How This Freelancer Hacked His Hourly Rate
fastcolabs.com
fastcolabs.com
This freelancer seems to have contrived a way to work the equivilant of two billable weeks (spread out over a presumably longer amount of calendar time) at a tiny fraction of his market rate.
Hopefully the marketing effect of articles like this one will result in a significant uptick in his workload. If not, he's not only put in a bunch of work at a terrible bill rate. But he's signaled to the world that the correct price for his work going forward is $76/hour.
Not the best place to be. Here's hoping another hundred-odd people buy time from him so at least the final number looks respectable.
He might accidentally zip past the optimum price point, but he'll get there a lot quicker.
$1, $2, $4,...$64, $128. $128 is too much then do a binary search between $64 and $128.
That's currently $7503, with a current average of $61.
Realistically success as a freelancer is down to how well you sell. You may have the best portfolio but if you cannot connect with clients you are going to lose out on work.
In the end I focused on improving the way I sold myself to clients and things improved drastically. My portfolio was fairly average but I did well by simply instilling confidence in clients that they were in the right hands and a project would run smoothly with me charge.
Edit: If it's less than your target, you'll automatically be spending more time finding new work. Use the extra time to figure out how to make yourself more valuable to your customers to bring in more work. As a last resort, lower your rates (maybe the market has changed?).
Also, avoid round numbers: $110 says "this is my market rate" $100 says "I am rounding up, let's negotiate"
The two keys to making this work are: 1) always be over delivering and learning and 2) keep utilization up, when your time is scarce you have real credible negotiating power on rates.
That's only possible if you can infer a client's ability to pay and match your quote to their expectations. You can earn much more if you're able to adjust your rates on the fly, which is one of the reasons most freelancers do not list a rate on their public website.
The hourly rate is $91 at time of writing.
However, it's still too early to call it "hourly rate hacking" as the original blog post does.
There's no evidence that the method will work after the rate increases above the standard market rates. A few hourly slots per day, plus travel is very inefficient use of his time. He seems to be a competent developer with good business & design skills, and could probably book projects at $100-200/hour for full weeks at a time, instead of a few hours now and then for an average of $45.
However, the primary difference is that you do this logarithmic scaling per student rather than as a set price for everybody.
(sorry, I OCD on numbers)
Try to mentally (or on paper) graph the freelancer's pay. The x-axis represents "hours" and the y-axis represents "pay per hour". The function we get is the linear function "f(x) = x". I.e. for the first hour, he's paid $1; for the 300th hour, he's paid $300. A very straightforward graph. If we cut off our x-axis at $300, the graph looks like a right triangle.
If you want to find the total amount of money he's accumulated, all you have to do is find the area under the triangle (which is a special case of integration). For a triangle, geometry class taught us "Area = (1/2)(base)(height)". Calculus courses prefer that we integrate, which has broader application. Integration of "f(x) = x" gives us "f'(x) = (1/2)(x^2)". Our "integral" is equivalent to the "geometry-class equation" because for our particular triangle, the base is the same as the height. For comparison:
Area = (1/2)(base)(height)
f'(x) = (1/2)(x^2)
DoubleMalt is saying kjay's visualized "shortcut" (intuitively faster approximation) is slightly off. This is because the triangle in our actual problem looks like a staircase, and not a smooth slope. But kjay's shortcut has a margin of error of only about "-0.033%" which is a good enough approximation by most people's standards.
Also, DoubleMalt's equation should look like
x * (x + 1) / 2
instead of
x * (x - 1) / 2
That makes it: $4,501,500
Well done. 10% of these business contacts will likely want to hire this guy back at some three-figure number, and he will be able to choose the ones he wants to work with in the future.
Set a Reserve ($A), and for every reserved hour, ad $B.
So, with a reserve of $50, and 40 backlogged hours (at $1 each), the rate gets $90. Once you have less work on the roster, the price drops. When more gets booked in advance, the price rises.
Does this guy show up to a job interview and when they ask for salary does he respond "you tell me?"
Your worth is a constant projection. Learn how to convince people of it, and he'll increase his rate three fold.
So I'm very confused by the methodology. That description (which seems to be taken from onehour.me) seems to indicate that the price is unbounded and monotonic.
I had unofficially been doing "startup therapy" for years, but I always treated it as a loss-leader for new business. Probably should have been charging for those meetings, oh well.
This clever PR stunt might cost him a month of free work, or bring him a load of clients. I'd be curious to read a follow-up a couple months from now.
I do like the idea though - there is a lot of value in getting an audience to a critical mass
Many people used to assume "hacker" meant "blackhat." Now, if they're paying attention but not part of the tech community, they likely think "hacker" means "janitor" or perhaps "blogspammer."
Yeah, I have small kids.
Yeah, I probably need help.