I'm one of the developers Mr. Altman is talking about and have recently rejected an offer from 10x. I have to agree with Mr. Altman's point of view: I'm making 1.5 - 2.0 times the average developer's salary already. Speaking with 10x, they told me that their average project was just 1 - 2 months long and that I should treat their service as a supplement to my income rather than relying on them to keep me booked.
The problem is they charge 15% of ALL of my income for that privilege and don't make any guarantees. Why should I pay them over $2k a month for them to possibly make me new sales when I'm already capable of keeping myself booked the majority of the time?
The whole thing reeked of predation to me. If they're really able to provide more value than they take from me, then they should only be charging me a commission on the sales they bring in.
It is how it's done in the entertainment industry (for 10%), but finding the work is only part of what an entertainment agent does. They also negotiate the deals, help resolve conflicts, help build the team for the project if necessary, etc. Plus in many cases, the agent (or their agency) is better known in the business than the client, and just mentioning the agency opens doors even if they don't make the contact.
The other key difference from the entertainment industry is that in-demand artists can potentially derive a large percentage of their income from royalties and "image rights", so it's a good thing for them to retain an agent who's incentivised to find that unpaid TV slot in New York that'll help them "break America" but advise of the pitfalls of an apparently lucrative advertising gig they've been offered. Agents for successful entertainers, in other words, are supposed to boost a wide variety of income streams related to entertainer's image, including pre-existing ones.
Contract programmers on the other hand, generally receive their compensation for a project in cold, hard cash, without any lucrative sidelines in selling T-shirts with pictures of their face to manage, or concerns over whether taking on a project for Yahoo will dilute their brand equity or boost their autobiography sales. It's difficult to see where 10X adds the value in cases where they're not finding the work. Interview coaching and advice on upping your rate is not hard to find; any recruiter that does have a position will offer it without wanting a piece of your existing income.
If what you're saying is true, that's a bit disappointing, but it may also target a different segment of the market than folks like you.
FWIW over at http://OfferLetter.io, we spent a lot of time figuring out the right pricing model - We let the candidate choose either %-contingency-on-increase, or flat-fee. This seemed to be the best route for incentive alignment. If you have any other ideas for pricing models that work well, do let me know! mallyvai-at-offerletter.io
[We discarded the %-of-net-compensation model - it felt too extreme, and it wasn't clear we could add sufficient value in every case.]
Oh, no actual recruiters or talent leaders? No way would I pay essentially a peer for something like this. That's what friends advise us for. You need inside info, and engineers and PMs just don't have it.
I think you'd be surprised - we are informed by certain awesome recruiters, but we've found that people generally feel most comfortable when talking to their peers about this stuff. There's a broad mistrust around recruiters.
One thing we could do is work with more recruiters more aggressively for data and guidance - ping them every conversation for example, instead of for larger industry trends. But we'll have to see if that could truly add value.
10X doesn't ask for nor take 15% of gross income from their clients. That statement is not accurate. All of my projects through 10X have been considerably longer than 2 months.
I'll clarify: 15% of all contract programming revenue. As I'm a contract programmer, that's all of my revenue. But they did say they won't take a fee on your day job if you have one. They told me their average project is 1 - 2 months. That's from them, not me. Maybe you've been lucky. But if you're not giving them 15% of your contract development revenue then you may want to review your contract: you either got a special deal or you're in breach of contract. They even take their fee on any equity you're awarded.
I don't want to get into details of my contract with 10X. I'm not in breach, I certainly wouldn't be posting about it here if I was. I negotiated the terms of my contract with 10X when I signed up. All contracts are negotiable. I've worked through other consultancies and placement firms that have similar contractual terms. I've had full-time job agreements that included strict non-compete clauses and claims of ownership of any inventions or work I did while employed there, and sometimes extended one or two years after employment terminates, subject to applicable state law.
The problem is they charge 15% of ALL of my income for that privilege and don't make any guarantees. Why should I pay them over $2k a month for them to possibly make me new sales when I'm already capable of keeping myself booked the majority of the time?
The whole thing reeked of predation to me. If they're really able to provide more value than they take from me, then they should only be charging me a commission on the sales they bring in.