This is going to be at least partly a rant. And I’m thinking how I can cleverly write it so I don’t sound too self-pitying, or too frustrated, or too lazy. Because here is the thing, when you lament the challenges you face in your own business… sympathy is rarely the reaction most people have when they hear about it. Unless they can really relate to the situation.
Being in quarantine much of the year in Colombia, I should be thankful that at least my business can continue. In fact earlier this year when the lock-downs began, I thought how lucky am I that I’m in an industry relatively unscathed, where even if there is a downturn, at least we can operate continuously. There are benefits to being a developer for sure. However, after my Upwork rating took a hit, sales from that platform dropped to zero. And when I tried to adapt and overcome, I fell flat on my face. My latest numbers from marketing tell a rather sad story:
Website bounce rate: 87%
Conversions from latest Google advertising campaign: 0.00%
As a developer I have too long relied on others to do my marketing (Upwork in particular) and the price paid is that when I do decide to venture into B2B sales, or online advertising or any other marketing methods, I quickly realize, this stuff is hard, really hard. And it’s not like programming where it’s a clear problem that you can work to solve. Sometimes you read 20 articles on marketing methods, even take a course at Hubspot Academy, and you end up thinking… WTF should I do? Especially when so much of the available advice seems fitted to “easier situations” like B2C (Business to Consumer). The frustration I have, is that “nothing works” has become our slogan… and that means a lot of pain on the financial side of the business.
What is the market like as someone with lots of experience as a programmer, in an industry where experience doesn’t seem to count for much? Well, the truth is we can’t compete. That’s the truth of it as I see it. As a Canadian turned ex-pat, my living costs are still 8-10 times that of my competition. I cannot compete on price with India, Pakistani and Bangledesh based developers. Even if I do what I’ve often done when busy, which is hire help from East Europe and Latin America, the help I’m hiring is still more expensive, significantly more expensive than South East Asia and other emerging tech regions.
I’ve been in the development business in one form or another for nearly 20-years. There was a time when I would have argued the case that options such low-cost offshore labor were not a good choice. I would have listed off the reasons, language barrier, timezone issues, even cultural differences. Now however, it’s akin to the realities of global manufacturing. Though perhaps not as extreme, web development despite any problems faced consistently is being pushed toward the lowest possible cost. That means that like manufacturing, while some try to hold on to an office in Canada or the US or the UK, the trend continues. More and more agencies find themselves driven under, and the percentage of the market where work is delivered from India, Pakistan and Bangladesh constantly grows.
At one end of the market, the cost-sensitive cheap end of the market, we cannot compete. We cannot even discuss a project with a potential client. We say $50 per hour, they say $7 per hour, and the meeting is over. There is no point saying, but we are 10-times better… so what? It’s like saying to a Chinese-based manufacturing you know there are some really great benefits to making your product in the United States, at 20-times the cost… benefits you say, oh really? Fuck your benefits, we can’t afford them. Just as with Chinese products, the price trumps any issues with product defects. Oh you can’t understand you’re web developer when they speak? So what, you understand $6 per hour is a pretty good deal on labor, right?
Let’s look at the other end of the market. The high end market. The companies that can afford to pay top dollar for services, and would prefer to pay for the best results they can get. Can we compete there? Not really. This is probably the market where at least there is a chance, at least there is the prospect of a profit if you do capture part of the market. However, doing so, is a massive uphill climb. Because you probably could not pick a more saturated market in any industry than the high-end agency market. Aside from of course, the low and mid-end agency market. At least in this market there is the potential for profit, but how do you really compete against the entrenched leaders, companies with relatively immense resources? Buyers at these levels will not be sold on price. They want service, very high quality service. That’s not “better programming” or “better design”, it’s usually “better strategy”, it’s reliability, it’s dealing with a company that has an office and picks up the phone and has a ticket system for customers and convenient billing and the list goes on. In other words it’s infrastructure which requires substantial investment, partnerships, staff.
Personally I’ve never felt more like “there is no place for me in the market” than in 2020. A good example of why would be Elementor. In the WP space, Elementor has brought a huge boom to DIY site creators and designers, but it’s also brought a reduction in the levels of freelance work available. There are entire communities on Facebook dedicated to making sure that guys like me aren’t needed. Any problem that might have required hiring a developer, site owners and hobbyists and DIY site builders are doing their best to ensure that developers get exactly $0 out of it. And I can’t blame them, it would never makes sense to hire a developer if there is any chance that a plugin could solve the issue. Even if a custom solution is better, it’s just like with offshoring to India, the lower cost is a bigger factor than the quality.
Increasingly this is the reality of the market that I accept:
- We cannot compete on price or even on value with South East Asia and other regions when it comes to general web development, coding services or other technical services.
- We cannot compete with entrenched upscale agencies that fully saturate the markets for high-end services where price is less of a factor and service quality and depth of services is paramount.
- We cannot expect to pick up “fix this” or “maintenance” work because of the substantial level of DIY building and free online support that makes “trips to the repair booth” rare or never for most site owners.
- Approaching site owners through B2B sales comes across as spammy and has such a low rate of conversion that it is pointless.
- Advertising online for these type of services is akin to burning your money, nobody is unaware that there are thousands of agencies and hundreds of thousands of freelancers available right now to build whatever, whenever, and usually at under $10/hour.
What would be my advice to somebody who might be just getting into this industry and wondering how the market will be? First of all, RUN! Whatever you’ve been told about the reality of this business, it’s probably not going to be that way because I know dozens of programmers, and one thing we all have in common is none of us can afford to buy a house. It’s true, buying houses is just something is out of reach for most developers today. Take a look at where I’m from maybe it’s a unique situation there in Vancouver, Canada. The average house starts at 1.5 million, the cheapest condos are around 500K. So you can’t even dream of home ownership with a salary of $25/hour which happens to be the steady average for web developers in that region. It’s been going down at the same time home prices have gone up. And let’s not forget to own a home, first you have to earn more than your rent so you can save up for a down-payment. If you think you can do that as a developer, well, maybe if you have a higher than average paying dev job. My advice would actually be try freelance for awhile and if you find your earnings are less than a typical job that you’re qualified for, consider switching to a job. Because it may not be true that this is an industry where being solo leads to greater payment. I’m personally struggling right now to make even 50% of what I could make if I would go and take a salaried position.