be harder to grow but with better rates.

What are your plans to move Hacker Trade beyond "really small" in this environment?

One of the lessons from our experience with remote freelance work is that it becomes much easier to work when:

1) The people who are working on the project (client and coder) are good and reasonable

2) When work is split up in short tasks/stories, allowing to always work on tasks of which the size can be reasonably estimated

3) The communication is well adapted to the medium, rather than a simple copy of what usually happens in an office

Although it sounds simple, in practice learning this is difficult, on both sides. We can help manually, as we are doing now, to learn ourselves what is the fastest way to get a new working relationship setup, and working.

For scaling, we think that that learning process can be made very efficient, and scale - you could probably describe our long term goal as to end up somewhere between the two models you're describing. Focusing on producing good matches that produces fruitful relationships, but maintaining enough support/advice to maintain a good level of safety.

A few things. (Disclosure: I'm a mobile dev/freelancer, been doing this own my own for a while with pretty good results)

1) I think the biggest issue is the cold-start problem discussed by another HNer below. Namely, while the copy sounds good and the coders in the photos seem trendy enough, do you actually have good clients? Selling promises about freelancing to either side plays to the ideal that we all want, but rarely does it work out that well. 2) How flexible are the payment / contractual terms? I usually see this as a negotiation with my clients which, if done successfully, improves the relationship. If there are disagreements about terms, is this service simply going to insist on the terms that benefit their interests? 3) Is the pre-project test work paid? What if I require at least some deposit on the overall project up-front? 4) Please don't spread misuse of the term hacker. You're trying to appeal to the coder-side of the demographic, but anyone serious should have no problem using a more professional term.

I'd consider signing up, but at this point it still does feel like another startup claiming to fix the problem with no guarantees of anything that different other than the best of intentions. No offense, but I've followed 2-3 companies like this so far and nothing's panned out anywhere near as well as traditional networking. I'm hopeful though, and definitely interested in hearing more about what you have to say.

1) Aside from the leads from our own network who have shown interest, we have got some good applications from clients already (even with the Hacker branding issue discussed below). So, even if we'll still have to go through the first batch to answer your question with a firm "yes", it's looking good.

Since we don't try to be big just yet, this is less of a concern for our first stage - if you get in, it's because we think we have a good match for you. Aside from the 5 minutes you would spend filling the application, you don't really have anything to lose to try.

2) Very flexible - if you and the client agree on something, we're willing to try it out. This is actually another reason for us to start small - to make sure that we can adapt quickly and match what works.

3) Yes, the test project is paid.

4) Duly noted - cf my answers on this topic below.

Good hackers don't need your services as badly as bad hackers do. If you focus on quality hackers, I think you'll need to drop your price.

Ten percent is reasonable if you provide a steady stream of work for hackers who don't have a clientbase. However, I have the impression that you're specifically trying to cater to gifted hackers, who presumably already have an existing clientbase or a robust network.

A lot of good hackers may have a good network and existing client base, but in our experience it's not always the case. You have good hackers who work in a cubicle because they don't want to tackle that part; hacker freelancers who don't want/like to do the necessary legwork to maintain a steady stream of clients...

Also, as mentioned below - even if you already have a good client base, applying allows you to extend your market - you can always evaluate the offers on a case per case basis, and see if the % cut is worth it. You get more options.

But you may have a point - it's quite possible that some client/hackers profiles will require less work from us than others.

Particularly right now. I can see using your service for the convenience factor, but I can't imagine a lot of companies or contractors being willing to accept a 10% surcharge on everything.

I'd consider making your costs more fixed if possible.

A few questions / comments (as a prospective client):

1. Do you have any thoughts or guidelines as to project size? Any lower or upper limits? (I sometimes have projects as small as a few hours' work for someone with the right background -- say, integrating with a particular tool or API. I would love a way to find skilled freelancers for this type of task. AnyFu sounds like it might be aiming at this, but they've been stuck in "we'll notify you as soon as [we're] ready" for a while now.

2. How is the project price determined? Direct negotiation between client and contractor? Do you get involved (at least to make suggestions)? Is price determined before or after the matchup is made?

3. It would be nice to have a general notion of what sorts of expertise your contractors have (collectively). For instance, are you recruiting designers? Frontend developers? Backend developers? What technologies are best represented? Before writing up a project proposal, it would be nice to have an idea of whether I have some chance of finding a good match.

1. Small tasks are much easier to handle in that context. But that doesn't exclude bigger projects - we'll just make sure it is split into smaller tasks (the usual sprint/stories methodology of SCRUM usually helps a lot here)

2. We start by asking both parties what is their price/budget. This allows us to do a first sanity check on both sides, and then we use that information, along with the project description, to see who could agree on a price. We discuss a potential match with both parties - if both agree to discuss, they get to discuss the final price together.

3. True, it would certainly be useful. We have a good core set of skill currently in web development, games, Python/PHP/Node/JS - but that doesn't take into account the many candidatures from HN exposure today. We haven't had time to process them properly yet, but the set of expertise is much larger already. I'd say that, unless your project is extremely specific, we can probably find a matching skill set for you.

According to http://jeffwhelpley.com/2012/03/14/just-in-time-expertise-my... it seems that AnyFu has had the first customer, and I've read on g+ (and heard on the podcast) that some experts are adding their profiles in these weeks

Very interesting problem to tackle. Only problem I see is how the incentive structure will work out. The YC process works because as a hacker, there is a huge monetary incentive(average YC statup is worth 22.4m) to apply. However, it's not clear to me how the incentives will work out with hackertrade, since most hackers already have plenty of paid work opportunities.

Two things here:

1) Yes, established hackers who already have plenty of clients and opportunities may not need the matchmaking. But it's also a way to extend the potential market, and get more choice & security - after all, you're never obliged to accept an offer, so there is nothing to lose to apply.

2) Some devs are good at delivering, but don't like/want the networking/business development aspect of finding clients. It's a way to minimize the amount of time spent on it, and focus on code instead.

Very cool idea! I'm wondering if it solves this problem that a lot of clients face- the client knows what they'd like, but have no clue as to what kind of coding is required to accomplish it. So when they look for freelancers, they don't know the alphabet soup of languages and end up connecting to people that might not be the best fit.

If you guys are acting as "matchmakers," you might want to specifically say that you can help people who don't know what they're looking for (if you offer that service). I've bookmarked you though, because finding good freelance talent is a real problem.

Yep, good point. Helping to figure out what's needed is an important aspect - it's one of the most tricky parts for people who are starting to contract online or don't have all the necessary technical background.

I exactly need something like this.

I think that there is a need in the market for a site like this, that focuses on quality. And avoids the problems of massified remote work sites, that end up full of silly projects, with lots of poor programmers spamming everything to death.

The presentation is right. The fee is appropriate for not too long gigs. But perhaps in the case of longer terms contracts, some other option could be offered.

Hope that it goes well.

It's a great idea and has potential to create value for both parties. Although the part where you say you guarantee the payments might be a little tricky when it involves transferring money across different countries. The client transfers the money to hackertrade, you hold the money and then transfer to the coder. It could be double-taxed and compromise the business cash-flow.

This part we didn't really innovate - that's how plateforms like elance or vWorker guarantee their payments. Taxes can be an headache, but nothing that hasn't been solved already.

http://en.wikipedia.org/wiki/Escrow

How are you handling chargebacks? What if the service buyer does not honor you escrow arbitration after the process and files for a chargeback? are you going to take the money back from the service provider?

Congrats on the launch! Very similar concept to my own project, Folyo (http://folyo.me). Pretty much exactly the same thing actually, except Folyo focuses exclusively on freelance designers.

EDIT: there is one difference, which is that Folyo takes a $100 fixed fee per project, not a cut of the budget.

Interesting idea. I respect that you are trying to match the client and the developers well, but the process you outlined seems to involve a lot of steps. Is there a way to simplify or automate portions of it? It also might be a challenge to be profitable charging 10% with the amount of back-and-forth you've proposed..

Reply on news.ycombinator.com