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While surely time clocks worked well for an assembly line worker, I have always found the push to clock my hours similarly rather annoying and this puncher makes me froth with rage. It's all sorts of wrong to force a creative person to work on an hourly basis. First, if I am able to solve something quicker, am I to earn less...? Worse, if I take a long time, perhaps even miss a deadline then you are to pay me more?? Second, this presumes there are hours when I am working and hours when I am not. Puh-leeze. I am not paid for the hours when I am actually typing the solution into an editor, I am paid to come up with solutions to problems. There are (at least) twenty reasons best ideas come in the shower. Shower works but I have also made breakthroughs on tough problems while exercising, eating and wandering the streets (and if you think all the above has something to do to get yourself into a special mental state then you might not be wrong. Is this flow, again?). Can we just switch to per project fees, please? It's not like the client does not budget per project or we are not planning on spending X hours on this project (and Y income), anyways. Get real, everyone and leave the punch clock behind already and most definitely do not invent a portable one for $deity's sake.
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Don't sell yourself, build a product... Like Dries did quite cleverly. :)
This article is related to design/illustration, but the concepts relate well to programming which is also creative work.
The Dark Art of pricing.
It contains some really good practical advice on how to speak to clients as well, and how to think of pricing and value.
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I do not have any. I am a fairly good Edge Case / Performance engineer, thanks much, but just keeping my small business (invoice issued, money comes in, that's it) running is very hard. Actually making a business with employees and marketing and sales, can't imagine how would I cope with that.
There are plenty of people out there to work with... You bring your skills, they bring theirs... and you try to bake a pie... And products can be as simple or complex as you want them to be. Also, note Dries did not do anything by himself... he got investors and other people to help.
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I don't understand you.
Goddamn grateful that you share our view on this matter.
Myself and my co-workers are in an situation right now where a person (a semi customer and part-owner. I know, a devilish combo, but still) has made up his mind that by asking the same f*cking questions about time estimates, time spent, current status, delivery time (by the hour!) etc over and over again, very much like sampling, he will get the kind of easy-to-track-and-follow-up-on answers and deliverables he wants and so much need [for his neat and super-rigid world to fit].
Since we decided not to answer these specific kind of questions anymore, and failing big in trying to explain to him just why - almost all of what we do is creative work! and what we actually can answer and answer to, this person now claim us as not trustworthy and unserious in our business and work. Just as if he knew! What we do, and how we go about doing it.
I've been unsuccessfully trying to find an old article I read on "value based pricing".
How can we charge based on the value the client receives for a given chunk of work, rather than based on the amount of time it took? It's hard to estimate this.
Some people talk about Value Based Pricing in terms of what the client is willing to pay. Whilst that's ultimately true, I think it's a narrow way of looking at this idea.
The challenge lies in understanding how the work really benefits each client, rather than just thinking about getting the job done. A smart 5 minutes of creative problem solving, might save a client days of manual processing. That's worth much much more to them than the cost of 5 minutes of your time. But how do you determine what to charge for that value? The equivalent cost of their employees time on that project?
I don't know the answer, but I definitely think it's worth exploring the idea further, and escaping a time based punch clock approach.
I found myself with several time-tracking related problems so many times...
I welcome your words on my note-taking app.
The problem is, that most programmers, myself included, underestimates a project, thus are getting too little money for the project.
Therefore the hourly rate is often a better business for you, unless you know exactly what you do.
If you are not doing hourly invoicing and there is some unknowns in the job, you will end up take all the risk.
I have a drupal consultancy company in Copenhagen and we are 10 people know, and hourly invoicing is how we do business in order to keep the risk low.
/Rasmus, Reload.
The other issue for anything more than a few hours work is scope creep. If clients are late meeting their own deadlines for requirements, try to add scope to the project etc., then at least with hourly billing it costs them more to do so.
While I agree 100% with your comment, I also think it is simply something we need to accept and live with to a certain degree.
However, we also need to understand that this is not unique to the software development business. In any profession where you perform construction of custom made client projects you have the exact same problem. Namely that the estimated time/cost involved often are way off. In most cases way under the real outcome.
I believe this simply is the result is that we are too optimistic about the time required and the challenges we will be faced with, but also that many challenges are very difficult to identify in the short time we often have to make a cost estimate. That things often changes during the development/construction process is of course also affecting the outcome.
Compare that to for example building that are constructed using only prefabricated parts. I believe this video, http://youtu.be/Hdpf-MQM9vY, is a very good example of that. Its a 30 story building constructed in just 15 days from prefabricated building blocks.
But, those building blocks had to be constructed at some point as well, and I am very sure the finished design and functionality was not on time or at/under budget. However, in this case that is called R&D and not client work. The outcome is, you could say, an IKEA-house that just have to be put together. They have thus effectively removed the hard task of calculating the time and other challenges otherwise faced in the construction of the building for end customers.
Result is they can practically be bang on when it comes to calculating the time, work and cost for the customer to build these houses.
/tsvenson
Per project pricing assumes perfect estimation, fixed scope and therefore a waterfall approach to project management. Time or effort based charging is much fairer and more transparent to both parties (if anybody specifies that you spend your hours typing rather than thinking, that is a technical management issue not a pricing one). The best approach I'm aware of is to charge by complexity points rather than time, but this requires a very high degree of trust, cooperation, and sharing of risk that may not be achievable in a client/supplier relationship.
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