Ask HN: Why do UK companies think that software development is cheap?

https://news.ycombinator.com/item?id=9897635

by JamesReeves1988 • 11 years ago

15 23 11 years ago

news.ycombinator.com

Just got asked from a reputable university to build a mobile phone application on (Windows, Android, iOS) with a CMS. The mobile apps are to include photos / videos / online shop / payment etc.

They wanted this done by 1st September, which is giving me 5 weeks to complete for the grand total of 3k.

Does anyone else find this on the low side?

sgt1012• 11 years ago

Will you be able to deliver to other clients in the same period? If not then you are working for ~28kpa which is low, and given you are freelance pretty unfair (because the reality is that you will be unlikely to get close to that on those rates.

Realistically if you have some experience you can expect (outside London) to earn ~40k pretty easily (and much more if you are good/prepared not to do the easy stuff) Given you are freelance my view is that you can ask for a 10% premium to cover sickness and fallow periods. So aim for 44k so I think that £4700 would be a fair quote (low end) for this job.

Of course this assumes that the work can be done in 5 weeks on 40 hr weeks. If in fact you will need to work 60hrs a week you need to be asking 50% more ~£7k

kohanz• 11 years ago

you can ask for a 10% premium to cover sickness and fallow periods

That is extremely low and, IMHO, not even close to what you'll need to make freelancing viable.

My rate is about 100% more than my former FT salary expressed as an hourly rate and it wouldn't make sense for me to freelance for much less than that. Remember all of the hours that you are not getting paid, looking for leads and doing admin work. Also you don't receive benefits as a freelancer.

sgt1012• 11 years ago

Yes - makes sense, I did factor in holiday time but you are right still far too low.

onion2k2• 11 years ago

Just say no and move on. You'll make more money going after sensible clients than negotiating with a bad prospect to get the price up to something reasonable.

hackerboos• 11 years ago

Don't say no.

Counter with a realistic timeline of deliverables and justify your quote.

When you tell people your rate is 60/70/80 pound an hour they laugh because they themselves most probably earn less as a full time employee. What they don't know is that this money has to cover the likes of sickness, holidays, hardware etc. you need to let them know that.

logn• 11 years ago

People should know this though. My auto mechanic (in the US) charges $90/hr plus costs. I don't think he's making $180K/yr and even if he were, it's the market rate.

onion2k2• 11 years ago

Every hour you spend meeting a potential client, send emails, and writing justifications is an hour you could have sold to someone else.

A client that comes in with such a low estimate (£3k for a £100k job) is going to take days of negotiations before agreeing to a sensible price ... if they ever will. There's no way that time will be recouped by winning the job. Ergo, say no and walk away because it will cannot be profitable to persue it.

Time spent pitching for work is lost time. Choose your battles wisely.

pyb2• 11 years ago

It sounds like they're just not very serious about getting this job done. In this business, it seems that a lot of potential clients are just fishing.

NumberSix• 11 years ago

Couple thoughts.

If "got asked from a reputable university" means the client is a university, in USA at least universities and non-profit institutions tend to pay less than for-profit.

Generally, I avoid firm fixed price contracts and quote an hourly rate and a non-binding estimate of hours. The reason is it is usually very hard to accurately predict how long a software project will take. Sometimes if it is something very cookie-cutter that you have done several times before, you can make a fairly good estimate of how long it will take.

flarg• 11 years ago

Will it take you 5 weeks to build?

audleman• 11 years ago

The scope of this project sounds huge. I can't imagine that you'd be able to do it as a sole developer in 5 weeks.

Are they handing you wireframes and design files? E.g. has somebody already done all the work of thinking through the UX, come up with all of the pages, handed you the static assets, and all you have to do is program it? Because if not, that part alone can take months.

Are you prepared to develop on multiple phone platforms? That could take 5 weeks.

to3m• 11 years ago

Yes.

Look here: http://www.itjobswatch.co.uk/contracts/uk/developer.do

This isn't quite the same sort of work, but it will do as a rough guideline. Look at the average rate outside London: £350.

So, what does this work pay by comparison? £3000/25 days=£120/day. Not enough! The page above suggests £300-400/day is a usual daily rate. So you could use that as a guide. 25 * 300=£7,500; 25 * 350=£8,750; 25 * 400=£10,000.

This isn't the sort of work I normally do, so I'm not hugely familiar with what people tend to charge - but I think £10,000 might even be a bit low. There's possibly people who've done this before laughing at the very idea right now. After all you'll be shipping on 3 platforms with payment/videos/online shop, and in only 5 weeks. If you're going to need to pay somebody else to do anything (artwork, programming), that is going to eat into this sum at quite a rate. Don't forget hardware and software costs too.

Aside from the scope, there is also a good possibility that more people at the client end will want their fingers in this pie once it gets going, and that will delay things further.

(Apologies if none of the above is news to you. I just assume that if you're contemplating doing this for £3,000, then it's something you haven't done before.)

avighnay• 11 years ago

I would not blame the client, any industry's value is a direct reflection of how the industry projects the value of its produce.

We software engineers more often than not, project the 'I can build that easily' view (you can see that in this thread too). Many of us are too eager to put our engineering ego before business sense. We forget that it is one thing to demonstrate technical feasibility and quite another to build a finished product. Even the smallest piece of software needs real good effort to make it complete.

This is compounded by having substantial pieces of software available as open source and customers always read that as free as in free beer. It takes quite some effort to make them see otherwise.

When we say its easy, when many of us give our work away for free (even with good intentions), when we put engineering before business, we are steadily moving software in the path to being a cheap commodity.

All this is not even considering availability of software talent in countries where the skill set is available for much less...

davismwfl2• 11 years ago

The scope seems way too large to fit in 5 weeks for 1 developer. Not to mention 3k doesn't even come close to being realistic. I do wonder though, are you talking a mobile responsive website or a native mobile application? The "with CMS" makes me question that as does the online shop etc. Either way, still way too much for the timeframe at money.

Realistically, in the US at least, regardless of web app or mobile app you are looking at likely multiple 10's of thousands of dollars to do it right assuming it is all new code and design work still needs to be complete etc.

As an FYI, I have seen a few companies make these wild type suggestions to find out who NOT to use. If someone even entertains it they know the person has no clue and so they won't work with them.

pyb2• 11 years ago

As for your last point, I could see this trick easily backfire against the companies. Who'd want to work with them ?

davismwfl2• 11 years ago

I don't necessarily disagree with your point, but it is a quick way for larger companies to filter through the many small consultants who may or may not understand the risk and complexity of an issue. And I have two great long term relationships with enterprise clients that did this to me initially. It was just their filter.

You could easily argue it is underhanded, or slimy, but I don't think it is as uncommon as we would like to think. Just like an Enterprise level client who won't pay for a $99/month SaaS, but if you change that price to $999/month, suddenly you are a contender and taken seriously. The value proposition is about perception, not reality for many larger organizations, which I put health care and universities in too.

JamesReeves1988• 11 years ago

Thanks all,

I have other contracts that pay above the market rate for my services. I did email the person back and said they would be able to get my services for one week for 3k.

I was interested in what people thought about the offer, as recently I've had a few offers in this bracket. (Which I've politely turned down).

blater• 11 years ago

have a look on jobserve and see what comparable contract rates are. As a contractor in the uk market for 15 years, 3k per week is unrealistic outside of banking. Universities are regarded as low paying generally. Android dev would be paying 300 at the low end and 550 p/d high end. The pay depends on the sector. Experience doesn't affect pay so much for pure development roles, except that entry level is usually 2 years relevant experience. Also location has less effect on contractor/freelance pay than you might think.

bbcbasic• 11 years ago

Given the spec and the deadline, I would quote a ballpark 100k. Drop it to 50k if they can relax the deadline. Maybe to 25k if they can accept a list of caveats about what will and will not be included and off the shelf solutions where they will have to accept some limitations.

6d0debc071• 11 years ago

The first offer is almost always low, especially if they're caching it in the normative terms most favourable to them - five weeks vs business value.

james1071• 11 years ago

Just say no.

VOYD• 11 years ago

Way too low. Say No.

frigg• 11 years ago

3K is not on the low side, it's at the bottom of the barrel. The project doesn't sound simple at all (on the contrary) and the time frame is short. Is 3K for each OS platform or for all three?

Assuming the latter and assuming you work 5 days a week 8 hours a day for 5 weeks, it amounts to 200 hours. You will be working for 15 pounds an hour.

Ask HN: Why do UK companies think that software development is cheap?

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