The guy said its hourly rate, so I simply calculated how much will it cost me to retain him for a whole year. I don't see how is that faulty. He bills 40hrs, client pays 40hrs. What am I missing? 

If you hire someone as a full time employee, there are intangibles as you mentioned but I don't think OP wanted to hire anyone full time. 

No startups can afford hiring US firms that quote $150/hr. Even for firms with decent revenue. 

Also your opinion on oDesk is completely wrong. If you pick the top 5 coders whether Django/Rails etc, the code quality is as good as anyone onshore. Having said that, a non-tech person going to oDesk and hoping to get a full product is an exercise in futile. Have a CTO and then accentuate your development team with freelancers as you need. 

Also, just because the person is onshore doesn't imply that he/she will be good in what they do, even if they are paid well. 

[anyway this is from my experience & it probably varies for each individual]

My 2cents.

On Thu, Oct 31, 2013 at 4:02 PM, Victor Olteanu <[address removed]> wrote:

It's a regular rate charged by US-based firms since 10 years ago. (not counting inflation)

At oDesk, you get a lower rate, but you most often get someone who'll take orders of magnitude longer to do the same thing - or worse yet, end up with bad code which will cost you a lot more in the end.

Your calculation to multiply the rate by the hours to get a yearly salary is faulty, since you don't count in client acquisition costs, time in-between projects and other benefits such as stability, equity that you get a with a regular "job".

Victor

On Thu, Oct 31, 2013 at 12:55 PM, Saikiran Yerram <[address removed]> wrote:

No offense but that price is ludicrous. A rails dev gets around 80K-100K/yr, so paying $150/hour is like 250K/yr. Hence my reaction in the beginning.

If you are just looking to integrate someone into your team, hire some one on elance/odesk. You can also negotiate a salary instead hourly. You will be surprised to find onshore devs who are good and cost around $35-$45 range.

On Thu, Oct 31, 2013 at 3:25 PM, Peter Gault <[address removed]> wrote:

The dev works with a small group of 3 rails developers. He splits his time between working on projects individually and working through his firm. His rate is $150/hour.

Best,
Peter

On Thu, Oct 31, 2013 at 3:20 PM, darius goore <[address removed]> wrote:

Thanks.  We are looking for a freelance rails developer who could help us on some projects. Is your dev an individual or a firm?

Any other developers reading this can contact me at [address removed].

On Oct 31,[masked]:09 PM, "Peter Gault" <[address removed]> wrote:
>
> Hi Everyone, 
>
> A couple of months ago I sent you an email regarding an experienced developer who was looking to take on a few rails projects. Those projects turned out very well, and his web dev shop, HoneyCo, is now looking for additional projects. If you're looking for rails developers, you can reach them at at: [address removed]
>
> Best,
>
> Peter
>
> -------------
>
>
> HoneyCo is a web development team that builds complete web applications. Quinn Shanahan, the co-founder, has lead the development of dozens of projects over the past three years.  http://tastehoneyco.com/
>
>
> HoneyCo has built: 
>
> Biblionasium - https://www.biblionasium.com/
>
> Long Island Index - http://longislandindex.org/
>
> Quill - http://quill.org
>
> see more - http://tastehoneyco.com/work/
>
>
> Their primary stack:
>
> - Ruby on Rails 
>
> - node.js
>
> - Javascript, D3.JS
>
> - PostgreSQL
>
> - Heroku / Amazon EC2
>
>
> I am writing this email because I've had an excellent experience working with HoneyCo over the last nine months, and I'd like to connect them to EdTech people who are looking for talented engineers. Quinn does an excellent job tackling complicated problems. Though their hourly rate is high, they are also able to solve problems very quickly, which saves an enormous amount of time. 
>
>
> You can reach them at: [address removed]
>
>
>
>
>
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