How to handle a client comparing your hourly rate to cheap overseas development

There's no worse feeling than feeling like someone is undervaluing your work. Don't do it. Sometimes it can feel like "something is better than nothing." It's not. Not only is it bad for your mental health and well-being, but you'll spend time doing something you resent instead of spending time building new business. In the end you're shooting yourself in the foot, not "surviving."

Regardless of how you deal with it, you should never go down on what you feel is a fair price for the value you bring just because they say, "I can get it cheaper in [insert common outsourcing location here]." 1

On occassion we get potential clients bringing this to our attention. We avoid discussing the price difference. Focus on the difference of value that they're getting instead. This list, in no particular order, are the value you get when dealing with a competent developer vs. the lowest bidder:

1. If they want to write a perfect spec, design every possible outcome to the T, and are confident 100% that no documentation and stone is left unturned then fine. But if they made a mistake in the spec, the mistake will be replicated exactly in code.

2. Your thinking and ability to reason, interpret meaning, and make good decisions are an asset. You have the ability to know that just because no error was in the designs for a given exception, that it needs one because you think about the end user.

3. Likewise, the client won't be paying an cheap outsource shop to solve problems. They'll be creating more than they solve. Your ingenuity works in your favour here. Most customers/clients value input on their plan and idea. They want you to come to the table with ideas.

4. Maintainability. If it needs to be maintainable, it needs to be built right. Good documentation, automation where possible, proper subversioning, and well commented code. I spoke with a potential client for our corporate skunkworks program the other day who spoke with a developer who didn't know what Git was. Regardless of your tool of choice (Git, Mercurial, or any other tool) - you should know what they all are and their importance.

5. Scalability. Quality of code could really cover these two, but they're both important. Building code that runs != building code that runs well. If their app needs to hit any kind of scale, doing things right is important. Milliseconds add up faster than you can imagine. I've seen static sites that take +5 seconds to load, whole applications without any sort of rescues or error exceptions, and databases where literally EVERYTHING is a table and they were running JOINS between a first name table and a last name table.

6. QA. It's not very flashy, but for a client and an end user it is important. Having decent processes in place and spending the tedious time with the app, makes all the difference in the work turned over.

7. Legal recourse is easier. Touch wood, they won't ever have to deal with any issues, but a legal team is much more confident of their abilities on domestic soil than abroad.

8. Their data is safe. You likely have a good process in place to protect their data. The lowest bidder likely does not. Also, IP when crossing international borders is likely not honoured in the same way as IP within your border. Even if the contractor does honour it to the best of their ability (of which I have my doubts), once it crosses borders foreign2 (and even local 3) governments certainly do not.

9. The IRS is much less wary of local transactions with domestic contractors.

10. Project/Product management. A dirty word for hackers and engineers sometimes, but another necessary piece when building something. Anyone who has tried to manage cheap labour can tell you that it comes with more headaches than I could list.

Regardless of how I approach this, I'll never forget the advice given to me by a mentor and it's something I always echo with others:

It's expensive to work with cheap people.


Notes:

  1. It could be said, ANY cheap development. It certainly has no basis on location. We just hear the overseas argument most often.

  2. http://www.theguardian.com/technology/2014/may/19/us-chinese-military-officials-cyber-espionage

  3. https://www.eff.org/nsa-spying/timeline

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Written by
Cody Littlewood 10 Mar 2015

CEO

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