I agree that it's important for freelance engineers and designers to have some business help. Being a good "creator" doesn't necessarily mean you're good at negotiations, and while its an important skill, there is something nice about being able to focus on doing the work (and doing a good job) vs having to find the clients, negotiate the deals, handle payment, etc. That can be an unwelcome distraction for some people who aren't naturally good at it.
But that's why design/development studios exist. Even in a small shop - there's a guy who specs the project, a guy who negotiates the deal, a designer, and a developer (yes, there's often overlap in those roles). You pay a premium for the full-service of those distinct roles.
I think what's bothering me here is that these guys are perpetuating the notion that, literally, hiring a "celebrity"/"rock star" engineer/designer ("10xer") is something that folks should be paying a huge premium for. And that if you are that rock star, that you're so awesome that you need talent management (who deserves 15%). The premium here isn't for a support staff to help manage the project - the premium here is to get that celebrity development talent.
Not saying this is necessarily a bad thing - maybe it's an innovation that's much needed in the industry. But my gut is that they're spreading the celebrity-worship mentality of the entertainment industry to the software industry, and I'm not confident that's the right move.
It works in the entertainment industry because the link is much clearer -- you put Vinny Chase in your movie, it's going to do better than if you put in a no-name actor (all else being equal). Does that same thing work in the software industry?
Thoughts?
Bugs me as well, but probably not for the same reason. It makes me sad how many programmers and engineers who aren't the mythical "rockstars" get left behind in all this. Average programmers. People who haven't founded their own company or created a popular software library, but are still capable of doing the work of a hundred number crunching people by themselves with a keyboard. So much rhetoric gets thrown around about ninjas and the skills gap, yet the median salary in the industry hasn't kept up with inflation in the past 15 years. A lot of time and industry effort is being spent on finding or importing people rather than supporting the ones they have or just hiring people and teaching them how to be more effective.
What are some of your reasons for believing that? Personal work experience?
Through my work running a Java users group for 13 years, when I reach out to big name speakers my reply comes from an assistant that handles that person's calendar and scheduling. This could be a service that someone who is speaking worldwide would pay for (as their employer pays for it if they are at Google).
In reality, talent agent's in tech will probably be managing very good coders who are probably not big industry names - and that's ok. They could be very good at coding but not very good at making career choices, negotiating, and the like.
The Vinny Chase reference seems to indicate that you feel that the quality of your engineers doesn't have an impact on the success of your software company. Is that accurate? I think that if you feel the quality of an engineer is not associated with the success of a product, at least to some degree, most of the people here would disagree.
I know people who already did that, but the stars then moved to the Google(s), Facebook(s).
ps. hi nlh!
not to be too snooty, but couldn't they get one of their best design freelancers to give their site a bit of a makeover?
I found them to help me with a significant employment/management need.
10x focused on finding the best solution and provided ongoing contact and advice through the whole process.
I don't get anything by recommending them. I do believe fully in their business and value.
Michael Solomon at 10x talked with me about various kinds of research into salaries, benefits, alternative compensation, and the like. Michael was open to creative solutions, able to research comparison positions, and always aimed for a good solution.
Overall I was entirely happy with his work, and he has a clear, solid, long-term vision for helping developers.
As I wrote above, I don't get anything for recommended 10x. I just like to see good people get good work.
So it would be great if something like that managed to work as a market force to push things up. However, these guys would have to be completely transparent, pretty much like we see sport athletes getting their contracts disclosed, all of their "stars" would have each of their signed projects on a billboard, complete with stats and metrics of performance.
If it increased my rate by 20%, I wouldn't do it. Promise me that I would be able to live in New York and make $300-$400k/year without having to get into finance, and I could give them 10-20% of it easily.
2) Apologies in advance for my blatant stereotyping, but I couldn't help noticing that most if not all names of the guys leading this are Jewish. Coupled with the "Here's your Ari Gold" comment it makes me wonder, why is this such a Jewish-dominated field?
You wouldn't pay someone a percentage if it increased your rate by 20%? That seems a bit of a strange concept. Curious as to why not?
Not sure what to make on your assumptions of the guys leading this and their possible religious background, but since you went there - the Ari Gold reference was one I made in a similar article about agents being a possibility in tech, and I chose Ari Gold not due to any religious concepts (for transparency, I'm not Jewish) but because that his style as an agent is what everyone seems to want and he is probably the most known agent (even though fictional) in the world. I could have picked Jerry Maguire, who would be a close second I'd think. I'd have mentioned Drew Rosenhaus, but tech folks seem more knowledgeable about TV than sports.
Also, social capital. If you are already somewhat networked and you start telling everyone to "talk to your agent", I would guess lots of people would turn up their noses. Yes, it should be an absolutely professional relationship and all, but just ask people in Cleveland about Lebron or people in Boston about Ray Allen how they feel about them leaving and you'll see that there is more to money in any kind of relationship.
Another reason: we computer people love automation and streamlining of processes. If this actually becomes a thing, you will start seeing lots of copycats or actual startups trying to emulate parts of whatever process become established. This would just lead to either a new market norm (like the way YC has changed seed-stage funding) or forcing players in this space to go for a new level of risk/reward (the high-6-7 figure earners)
About the "Jewish" part, again I apologize for my ignorance. I think I wrote Jewish when I meant Jew (as in ethnic/cultural background, not religion? Semitic would be better?) and I was just going for last names. Coincidentally, if I had to guess, Rosenhaus sounds like a Jewish name to me.
Because nothing is free. Adding an extra layer to the sales process costs more than 20% of my time. I can't speak for rglullis, but I'd only accept 20% it if I was incapable of finding additional clients.
Can't you guys understand that?
Most don't bill themselves as only for the 10xers--and for good reason--your supply of exceptional talent will quickly run out. Few 10xers get paid ten times of a 1Xer. (I bet you'd bill more with 50 1xers than 5 10Xers.) It could be that a boutique agency will get enough traction and recognition to draw enough 10xers to be crazy successful--it will be interesting to watch.
But coming from the side of someone looking for good developers I'm all for a little innovation in the recruitment and employment space.
As far as the website goes though, it needs a ton of work. They should basically take out their life story in the middle and use that for a press release and create a simplified about us page. Overall it really just seems like they threw everything on the page, and while nobody wants to leave anything out, having so much text is very distracting and takes away from your message
(Oh, and we're not charging you anything - we charge the employer, fixed rate, no shenanigans.)
Also, freelance IT people typically work through several agents. What happens if you find a role yourself, not through these guys? Do you still have to pay them a cut?
The same is true of some programmers as well, but I would guess more programmers (and architects, designers, project managers, tech leads, etc) do the freelance thing compared to other professionals.
But I think it's commonly accepted that there's a huge performance difference between a good programmer and a bad programmer. People disagree as to the ratio of course; I've heard between 3x and 100x. I don't believe that's as widely mentioned for lawyers or accountants. So technology talent seems like a great place for 10x to start.
Ted Pearlman at Us Is Two (http://usistwo.com) was referred to me by a former business partner. He was scouring North America looking for someone with legitimate CTO instincts to advise a client on an ongoing basis. Their business (health and nutrition) aligned with my interests and their location (two minutes from my house) aligned with the stars. I met the client and they were nice, interesting people with a profitable business. It's been an exceptionally good relationship; fun and lucrative for them and me.
Ted and I became friends and now we work together often. I'm effective at pitching what I do and selling consulting (I started and co-ran Unspace for 8 years) but it's not what I enjoy doing. However, the real reason I'm excited to work with him is that no matter how good I am at keeping my pipeline full, there's no way that it's better than being recommended by a third party who is paying a fee to find someone with my skills.
Ted authored The Pudding Manifesto (http://puddingmanifesto.org/) and in my experience he puts his money where his mouth is. He sends an invoice up front and says, "don't pay this unless the person I introduce to you is as good as I say they are". You'll have to ask him what percentage of people end up paying.
As for developers uncomfortable with comparisons to celebrity culture and folks that complain about average developers getting left behind... this really isn't about any of that, or at least it doesn't have to be. Ted exhausts huge amounts of energy making genuine connections between people, often at his own expense. He's a hustler with a heart of gold, and has his client's best interest in mind far more often than a lot of the folks HN-types are so eager to take investment money from.
If you have any questions that I haven't answered, please feel free to ask. Moreover, I encourage you to set up a time to speak with Ted: http://usistwo.com/contact
If 10x can stay focused only on genuine talent, giving the talent a steady flow of well-paying work from businesses that can't afford to have someone under-deliver, that seems like a win/win/win to me, and I'm sure they'll do well.
Tech pros love to hate how companies evaluate talent - tests, coding exercises, interviews, whiteboard work, Fermi problems. How they choose to evaluate talent, and whether they choose to tell some coders 'sorry, you aren't 10x material' will be very telling.
Here is some recruiter-speak (what we are trained to say) that might make sense to some of the contractors out there or at least sound familiar. If you are working with a recruiter and you ask for $125/hr, and you feel that is a very fair market rate for the work you will be doing, and the recruiter is able to get the client to pay say $130/hr, chances are you won't care because you are getting your 125 and the recruiter is making almost nothing. So let's now say that the recruiter is an excellent negotiator and gets $150 - should you (as the coder) get more because the recruiter was able to negotiate a higher rate? At what point should the recruiter be rewarded for doing a good job negotiating? If the recruiter is getting $250 total and you are only at $125, surely you will feel slighted - but if $125 is the market rate for that skill, should the recruiter not be rewarded for the ability to negotiate and get a higher rate? I could argue both sides of this.
One way to alleviate part of this problem is to essentially split the difference. If you come to me asking for 125, let's say my standard cut is 10% (which is low, but this is just an example) - and anything I get above that 10% we split. So at 137.5, you are at 125 and I'm at 12.5 (10%). If I get the client up to 150, I get my 12.50 (10% of your 125) + 1/2 of the additional 12.50 (150-137.5) for a total of 18.75, while you get 131.25. This way the recruiter is rewarded for getting a higher rate, and the coder doesn't feel like a victim.
Unfortunately, most recruiters won't reveal the bill rate (paid by the company) to the coder or the coder's rate to the company, so all sides are in the dark except the middleman.
Almost all recruiting models are quite imperfect and have some really disturbing incentives for the recruiters (http://jobtipsforgeeks.com/2012/09/17/disrupt/). Transparency between all parties is something I am offering my candidates so they can use their best judgment as to whether my advice is clouded by a higher fee with one company over another. Transparency is the real key to solving many of the problems in the industry.
The agent model seems to be the right track, and hopefully we'll get it right some day.
Fair recruiter reward for results is also the case when the recruiter just takes a flat percentage.
And in trying to define a 'minimum acceptable rate', you'd be incentivizing all sorts of odd behaviors, as recruiters would preference the gap between 'acceptable' and 'final' rate, rather than a higher final rate.
You'd have created additional pressure to mask final rates, depress clients' understanding of their own value, etc. Those are not remotely healthy incentives for a client/manager relationship.
e.g. placing a 150 for 180 nets you 30. placing a 180 for 200 nets you 28. how many 180s do you expect to keep? what conversation do you imagine taking place when a client says "we should bump up my minimum from 150 to 180"?
Rather counter to your goal of keeping coders from feeling like victims, that incentive structure is maximized when agents explicitly take advantage of coders who least understand their value and then keep them there.
Odd incentives are so deeply ingrained in recruiting that it's almost impossible to get them out of the system. Recruiters have the incentive for motion - people leaving jobs all the time, regardless of whether it is a good career move. If an agent had tech talent paying $X,000 per year to tell them which moves were best for their career, that would be much more of a positive incentive for all sides. Instead, the incentive is for recruiters to get people to change jobs, regardless of how happy they are now or how happy they will be in the new job.
The pressure to mask final rates is much higher under current conditions. Take that incentive out entirely by showing your employees/contractors the invoices that you are billing the company.
Depressing a candidates understanding of their own value is a valid point, and very unhealthy. I don't think agents can take advantage of coders who understand their value, as they are able to leave. At a former company, I saw consultants leave over as little as $5/hr. The only thing that prevents coders from being taken advantage of by recruiters placing them for contract work is the coder's knowledge of their market value. If they know that, they should never get taken advantage of. Again, if they are being paid 'true market value', and a recruiter is able to negotiate a rate well above market value, that isn't taking advantage of the coder - that is taking advantage of the company paying the higher rate.
looking forward to receiving shares as a thank you ;-)
Let's be honest here. Aside from the ego stroking of having an agent, what value do these people provide?
Hollywood agents are capped at 10%, Hollywood managers typically are more like 15%. Agents are "forbidden" by California law to produce projects, though that line can be awfully blurry. Managers can't, in theory, directly negotiate contracts. In theory.
A lot of talent ends up with both a manager and an agent, each with their own percentage.
Toss in an attorney at 5+% and you can see how the Hollywood money really flows.
Do you we know which party pays 10x?
