Ask HN: Self-Employed folks, are you earning a living wage from your work?

[freelancelot]

This is a very vague question but it was prompted after reading about this [1] topic yesterday. The author mentioned it took them 5 years to get to $1000/month.

This made me think about a distinction, although I'm having trouble putting my finger on it.

One kind of a self employed person is a product developer/seller and the other is selling services/consulting. (And I'm sure there are more if we further down.)

To me, it seems like 'The odds of success are very low for a startup' and other related wisdom is usually referring to the product based solo entrepreneurs.

I'm curious to know what are the experiences and how hard is it to earn a decent* income doing the consulting/freelancing/contract based 'renting out my time' approach?

I'm hoping to hear someone insights into people's experiences, and possibly comparisons to going down the product path. The end goal would be to work for yourself.

* - `decent` could be defined as within 50% of the income you could earn by working for someone else. It's vague, and not really a constraint for this discussion.

[1] Five years of indie hacking https://news.ycombinator.com/item?id=35036871

Thank you for any comments and experiences.

[dieselgate]

Strictly speaking about software/coding businesses all the people I know who make it work are contract devs. The most stable way is to just get an x-month contract and then rinse and repeat as needed.

From people I've spoken to/worked with who do this they mention a pay increase due to handling their own insurance etc.

Even if you "work for yourself" you still will have a "client" - the client can just be another Company.

Of course there's the "product path" you mentioned but that's less reliable and consistent. Feel free to ask more questions if interested, this is a good topic for HN and a lot of people seem interested in the topic (myself included)

[freelancelot]

Thank you confirming my suspicions. The whole startup culture seems very product focused, but it's really hard to find more information about the self-employed contractor style of work.

As a newbie to this world, the biggest questions I have are:

- how do you seek out new clients, are there job boards/discussion boards for these types of jobs? Or perhaps you just reach out to companies that seem to be doing interesting work?

- how do you prove to them that you can earn their contract?

- how do you even begin to match the project requirements and what you can bring to the table, and if needed, bring / integrate an additional member/team/contractor? Is that handled by the project manager at the company?

I have many questions, but basically, if you know a good place to get a primer on this, please share! Thank you.

[muzani]

I did for about 5 years. By definition, I wouldn't be self-employed if I wasn't making a living wage; I'd just be unemployed.

Contracting is easy. Just that 80% of the effort is marketing or collecting payment. People say Upwork is hard, but that's because with Upwork, you're competing with all the people who don't want to market or take higher risk projects. When contracting, you also have to charge more than you would at a FT job, which also raises the marketing effort needed.

The problem with contracting isn't really the money, it's that you spend little time actually doing the work you're paid for and get rusty. So after a while I'd do teaching (which pays much worse). Then just ended up getting a full time job to be able to just focus on the coding.

Doing product as a solopreneur is probably hard mode. It's actually easier to go the VC route, which is why people just do that. There are people out there whose full time jobs is to find someone who can build a product and give them a million dollars. If your odds of making a billion dollar app aren't very high, then you can try the million dollar route, but that's probably the niche of making well, apps around ChatGPT, selling diet products, and essential oils. Things that people would buy, but won't fund.

[freelancelot]

I like that definition of self-employed.

How does one handle collecting payments if the contract work is remote?

How do you even begin to market yourself for a contract/consulting project? Unlike a product, you can't place ads, or use traditional advertising, you would instead need to do things like beef up your linkedin/twitter/github?

I can see that thought where the actual coding work would only be a small part of it.. and I suppose that's something to think about.

The product route sounds very shiny and the one discussed most, but that puts me off. I do not enjoy the thought of writing twitter/linkedin posts to advertise stuff, nor do I enjoy hiring SEO and doing much marketing.

My hope is that avoiding the product route will allow me to get away with not having to worry about all this stuff, but I get the feeling there's no escaping it.

I'll copy paste some questions I posted to another comment here, if you feel like answering:

- how do you seek out new clients, are there job boards/discussion boards for these types of jobs? Or perhaps you just reach out to companies that seem to be doing interesting work?

- how do you prove to them that you can earn their contract?

- how do you even begin to match the project requirements and what you can bring to the table, and if needed, bring / integrate an additional member/team/contractor? Is that handled by the project manager at the company?

[xerox-elf]

I'm not in tech, but I'm a self-employed independent contractor (motion graphics design).

My annual gross income is between 100-150% that of my full-time colleagues. For roughly half the working hours. It's a pretty sweet deal.

How I did it: I spent 2.5 years full-time at one of these pressure cooker SF ad agencies that churns through junior employees like nobody's business. By the time I left, I had connections at ad agencies throughout SF. Five years later, all my jobs have come through word of mouth referrals.

I bill based on a day rate. The average job is between 1-4 weeks long.

However, there's a strong caveat: for the last couple years, 75% of my work has come from one client. The tech recession has made a lot of my smaller side gigs shrivel up, so I'm pretty dependent on this one agency holding steady. I'd feel a lot more secure if I had a more diverse client roster-- I've been brainstorming ways to be more proactive about client outreach.

Looking back, I should have started looking for opportunities to productize from day one. The thought didn't occur to me. It's definitely something I'm looking into now.

[freelancelot]

Thanks for sharing and good to hear that you're making it work!

The beauty of your success is that you are in advertising, and so you advertised yourself successfully enough to get word of mouth of referrals, and so you must be good!

How do you go about looking for clients that are interested in your services? Do you wait for them to come to you through word of mouth? How do you expose your availability and skillset?

[asicsp]

I sell programming ebooks. Started in late 2018, the last two years have brought in more than double my needs. Which is just about $150/month (I'm from a developing nation, live alone in the outskirts of a second-tier city).

Compared to what I used to earn 8 years back, the current income is only about 30% (not adjusted for what I might be earning now). This is still more than enough and I'm grateful that I don't have to look for a job.

[freelancelot]

That is very cool. This makes me really happy to read, because it shows that you need to find the point in life where you find happpiness, and balance with money, autonomy and peace of mind. Thanks for sharing.

Do you write these books yourself? Are these all on one/similar tech? Do you learn new tech to be able to write books on them?

EDIT: I see you have links in profile, that answers some stuff.

[asicsp]

Yeah, I've written them all solo so far. Might team up with internet friends in future.

Whether I was familiar with the topic or not, I had to dig deep while writing the books. I did have to learn new things as well (for example: `tkinter` and third-party Python modules for the Python Projects book). And almost always, I understand something better whenever I work on new version of the books.

[freelancelot]

That's nice! This way you build your skillset and have a way to demonstrate it!

[jventura]

Can I ask you where you sell your books? I’m also looking for authoring programming ebooks and looking for platforms where I can market them..

[asicsp]

I use Gumroad and Leanpub. My main marketing strategy is giving away the latest ebook for free and link to a discounted coupon for other bundles.

[alxmng]

I earn a living wage working as a software consultant. I work for myself primarily because it's the only way I know of to do software engineering with flexible hours. I work on retainer with weekly deliverables. Within the week I can choose to work whenever I want.

I'd love to bootstrap a SaaS that would replace this income. I've actually started multiple, profitable SaaS, but they don't match anywhere near what I can earn as an engineer. Total addressable market is a real bottleneck. Sales/marketing is a difficult challenge for solo developers since there's no leverage. Unless you have a very expensive product or a huge funnel and market, it seems impractical to scale to engineering salaries.

[freelancelot]

This is my primary motivation, flexible hours.

Your retainer + weekly deliverables arrangement sounds nice. Do you propose this to your client? Do you expect payments weekly? What medium do you get paid in?

Why do you suppose your SaaS products don't match your engineering rates?

Are you not charging enough or are these products not providing enough value as you can as an engineer?

Perhaps a low volume high price service might be the ticket? Have you tried increasing prices?

How much is the difference in the SaaS revenue/profit vs contract income? (%)

Thanks!

[alxmng]

I’m essentially a full stack / product engineer for hire. I’ve done proposal type projects but I try and avoid them, I think it’s harder (almost impossible) to land clients with well-scoped projects. I find it easier to find companies that just want a product engineer they can throw tasks at, fix a problem, or augment a team to get a release done faster.

I bill monthly, and get paid by bank transfer (is there any other way?).

My two profitable SaaS have combined a few hundred active subscribers, maybe 5% of what I can make consulting. They are low-cost consumer products, so I’d need 5k active subscribers before I would think about not consulting. Without a breakthrough in marketing, I don’t see how I’ll ever get there.

My main bottleneck is I don’t really know how to market them sustainably. Most customers have come from HN or word of mouth.

My next software product will be high-price ($200-500, ideally a subscription). But there’s no free lunch. Most high-price software is feature heavy, especially enterprise apps. That is potentially months of unpaid development work without any guarantee of success. Very difficult for me because I have a family to support. The trick for me is to find something where the MVP is not too time intensive to build, but provides hundreds of dollars a month in value to other businesses.

[freelancelot]

Thanks for your reply.

>The trick for me is to find something where the MVP is not too time intensive to build, but provides hundreds of dollars a month in value to other businesses.

I think that is indeed the target for most of product oriented solo entrepreneurs. And stretch goal being getting bought out or acquired.

Do you do market research for product ideas/customers willing to pay?

[alxmng]

For my existing products? No.

I made a resume maker product before, and in retrospect I feel stupid not doing more research. I had good conversion, but I quickly realized that SEO was the only viable marketing strategy, and the competition in that space is brutal. Ranking is very difficult without spending money on agencies to get backlinks and write blog spam. After some research I realized the people on the front pages of search had amassed millions of backlinks.

It’s absolutely necessary to understand the funnel before building something. Especially the top of the funnel. For high ticket products it’s simple because the top of the funnel could be ads or cold outreach. But for anything that relies on decent traffic volume you need some kind of organic marketing strategy. You have to figure out how to reach your audience sustainably.

[freelancelot]

Makes sense, thanks for sharing your insights.