The Art of Valuing Time – How Experts Should Set an Hourly Rate


Setting an hourly rate is always a challenge for contractors, freelancers and consultants. The wisdom is to look at what the market will bear and price specifically based on that. With Experts, the rules are slightly different.

Pricing should be a reflection of the value we bring to our clients and the level of expertise you have. The value of your time is not a reflection of the minutes spent, it is in the depth of knowledge and therefore value that you can provide.

1. You are a Trusted Source

Open Source creators, maintainers and contributors sit in a unique position. The software that you build is used by thousands, hundreds of thousands or millions of users every day. All of these users rely on your ability and expertise to achieve their own projects or build their own software. Your users trust you to help them accomplish their goals.

2. Your Knowledge is Rare

You are an Expert in your software. To put it into perspective, if you create a piece of software with 3 other maintainers, your knowledge of that specific software is within the top 0.0000000005076% of people in the world. Your unique knowledge, to the right customer, is extremely valuable.

3. Customers Pay for Value, Not For Time

A scenario we've seen time and time again on Ringer is this: A customer is working on a project. They hit a bottleneck that they can't figure out. After spending 10 hours trying to solve it themselves they turn to an Expert. In 30 minutes, the Expert provides a solution that fixes the problem.

The Customer has already spent hours on the problem by the time they turn to the expert - that cost has already been absorbed. The real value of the time with the Expert is that the Customer doesn't want to spend another 10 hours on the problem. Any cost that is less than that amount is therefore worth it to the Customer.

This is a simple example, and oftentimes we see Customers approaching experts before embarking on a project, simply to understand whether there could be any bottlenecks like this along the way, to avoid wasting time and money in the first place. Once you start multiplying the cost of these bottlenecks to a team of engineers you start to understand why paying hundreds of dollars per hour for an Expert's advice is worth it.

The Customer is paying for the value that you provide, not your time.

4. It's Not About Overcharging

We're not encouraging Experts to price their time ridiculously for the sake of it - there are still market dynamics which need to be respected. The real goal is to ensure that Experts price based on the value that they provide, rather than the time spent.

5. Ringer is Not a Race to the Bottom

Ringer is exclusive by nature. To become listed as an Expert on a given project means that you have proven your technical chops. As such we don't want to see scenarios where Experts are charging a few dollars for their time in a bid to outcompete other more expensive Experts. We operate a price-floor policy, and will adjust pricing to a set floor if we believe that the prices are too low - this is to protect all of our Experts and ensure that the value of their knowledge is maintained.

Price your time based on value - that's what you are really providing.

You can read more about this on, Patick McKenzie (patio11)'s site.

Ringer - Where you find Open Source Experts -