This made me think about a distinction, although I'm having trouble putting my finger on it.
One kind of a self employed person is a product developer/seller and the other is selling services/consulting. (And I'm sure there are more if we further down.)
To me, it seems like 'The odds of success are very low for a startup' and other related wisdom is usually referring to the product based solo entrepreneurs.
I'm curious to know what are the experiences and how hard is it to earn a decent* income doing the consulting/freelancing/contract based 'renting out my time' approach?
I'm hoping to hear someone insights into people's experiences, and possibly comparisons to going down the product path. The end goal would be to work for yourself.
* - `decent` could be defined as within 50% of the income you could earn by working for someone else. It's vague, and not really a constraint for this discussion.
[1] Five years of indie hacking https://news.ycombinator.com/item?id=35036871
Thank you for any comments and experiences.
From people I've spoken to/worked with who do this they mention a pay increase due to handling their own insurance etc.
Even if you "work for yourself" you still will have a "client" - the client can just be another Company.
Of course there's the "product path" you mentioned but that's less reliable and consistent. Feel free to ask more questions if interested, this is a good topic for HN and a lot of people seem interested in the topic (myself included)
Contracting is easy. Just that 80% of the effort is marketing or collecting payment. People say Upwork is hard, but that's because with Upwork, you're competing with all the people who don't want to market or take higher risk projects. When contracting, you also have to charge more than you would at a FT job, which also raises the marketing effort needed.
The problem with contracting isn't really the money, it's that you spend little time actually doing the work you're paid for and get rusty. So after a while I'd do teaching (which pays much worse). Then just ended up getting a full time job to be able to just focus on the coding.
Doing product as a solopreneur is probably hard mode. It's actually easier to go the VC route, which is why people just do that. There are people out there whose full time jobs is to find someone who can build a product and give them a million dollars. If your odds of making a billion dollar app aren't very high, then you can try the million dollar route, but that's probably the niche of making well, apps around ChatGPT, selling diet products, and essential oils. Things that people would buy, but won't fund.
My annual gross income is between 100-150% that of my full-time colleagues. For roughly half the working hours. It's a pretty sweet deal.
How I did it: I spent 2.5 years full-time at one of these pressure cooker SF ad agencies that churns through junior employees like nobody's business. By the time I left, I had connections at ad agencies throughout SF. Five years later, all my jobs have come through word of mouth referrals.
I bill based on a day rate. The average job is between 1-4 weeks long.
However, there's a strong caveat: for the last couple years, 75% of my work has come from one client. The tech recession has made a lot of my smaller side gigs shrivel up, so I'm pretty dependent on this one agency holding steady. I'd feel a lot more secure if I had a more diverse client roster-- I've been brainstorming ways to be more proactive about client outreach.
Looking back, I should have started looking for opportunities to productize from day one. The thought didn't occur to me. It's definitely something I'm looking into now.
Compared to what I used to earn 8 years back, the current income is only about 30% (not adjusted for what I might be earning now). This is still more than enough and I'm grateful that I don't have to look for a job.
I'd love to bootstrap a SaaS that would replace this income. I've actually started multiple, profitable SaaS, but they don't match anywhere near what I can earn as an engineer. Total addressable market is a real bottleneck. Sales/marketing is a difficult challenge for solo developers since there's no leverage. Unless you have a very expensive product or a huge funnel and market, it seems impractical to scale to engineering salaries.