| Altay, I wish you the best of luck here - I hope this model works for you and your team. One thought for others, one for you. >>First and foremost, our clients are the developers. No, they're not. Your clients are the people who pay you money. The companies pay you money, then you pay the developers money. The developers are your vendors. What you're actually saying is that you care about your developers and you want to treat them really well. That's awesome! Great agencies do this _all the time_. I run an agency - we have a good reputation, and each of our recruiters has dozens of candidates who will answer the phone when they call, because they've built a relationship over the years that nobody's time will be wasted. All good recruiters have engineers who trust them. If you live in a town and haven't found a recruiter who cares about your best interests, keep looking. If you're in Seattle, find me. Then when the recruiter finds the right role - or, as the article says about 10X, "the company tries to find gigs that match coder skill to client need" - you can make a match. (Note that the article forgot that 10X's "clients" were the developers. That's because they're not.) >>And finally, as the article mentioned, our cut is only 15%. My understanding is that consulting agencies often take 50%+. I wish! I wouldn't be typing to you, I'd have my minions do it. OK, kidding. There are consulting companies that do bill >2x of their employee's wages, but they're not the kinds of companies you're competing with here. Those are companies that have folks on salary, that bench them and pay them in between projects, that provide training/mentorship, have management in place to help support their people, etc. (You can decide how valuable those things are.) Also keep in mind that their folks are employees, so they're paying a burden of 18-22% on top of their wages, which my assumption is you aren't doing. You're competing with placement agencies (whether you want to or not). Those are the Volt/Greythorns of the world, who are likely taking more like ~15-25%. For example, many hiring companies will negotiate a markup rate of ~50% on top of someone's hourly rate, not including load/benefits - which when you add on load/benefits and calculate cut (i.e. margin) off the top, that's more like 20%. ($150 bill rate -> $100 pay rate + $20 load/benefits -> 20% cut) If you can make 15% work with the cost of client loss and wasted time, etc., that's great. I hope the press gives you a lift you can sustain to get there. |
> No, they're not. Your clients are the people who pay you money. The companies pay you money, then you pay the developers money. The developers are your vendors.
What would be the big problem with the money going directly to the developers, and then the agency billing them for their agent-y services? Presumably, the agency could just help the developers create a a Limited Partnership or something, consisting only of the developers; the clients would pay that LP, and the agency would bill that LP.