I started programming in 2006, writing my first lines of code in Java. The first „usable“ program I wrote was a time tracking tool for my brother as a Java desktop application. And he really used it for quite some time. A lot has changed since then. Having started and worked as a freelancer for many years, some good friends and I eventually founded a company named ueberdosis. The number of jobs rose and the projects became larger. The tech stack became more complex and the process more professional. But one thing has not changed in all those years: that one client who is cynical about the monetary value of your work.
I have thought a lot about whether I had to offer my work at a cheaper price. And where I could cut corners to bring down the costs. On the other hand, I have often received good feedback on the work from the same clients who where cynical about the price in the first place. And the more I think about it, the more I realize that the price will not change that quickly. At least not when it comes to getting cheaper. But most of all, I realized what the real value of software is. And what makes it so much more valuable than what most clients are probably willing to pay for.
Software gives you more of the most valuable thing in the world: Time
It does not matter on what level you work. Whether you have just started or you have made a living by doing this for years. Whether you are a beginner or a professional. A junior or a senior. From the moment you start implementing projects for customers, the primary goal is to improve processes. To digitize and speed them up. And no matter how large or extensive the project is, in the end it usually results in your customer getting more of the world's most valuable asset: time.
The problem I see here is that the ratio is not consistent. As long as you do not have a subscription-based contract with your clients, you will only receive money for the time you are working on their projects. So the ratio is 1 to 1. You spend one unit of time and will receive one unit of money. But the value that was created is much higher. While your clients pay you for your work only once, they are saving time as long as they are using the software. So the ratio is 1 to n. The clients spend one unit of money, however, receive many units of time in return.
But the value created by the software is much higher than that. You saved your clients’ time. And time is something extremely valuable. If not the most invaluable thing in the world. It passes equally fast for all of us. Every single second that goes by is as long for you as it is for me. And for everyone else too, presuming we ignore all the physical theories that allow us to bend time. And now, actually the sentence would follow, that you cannot buy time. However, as programmers we can sell it in the form of a software that will do your work and thus gives you more time. And that’s not just happening once, but as long as your software is in usage.
What you sell is a value, not a product.
So what should you do in the future? Quintuple your hourly rate? I mean, that would be a beginning. I think - and I’m sure we all agree on that - that there’s no panacea for this problem (let me know, if you know one!). But you should be concerned about the value you are selling. And why you are selling it at a given price. And not only the product you are selling has a value. You’re having one too. With the knowledge you have gained over the years and the time you spend on your customers or even on side projects, you will become better and faster with every step you take. It is your job to make it clear that you are selling a value. That you are selling something that’s actually not for sale, but you make it possible anyway.