How to Turn Your Passion for Coding into money as a Software Developer
A case against fixed-price projects
This is going to take a bit different direction than I initially thought.
I ended the previous issue with this:
Some people, even well above the 10k/month visit, don’t know how to make some side income only with their blogs.
This is why I had to dig deeper and find out if direct monetization is likely not the answer for software developers, then what is?
But instead of going through the list that you’ve seen thousands of times, I’m going to share the thoughts I’m having at this moment on making money, sustainability, and growing your business as a developer.
In February, I returned to Upwork.
My biggest client - outside Upwork - reduced my hours, and I wanted to compensate for my lost dollars.
I could’ve easily found a job at a similar hourly rate that I had, but working hourly scales terribly.
So this time, I went for fixed-price projects on Upwork.
Despite having success and landing project after project, five contracts later, I’m starting to realize the problem wasn’t in fixed vs. hourly projects.
And why simply going fixed-price won’t solve my scalability issues.
The problem is more in what I offer, so
What do I offer?
On Upwork, I’m your all-around Fullstack developer guy.
I can do pretty much everything you can imagine with JavaScript in 2023.
You might think this is a crazy valuable asset, but there are two caveats to this:
Developers are getting better, faster
Usually, as technologies get better, they are easier to learn and work with.
Building a web page was black magic around 2000 when I started.
Today, everyone who got 15 minutes could make one.
Similarly, learning JavaScript, or even better, TypeScript at an acceptable level, is much more achievable than ten years ago. And ChatGPT only accelerates this:
The other day someone sent me a YouTube video where a data scientist working at Meta reviewed a perfectly valid roadmap for a Python Data Scientist role that ChatGPT generated.
More devs, affordable prices
I hired a guy two weeks ago for the hourly rate I made ten years ago. He’s a beginner but doing a far better job than I expected.
In the past 15 years, outsourcing was probably worrying to programmers in the US.
It was an effective way for US companies to cut costs and hire disposable talent - we had clients who were like, hey, from tomorrow, there will be no work for you, OK?
Going remote worldwide during the pandemic didn’t help this process either.
But South Africa is like, hold my beer.
Diminishing return to raising rates
Being an agency owner, dealing with payroll, and working in outsourcing - being on someone else’s payroll - often makes me wonder, do I worth the value I want to charge in the future? $100/hr, $200/hr?
My total profit / all hours worked for the recent fixed-price projects comes to $50-$60.
But how do I scale this now?
Let’s say I build a browser plugin for the client with a fixed set of features for $1500.
It takes 30 hours to build it. That’s $50/hr.
But I want my hourly rate to be $100/hr.
One option is to work twice as fast (JK), and the other is to charge $3000 for the plugin.
If the client wants to work with You, they might do $3000, but they’ll most likely find someone who will still do it for 50% of the price and do only a 10% worse job than you would have done - or even %10 better!
The third option is to have a plugin that does most of your client’s needs.
This leads me to my conclusion:
What should I offer?
I think I got the fixed part of the equation right, so at least I’m thinking in the good direction.
But not only the project price has to be fixed, but you need a fixed offer too!
Why is this not the same as fixed-price projects?
Well, on places like Upwork, fixed price means that if you can’t do it for $100, the other guy will do it.
On the other hand, a fixed-priced offer would be like a website for $99.
Take it or leave it.
Next, I’ll be exploring what can be a part of fixed-price offers and how you can use no-code, open source, and social media to create and market your fixed-price offers.
Thanks for reading my newsletter and figuring out this entire thing with me.
Until next time,
Akos