DragonI

Why an Ex-Google Coder Makes Twice as Much Freelancing

With a talent war raging, companies from Airbnb to Pfizer are paying top dollar for the services of independent programmers

www.bloomberg.com

James Knight recently made an unorthodox career move for a 27-year-old coder: quitting a well-paid gig writing software for Google to go freelance. No more catered lunches, gold-plated benefits or million-dollar views from the search giant’s Manhattan office.

Knight is willing to sacrifice those perks because as an independent he’s pulling down about twice as much as he did at Google. Plus, he has more freedom. In March, Knight and his wife plan to travel to Spain and hopscotch across Europe—all the while writing code for a dating app and a self-portrait app, among others.

"I’d rather control my own destiny and take on the risk and forgo the benefits of nap pods and food," Knight says.

Amid an accelerating war for tech talent, big companies and startups alike are paying top dollar—as much as $1,000 a hour, according to a person who gets coders gigs—for freelancers with the right combination of skills. While companies still recruit many of the best minds, they're turning to independent software developers to get a stalled project moving or to gain a competitive edge. In some cases, the right person can be the difference between a failed and successful product.

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Independent software developers like Knight represent an elite echelon of the so-called Gig Economy—a 53-million-strong army of freelancers who now account for one in three workers, according to the U.S. Bureau of Labor Statistics.

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With the tagline "genius on demand," 10x Management typically represents about 100 software developers, though the New York-based agency receives thousands of applications every year. Co-founder (and former entertainment manager) Rishon Blumberg likens his clients to movie stars: "The demand for Tom Cruise is very large," he says, "but the supply is very small."

Martin Langhoff, 39, typifies the elite freelance coder. Having taught himself programming at the age of nine, Langhoff went on to become chief technology officer at the non-profit One Laptop Per Child program, where he managed a software and hardware team, industrial design, manufacturing and prototypes. Burned out and wanting to spend more time with his son, he joined 10x, which he says is akin to qualifying for the Olympics.

You can never say a price is high or low without asking, “Compared to what?” Here are some of the bases for comparison:

• Value created. If I create $1M of value for the company, you can compare my price with $1M. Value is notoriously hard to measure in isolation. If a team gets rid of a bad apple, their value created goes up but their price goes down.
• Opportunity cost. If the company took my price and paid for something else, how much would they make? If two junior engineers could make the company $1M, then I shouldn’t get paid as much as that.
• Market value. How does my current price compare with the price others are willing to pay? Interviewing is expensive and stressful, and what happens if I find a job I like better?
• Replacement cost. How much would it cost the company to get “the same” job done?
• Comparables. How much are other people “like me” getting paid?
• Needs. How much am I getting paid compared to how much I need to eat, sleep, educate children?

Is a price high or low? It depends on how you look at it.