Some clients are ok with it, some don't; this is normal and what a competitive market should look like. I tell clients openly when my premium service is not the right fit for their current requirements or budget, and there are cases where cheaper labor or LLMs are absolutely a better fit (and they should come back once when/if they outgrow the cheaper, lower-quality product).
Only road I can imagine is highly specialized industry, with money, that often has time-sensitive needs, and smart management that knows how to recognize value or trusts their tech management. And even then I think you'd have to start in the coal-mines version of it, $50K/year flat salary, and building a reputation without management taking credit for your successes, somehow.
Once you have them on the phone, you can not only better understand their problem but also demonstrate your skill and credibility in a way no resume or branding could.
At that point it's just a sales game - generally you'd avoid hourly rates and sell them a solution (see my other comment) which will maximize your effective hourly rate while being structured in a way that's very good value for the client. Hourly should be a last resort, at which point generally you'd rather have the client bounce, so you quote a high rate.
I'll offer a specific solution that takes me a week of full time work (14 hours each day -- I'm focused) for about $10k, which is roughly $150/hour if you want to calculate it that way, or another specific solution that takes me 3 weeks of 10 hour days for $15k which amounts to $100/hour. And like any good consultant, I'll eat the cost if I'm wrong. Other times I'll charge $40k when I know it will take a few months of dedicated work and I have to really lock in.
In practice, I never actually charge hourly. So the $999/hour is really Schrodinger's rate.
Clients don't buy hours though, they buy solutions. They have problems costing them money or preventing revenue and they'll pay a percentage of that value to solve it. When you price based on solution value rather than time, your effective hourly rate merely becomes a function of your efficiency and expertise delivering said solution.
They key to achieving such a rate comes down to your sales and business skills: understanding what to sell, how to structure it to maximize your earnings and make it palatable for the client.
For example I generally avoid hourly billing except as a filter for time-wasters. Instead, consultancy becomes a loss leader for the real business: deeply understanding client problems and delivering high-value solutions. Clients happily pay premium rates when they see the price as a fraction of the solution's worth to them.
I only resort to quoting (quite high) hourly rates where it's clear the client just wants consultancy/advice (basically a glorified IT/business support) as a way to make it worth my time and gently encouraging them to bounce (I openly suggest more cost-effective options and refer them there).
I am not sure if I fully understood what you meant exactly with your (detailed) reply.
“This is the price for me to do work I don’t want to do, but will do, if you make it impossible for me to say no.”
It’s not about justifying the rate, that’s the wrong way to think of it.
How to get credibilty? Well, you gotta be in industry. The thing the two consultants here are besmirching. You can't win.
> There's not a lot of vectors I feel I can jump in to say "I'll do this for 1000/hr" without getting some bulging eyes.
1000/hr might be a lot for you, for many businesses it's not even a meaningful expense, the bigger hassle for them is doing the paperwork to get the money sent out.
I'm well out of tech at this point, running a small lifestyle business in a different industry. At least once a month, I get people in my new industry offering me significant amounts of money to build them software. I don't have a fancy public tech resume; really, the only thing these people know is that I'm some relatively pleasant, rich, former tech guy.
2. Make and maintain connections.
3. Be pleasant to interact with.
4. Know what value you provide.
5. Find out what value people need.
If you're someone like Steve Jobs then #3 is a bit optional because #4 is increased, both in truth and in arrogant overestimation.
The hardest part of this really is #4, because most people either get too cocky and overconfident in the value they provide in general, or they are so overcome with imposter syndrome that they believe they offer practically nothing, so they do almost entirely open source work and fail to start a consultancy.
Vimeo employees and all the people part of the recent tech bloodbath experienced that too, but without even pocketing the upside beforehand. I'd argue that for anyone currently searching for a job, they will get a better ROI engaging in sales instead.
Any monkey can (and does) sling ChatGPT'd resumes at anything that moves, hoping to get the job and pocket enough salary before people catch on. That scam doesn't work with consultancy on a "paid on delivery" model, so the market there is much less crowded. There are different scams out there but those primarily target big companies.
> There's not a lot of vectors I feel I can jump in to say "I'll do this for 1000/hr"
We as techies know how the sausage is made and estimate a "fair" price based on the effort it would take us to do it. A car mechanic would probably also consider retail oil change prices to be unfair... because he's already invested in the knowledge and tooling and with those it's indeed a 5 min job.
From a business' perspective though, our work might as well be magic - we are writing prayers in an arcane language to make silicon come to life and do things that generate money for the business. It's magic that they have repeatedly failed to replicate for themselves. The latest fad is AI/LLMs and that will fail too - LLMs only work in the hands of a skilled operator - and otherwise fail disastrously and often generate extra remediation work on short notice.
If you worked in tech there's a good chance your past contributions are netting way more than 1k/hour to someone else already - so you can generate this value. The challenge now is to capture more of said value.
Nobody in their right mind will pay 10x market rate for no guarantee of result; see my other comments in this thread. This would open them up to the same scams that happen with permanent employees and third-world countries will be all over it the next day.
But if they are guaranteed a result then the calculus changes, they are no longer thinking of hourly rates but instead of as a fraction of the revenue enabled by your solution, and their risk is lowered to only the opportunity cost. This is a much better deal for the client. Your resulting hourly rate now purely depends on the value of the solution to the client divided by how quickly you can do the task.
You only explicitly quote the 10x market rate when you want the client to bounce because the job or client sounds like a nightmare. You will get some clients who are cheap and insist on an hourly rate to explicitly prevent you from playing the above game and earning the (much bigger) cut of the solution. The "fuck you" rate is for that, it's not expected to be taken, it's there to set a baseline price for your expertise and make the deals you offer sound more attractive in comparison.
It's basically all sales and reframing your work from salaried/hourly rate to how much your work is worth for potential clients (which doesn't scale linearly with time invested nor software complexity).
As to why am I giving you advice on how to compete with me? Because you're already competing with me by willing to settle for permanent employment market rate for the services I am offering. Encouraging you to charge more helps us both.
Let's say your client has a problem that will bring them 1k/hr of revenue when fixed. You think you can fix it in an hour.
You could quote them 5k/hour, because you think you can fix it in one hour and you estimate it'll take them at least 5 hours to find and talk to someone else who could fix it. This is a big gamble for the client, what if you don't fix it or take longer? The client balks.
Now let's say you offer a "reasonable" hourly rate like 150/hr. Your client is happy to take the gamble because 150 is peanuts compared to the value they get if you do fix it. Client takes the deal, you fix the problem, but you got paid peanuts.
Now let's say you offer them a no-fix-no-fee rate of 5k. The client is happy to take it because once the problem is solved it takes them just 5 hours to go back in profit, and they risk nothing if you end up not solving the problem. They take the deal, you fix it in an hour, the client happily pays you 5k, netting an hourly rate of 5k/hour.
Same hourly rate as the first scenario, yet the first scenario will cause everyone to balk while the second one is a steal for the client (in reality, you can actually charge more than 5k, how much more depends on your reputation and sales skills).
I very much worry for Gen Z. Through no fault of their own.
it's only been released for two months but its changed the calculus entirely
if its been over two months since you've tried any LLM generated code solution, or are still occasionally copy pasting code requirements into a browser chat session as if its still 2023, then I can't put any weight into the opinion
its beneficial to check it
HN is full of people who tried the free version of ChatGPT a couple of years ago, got a load of random hallucinated slop, and concluded it was all a bunch of useless hype. They enjoy parroting a lot of obsolete stuff they read once about stochastic parrots, without the slightest sense of irony.
When I was growing up, my old man recalled engineers who reacted the same way to transistors, which sucked even more than early-generation LLMs when they first came out. Most of them got over vacuum tubes eventually, though. So will most of the HN'ers, likely including you.
Every generation has at best been a 5% improvement, and nothing revolutionary compared to the last generation. Absolutely no significant improvements between me selecting say Claude 3.7 Sonnet, Claude Sonnet 4, or Claude Sonnet 4.5. Still the same somewhat useful tool for specific purposes, still not good enough to be let loose on production, still not better than what I can do myself with 10 or so years of experience.
Genuinely useful from time to time? Sure, I agree completely. Anywhere near being revolutionary enough as people here insist on gaslighting themselves to be? Absolutely not. Not even remotely.
What's really different now is that LLMs have become useful research tools. Three or four years ago, models couldn't cite their sources at all. Two or three years ago, they started to gain the capability, but a large proportion of the citations would either be hallucinated or irrelevant. About a year ago, significant improvements started to emerge. At this point, I can give Gemini 3 Pro or GPT 5.2 Pro a multilayered research task, and end up with a report indistinguishable in accuracy and bibliographic quality from what a good human might produce in a couple of weeks.
It might take a half hour to get the answer, and I'm not sure if you could get the same result at the $20/month level, but the hype and promises we started hearing a couple of years ago are starting to bear fruit. The research models are now capable of performing at grad-student level. Not all the time, and not without making stuff up on occasion... but to argue that no progress at all has been made is nothing more or less than moon-landing denial.
Cool, how much of it can I use with a $20/month subscription? I'd reach the monthly limit within hours while gaining nothing. It's not that I never tried it, it's that I did and the difference is nowhere near worth 10x my money (nor even the wait time needed to get results).
> I'd suspect a skill issue.
There's 0 skill involved with asking a magic 8 ball to solve your problem for you. There's some skill involved with making it better for yourself consistently by cramming as much useful info as possible into the context window by writing very specific custom agents / skills / MCP servers / whatever, but I have yet to find a client that would pay me to spend an ungodly amount of time fucking around with my toolbelt instead of delivering results.
> Three or four years ago, models couldn't cite their sources at all. Two or three years ago, they started to gain the capability, but a large proportion of the citations would either be hallucinated or irrelevant. About a year ago, significant improvements started to emerge.
Let's translate that: You don't understand what they're doing under the hood when they "do that", you don't understand where that "improvement" is coming from, and I'm not interested in spending my time teaching you for free. For as little as €50/h, I'd be happy to! contact at my username.
> but the hype and promises we started hearing a couple of years ago are starting to bear fruit.
You're gaslighting yourself again in order to justify the price you're currently paying. Downgrade yourself back to $20 subscription, stick to it for one whole month, learn its limits properly, and then if you feel like you need to upgrade to a higher tier again, do so! Spoiler alert: it's gonna appear "significantly crappier" for about a week, and then after that week, you will get used to it and realise you've wasted a fuck ton of money on nothing.
> but to argue that no progress at all has been made is nothing more or less than moon-landing denial.
Where's that coming from? You're putting words into my mouth again. I specifically acknowledged small improvements, but I dismissed drastic improvements. Zero of what you said convinced me otherwise. For the love of all holy, use your own brain a little bit to actually understand the tools you're advocating for. Saying that you drank too much Kool-Aid would've been a severe understatement.
right, yeah, I got started by being able to expense the $200 plan, and now I don't expense it but there's no going back, mostly because this is extremely undervalued and its unclear how long this deal will be around
Claude's $200/mo Max x20 plan is the best deal in the game, its equivalent to about $2600 worth of API credits, and is 4x more ability than the $100 plan (Max x5)
all roads to not really... caring... about why you're resistant to this. it's going to be too late when Anthropic raises the prices, all the reasons behind your reservations grow, unless someone else undercuts them just as well.