Summary

A 30-year-old developer, Mr. Andrew, shares his strategy of securing royalty deals with startups, which has significantly increased his income beyond the average developer's earnings.

Abstract

The article titled "Untapped Opportunity: How A 30-year-old Dev Earning 100k/Year from Royalty" features an interview with Mr. Andrew, a full-time freelancer who works with startups. Despite being an "average" developer, Andrew has managed to earn more than 90% of his peers by negotiating royalty deals instead of traditional payment arrangements. His approach involves asking for more than the client's initial offer, aiming for either a higher fee or a royalty agreement. This strategy stems from a pivotal experience where he accepted a royalty deal in lieu of unpaid fees, resulting in substantial monthly earnings. Andrew emphasizes the importance of negotiation, suggesting that developers should never settle for less than they deserve and always aim to get something in return during negotiations. Although not all negotiations lead to royalty deals, his method has proven successful, with three out of five royalty arrangements generating significant monthly income.

Opinions

Mr. Andrew believes that skill alone does not determine one's earnings, highlighting the importance of negotiation.
He values his freedom and prefers working with startups over full-time jobs at big firms, as it allows him to learn and grow in ways that traditional companies might not offer.
Andrew suggests that developers should not compromise on their regular payment and should aim to negotiate for more, whether it be money or a royalty deal.
He views royalty deals as a win-win situation for both developers and startups, as they alleviate the startup's initial financial burden and can result in greater long-term earnings for the developer.
Andrew's negotiation philosophy is encapsulated in the idea that one should never leave the negotiation table without getting something in return, even if it means walking away from a potential project.
He acknowledges that while this approach may lead to losing some projects, it has ultimately been successful in increasing his income and job satisfaction.

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Untapped Opportunity: How A 30-year-old Dev Earning 100k/Year from Royalty

I also learned a great deal about how to negotiate

For the first time in my life, I was interviewing someone who was my age and earning 3 times more than me. But the fact is, I felt like he was 3 times more mature than me. Today’s guest is a developer who is 30 years old, Mr. Andrew(Fake name upon request).

When Mr. Andrew was introducing himself, the exact words he used:

I am an average developer. And I am not being humble. If you give me 1 day, I can find you at least 10 developers better than me. But I am earning more than 90% developers. Today, I will tell you how earning doesn't always depend on skill.

This interview is probably the most important one you will read before this year ends and probably helps you a lot in the future. I have learned two very helpful life and career lessons. I am sure you are going to enjoy it a lot. So, let’s start.

No more trash talk… let’s get into the story….

All you have to do is ask…

My mother used to tell me that if you never ask, you will never get it.

After a long time, when Mr. Andrew was telling his success story, I could feel my mother’s words inside my head. You can understand why in a while.

Mt. Andrew is a full-time freelancer. Working with local and international clients. He mainly works with startups.

He said…

“It was early in my career. Every one of my developer friends was working for big firms, FAANG, or earning big bucks. If someone had made a list of who was earning the least, I would have been at the top of that list. 😃 It’s not like I was a bad developer, but I was terrible at interviews.

That’s why I changed my focus from joining big firms to startups and small firms. I love my freedom. That’s why I rarely engaged in full-time jobs. I have worked with more than 40 startups and small firms. Working with startups helped me understand many things that I would not learn from big companies.

Almost all startups go through financial problems. That’s why I was not getting paid properly. Once, I was working with a startup, and at the end of the project, suddenly, the founder called me into a meeting and told me that he couldn’t pay me anymore because their investors backed out.

He already had paid me 75% of the agreed amount, and the due amount was $15k. But he needed me badly to finish the project to keep his dream alive. Their product was a SaaS product. He offered me that if I finished my project, he would give me $1 from each subscription until I got $300k. And if he got any funding, he would also give me the $15k.

Honestly, I didn’t have a choice. Because I already had finished the project. I had two options. I could simply walk away, or I could get whatever he proposed. I didn’t want to destroy his dream. The choice was simple.

He quoted then… When life gives you lemons, make lemonade.

So, I took the offer and helped him. I worked for one more month and delivered what I promised. After 4 months, I suddenly got a call from him, and he paid me $15. But that’s not the best part.

The best part is after one year, I started to get the royalty, which I had totally forgotten. In the first month, I got $27, 2nd month $250+, 3rd $500+. I still get $2000+ monthly from that company as a royalty.

This was just the beginning of a new era…

He continued…

After that, I understood that I could earn a lot more by royalty or something like that. The first thing I did was consult with one of my wise entrepreneur friends. He gave some of the best advice I had in my entire life.

My friend told me that the first thing I should do was never compromise with my regular payment. However, I could get more by applying some negotiation techniques. He taught me two techniques…

First one: Ask for more they can offer…

Then he explained…

This is one of the ancient rules of negotiation. If you want to negotiate this way, you want to ensure you have the upper hand. You can only do this when you know you have nothing to lose.

Let me give you an example.

Suppose A client (A startup) wants to build an e-commerce project, and their budget is $30k. Let’s say… you can do it within $30k, but it will hardly make you any profit. And you understand that the project is so complicated that your client will not find anyone better than you to develop it.

This is the kind of situation that I call “Nothing to lose”. Because I can negotiate aggressively in these situations, and I lose the contract, I won’t regret it.

So, what I would do is… I would ask for the amount that would be worth my time.

So, now either one of two cases will happen…

First… They might back off from the negotiation.

Or… They will try to negotiate to convince you to take the job.

And when you can sense that they are the second type, you have the upper hand.

Next: Don’t leave the table without getting something.

Now, you have the upper hand in the negotiation. You can carefully convince them to give you something more. In these cases, my target is one of two things: more money or a royalty deal.

Suppose that startup is unable to pay you more than $30k. And now you have learned they want you and are willing to do more to land you. So, that’s when you can offer them a royalty deal.

Royalty is a win-win for both startups and developers.

Because the startups don’t have to pay you upfront in a royalty deal. Instead, they will pay you when they start earning. When a company starts earning revenue, it can easily give you a small portion. It removes the pressure on the founders and investors to invest significantly in the early stage.

On the other hand, the developers will get 10x or 20x more than they could get in an average deal. I even prefer it more than being a shareholder. Because… being a shareholder also brings some responsibility and liability. But a Royalty deal is the real winner.

Don’t make a deal that makes you unhappy. Try to make something out of nothing. Then… My friend quoted one of the best things I have learned in a while:

Never leave the table without getting something in return

Success rate:

Now the question is… How much royalty deal have I got so far? And is this so easy?

Of course, this is not easy and doesn’t happen frequently. Out of the 40+ freelancing jobs I have done so far, I could only land five royalty deals. 2 of them didn’t make me any money yet. 3 of them are generating $7k-$10k per month.

I lost at least 20 projects/deals when negotiating.

And one more important thing, these negotiation techniques not only landed me these royalty deals but also helped me get 10–50% money from each project. That’s why I don’t regret the contract I didn’t get.

A single interview-to-article process often takes 10–15 days! So, your clap, comment, and share would mean a lot to me!