James Knight recently made an unorthodox career move for a 27-year-old coder: quitting a well-paid gig writing software for Google to go freelance. No more catered lunches, gold-plated benefits or million-dollar views from the search giant’s Manhattan office.
Knight is willing to sacrifice those perks because as an independent he’s pulling down about twice as much as he did at Google. Plus, he has more freedom. In March, Knight and his wife plan to travel to Spain and hopscotch across Europe—all the while writing code for a dating app and a self-portrait app, among others.
"I’d rather control my own destiny and take on the risk and forgo the benefits of nap pods and food," Knight says.
Amid an accelerating war for tech talent, big companies and startups alike are paying top dollar—as much as $1,000 a hour, according to a person who gets coders gigs—for freelancers with the right combination of skills. While companies still recruit many of the best minds, they're turning to independent software developers to get a stalled project moving or to gain a competitive edge. In some cases, the right person can be the difference between a failed and successful product.
Last spring, Aaron Rubin hired a freelance coder through recruiter Toptal for about four weeks to help get ShipHero, his cloud-based logistics startup, off the ground. "To find someone that talented in New York in three days was never going to happen," Rubin says. "Every talented engineer I know has a job."
Independent software developers like Knight represent an elite echelon of the so-called Gig Economy—a 53-million-strong army of freelancers who now account for one in three workers, according to the U.S. Bureau of Labor Statistics.
The need for coders mushroomed when the iPhone's arrival in 2007 set off an explosion of mobile apps. Since then, software has been seeping into fridges, watches, apparel, you name it—requiring ever more people to write the underlying code. Demand for software developers is expected to grow 17 percent between 2014 and 2024, or more than twice the average, according to the BLS, which estimates that the U.S. will have 1 million more information technology jobs by 2020 than computer science students.
Big companies have resorted to buying out entire firms just for their engineers, a practice known as acqui-hiring. Most have dedicated engineering recruiters, but finding the right people can be pricey and time-consuming. So companies have turned to a host of freelance agencies that specialize in finding top-notch coders.
Five years ago, Toptal, a self-described freelance network, had 25 programmers on its rolls and about the same number of clients. Today it represents thousands of coders (the company won't say exactly how many) and has more than 2,000 clients including Airbnb, Pfizer and J.P Morgan. Rival agency 10x Management says the average budget for software-writing contracts have doubled in the past three years as the company becomes the go-to place for bigger and broader projects.
Despite accelerating demand for coders, Toptal prides itself on almost Ivy League-level vetting. A virtual company with no home base, it received 15,000 applications in the past two months and accepted fewer than 3 percent of them, according to Taso Du Val, co-founder and chief executive officer. The vetting process has four parts: an interview to screen for personality, technical exam, live coding test and finally a test project that evaluates the candidate in a real-world scenario.
Helder Silva, a software engineer from Portugal who has worked at Deloitte and other companies, made it past the first two rounds and failed during the live coding exam because he took too much time to solve one problem, even though he was on the right track. "You miss something and you get kicked," Silva says. "I get where they are coming from; they charge a large amount to their customers and they expect you to be as proficient as you can get."
With the tagline "genius on demand," 10x Management typically represents about 100 software developers, though the New York-based agency receives thousands of applications every year. Co-founder (and former entertainment manager) Rishon Blumberg likens his clients to movie stars: "The demand for Tom Cruise is very large," he says, "but the supply is very small."
Martin Langhoff, 39, typifies the elite freelance coder. Having taught himself programming at the age of nine, Langhoff went on to become chief technology officer at the non-profit One Laptop Per Child program, where he managed a software and hardware team, industrial design, manufacturing and prototypes. Burned out and wanting to spend more time with his son, he joined 10x, which he says is akin to qualifying for the Olympics.
Langhoff sometimes can be found writing code aboard "Persuasion," a 41-foot timeshare sailboat; he bartered access to the Jeanneau 409 by writing the timeshare booking software. Most recently Langhoff helped build a security product for a "major U.S. corporation," a project that typically would take three years to complete, he says. The 10x team took three months.
"We get called to do mission-critical things that will make or lose the company a lot of money," says Langhoff, who lives in Fort Lauderdale, Florida, and makes 50 percent more money than he did working full-time. "It's like you get a seat at the New York Philharmonic. Now every performer is performing at their top level, and when it's your turn, you feel the heat."
Langhoff and other independent software developers say they're free to program and avoid the bureaucracy and endless meetings endemic to big companies. Anne Adams, 30, left a programming job at Bank of America Merrill Lynch in 2013 and began freelancing through TopTal. Currently she's writing car insurance software for a large U.S. insurer.
"At a company like Merrill Lynch you have to be seen by the right people doing the right thing rather than just getting on with the job you've been given," she says. "You have some people contributing more than others and people are operating at different levels, while at Toptal, everyone is kind of up there. So that way, you get a lot more productive."
Knight, who left Google to work with 10x, agrees: "At Google you could probably get away with not working for six to nine months—just showing up and making it look like you’re working," he says. "There’s definitely a level of stress that comes with being independent that’s absent at Google, but I like that. I have motivation issues if I don’t think my paycheck is on the line."