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Comment by jcbrand | Hacker News Reader

From TFA:

> OK, what's the solution, then? Just pay more? I don't think that's going to solve the problem; I'll just burn more money.

Sounds like the author hasn't actually tried to solicit a company with higher rates and therefore assumes way too much here.

I think a lot of devs/shops who are more expensive are so because they're demonstrably better. According to free-market logic, they can charge more because the market is willing to pay them more. Why would the market be willing to pay them more? Because their services are worth paying more for, due to them being better.

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You're absolutely right.

Higher rates align incentives because they make the provider more vulnerable to reputational effects. If you're targeting $150+/hr projects, you can't use online platforms to find clients. That end of the market simply depends almost exclusively on reputational marketing (referrals, industry contributions, mindshare).

Hence, as their continued ability to get contracts depends on having satisfied customers, higher-priced shops have an inherent incentive to deliver quality. As opposed to low-end shops who are just scooping up clients with their low rates and therefor have no quality incentive.

This is questionable though. My first company was an onshoring consulting firm, and I know I was rented out for 197/hr, yet this was still 100% their business model.

> If you're targeting $150+/hr projects, you can't use online platforms to find clients.

Not true. I make $150/hr. The client found me online and we work entirely online. Furthermore, it is a deeply-discounted rate because I have 15% of the startup's shares.

The article is talking about working with dev studios & outsourcing large-ish projects.

If you're a singular developer charging a flat hourly rate (I am too), yes posting on the web will likely fulfill your needs.

If you're a dev studio looking for your next $50,000 project, probably not.

>Why would the market be willing to pay them more? Because their services are worth paying more for, due to them being better.

That's a stretch. It might be be the reason they're more expensive, but it might not be. Maybe they choose to work in San Francisco, rather than Idaho, so their overhead is higher. If price were the only signal of quality, then the low-quality workers would take advantage of the signal and charge the same.

This isn't hard to see in reality: can you name any industry or product where higher price assures better quality?

It's not a stretch. A more expensive laptop is generally better than a cheaper one. A good engineer is generally more expensive than a cheaper one. A good doctor... a good lawyer... etc.

> can you name any industry or product where higher price assures better quality?

Life doesn't give you any assurances. I'm talking about free-market logic and its application in general.

Generally speaking, you get what you pay for. If the dev in San Francisco is not good enough that the market is willing to bear his rate, then he won't have enough work to make ends meet and will move back to Idaho.

You have to be willing to pay more for quality, but simply paying more won't magically increase the quality. The only solution is to learn enough about that you can distinguish good from mediocre. If you just go looking for someone who costs as much as a good dev, you end up running into the arms of con men.

> This isn't hard to see in reality: can you name any industry or product where higher price assures better quality?

Nothing is assured, but almost every industry has a correlative relationship between price and quality. It might not be a linear correlation and it's not 100% consistent, but on average a more expensive product is almost always better than the cheaper one. This applies for everything from cars to employees.

This is only true for people who thoroughly understand what they are buying. This is very rarely the case for people hiring programmers. The only people who are capable of hiring programmers are other programmers (and often not even then). Everybody else is totally incapable of hiring programmers or distinguishing between incompetent, lousy, mediocre, or possibly good candidates. That is why the boss of a technology company (Google, Facebook, Microsoft, Oracle) has to be a programmer, or else sooner or later, the technology firm will crash and burn.

Even when developers are included in the decision, any decision other than 'use outsourcing' is met with "But, $10/hr!" by management and game over. Been there; had that done to me.

Either the management are programmers themselves (Bill Gates, Sergey Brin, Mark Zuckerberg, ...) or else the company is a lost cause. They will simply get expelled out of the market by companies -- who take no prisoners -- of which the management are programmers. Only a programmer can create half a trillion dollars of value (Google Search). Nobody else can do that. Their output is too inferior for that.

https://en.wikipedia.org/wiki/Norman_Borlaug

"The Man Who Saved A Billion Lives"

https://en.wikipedia.org/wiki/Norman_Borlaug#/media/File:Whe...

Granted, not exactly the work of one person, but neither is Google search. https://en.wikipedia.org/wiki/Edward_Jenner is probably the highest gains from any one person. Though there was a lot of prior work in the field.

If I've only had self-taught exposure to programming and can do like PHP/WordPress and a bit of rails, but am more of a marketing business person, if 5-10 years down the road I want to start a software company and don't want to be taken advantage of would you absolutely recommend becoming proficient in a language to have cursory knowledge, or for your examples above would the management/CEO have to be a full-time extremely proficient programmer?

Free market logic requires perfect information, though. How many of us have seen Highly Paid Consultants come on that were absolutely terrible, yet were paid more than we were in salary?

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