Never say no, but rarely say yes (2011)
longform.asmartbear.com
longform.asmartbear.com
Often you are quoting a super high price because you don't want the work and maybe it isn't really what you love to do or your expertise.
But the buyer assumes you have a super high price because you're the best and can charge what you're worth.
End result: The buyer is unhappy with your work, because you priced as if you were a world leading expert and actually you are learning on the job and don't want to be there anyway.
Regardless, companies that don’t know how to evaluate the value of quoted work will eventually figure out the value later. A client that that is initially happy with a price will likely become retroactively disappointed when they deal with another contractor in the future who has more realistic pricing.
In my experience contracting, I’ve encountered a lot of “You paid how much for this!?” situations when dealing with work from prior contractors. Once they realize how bad and/or overpriced the work of a prior contractor was, that person’s reputation is done. Ironically, the contractor will often try to use them as references for other clients because they were initially happy.
People are not rational consumers.
See the Palessi story from a few years ago: https://www.cbsnews.com/amp/news/payless-sold-discount-shoes...
Tl;dr: Payless Shoes, a discount shoe retailer, opened a fake high-end store under the Palessi name and got fashion influencers to gush about how great the shoes were. People who actually bought such Palessi shoes probably were happier with them than if they’d bought them at Payless.
> winners that they could buy 1,000 gold stickers to display on their wine labels for just €60.
That's not a bad price at all for gold stickers intended for wine bottles. €0.06/sticker. I assumed they'd be able to get a good bit higher price.
I believe it. Here's an anecdote which blew my mind when I saw it as a kid, and which illustrates the point.
When I was growing up, we had a guy in our church who made guitars. Beautiful instruments (seriously, look up Petros guitars sometime because they're really beautiful), and played/sounded good to boot. Bruce was charging between $3000 and $6000 at the time depending on specifics, so while pricey they weren't expensive by guitar standards. He told me that he got feedback from customers that they weren't sure whether or not his guitars would be good, because they were priced so reasonably (compared to what one would expect to spend on a custom made guitar).
So Bruce decided to raise his prices, and see what happened. He said his sales went up after raising prices, presumably because the guitars were now at a price point where people went "yeah this is what a custom handmade instrument should cost" rather than "what's the catch here". Weird, but hard to argue with results. People aren't always rational buyers, as someone else pointed out.
In recent years I’ve been getting more recommendations for who to avoid than who to hire. There are a lot of contractors and small agencies out there who have gotten good at selling the contract but not so good at delivering satisfactory work.
Often the negative recommendations are from a situation like you described where they pitched a high price or otherwise played games to charge more and more, then delivered a bare-bones result that barely worked or struggled to deliver anything at all. The gap between the expectations of a high-priced contractor and the reality of a disappointing work product leaves a bad taste.
I think a lot of these contractors operate with the mindset that customers will always be available and none of them will talk to each other or seek reference checks, but this approach suffers as the person’s reputation permeates their local industry. There are a few contractors in one niche I worked in where nearly everyone knows to avoid them, or at least to put strict oversight and micromanaging in place on their work and billing. At this point their primary audience is new startups where they can milk them for overpriced work until they catch on.
Well, did they get out of business ? No? Then by captialism the approach is great working strategy...
More constructively, I don't think anyone argues that there isn't (rudely speaking) a broad supply of fools waiting to be parted from their money. For the purpose of this forum the question is what can the clients (quite possible technically weak which is why they need to hire out) do to improve their odds.
Rarely is being a more informed customer not a benefit.
Or being a less informed customer not associated with greater difficulty determining which supplier/service/product is the best fit.
This has been a problem beyond "recent years". In part because of splitting the sales function from the technical function - which is many agencies as soon as they decide on growth vs specialization.
For clients with a little more time and budget - i.e. a little more forethought in general, it's good reason to hire someone more broadly technically competent or at least aware just to help with the process of hiring more specialized work. At least the first time around it can end up being a recursive problem: if you hire a hiring advisor who has their mind locked on just one way to do things, then you just shot yourself in the foot.
And that means that you would follow the author's advice and say "no" because you know in advance that it's not your area of expertise and not what you want to do, and most importantly you haven't stated any long-term benefits of making this short-term sacrifice.
Edit: emphasis
"That is not the type of jobs we usually do, and if we did we'd have to use a lot of time to build competency in the problem and that would've costed you a lot. You'd be better off trying X or Y contractor, that's closer to their wheelhouse"
And as a bonus you'd still be considered for future work that's not that rather than being filed under "those are those super expensive guys we can't afford"
That's a bargain! I needed a kitchen faucet replaced (the kit kind you can buy at Home Depot) in Los Angeles and was quoted "$225 per plumber and two would be required, one hour minimum" and this was not from a large plumbing contractor, but the one recommended by the condo front desk. And I got to thinking, "unless they show up with everything they need, which they haven't even asked me anything about (it's cosmetic, it needs to match the kitchen) there's no chance this is done in an hour"
did it myself.
Back when I did support and custom dev, our minimum price was $100K/year (back when $100K was a lot of money). Most of those contracts were fabulously profitable. But once in a while a bug would be reported that took five or even ten person-months to fix, scrambling all our other plans in the process. So what: we didn’t charge extra and didn’t complain to the customer. Led to crazy levels of customer loyalty.
They want to have stuff done and move on so drop the money and you have to figure out how to do what they want.
I don't want to discuss with plumber how he is going to fit the pipes I want him done and gone from my house as soon as possible.
The same with people using my software, they want to tend to their customers not spend time making my software better. Most of people don't even care about filling in bugs unless it is something that breaks their work.
Lots of entrepreneur porn is about "how we get nice meetings with the customers while sipping pumpkin spice latte" ... sorry but no that is not the way world works. If you want to earn money make yourself useful and do your job in efficient way.
It's the opposite.
You quote high to inform them honestly what it would take, rather than deciding for yourself what is really their choice not yours. Your choice is to not take a job if you just don't want to or can't of course, but is not to tell anyone else what they want or what it's worth to them to get it.
So as long as you don't mind doing the job fundamentally, but it's just a matter of resources or time or efficiency etc, (you're not being asked to do something you morally object to, or totally unrelated to the kind of work you want to do, or requires something like living on an oil rig for a year etc...) then you have no excuse to do anything but make your best guess at the honest estimate whatever that is however outlandish you think it is, including whatever no-promises cya terms you think should apply, and just tell them that. "It will be $200k, 4 months minimum, and you might get nothing in the end."
And part of that is also giving your best honest advice about what they should actually do, and your reasoning. Some other approach that you think is better, or recommendation how to find some other supplier who could do the approach they wanted "that will require rust and high availability, so you want to look for shops that specialize in rust and high availability...", whatever.
The end result is that they are the ones who decide not to do it rather than you. And if they go for it, well, considering you weren't bullshitting them but giving your honest best info, recommendation, and reasoning, you take it and do the job. If that means spending 2 months just learning a new system or language and throwing away a bunch of experiments just to get started, or hiring someone else to do some part you can't do, so be it. You put all that into the quote, and they said do it, so enjoy your big safe gig for the next while.
The title is a bit clickbaity, it's too general.
For example,
Them: “Will you do x thing for me by year end?”
You: “Are you actually trying to solve y problem? What if I refer you to Z person by end of day? Or start by bringing you some research around X by end of month?”
Tbh the same applies to business not just personal
"Can you do X?" "Maybe, I'm very busy so I might not get to it this week" "Ok nevermind I'll ask [other team member] / I'll do it / I'll do Y instead"
If you say no when you're busy/uncertain, you quickly become useless to me and I'll learn not to ask you for things. But if you say yes, I'm counting on you and I will be both disappointed and in trouble if you don't deliver.
At the height of the financial crisis I was just 2 years out of school and working for a small startup. Our first child was just born, and I got fired from my job as they discovered I was trying to bootstrap my side-project. There was no non-compete clauses in my contract but the company used it as an excuse to avoid paying me severance as they laid off a quarter of the staff the following week.
So there I was, anxious that no one would hire a young developer who has a tarnished work experience with a newborn at home.
I was desperate to just find some work. I eventually got two offers with the exact same salary as the job I had gotten fired from. One job sounded more appealing and offered me a chance to learn and grow. The other was for a job to maintain an existing legacy codebase for a struggling company that just went from 100 employees to 10. My wife suggested to just counter-offer with a 50% increase for the unappealing job. If I didn't get it, it was no big loss as I had another in hand. Sure enough, they accepted and the job wasn't actually that bad in the end.
Strangely, when I look back everything turned out in the end for me. I got a 50% pay raise and I also got to spend 3 months at home with my newborn child while unemployed.
Perhaps. Make sure you're high bar is high enough. Opportunity cost is an underappreciated metric. The exceptional (read: as in a rare exception well above average, mean, etc.) can be addicting, and eventually self-defeating (read: before you know it your temporary digital ditch digger stint gets less stint-y and more permanent-esque). It's like a bad-ish romantic relationship that goes on too long. Regrets, and the some.
If you're going to go this route, be certain to plan your exit. For example, "The first X weeks are $Y per hour. After that we revisit, if necessary." Baking this into the agreement will force you at the end of X weeks to recalibrate the revenue vs the opportunity costs.
In fact, for any type of contract work with too many unknowns and/or too much possible career friction always include a time limit along with the rate.
It’s a reflection of your perceived opportunity cost.
But you are right to suggest time-bounding your engagement up front to avoid getting stuck in a local maxima.
Or, at a certain scale, have a segregated set of people doing these requests where possible to limit and help govern the distraction.
However, as you leave your sweet spot, be aware (read: beware) of what you don't know. Be aware of the fact that bad decisions are very similar to trust...one slip and you've lost 10x more than you anticipated. If you're going to leave your sweet spot be sure you're prepared for the worse. It can and does happen.
Put in real terms, over the years I've worked as a contractor for a number of marketing / web dev agencies. The more successful ones didn't get there from yes, they got there because of no. No to projects beyond them. No to clients with expectations out of proportion to budget. No for the win, so to speak.
I've also seen those same agencies start to drink their own Kool Aid. They get in a financial pinch and take on work / clients they're not tuned for. For example, they don't have the in house expertise in the technology / solution required. Eventually the project costs more than it brings in *and* the team is miserable, has lost faith, leaves the conpany, etc.
If you're leaving your sweet spot and you're not concerned, you're probably doing it all wrong.
The hourly rate example is a clear tell. If you're selling your time by the hour you're already doing the wrong work. Consulting = death, and I mean that literally. The months of our career are finite and we should allocate them carefully
Consulting with value—based fees is a fantastic way to deliberately allocate our finite time .
You can only get the value of your work over time though equity. If your impact really is large, nobody could afford to pay the net present value up front (and only a lowlife would want to damage the company by taking out cash like that)
Equity increasing in value, as has been discussed on HN multiple times, is not a guarantee - and businesses engage all kinds of other businesses for all kinds of help.
There are lots of ways to structure a temporary engagement that's mutually beneficial to both parties - in the short & long term.
Anyway this approach is profitable but comes with two downsides:
-You risk getting stuck with a project that was much larger than you anticipated.
-Eventually you find that your business is not what you originally envisioned.
I used to work for a company that wanted to get into the Big Data space back when that was a fashionable buzzword.
I went to an interview there a couple of years after parting ways only to discover that while they still heavily advertised big data, deep learning and whatnot, their main money maker was some pretty standard DevOps.
A guy who's drowning in business and a guy who's sitting idle will likely quote you very different rates. Obviously you should also be conscious of why someone is busier than another, but sometimes it's just a matter of timing, etc.
Yes, that's how it works. That's why no one goes out of their way to hire unemployed people
I don't know why someone would "go out of their way" to do that, but the numbers take care of it. For example, if I post a job at $XXXK per year, if XXX < FAANG salary, I would expect nobody from FAANG to apply, but I might get some "laid off from FAANG" candidates.
If you are doing custom development you can also use this at a finer level of granularity: charge a lot for parts of the project you’d rather not do (even possibly pay a bonus for the poor person on the team who draws the short straw and has to do that part, and maintain it) and charge less for the parts the customer might be on the fence about but you know will either make them happy (though they don’t realize it yet) and/or help you get future business elsewhere.
Customer A says, “hey, would you add a feature to your emoji generator to interface with the ACH system?” Stupid request, maintenance nightmare. But you might get paid to have one person get some exposure to the horror show that is banking APIs. Exposure that might later help you think a bit better when it’s time to start thinking about that market. Of course charge a LOT because it’s new and charge a LOT for the maintenance contract. Maybe it helps you estimate engineering and marketing budget, or maybe it helps you decide on a different expansion path.
The converse is true too. Customer B wants hospital integration so they can add cute emojis to messages like “hey, you’ve only got four months to live. Have a nice day!” You’re not stupid so you know you never want to get anywhere near the tarpit of medical software. So you can confidently say “no” (phrasing it, “we don’t believe we could honestly provide the necessary level of support you’d require and don’t want to let you down blah blah blah”).
nice theory for "getting more money is good" but doesn't work for "I have no time". If people could package up "more time" for me in some kind of interdimensional container, I'd be all set.
If your big (technically, your ask) isn't high enough to cause you to make the time, the it's not high enough.
https://lalgudi.medium.com/orange-juice-test-will-you-pass-i...
In my work with startup founders, I regularly say, “people say ‘no’ in a lot of ways, many are very subtle. But when they say ‘yes’ it’s clear and obvious.”
If you land a $100/hr gig, and the work takes 90 minutes: bill the client $200, not $150!
- "yes"
- "no"
- "this is not our specialty but we'll do it within our current relationship for $BIG_ENOUGH" (and then you know, actually do it.)
- "this is not our specialty but we'll help you hire and manage a specialist so they fit in (for $MODERATE)"
Never say “no,” but rarely say “yes.” - https://news.ycombinator.com/item?id=2481213 - April 2011 (36 comments)