One of the first web systems I ever put into production (still in use other than modernization I went 5 years without a bug report which still astounds me) after I jumped from desktop to web I charged £1500 for (it was about 20 hours actual work the rest was spent learning the right way to do things), did the job over 6 weeks.

Client let slip they'd been quoted £11,000 for it and 3mths.

Next job they asked me to do was £5,000 and I said 3mths (it took less than a month and I was working full time).

I learnt that lesson fast, don't charge what it's worth to you, charge what its worth to them.

Or as an ex-boss pithily put it "serious people charge serious money".

As a European I wonder how much this whole discussion translates to Europe (and its countries more specifically). American professionals seem to be dealing in ridiculously, obscenely high payments, seen from my personal vantage point. But that's also because money has an enormous role in life there. If you have money you are someone. You are someone to the extent of how much money you have. More generally I wonder how much my perception gets distorted by reading HN regularly.

Maybe it's because the most common stories of this type from the US are about corporate environments rather than small businesses. European corporations also spend obscene amounts of money on services and contractors, but few of us get anywhere near it, and large European companies tend to be more conservative in procurement and rely on big names or the "old boy's network" more.

I once did a job for a European client who ended up being a manager in some government department. He had a use-it or lose-it budget and needed an app prototype turned around in 48 hours to avoid losing the money.

After the initial prototype we did a few more rounds. That ended up being IIRC $30-$40k for what amounted to 5 days of work.

Client was super-happy. I guess the prototype was enough to convince his bosses to fund the project for real.

Marginal tax rates probably have something to do with it as well.

> Or as an ex-boss pithily put it "serious people charge serious money".

Leadership teams are buying validation as much as they are a product. That's why management consultants can charge so much damn money, they usually aren't telling the company anything new, they are there to back managers decisions.

When you look at it that way, you're not just getting paid to build something, you're getting paid to be the subject matter authority who walks in and tells leadership how smart and forward-thinking they are.

Hourly billing is how you protect yourself against a sloppy client like this, especially with unpredictability. I have seen fixed price blow up so much I would never ever do it personally - I would have to add so much it would be astonishing to be worth it.

I would never bid a fixed amount with a client like this. The only way to do a fixed-bid is if a) the requirements are 100% defined, b) appropriate controls are in place to account for scope changes and roadblocks, and c) the price of the overage risk were priced into the bid.

Firstly, I bet if you asked OP they would say $18k is "astonishing," and yet here we are.

Secondly, you can avoid most issues by charging for a weekly or monthly retainer. It's much easier to estimate number of months than number of hours.

GK, I remember your presence on that thread. For those who were not there, it's under comment history. You spoke to the point of people needing your help (and not just anybody), which is kind of ridiculous in this case and the case from last week. You're opining value-driven fixed rate wisdom on a thread about a simple HTML page. If you dictate the pace of a specialty, of course you can charge whatever you want and call it "value-driven." For the other 99% of consultants out there, supply and demand bring pricing to an equilibrium. Retainers need not apply here nor in 90% of first-time client engagements.

Consultants who win the job will always leave money on the table. That's how you get the gig to begin with. Value is relative, and it takes at least two to tango come contract time until cost (what the client sees) and value (what you see) intersect.

Billing hourly brings pricing transparency clients want while protecting you from true under-utilization. If you're not being utilized because of red tape that was unassumed at contract time, a change order is the logical next step to account for scope remaining/additional scope.

As I said somewhere in that thread, I only ever encounter arguments against value-based billing from other contractors/consultants, and not companies. There's probably a psychological topic there to explore but I won't go there. I have nothing to gain by convincing other contractors/consultants, except the feeling that I helped someone escape the hell that is hourly billing.

Yes, it helps to be offering some unique value that can't just be found on Upwork (see excellent posts on this [1] and [2]), but you don't need to be in the 99th percentile to do value-based billing.

I don't know much about the author but they're probably in that 99% whose work you think is commoditized (or at an equilibrium). Clearly this is not true, since they were paid $21k for work that could've been done by a large portion of that 99%.

[1] https://www.kalzumeus.com/2011/10/28/dont-call-yourself-a-pr...

[2] https://tomcritchlow.com/2019/04/04/the-strategic-independen...

I'm gonna disagree that hourly billing makes no sense for the contractor. He clearly just didn't charge enough per hour; $75/hour is way too low for contract work, and his $21k could have been $56k at $200/hour.

What if the project was billed at a fixed cost, he negotiated $21k, but the project took a year to complete because the company moved so slowly? That'd be a terrible salary. He'd have to quit and somehow bill even with no deliverables. How hairy would a contract covering that be to defend when you sue?

I don't think that the parent means that you shouldn't be structuring your billing to be per hour/day/week of work. Rather, their point is that you shouldn't be doing math like this:

1. "I think I'm worth $75/hr"

2. "the job will take 40 hours"

3. "I'll charge $3000 for it"

but rather, like this:

1. "I think they would be willing to pay me 40k for this, and I think the project should take 40 hours"

3. "Therefore, I'll negotiate for a $1000/hr pay-hourly contract with a projected end-date of two weeks."

Well, the problem is you have to estimate how much they are willing to pay and this varies wildly.

> What if the project was billed at a fixed cost, he negotiated $21k, but the project took a year to complete because the company moved so slowly?

Simple: Charge $21k per month. If the company drags it for a year then you make $252k.

Okay. Why not charge $X per 2 weeks? Or X per week? Or X per day? Or X per quarter?

The granularity here is entirely arbitrary. Hourly billing is by far the industry standard. That's why we default to it. It's easy to justify in court, it's easy to reason about contracts which use it.

But the granularity isn't arbitrary!

If you're billing hourly, and the client chooses not to use your time, you don't work any hours and you don't get paid. If you then billed them for 100 hours without working, you've committed fraud.

If you're billing monthly, you've set aside the month for the client. If they choose not to use your time, you still get paid, because in your agreement you specified "use my time it or lose it".

There's no reason he should have charged more. The website was not worth $21,000 to the employer. They made a mistake and threw away money.

If he had tried to quote $21,000, he would have gotten thrown out the door.