Decoupling time spent from value provided as a software developer

As software developers, we are uniquely positioned to create something and give it a life of its own, and then barely having to support it anymore. We can sit in our living rooms in our fancy fluffy pink loungewear (what, you don’t have that?!) and create products that touch and empower thousands of people. So why are so many of us content to clock in and sell our time, 19^th century factory style?

I spoke of this already in My super secret spaghetti business plan: I don’t want to do this anymore. At least not 1:1, selling my time at an hourly rate. That way, I can only scale my business one way, which is by working more time. There are only so many hours a day to do this, and I’d also rather not die of exhaustion.

Couldn’t I just increase my hourly rate? Well, yes. To a certain point. But it becomes cultural and political quickly, and there’s just a ceiling for how much you can charge per hour to most businesses. If you’re lucky and skilled at negotiating, that ceiling can be quite high. But still, I believe there’s much more value to be unlocked if you don’t do it this way.

It’s not that I don’t like consulting, I do. “Consulting” is just a different way of saying that I help people using custom-built software, and I like helping people and I like building custom software, so, win-win. But I want to have my share of their business income for doing that, not just a fixed rate potentially much, much lower than that. If I can build something for them that increases their revenue by X, and I can charge X/10, they’ll walk away with roughly 9X/10, and both parties will still be as happy as two dogs conjuring delicious treats out of thin air.

The trick, of course, is to figure out what X is, which is not trivial. But is it really that much harder than all the other things we do? And is it not worth trying?

Software development is basically magic. We tell computers what to do, copy those instructions around the world in literally seconds, and everyone with access to some sort of computing device and the internet can make use of what we created. It’s like scaling your thoughts to a million brains. And it doesn’t even cost that much! And it’s easier than ever! The more you think about it, the wilder it sounds. The only reason we don’t walk around mind-blown is because of hedonic adaption.

You’re a magician. Figure out how to charge appropriately.¹

A note on incentive alignment §

One thing that really bothers me about being compensated hourly is that I have absolutely no financial incentive for creating things more efficiently. In fact, the opposite is true.

If I finish things faster, I am punished for it, either with more work or less pay. So, egoistic as we are, the natural tendency is often to go at a leisurely pace instead. Not stalling, but not sprinting either. So both the client and I are worse off, since I’m wasting my limited time on this Earth, and the client is paying more than necessary. It. Just. Doesn’t. Make. Sense.

Building products §

If you’ve read some of my previous posts on this blog, you will know that I also like building products, using my almost-patented business strategy of creating a small thing as fast as possible and seeing whether it sticks.

Because most of the time, I don’t now what I’m doing and I’m just trying things out, I can’t spend a lot of time building just one thing, and then probably see it fail. Building a new product is as much about improving the process as it is about building the thing itself. It’s especially about automating, deduplicating, and simplifying the process.

Jeremy Howard from answer.ai (and fast.ai fame) wants to build thousands of products with a team of 12. Can I build tens or hundreds of products with a team of one? How would that work, operationally? Can I scale it both on the tech side and business side of things? I don’t know the answers to those questions yet, but I’m exploring, learning, and figuring it out along the way, always with a goal in mind.

And if I strike the right balance between business prowess, technical skills, and luck, maybe I’ll end up with a few products that can both make some people’s lives better, and provide me with a diversified income stream that’s enough to live on.²

The important part here is that I don’t scale my time linearly with the amount of people getting value out of what I’m building. That’s also why, in my spaghetti post linked above, I talked about my products being mostly self-serve, not within B2B, etc. I just want to build them, expose them to as wide an audience as possible, and hope that a relative few think it’s valuable enough to pay for.

That’s basically it. Wish me luck, I’ll need it.

How do YOU start doing this? §

Enough about me. You’re probably the most important person in your own life. How do you get started decoupling your time spent from value provided?

1. Start thinking about how you can stop selling your time.

   Whether that’s in a regular job function or as some sort of consultant, think about the value you create, and what that is worth to someone else. Then start thinking about how you can capture some of that value for yourself without having to spend more time on it.

2. Start acting on those thoughts.

Hmm. I think that’s it. Obviously, it’s much easier said than done, but who said this would be easy? Get to work, one step at a time. Small steps are infinitely better than no steps at all.

Footnotes §

1. If you need some help here, like I did, go read some Jonathan Stark. ⏎

2. Just don’t call it passive income. There’s nothing passive about building and running a business. ⏎