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Your Income & Your Art – For Developers


In class we discussed the ways in which we can make income and the techniques relating to that. Today my income is based upon freelancing and contract work, and this is something I intend on taking further so I chose to blog about this topic and to look deeper into the workings of “Your Income & Your Art”.

I believe this area of study is an important one for small business owners like myself and also freelance developers. This topic is important to me because as a small business owner you are the one that ultimately has to make these decisions about what your work is worth and how to price it. This topic also relates to me and my future because I plan on on using the skills learnt in my game programming bachelor to expanding my skills into the area of code based prototyping and small automation solutions. I also have life experience in various scenarios mentioned in this classes lecture, Hopefully my thoughts and opinions can help guide you to a decision that fits your career.

Image Reference: https://www.huffingtonpost.com/entry/the-real-cost-of-freelancers-vs-full-time-employees_us_58efd87de4b0156697224d86

In this blog I would like to discuss is the various ways of making income and to give some pros, cons and tips of each method.

My Thoughts on working as an employee vs a freelancer:

I have used the articles “Freelance vs. Full-Time Developer: The Pros and Cons” from medium.com  and “Software Developer – Employee vs. Contractor, Part 1” from atodorov.org to pick some key points and refresh my memory on the topic but the following are relating to my thoughts and experiences within the industry.

Having set times and a set schedule is productive.
I find that working these hours in a studio environment helps with motivation, productivity and keeps distractions at bay.

When working as a freelancer you have the freedom to choose your hours but your time can quickly disappear as you fill your days with day to day tasks, you need to make a schedule and stick to it.

Being part of a larger company gives your work credibility and your chance of opportunities rise.
I found that the company could pitch to larger clients and get the big projects due to the bulk amount of past projects and collective experience of the office. This allowed me to assist in filming larger projects. I even had a paid trip to film /edit in Monaco!

I find when working for yourself I will often have less client credibility unless you have a killer portfolio and you may need to offer competitive pricing to entice their business. Also you are seen as a higher risk, a company can pick up slack if there is a loss in productivity but if it is just you or a small team this is harder to do.

If work is quiet they are still obliged to give you hours.
I found that there were plenty of quiet weeks, and maybe this was managements fault but as an employee they are obliged to give you hours otherwise you would lose faith in the companies reliability and consider seeking another job.

When I have worked for myself you learn to live cheap and it can be stressful when your clients pay invoices late.

You can leave your work at work.
One thing I found was that when I wasn’t at work I didn’t have to worry about or deal with any work related issues, this was good because your weekends and nights were your own. This helps a lot in balancing your life when as a freelancer you will often feel guilty and put in a lot more hours whilst at home.

You are working to make someone else rich.
At the end of the day you put in all of the hard work with some credit but you never really build anything for yourself except your experience and skill. The owner or boss will reap all of the financial rewards and take credit for completing a successful product and if you’re lucky you might make the credits.

I personally have a huge drive to make something of my own, and to hopefully build a self sustaining income (continuous income without needing to work). to reach this goal requires a lot of work building your own income streams.

Pay rates

As an employee you have job security, set reasonable hours and receive benefits like super, sick and holiday pay.
According to Indeed.com the average Australian Game Developer Salary is $81K reference  and software developers is 95K reference .

Also if you are looking to hire employees it is a good to keep in mind what this article states about the real cost of new employees. “The Real Cost of Freelancers vs. Full-Time Employees”  by www.huffingtonpost.com states that
“Our $135,000 per year full-time employee actually costs $175,500 to $216,000 per year. Freelancers, on the other hand, generally charge by the hour and their rate is exactly what you pay”

More Info about:

Image Source: https://www.quora.com/Why-is-hiring-a-freelancer-better-than-hiring-in-house-employees

Crowd funding is a relatively new way of group funding a project which I personally have not yet explored. The developer usually builds a prototype or working model of a product plus a really well done game pitch and video. Using the Kickstarter.com platform they then acquires the funds to finish the product and bring it to market. The contributors will receive a reward based upon how much they contribute.
To view Kickstarters video games (11,868 Games as of today) check them out at Kickstarter.com

Running a studio can be a big deal and very risky. The overheads of a studio are a lot larger then that of a freelancer.
Costs to consider when running a studio include:

Office Rental
Electricity
Software licences
Server Storage and backups
Workstations
Staff

You also need to be able to provide your staff with adequate and reliable hours so they don’t feel uneasy and look for work elsewhere
Staff Training – Although employers don’t like to pay for this, on the job training / meetings will need to be budgeted for and will often result in non billable hours for the company.
On the positive side if you run a successful and profitable company the owner reaps the benefits.
An article “What does it really cost to open an indie studio? All your money, most of your life” polygon.com states that “People grossly underestimate what it costs to run a game studio” and go on to mention both money and personal cost breakdowns.
This article highlights the real struggles game developers are expected to encounter if they consider running a games studio and there is A LOT, if you are considering doing this you should really take a look so you can know if it is really worth it.
And here are some more less gloomy tips from an article “Starting Your Own Game Development Studio – One Year On” found on gamasutra.com from a developer 1 yr into their studio.

Building a product and bringing it to market


This section of the blog is a little off topic but I found it very informative and believe if you are considering building commercial products under your own business it is definitely worth the read. A little more info about myself, I am currently developing a product which is soon to enter its beta testing phase with multiple clients. It should be noted that my research is slightly more focused towards this goal. The following information is a blend of my own knowledge and a lot of useful points I found in the 2hr video “Harvard i-lab | Startup Secrets: Turning Products into Companies” by Harvard Innovation Labs

  • Simple – Make your product simple and easy to use with minimal maintenance.
  • Low to no initial cost – Trial periods, etc.
  • Proves value quickly – instant gratification, rapid payback, provide proof of value.
  • Package and progressively disclose value – Don’t overload them with info.
  • Easy to use and apply – Out of the box experience.
  • ROI – Needs to be quantifiable, increase revenue or reduce time, resources, cost, drives competitive advantage reduces risk.
  • Something your customers cant live without, Fulfills a real need, Leaves customers wanting more.

Initially find a target audience that aligns with your base product and don’t get caught up in always adding features at the start. Find paying clients first. This is an error a lot of start ups make and then run out of cash.

How to price your product.

Find what it costs to make your product.

Find a reasonable profit margin %.

Factor in the middle man’s cost and any factors that they require (training etc).

Back up your products worth with analytics i.e You saves x amount per month.

Video Source: Harvard i-lab | Startup Secrets: Turning Products into Companies By Harvard Innovation Labs

How do we break into the market

  1. Gain credibility through numbers
  2. Pick a client, show other clients how they became successful using your product.
  3. The others (including leaders will join)
  4. Don’t chase the big clients with large company structures first, you will spend a lot more time perusing these leads than smaller companies, chase them later when you have a stable income.

More valuable tips!

If you are in a startup the ONLY advantage you have is time, your opposition has a customer base, capital, presence

  • Its easy to start a company, its hard to build a business.
  • Events force actions (set deadlines, have events).
  • The perfect is the enemy of the good. (Get your product out there then iterate).
  • Hiring is the most important thing we do (Hire people that scare you with their confidence).
    • It should be part of your culture.
    • You are going to make mistakes, fire quickly.
    • Sales people are motivated by money (if they aren’t they aren’t good sales people) and recognition (if they aren’t concerned about how they rank against other sales people get rid of them). Sales people are aggressive and competitive, not to say that they would be great for your company, they are just not going to be great sales people.
    • Pick sales people who know that specific industry, media, engineering etc.
  • Your Job as the CEO: Create the culture.
    • Hand written notes go a lot further than you think.
    • Celebrate victories, anniversaries…
    • As a leader NEVER take credit, give it to the team.
      • You will get enough, don’t worry.
  • Have fun – It’s about the journey not the outcome!
  • Subscription models – (consider a performance monitor style system to send valuable feedback back to base to make better decisions).
  • If you sell add-ons, if you look at your feedback you could bundle 3rd party apps to push sales and increase product diversity.
  • Analytics are key.
  • Be careful of branching off on random product design paths.
Image Source: https://www.slideshare.net/pmd06c/were-in-this-together-summary-interview-findings-for-the-ez-publish-community

My Summary and findings


Whilst investigating these income streams, techniques and methods I gained a deeper understanding of how to make an income. At my current stage in life I am still focused towards running my own business and creating my own commercial products and solutions. In the future I will also likely peruse my interests in prototyping and code based automation solutions plus also work on VR apps (why I am studying games). All of the tips mentioned are very relevant to working in this line of work and although this has been a rather large blog I believe that the information included could be very beneficial to anyone looking to take a similar career path, or at least is considering which path to take.

References

(2018). Kickstarter.com. Retrieved 25 April 2018, from https://www.kickstarter.com/

Designer, V. (2018). Video Game Designer Salaries in Australia | Indeed.comAu.indeed.com. Retrieved 25 April 2018, from https://au.indeed.com/salaries/Video-Game-Designer-Salaries

Developer, S. (2018). Software Developer Salaries in Australia | Indeed.comAu.indeed.com. Retrieved 25 April 2018, from https://au.indeed.com/salaries/Software-Developer-Salaries

Freelance vs. Full-Time Developer: The Pros and Cons. (2018). Medium. Retrieved 25 April 2018, from https://medium.com/devmountain/freelance-vs-full-time-developer-the-pros-and-cons-e50d5f4a648d

Harvard i-lab | Startup Secrets: Turning Products into Companies. (2018). YouTube. Retrieved 25 April 2018, from https://www.youtube.com/watch?time_continue=5&v=092JQrye9IM

Starting Your Own Game Development Studio, One Year On. (2018). Gamasutra.com. Retrieved 25 April 2018, from https://www.gamasutra.com/blogs/AlexPetlenko/20160307/267328/Starting_Your_Own_Game_Development_Studio__One_Year_On.php

The Real Cost of Freelancers vs. Full-Time Employees. (2018). HuffPost. Retrieved 25 April 2018, from https://www.huffingtonpost.com/entry/the-real-cost-of-freelancers-vs-full-time-employees_us_58efd87de4b0156697224d86

Todorov, A. (2018). Software Developer – Employee vs. Contractor, Part 1atodorov.org. Retrieved 25 April 2018, from http://atodorov.org/blog/2013/06/07/software-developer-employee-vs-contractor-part-1/

What does it really cost to open an indie studio? All your money, most of your life. (2018). Polygon. Retrieved 25 April 2018, from https://www.polygon.com/2014/7/31/5949433/the-cost-of-a-game-studio