Margins on website development are shrinking | Hacker News Reader

Margins on website development are shrinking

chrishardie.com

64 pointsEstragon77 comments

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I've had the same experience the past few years with car maintenance.

- I can find any owner's manual online.

- I can find detailed instructions for any type of repair in written form or in a Youtube video.

- There are free online courses for anything from changing a tire to becoming a full-fledged mechanic.

- I can find and order any part of my car at wholesale prices.

- The same diagnostic software that repair shops use can be downloaded for free. I can hook up my iPad to my car through a simple USB cable and find out exactly what's wrong with it.

And I still take my car to the local auto repair shop, because I'm not a mechanic.

To be fair, if you have the time and the room, it really does make a lot of sense to learn some items in care repair. Similarly, being a fully trained plumber is a daunting task. Fixing most problems in your bathroom is actually straight forward.

Of course, some of this comes down to a value judgement. How much is it worth it to you, personally, to not have to mess with a broken toilette? :)

One thing I don't see people talk about enough in the context of home or car repair is liability. Not only do I not want to mess with a broken toilet, but if I screw up and flood my bathroom, it is my fault. If the plumber does it (less likely because they know what they are doing) then they are on the hook. For some things the cost of failure is low, but for many, especially when being paid a programmers salary, the marginal savings (e.g. 15 bucks for an oil change) isn't worth the time and liability.

YMMV (literally :D).

Well, it really depends on the "fix". Most toilette problems can be fixed by a simple $5 part from the store. Hell, the last time a pilot light was out at my place, the plumber literally just scrubbed it with a wire brush. Just calling him out was $130. And no, I did not feel ripped off.

So, yes, there can be liability concerns. But there is also the line of thinking where "everyone should know how to cut the water to their house." Or "Everyone should know where the circuit box is to their house." etc.

Then there is the current reality. Getting stranded in a car accident is something that I would imagine is a lot lower in occurrence nowdays. I know how to change a tire, but I have to confess with cell phones being what they are, I am less concerned about my kids having this skill. I think they'll be ok.

Ha. Scrubbing with a wire brush is worth a dollar - knowing what to scrub with a wire brush was definitely worth $130, right?

I know your joking, but I feel like this is an important thing that's often lost on people. The other day I got in a bit of an argument on oDesk because I turned around a job too quickly. The guy didn't think it was worth the price we agreed upon. I had to explain that that wasn't a 15 minute fix, that was years of studying in university, and years of trial and error, and hard won experience to know how to solve his problem in 15 minutes.

He stiffed me in the end...

The problem with these sorts of sites is in the reputation system, in that reputation is far more important to sellers than to buyers.

If you had left bad feedback on this guy's profile , it would be easy enough for him to create a new account and still get bids for his projects.

OTOH for a seller even neutral feedback is viewed as black mark and starting from scratch is difficult.

I'm not joking at all. I had a consulting customer once that had a problem; I asked him a couple of things on the phone that he insisted he'd checked, and he pleaded that I come to Chicago in person and take a look, when I lived in Southern Indiana at the time. I said I'd bill him a day (which was generous; the whole thing cost me 13 hours).

Turns out that yes, one of the (trivial) things I had asked him about, that he'd said he'd checked, hadn't been checked. He was up and running in half an hour.

Then he didn't want to pay for a whole day because it had been so easy. But he did, in the end, pay for a whole day.

Yeah... I am dead serious that I did not feel ripped off. Learning a lesson is worth every penny, in itself. Having someone else risk a spark near a gas source is a special kind of cost. :)

The hinted solution then is for webshops to provide some form of liability protection for the client.

If the website is buggy (like a leaking pipe), its the webshops fault and reponsibility to fix. If personal information was leaked thanks to bugs in the website (ie, the leaky pipe caused a flooding), then again the webshop is responsible.

If a customer know that they are not responsible to maintain the website security and protection of data records from customers, then I suspect many would be willing to pay quite nicely for not being "on the hook" if something goes wrong.

To make that economical possible for the webshop, we might need to utilize regulations. With plumbers, they are forced to be liable, so everyone is competing with that assumption. It is always part of the price, and they don't have to compete with non-liable plumbers that can undercut the price.

That metaphor doesn't work for two reasons. First, over time a car has grown MORE complex, while the tools to create a website have grown LESS complex. At the same time, improved quality in engines, motor oil, and service technology has made routine maintenance not only easier, but also less expensive. Second, auto repair, like most skilled trades, is a great example where specialization of workers gets involved. It's not that you can't spend the time to learn how to repair a car, it's that you consider your time worth more. But in many cases, the cost of building a website has come down so rapidly that it doesn't require a big time commitment for many people.

There will always be room at the high end to solve problems that are complicated, large, or rare. But at the low end, things that were new 20 years ago just aren't anymore. Website development is becoming less like a mechanic and more like pumping gas.

- Websites have become much more complex. It just appears that they are simpler. WP makes it seem like nothing to press a button and upgrade. Behind the scenes thousands of lines of code are doing work. When those lines of code break and you come to me to fix them. Fuck you for thinking I am going to charge you $100. You are going to pay me $1000 or you can do it yourself.

- If you want to use a theme exactly as it is then fine use it exactly as it is. If you want me to make changes to it, fuck you for thinking I am going to do it for $100.

- Websites are complicated as ever (with tools that don't match their behind the scenes complexity), they appear to be much simpler because a lot of stupid people have spent thousands and thousands of hours providing services for free through modules and themes. But when those things break down or don't work the way you want them to, you will pay for my 15 years of experience or you can just do without.

Hey, no problem. Me and about a dozen friends only have around 3-5 years of experience but are more than happy to do the work for about 1/3 the price you want to charge. If they don't want to pay your rates send 'em our way!

There are also people in the third world that will apparently do it for $5/hr until what you get are shit results that are an embarrassment to look at.

In the case of Wordpress, the cost of labour for development and bug fixes on those thousands of lines (to the client) is effectively free unless you are extending it.

Yes but when you are extending it... it's not trivial. So the price curve jumps from a few hundred dollar to thousands of dollars if you try to do anything significant.

I guess the point of the article is that WP and friends already offer a significant enough amount of functionality straight out of the box or with a very minimal amount of custom code.

Out of curiosity (not being snarky), how's that working out for you, and how long do you think it will be viable to charge that amount?

Web dev, as I see it, is undergoing a race to the bottom. As you say, "the stupid people" are generating good content for free. Yes, there are 1000s of lines of code behind WP.. but those 1000s of lines of code exist just so that the end user doesn't have to mess with them. Do people really pay 1000 to adjust a word press theme?

> generating good content for free

They are not generating it for free. They sell themes at $50 pop to at least 100 people. They make their $5,000. They also charge $100/hr for support.

> those 1000s of lines of code exist just so that the end user doesn't have to mess with the

Until things break. The developer goes away, etc.

> Do people really pay 1000 to adjust a word press theme?

Depends on what level of adjustment. If I charge them $1000 they will get $1,000 worth of services. But I am not willing to engage a client unless they are at least willing to spend that much. Not worth my time.

When things break ... but websites for SMBs break less and less.

All the tools mentioned in the article are mainly useful to the bottom of the market; low-budget customers can now put together something half-decent on their own.

If anything, this is GREAT for us as web developers. We've taken to pointing prospects to ThemeForest if we don't think a custom site would add significant value to their company. It keeps us from having to do boring & repetitive work, so we can focus on the fun, high-impact stuff.

The fun high-impact stuff rarely drives the customer's bottom line.

Judging by the amount of people in my office who can't handle something as simple as formatting a Wordpress post correctly...I think it's a bit pre-mature.

Yes, most things have been made far easier, but good design and code skills still trump most of the out of the box systems out there and those themes he mentions are a form of web development, just not the ones making the author any money.

The good web developers are generalist developers at heart and will always be looking at the next bleeding edge system/project/new shiny to work on and deliver the new and shiny to customers.

The title should be "the margins on bottomfeeding are shrinking".

I consider this a good thing. Now if only these companies could stop calling themselves "developers" altogether, and maybe we wouldn't have to explain so often to potential clients why our software development is so much more expensive than their so-called "web development".

It's the starter-kit Walmart hobbyism. I can buy a bike at Walmart for ~$100. The bike will get me to where I want to go with reasonably light usage. Anything outside the first time, light usage model is a ever deepening pool of cost/value.

Walmart is great if I'm poor and my son needs a bike that he can crash (since he's just learning) and he will grow out of in the next 2 years; he probably couldn't put enough miles on the bike to break it within then.

If I want a bike to ride five miles to work everyday, I'm looking at $500 (used) to $1500 for something nice and dependable.

The Walmart model isn't bad as long as everybody understands the metrics involved.

Omg . Best comment on this article. Sums it up. Really though, you hit the nail. I swear if one more Wordpress end user tells me they are developer, I am going to stab myself in the face.

Here is the trick:

All of the technologies that your customers supposedly now use to replace the services you used to offer them, can also be used by YOU... to replace the services you used to offer with better services in much less time.

Proper use of today's tools will make your customers think you have somehow gained super powers as you deliver them better results, faster, and with much less effort than when you had to spend time custom coding solutions that are now implemented as easily as pasting some javascript code onto your customer's website.

This can work if you get in on the new tools and technologies quickly before everyone else.

Eventually the expectation of price will go down due to competition.

Hi, original article author here. Thanks for the great comments and feedback. I just appended my post to say:

I probably should have used a question mark in my post title instead of an asterisk. I don't claim to know the future and I get that I'm talking about an industry and an area of tech that's unpredictable. I've no need to be "right" about this and am just glad to have started some conversations.

I probably also should have referred to something like "generalist retail website development for the masses" instead of just "website development." One part of my current company that is still going strong is a business unit that's performing hundreds of hours per month of custom software development, database management and consulting for a client pioneering a unique problem space where no off-the-shelf tool is going to do the trick. We just had challenges replicating that scale of project within our company, but that's been more about roadblocks to growing the way we wanted to than it has to do with the nature of the industry overall. I fully agree with the commenters who note that at the higher end of client and project requirements when it comes to creativity and complexity, there's still a great need for professional service providers with a broad range of experience and deep knowledge. As I tried to say in my post, I think the folks working with bigger budget clients and projects will have plenty of work for the foreseeable future, even if under a different name from "website developers."

Thanks for reading.

I disagree somewhat because lots of people I know have a broad range of experience and deep knowledge but the market for it is shrinking. They do get calls when things go wrong but other than that, there's not much going on. Some made the jump to app development but the market's just not there anymore. That may sound strange to those living in the valley but that's just the way it is. Some are now teaching others and that seems to be profitable.

This happens in every services industry, not just website development. A combination of new technology, experience, and the dispersion of knowledge drive down costs and margins. Nobody hires accountants to do their adding and subtracting, but there's still demand for experts in new regulations or the eccentricities of the tax code.

The same thing is happening in website development (and really, all sorts of technology related services businesses). Over time, the low hanging fruit gets automated, and margins get compressed.

As your firm evolves, you find margin in one of two ways. You either stay at the high end, and continuously learn new technologies and how to solve higher level problems for clients. You are continuously jettisoning your old bread-and-butter projects to work on the latest and greatest thing, solving new problems that didn't exist a short time ago.

Or you follow the work down-market and focus on scale and efficiency. You figure out that you can get profit from process and automation, you turn your toolkit into an offering that you can sell at a high margin.

Either approach works, but firms tend to get in trouble when they try to straddle the middle, and just sort of hope that clients will still pay big margins for work that's become routinized.

Very true, though I would suggest that if you live in a western economy and you intend to go low end you should make sure you are scaling in such a way that your marginal labour costs are insignificant. For example, rather than construct websites build tools for building/hosting websites.

It will be impossible to compete on price with elancers if you like eating food.

I've had no shortage of people looking for custom websites. Having a fully-customized identity throughout, warranted or not, is still very important to a lot of clients. You still integrate with third-party services, whether it's social media sites, blogs, or e-commerce--but even then, these clients want it to feel like their own, not some generic, off-the-shelf product.

Also, I've shown clients pre-baked themes to save time & money and they've been quite offended, or agreed to use one, but then ended up changing the theme so much, it was hardly worth the effort.

They feel offended ? When they buy a new car, how does that make them feel ? It's very similar, imo. You can buy a car as is or you can customize it somewhat but you never start from scratch. You start from an existing design.

This article takes a fairly narrow-minded look at the work done by lots of "website developer" professionals, and an even narrower look at what clients want from a website, app, etc.. It's like saying that Graphic Design will cease to be a profession because there's free photo manipulation tools.

There's a valid point that, sooner or later, CMS/app farming isn't a valid long-term business. But, thankfully, what you don't typically find at these shops, or on free/cheap online tools is the creativity that many clients demand.

The author does bring up "Marketing and branding consulting" as one of the two continuing successful business models. Ok, halfway there. However, anyone that's worked in marketing or branding knows that ideas are just a fraction of a successful campaign. A great idea will fail if it's not executed well.

Before I got into web development, I spent 4 or 5 years as a recording engineer. And people were constantly predicting the "end of recording studios".

Certainly, there was a big shift. Pro Tools got cheap, companies like Behringer started making affordable large-diaphragm condenser mics that sort of looked like the nice ones. Line6 and Amplitube were making reasonably convincing guitar amp simulators. And some studios did close.

But there is absolutely still a market for for experienced recording engineers and big studios. The difference is that now there are DIY alternatives at the low end of the spectrum.

This article makes the mistake of predicting the end of web development, when in reality, all that's happening is that people with simpler needs are finally starting to see alternatives. Just need a basic home page? Go to Squarespace. Need a high-performance single-page web app? Still need a real developer. I don't see that changing soon.

Exactly this. I've made a similar transition and I'll say one thing: we web people at least don't have to deal with declining customer incomes. The worst part about being in the audio (live and recorded) biz was not only the bottom up effect, but the fact that the ROI of the average recording was plummeting (at least from where I was sitting, for the artists I was working with).

People/Clients still make money on the internet, even off $50-100k plus builds. $50k on a pro studio album would be damn near impossible to recoup these days, from what I've seen.

It'll be interesting to see if the web starts to follow the trend I saw in recording.

Basically, a lot of clients would come to me to track drums and maybe guitars. They'd pay for a nice room, good mics, lots of guitar amps, and someone who knew how to use them. Then they'd do vocal overdubs, bass, synth and occasionally guitars at home. And they'd usually bring bit back for me to mix.

I sort of like the model of "pay an expert to do the hard stuff, and do the rest on my own".

Yeah I've definitely seen that as well, get a couple of days in the studio to get a great drum sound then beg, borrow enough gear to get passable synth, gats etc. It makes sense, I just hope more models emerge to recoup some of the lost CD earnings, but they don't really seem to be.

It's quite sad actually, the number of my friends who are now considering retraining as developers because the state of the music industry is so shitty.

How did I say anything worth being downvoted here?

Beats me. Maybe someone misclicked; it happens. I've upvoted you, FWIW.

Weird. Mine got downvoted a couple times too.

It would be great if people would take the time to point out whatever it was that they found to be objectionable.

For single page applications, take a look at applications like Zoho Creator or Wufoo or Weebly. Or QuickBase, Knack, Grubba, probably dozens more.

I recall similar observations being made roughly 15 years ago in response to the growth of FrontPage / Dreamweaver and the presence of Angelfire.

I think part of the issue is that many businesses have presence on the "mega sites" (facebook/youtube/twitter etc) and unless they are going to spend a lot of money marketing a website their presence on the mega-site is likely to be getting more exposure (higher up on google , more engagement).

Very true, which is why I was expecting to hear them mention that they are turning into a digital marketing agency, which is what a lot of firms become. That way they can probably keep charging the prices they are used to while web development will be part of the package (placed on one of the hosted services they mentioned or outsourced to another firm/freelancer).

True, although "digital marketing" is a somewhat different skillset than web development.

"Instead of having us create an administrative interface for updating your web content, you could just install Joomla, WordPress or Drupal and do it yourself."

hahaha who? Is your client Stephen Hawking?

True. But you're competing with Foursquare and GoDaddy websites for $ 1 / month. I don't recommend people use those services but in the end that's what you're competing with. Compare that to setting up a website with Drupal.

So you're either severely constrained by a cookie cutter CMS, or completely overwhelmed by a more flexible platform like Drupal. Ultimately I'm not hearing anything convincing about why web development has become obsolete.

I think the most valuable thing this is pointing out is that the nature of the problem is shifting to an integration challenge - how to hook together the 5 or 6 services that I will need to get everything up and running. Most web driven businesses are going to need some combination of different technologies at some point - the people who can orchestrate that well are in a good position.

I understand some of the points the author is making, and will have to give it a closer read when I'm not at work. But I reject the thesis at a glance. Most clients don't have time to deal with everything related to their web presence, custom or not. If you're solving business problems, not training them to use WordPress, you can charge a premium.

Posts like this strike me as comment and controversy bait (more specific than linkbait). An underinformed post whose points are stated too emphatically about a large topic.

Where I live I can clean my car for $ 8 if I drive to a place and do it all by myself. It will take me an hour to drive there, clean it and get back.

I can get it cleaned at the carwash for around $ 21, that will take me 40 minutes.

Or I can make an appointment and give my car to a guy who cleans it for me, the cost is $ 35 and it takes me 10 minutes.

They all make good money. Even the guy who charges $ 35. But none of it is 'premium'. There's a guy in Derbyshire, England. He charges £ 7200. Now that's premium. But the market's too small for premium. At least where I live.

I think this is a lot of perception and to be perfectly blunt, complete bullshit.

People who think that just because tasks have become easier for experts in that field that they are easier for everyone are just plain wrong. I know this through personal experience. If you are just making static websites for small businesses and trying to compete with 1&1, then sure, you're going to have a hard time getting rich. But that's always been the case.

You will never make a lot of money selling services to people or businesses that are highly price-sensitive or just don't need (or see a need) for a more sophisticated product. I wasted a lot of time selling services to these types of customers and I can tell you it's a mistake. Choose your customers wisely and go for one's that have money to spend. That type do not want to spend any time splitting hairs to get a shitty product. They want something that is great and will pay handsomely for it. The challenge in that is proving your worth, but as I said before that's always been the case and there's nothing new about that.

EDIT: I realize that is a little vague, so let me add some hard numbers. On my first large web dev contract I built a custom website (not incredibly complex) for a guy who had a $250k budget. I met him through the local Chamber of Commerce. I went back-and-forth about how much to charge him for the specs we discussed and in the end went to him with a quote of $15k (quite a lot of money for a single project for me at the time) and his response was something along the lines of "Okay, that sounds great!"

Fuck me for not realizing that I could have charged more. Moral of the story is one that is becoming trite at this point: people who know how to code and sell are rare but for some reason seem to undervalue themselves a great deal. That's a huge advantage for those that do not.

You seem to have missed the part where they were successfully running a web development business from 1997 to about 2008, when things started to change.

The point about choosing your customers wisely is certainly true, and I'd expect the OP would agree with you on that, but it doesn't invalidate the rest of what he's saying.

I see so from 1997 - 2008 things were awesome, then they sucked, but now they're great again!

Do you honestly think web development technologies have hit some inflection point after which everyone can build their own web applications? People have been saying that about technology for hundreds of years (that it can't possibly improve) and they are always wrong. If you are trying to sell your services and you are competing with commodity web developers as the author plainly implied is now the case Im afraid I have some bad news for you: you suck at selling and should work to improve that before learning the next hot technology. There will always be more work.

Automation has eliminated a lot of jobs in manufacturing, I don't know why one would think that it was gonna be different for web development.

There is still a lot of creativity in creating a website. You can put up a quick website using a theme and get online for pennies, but would you really want your online presence to be a theme?

only mass production is heavely automated, the customized production didn't dissapeared, so you shoudnt think that all web projects will be mass products, you will never create production line for unique product not oriented to mass, thats why customized development will be alive forever!!!

Clients understand the value of design, but the development costs are an overhead. They expect the finished site to be delivered as soon as the design has been finalized. Meanwhile, the front end developer is sitting there typing away, converting a photoshop document into HTML/CSS one tweak at a time. It's archaic, and I truly hope that it will become obsolete.

I agree with the premise of this article, but I was disappointed to see that none of the suggestions included focusing on web application development instead of website development. I started Brightbit (http://brightbit.com) 2 years ago with 2 other co-founders, and we have always focused 100% on custom web and mobile applications, and have referred 100% of the smaller websites to local CMS/WordPress shops around us who serve them.

With our focus on building more complex high-end web apps and startups, we have had no shortage of work or shrinking margins, and have in fact experienced the exact opposite. We have been raising our rates, and have continued to experience strong growth and have had very happy clients.

Long story short, there is another path away from general web development with pretty good margins if you're willing to learn more and do more programming work instead of frontend theming/customization work.

I've been seeing things differently. Between myself and my friends/former coworkers, some of whom are contractors, some in agencies, some internal teams in non-web companies. Across the board, we've all been rather overwhelmed lately. It's a constant struggle to keep up, let alone get ahead of the backlog. Who isn't hiring, subcontracting, or both, just to keep from falling too far behind? The story the recruiters have been giving us as they try to lure us away is that it's a developer's market.

I would imagine that using custom development to compete with Geocities or MySpace style 'build your own page' services is probably not doing as well. But that market was already thin many years ago. Those services didn't kill web development as a profession then, and they're not killing it now.

The bit about people who've grown up with this stuff coming into power is certainly a wildcard, but I like to think it'll be a positive one, not a negative one that kills the industry.

> is that it's a developer's market.

Interesting. I've found 2013 much tougher than 2012 - or 2011. All the agencies round here are recruiting good developers, but the rates for freelancers have gone down.

I both subcontract and work direct for clients, and work has been distinctly quiet since February. Mind you, the last 2 years have been amazing, which was when all the local agencies were laying off staff (or folding). Not sure what I'm doing differently to make me go in the opposite direction!

I can can recall numerous instances when I opposed to clients idea about the website. And most of the time it turned out I was right.

People will make sloppy decisions without good advice. I can buy a kitchen blender, assemble it, make it chop my vegies. But I will never know if it is any good. Unless it breaks.

So do we need more work visas or not?

I don't agree with this article. A canned solution can never compare to a custom built project. I think that building on top of things like Wordpress and Joomla is cool but not for a professional developer. Systems like that make the developer jump through so many conceptual hoops that only exist so that the lamen can use it. A developer is better of building a custom suite of tools that are upgraded through time and iteration.

I do agree that end users are utilizing more services online but I don't think that equates to the death of the developer. I actually think that this makes good developers worth more.

This overstates was the vast majority of clients are capable of. The very low-end is definitely eroding though and it's a good thing.

I've used a ton of CMSs and blogging engines and think Squarespace is the future of where this is headed.

I'm in the high-end web consulting biz and there is no shortage of customers looking for fork over millions for an end-to-end solution. Even at the low-end that he is bemoaning, the plethora of off-the-shelf tools is coupled with a massive explosion is the number of businesses requiring a web presence. Now they can all get a decent looking site up for cheap or even just a Facebook page for nothing, but the next frontier will be differentiating themselves from their competitors which will require professional services.

I wish that the article was true and no one needed to do all this web development work. I truly do not enjoy working with forms and xml.

As many others have commented, its true that the easiest and hastiest form of web development is now "done" through pre-made tools. Sadly, everything else isn't as easy. Building a rest api for cool new stuff X is not very easy, nor is it to present such API on a easy to use designed site. Nor is turning a horror of an XML standard to a useable form and presenting such things to end users.

Web agencies that aren't able to differentiate themselves in the market will have a difficult time giving the right advice to customers about their branding...

This article forgets that using Microsoft Excel skillfully is all it takes to net a middle-class salary in much of America.

This is exactly why I enrolled in a Rails developer bootcamp. Its hard out there for a Wordpress Pimp.

That makes sense, if there's a market for it. It depends on where you live.

C'mon, I can't be the only one who thought the OP was talking about CSS when reading the title :) . Since the advent of Twitter Bootstrap and the kind of layouts it inspired, shrinking CSS margins would've be surprising to me.

lol I don't buy this, just take a look at pretty much every CMS (hosted or otherwise) and weep if you think as a complete amateur you're going to create a site with their wysiwyg content editable that actually looks half way decent.

Website design isn't just about being able to create a site without touching html, it's actually about it looking like a grown up made it. As soon as you're a few hours into your new creation you're going to want to tweak it (a lot), good luck sifting through the html soup the editor created for you.

You know what can replace you. Your clients do not. Most of your clients don't even know what they need. What solutions are available or what problems they have or will have.

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