We’ve also learned this lesson the hard way. These are now the clauses we require in every project we do:
- Payment is due X days after receipt of invoice, or immediately after the consultant has addressed any quality issues, whichever is sooner
- Late payment shall incur interest at 8% above the BoE base rate and a late fee of 100 GBP as per the UK Late Payment Legislation. Partial payments on invoices shall apply to late fees, interest, and then principal, in that order.
- In the event of a late payment the invoice for the next deliverable shall immediately fall due.
- The consultant shall be entitled to shift deadlines on deliverables in the event of a late payment as a result of any work disruption, without incurring any liability.
- Payment shall be made in X currency, or an exchange rate at X date on Oanda.com shall apply.
- The client is responsible for any bank fees incurred by their, or any intermediary bank. In the event of a SWIFT transaction it shall be made with the OUR payment code.
- The jurisdiction in the event of a conflict shall be England and Wales. Neither party shall be bound by arbitration.
- The client and consultant shall both indemnify the other up to the total value of the contract and shall not under any circumstance be liable beyond X GBP.
We also no longer share downloadable links of our deliverables until they are paid up. They get a view/comment only link for reports/data etc.
We’ve found that clients that aren’t willing to accept these terms won’t pay you either way.
We determine the net days on the invoice based on the credit rating of the client. Ironically, the good clients pay within 2-3 days normally, and the difficult ones are very “long tail”. About 1% of contracts tend to fully or partially default on their payments.
We’re in a particularly credit poor industry but our average delay due to late payment is 23 days. Those clients where we stop delivery pay on average 11 days sooner than those contracts where we don’t stop delivery.
This is based on around 2,000 invoices sent over the last 5 years.
Oh and another lesson! Ensuring that each deliverable invoice is small enough that it falls under the simplified claims procedure (in the UK it’s 10,000 pounds) greatly simplifies collection.
It costs something like 80 quid to file for recovery in court and in our experience invoices are immediately paid up when a “Letter before action” is sent.
You burn the relationship, but arguably you probably don’t want it anyway.
I believe this is what we call small claims court in the United States. The threshold varies by state, but it is a very effective way to deal with recalcitrant companies both large and small.
> - Late payment shall incur interest at 8% above the BoE base rate and a late fee of 100 GBP as per the UK Late Payment Legislation. Partial payments on invoices shall apply to late fees, interest, and then principal, in that order.
As I understand it, from our lawyer, is that this exact wording is automatically enforceable in UK courts and easiest in the event of a dispute. It’s also generally internationally accepted.
I took "good client" to mean, "is easy to work with/communicates well/knows what they want", not just "pays on time". The inverse being, the ones who don't pay on time were already a pain in the ass to work with.
I think OP needed "emergency service is cash up front".
In a different domain, this is the painful lesson of almost anyone who tries to help people in a bind -- you can try to help, but yours is unlikely to be the advice that sets them straight, so you shouldn't get too invested with unproven or, especially, proven unreliable actors.
It's worth keeping in mind that the only practical "saving" for the OP will result in not doing the job at all, since this client most likely doesn't actually have the money and never will.
It should be, oh, short-term rush job in a foreign country for a sketchy client? That is most definitely cash up front time. Oh, you can't afford that? Sucks to be you, not going to do it.
It isn't, but you can't get blood from a stone and squeezing costs money.
It sounds like the entity that the contract is with has no real assets and/or is based in a jurisdiction which is hard to enforce judgements in. That's a case where you need to get paid up-front, which is the real lesson in this article.
One thing I learned from consulting is if you position yourself as the "fix your mess" guy you have to be very defensive. Ask for more up-front, and bail at the first sign of underpayment.
Be pleasantly surprised when a poorly run project is being run by nice, honest people. Prep for the opposite.
You're not just delivering expertise, you're stepping into a situation where incentives are already misaligned, expectations are fuzzy, and there's often a cashflow problem hiding somewhere
It sounds counterintuitive but from my experience it are often nice and (somewhat) honest people. They just came after whoever messed it up horribly in the first place and at some point they came to the conclusion that they need some external help.
Worked in the SF tech scene since 2010, and so many founders who I found through YC/HN and AngelList failed to pay me over the years.
Often paid late, but FIVE times, I never got paid at all, one time it was several thousands over the course of months and I almost pursued it in court, but in the end I took the L.
It's always these incubator types, they're the absolute worst clients. They have the cash in the bank too, they often just forget or feel entitled and don't want to back down.
I'd say it's almost something of a rite of passage to get taken advantage of if you're young and working in tech startups. Usually this is in the form of abysmally low pay, along with "Sweat Equity":
I would generalize this to "don't work for someone whose ability to pay is based on a high-risk gamble".
There are certainly shady people who can pay but don't because they are greedy avaricious bastards. But there are also plenty of people who would like to pay but whose business venture fails and with it goes their funds.
In the author's story, they probably should have concluded fairly early on that a team that wildly incompetent was also unlikely to produce a product that satisfies their client. And if the client doesn't pay, no one gets paid.
Good lessons in here, but the part about giving up on legal action because they told him they’d dissolve the entity is questionable. This is where it pays to have a good relationship with a lawyer who will be up front about your chances and the cost of legal action. The sum discussed falls into the difficult range where it could take enough hours to try to collect that you’d be worse off than where you started if the lawyer can’t deliver anything.
However them dissolving the entity and moving their assets and IP around is also not free and will incur overhead, if they actually did it.
Threatening to dissolve the entity seemingly admits that they do have something worth collecting against. In my experience the companies who run out of money just tell you that they’re out of money and they also start losing key employees and your email contacts because they’re not getting paid either. If the company continues to exist and they’re threatening you to not sue, that might be a sign that they do have the money but they’re relying on intimidating contractors to not try collecting it.
Legal action is not free, so all of this has to be weighed.
EDIT: I should explain how I know this. Younger me took a job with a startup that got in over its head with spending but the CEO didn’t want the party to stop. His strategy was to stop paying any vendors and use the remaining cash flow to only pay past invoices for vendors that we needed something from (more work, more product) or anyone who looked like they were going to sue us. If someone got lawyers involved, they got paid. Needless to say I didn’t keep that job very long.
I don’t know this for certain, IANAL, but it seems to me if they’re threatening to dissolve the entity, that could open the owners to personal liability.
I used to have an uncle who did emergency oil well repair. He'd get a call from his boss, then he'd be on the next flight to whatever remote offshore drilling platform or exotic dictatorship had need of his services.
Apparently doing emergency repair work can be extremely well paid.
(His wife was fine with it, but when there's great inconvenience for the family balanced by great pay for the family, you've got to get paid)
> The weirdest part to me, receive a call and just get up and go? Priorities?
The author does contracting in niche topics. When your contracting domain is uncommon you have to go where the work is.
You can charge higher prices for niche work and therefore tolerate more time in between contracts. This person may be spending more time not working and with his family than the typical FTE in this arrangement, even if the jobs occasionally require them to fly somewhere for a month.
Reads to me like the author is trying to elicit some empathy. It just sounds like he was just fine leaving his family for a job. Not getting paid couldn’t have factored into that decision.
He doesnt provide any context for that if so and if you look around the site, doesn't seem like the case at all. More like he just decided on the phone something interested him enough to bounce indefinitely.
They work within a niche space, as others have said, they follow where the work is, So they are able to charge more which I hope is able for them to survive in modern economy and be able to give more time to their family.
atleast that's my interpretation of it of how logic might follow if they are working in niche space, many people seem to be applying the logic onto themselves into completely standard situation, but I don't suppose that is the case here.
Hope this helps in genuinely understanding their situation, from my reading/thinking about it.
Never do anything on faith or as a handshake deal. Always ensure you get paid (hint: escrow is kryptonite for weasels). Trust everyone, just not the devil inside them.
Back in my freelancer days, I learned this lesson the hard way, and I became strict about payments (half in advance, the other half required to turn over the final work). But when someone I'd known for years had an emergency, and needed their software patched over a weekend, I made an exception and delivered the work in good faith. And then they tried to get out of paying for it. I had to harangue them for months to get the check.
The lesson I learned is that it doesn't matter how long they've been your friend, when it comes time to pay, they may still try to stiff you. The value of your service diminishes infinitely after it has been performed.
I've started operating in really granular units of work. Like less than $1000 per. Cash on delivery. This won't work with all clients and all jobs, but there are places where it does work very well. Advantages include being able to avoid paper contracts altogether. Verbal agreements and a 4 column xlsx that is reviewed monthly are all that seem to be required with some of my clients.
If I don't get paid for one day of work, I will probably get over it in a few hours. If I don't get paid for six months of work, we will have a serious problem. The tighter and more incremental we can make the delivery process, the less likely anyone gets screwed.
If a party is pushing hard for long-term contracts or large up-front sums of payment, I would walk away from that transaction unless there was a literal golden goose sitting in their lap.
I am also trying to set granular milestones and get paid every 1000€. Not provide 20000€ work and then start looking for my money. I can live with a loss of 1000€, but missing 20000€ will impact negatively my mortgage and investment plan.
I have a friend who retired but still does some contract work. They were on salary their whole career and are not used to sending invoices and tracking down payments. One of their clients was late paying and my friend wasn't concerned, but I encouraged them to be diligent about insisting on being paid on time. I have been a freelancer for over a decade and in my experience, the further away you get from a bill, the less real it becomes to the person who owes it. They start forgetting what the project was, or worse, start questioning why they even have to pay for it. You have to stay on top of these things or they can spiral out of control.
Just for my own general curiosity, once a bill is overdue, how often do you nag the customer about it? Or does it look more like an escalation process? (Start out with a polite email, then a phone call, then a phone call to their manager/business partner, etc?) Do you ever "fire" customers who always pay, but always pay late and only after they've been reminded 3 times?
They get 30 days to pay. I used to start sending reminders if they were late by even a day past that, but I quickly learned that can unnecessarily embarrass or annoy some clients, so now everyone gets a two week grace period after the 30 days are up.
I send a gentle reminder just to my immediate point of contact to start. If that doesn't work, I start sending more business-like requests for payment every week, and I CC anyone I think might help make it happen.
I've never fired anyone, and everyone has eventually paid (knock wood), but there have been times when I assumed the money was a lost cause (though never five figures worth like the person who shared this blog post).
But more than once, I've had a client contact me and request new work, and I've had to remind them they still have an unpaid invoice. I'll tell them I can't start anything new until the old work is paid. They almost invariably blame the delay on their billing department, and the money eventually finds its way to me.
Actually sort of darkly clever– they turned OP into an unwitting investor.
Project goes well, he gets paid and they're best buds, and he doesn't even realize he was scammed (by intent). If not, well there's no point suing a failed company.
If you're in California, even if business goes totally kaput and runs out of money company officers are personally liable for any and all unpaid wages. Labor Commission Office will also include a hefty punitive sum to boot.
What's an "AR bus"? How can augmented reality windows work on a bus unless you are (a) tracking the passenger's head and (b) there's only one passenger?
Screens outside the windows (not on the windows) can provide parallax, no need to track heads. However, in this case:
> They were attempting to pull off AR effects on the transparent OLED windows of the bus without accounting for lens distortion, field of view, parallax, occlusion, etc., and were frustrated and mystified when things didn’t appear to line up. They were completely naive to what depth and scale cues are and how to deploy them.
Imagine two passengers seating in rows r10 and r11, looking at the target T
A. You need to know where a passager's eyes are to display the POI in the right place. Even if each rows gets their own and only screen you'll need to account for their head vertical position (different people are different height) and movement, hence the eye tracking.
B. If you share a window between multiple people you end us with a POI mess with informations displayed multiplied by as much passengers in the bus.
IMHO the only practical way is with personal headsets like [0] but then you don't need a bus: just use your foot or any transportation: it's AR and not VR.
Can you elaborate? It seems to me that unless the screens are that far outside that they are where the target object is, two people that are offset laterally wrt the target object would have to be displayed something that's offset on the screen.
Your blog is a treasure trove - thanks for sharing.
Do you still cut your own hair ;) ?
But yes us folks in the creative world can learn a few things from the corporate world when it comes to contracts and payment schedules. Mike Monteiro's talk 'F*ck you, pay me' comes to mind.
I am so deadly serious - do not continue working if your invoices are late.
You don't have to be a jerk about it, just explain to your primary contact that you need to be paid and you pick up tools again when the money has arrived.
BUT it is on YOU to properly negotiate reasonable payment terms. And if you don;t know or don't trust the client then require payment in advance until a stronger commercial relationship can be settled in. Do not be a baby - go research business contracts and payment terms.
Do not be afraid to lose business from companies that are squeamish about paying you - in fact actively avoid such companies.
Sadly this is true and lesson anyone who has worked freelance has probably learned - either that or I'd wager they no longer do freelance.
Its easy to say don't be afraid to lose business, but when you're starting out, the economy is rough or all you have are the one or two clients, that's a different matter entirely.
One thing I've learned is that you always have to do the leg work, you can't assume someone will do the right thing or keep their word.
Develop a system where even bad clients, can't do too much damage i.e. upfront deposits, milestone-based payments. You have to control cash flow risks, if you are gonna take risks know what risks you're taking and when to get out.
There are also bad suppliers who don't do their leg work. I've "fired" some companies who did great work for me because they couldn't be bothered to send a bill - I know I owe someone some money, but I don't know how much as despite begging they won't tell me how much or where to send it (I only have a phone number) - this bill could get larger, and they can come after me at any time for it...
Please don't be them. If you do good work make sure that you get your bills sent on time.
> Sadly this is true and lesson anyone who has worked freelance has probably learned - either that or I'd wager they no longer do freelance.
Sadly, while this is true, there are plenty of folks still doing freelance who have not learned this, and there always will be. It's just one of those lessons that quite a lot of people have to learn from experience, even after reading posts like this. The exact same reason why companies will continue to get away with taking advantage of freelance work.
> Do not be afraid to lose business from companies that are squeamish about paying you - in fact actively avoid such companies.
My boss said that the ones who have negotiated the best deals are the ones that are late paying, complain about just about every bill and will write angry letters when my boss index adjust pricing.
He said it taught him to never offer a really good deal for a regular customer (ie where the upside isn't very obvious).
I'm not sure that's the best takeaway here, in that it gets the causation wrong. It's not the deal that made the customer bad, it's that the bad customer insisted on getting a deal, whereas a good customer usually knows what quality costs and is prepared to pay.
The takeaway here is probably that the fix isn't just "never discount", but it's to screen for the kind of customer who treats a good deal as an invitation to strengthen the relationship.
This is really the key. The "deal" has to have something for both parties. The vendor gets some kind of lock-in, prepayment, guarantee of future business, whatever it is, and in exchange the purchaser gets a discount.
Where I live the phone companies do this: you can get a discount every year by calling them and saying you will change companies unless they give you a better price. They always do and the only people paying normal prices are the ones who can’t be bothered to call them every year to request the discount!
And dealing with a lot of that crap is more trouble than many of us want to be filling our days with. Micro-optimizations I might have done as a student I mostly don’t do today.
These companies are scum. I don't want to be part of this march to the bottom of caring for your customer. Big companies are also different because of the firmness with which they are locked in to the purchasing infrastructure (among other reasons).
Sure, all major US cellular carriers are scum and abuse customers in similar ways. So you'll be part of the march to the bottom whether you want it or not.
It is possible to switch to a smaller VNO with better customer policies. But then your cellular data gets dropped during heavy network congestion, which is probably worse for most of us.
A professional knows what they're worth and what they need to deliver. On-time payment according on an agreed-upon schedule is table stakes. That's the most fundamental requirement. Nothing happens without that.
I guarantee you that if OP said, sorry, do this or I am going home, they would have done what needed to be done. Both in terms of payment, and in terms of getting their software and hardware houses in order.
It might have involved OP getting a taxi to the airport and being chased down at the gate, but it would have worked.
And even if it didn't, they would have saved themselves enormous time, money, and stress by following through on their threats if it didn't work out.
So true. And I'll add, no matter how trustworthy you believe the other party to be based on reptutation, relationships, or otherwise-- they should understand requiring assurances. The worst backstabs are from the people you know and who should know better. And a lot of people will justify it to themselves if they get in trouble. They will continue telling themselves that they are fundamentally good people and it just didn't work out as they rip you off for a lot of money. If they say the equivalent of "why don't you trust me?" that's a red flag.
I feel like it's easy in hindsight to say some tough sounding advice in the form of "be a hard-ass", but idk, I feel like there are plenty of real life cases that contradict this advice- taking a chance on a referral to work on something you find interesting. Of course the big-money clients will be fine with a hard-line stance and they have money to pay at the end, but that work tends to be less interesting.
OTOH, one other clear subtext of the story is the "savior" attitude of a lot of tech people, who think that, if they weren't using version control before, think, "oh, I'll just tell them about this great thing, and because it's much better they will definitely listen to me and implement it - it's only logical". But the harsh reality is that "better" things won't affect an org that went along that far and dug themselves that deep.
Never underestimate an org's ability to shoot itself in the foot, even if you think you know better. That includes getting your money from them.
Agreed. Another important lesson I learned when delivering code to a non-profit org, and them asking me to convert my final invoices into "donations" to the org.
As an electrician currently self-stopped (for both non-payment & absenteeism, two months no contact, so far) I'm not budging. When you didn't show up for our last two on-site meetups (and still haven't contacted), I thought about filing a lien... but decided to just keep you from having tenants (by not finishing AC/water/electric). You'll get around to it..?
When I told this LLC/owner "you obviously aren't in a rush because you obviously aren't visiting the jobsite/me" I sort of expected him to show within a few days. Then a few weeks. And now we're entering a few months.
You have weeks of my punchlists (unresolved to do), I have weeks of questions (what do you want?) and you won't even do simple things like turning on power/water.
It doesn't have to be messy. A lot of the messiness is self inflicted by contractors who are desperate for work and would be better of just getting a regular employee job instead.
100% agree, and to add it can be tough sometimes to walk away from a cool project. I had worked on a project building scientific trial software, an app to review 3D lung scans, and an ML model to detect lesions in lung scans. It was really empowering, but after the first scientific trial the customer stopped paying their bills and ended up in back payment of $1M. My boss closed the project which sucked but it ultimately cost the company and people’s jobs. Just not worth interacting with bad people if they stop the agreement. There is most likely more money later but there is also money that is on time with other customers.
Your business is getting the money. Your business is not to fly around the world trying to engineer-mog the client. The OP has a bad ego.
"They don't even use version control..." Yeah? Get the money. The client are "carpetbaggers", yeah okay... get the money.
It's implied that they hired you because they need the help. But they also may have hired you because they need the help and you seem like a sucker they can stiff.
Unlike in the article where a contractor was promised payment and no payment was made, the cofounder here knows already that the company can’t pay until they raise funds, and has planned for this accordingly, by living off of personal savings or contract jobs. They also understand the risk they’ve taken on and are comfortable trading their time for possibly zero returns.
Have a contract that encodes "fuck you, pay me" into the terms. Ideally, have an actual lawyer take care of the contract and the enforcement. There's a lot of law-y stuff out there that won't hold up in reality. Mortgage companies don't take payment in excuses from your clients, so neither should you.
When you walk into a shitshow like this, the first thing you do is secure your payments. Anyone who is in such bad shape like how OP described it means that they are desperate, and desperate people will do and say anything to get help.
It is most likely going to not pay anyone so you need to make sure you're paid above and beyond anything else otherwise walk.
That's not the middle ground. That's the other extreme, where people are desperate for work so they will say they can do anything in order to get work.
That doesn’t really sound like “being ripped off,” as opposed to “betting on a lame horse.”
The people behind this were irresponsible, childish, and exemplars of the Dunning-Kruger effect. They weren’t really hardline crooks. Crooks are probably a lot more organized.
I have gotten myself invested with similar crowds. There’s usually a charismatic spokesperson, leading the chaos.
They likely didn’t plan to rip him off, but paying him wasn’t really something they thought about. Real crooks put lots of planning into taking money.
> Multiple very junior developers were touching (binary, TouchDesigner) code and deploying straight to production via thumb drive, with zero version control. In fact, they didn’t know what version control was.
I suspect many startups fit that description. If they survive, then they usually pull themselves up by the bootstraps, eventually. Many of them collapse, taking everything with them.
I think you’re right and it’s fair to reframe this that way, in that in a certain sense, despite my naivety, I was the adult in the room and should have seen what they couldn’t.
But then given what I’ve learned since I think I can say with some certainty that this particular group saw the writing on the wall and were willing to use the skilled labor and time of an endless army of cannon fodder to try to staunch the bleeding or take one more long shot at getting final payment, and doing so without the agreement or awareness of the people they enlisted to the risk they were participating in.
When the wheels start coming off, morals are first over the side.
In some cases (think Theranos), it can go all the way into straight criminality. Most times, it just reaches the point where everything collapses, when the supports rust away.
The fact that this is so many words makes me worry the author underappreciated the main lesson: risk exposure.
When you go out of pocket - you are out of pocket and the risk is all yours. If that one thing was different then all the remaining risk is on the client - they don't want to do version contr - ok cool you still get paid.
Usually when you have to pay in to get paid out (outside of a direct investment scenario) it's a scam. The people who fall for the Nigeria Prince thing are operating the same way.
In such a situation (startup with unclear financial situation, foreign country) I would demand weekly payments. And if it is more than a week late, I would just leave.
There's not any incentives to pay you when they're in China and there's no legal recourse from the US. Even in the US suing is often times not worth it economically and getting someone to pay after a win is painful too if they don't just file bankruptcy. Escrow or upfront only is the best way to go.
The company was California-based, they were offering services in China. At least, that was my read. The contractor was also in California.
Honestly, this seems to be bad advice from their recovery services. Suing is 100% recommended here. There are plenty of lawyers that will work on a pro rata basis for account recovery in California. Sure, you lose a portion of your 35k; but you get more than you would have letting them get away with paying zero.
There's also laws in place to keep companies from "closing up shop" and opening in a new entity. It doesn't necessarily erase your debt (it can, but only in rare circumstances). And, even if they do get around it, it keeps them from pulling the same shenanigans going forward, in the state.
Not saying I know better but this contradicts what I heard from multiple collections companies with in-house legal - they all said suing would not be worth the ~$2,500 upfront fees and that the debtor would just vanish. The debt still exists so I'd love to think otherwise! Feel free to HMU if you have a specific lawyer/practice in mind ;
The debtor can't "vanish", they are either an individual or an entity with registered individuals attached to it. Obviously, their structure matters a little bit along with where they are incorporated. But if they are incorporated in California, their debt is 95% recoverable if they want to continue doing business in any way. As an individual you can go after garnishment and other relief. As an entity, it's similar but to their company/corporate holdings.
If they try to dissolve and create another business that operates in the same sphere/as a successor or with the same management team; the debt doesn't disappear, you just prosecute the new entity. With an added cherry of potential criminal prosecution, if they're particularly egregious about it.
People can 100% get around paying, that happens. But the judgement will remain on their record. This will make reincorporation difficult as well as just acting as a warning to future partners that do basic due diligence.
No one's saying it's easy to get the money back, but rolling over probably is the least desirable outcome (and probably why they've acted this way with so many people).
As to your collection firms, I can't speak to it. Maybe your situation is more complicated (e.g. registered entity out of state, unclear contract terms, etc) or they just don't want to go through with the hassle of doing more than they were hired to do (send nag letters and hope for easy turnover).
In the future, you can use it as a learning experience. Keep your deliverables under the small claims limit, do metered payouts, etc.
Sadly every consultant can tell you at least one (hopefully only one) story about clients who refuse to pay. Either outright, or with some excuse about you "not delivering", or they "not liking" what you delivered. I have one of those stories as well.
My SO has her own story - she ran into a guy whom she later found out does it as a policy: hires people, never pays, threatens to sue them if they publish their story. Her lawyer told her to just forget about it.
It's then that find out the limitations of our legal system: if the client is international, forget about it. If they're out of state, prepare to deal with an expensive legal process taking place where the laws may not always favor you. And even if it's local, and you won in a small claims court - good luck collecting.
I have periodic payments built into all my contracts, with the final payment taking place after acceptance tests, but before me surrendering all materials and code. I won't say this is a 100% bulletproof solution, but the alternatives suck.
> If they're out of state, prepare to deal with an expensive legal process
> you won in a small claims court - good luck collecting
While these statements are generally true, it shouldn't dissuade anyone from pursuing these remedies.
Years back I took a small programming contract with a 'friend of a friend' that ended with me delivering what was asked and them suddenly not having any money, claiming the company was going under.
They were in another state. I filed small claims by mail and they never responded, so I got a default judgement without ever needing to travel, for under $500 in total fees. The judgement is worthless though, right? Probably...
Fast forward about a month and they had an investor willing to float the company for a while longer, but now my judgement is a giant wrench - the investor won't give them money as long as this is hanging around. I got the cofounders to jointly take on the debt personally (after consulting with a lawyer that this was possible - he didn't even charge for the consult!) and I vacated the judgement against the LLC.
A short while later the LLC went under anyway, but since I had both founders' personal finances under my thumb (which would allow garnishing wages, obtaining leins, etc.) I was able to recoup the entire contract amount from them personally.
I wouldn't have spent more than about $1,000 chasing that money down, but a few hours of paperwork and a few hundred dollars ended up making it easily worth my while.
Very very important to get something up front; sometimes half up front doesn't always work for long projects, but you can scope out tranches where if you dont get paid for the first section of work, you walk away.
Has saved me from wasting my time on loads of projects before.
Reading the thread, I think most of us who have worked contracts here have been burned one way or another
Contract terms can vary greatly depending on the situation and the company you’re working with.
Early/frequent payment terms are always good to have but you may not always have the leverage for it depending on where you’re at as a contractor.
Takes getting ripped off a times before insisting on better terms I guess. It’s like bombing your first job interview… you can prepare but it just needs to happen.
I don't know what it is about me, but I have a sixth sense for losers who will not pay. There's been a number of times where acquaintences have taken contracts I've turned down (against my advice too) and have not been paid. There's something about slick communicators that just activates my spidey sense.
And TBH, I have also had a few false positives. One contract I did not take (it was for a mix of equity and cash) turned into a 10B+ company, and I would have made enough to retire (again) on it over a 1-year contract. I didn't because the founder who called me just sounded completely clueless and was barraging me with marketing speak instead of explaining what he needed. I was so exhausted from his BS I just decided I didn't need the headache. (This is also a danger of having enough to retire ... you turn down a lot of potentially lucrative work because you just don't think the headaches are worth it).
In the grand scheme of things, other than that one big missed opportunity, I haven't missed too much upside by being so picky. And when I'm counseling colleagues about their unpaid contracts and conflicts, I'm always silently thanking the stars I have the luxury to say no. I know that's a priviledge.
No longer a contractor but I used to offer a 10-15% discount for paying upfront. Almost every client took this deal. Earned a little less but never lost sleep over payments.
> They were carpetbaggers and dilettantes convinced by their own inexperience and the advice of a onetime VJ that they could pull off something I’d twice helped quote to be brought home by a cadre of hardened killers with shitloads of math and know-how at eye-watering prices. They were way way way over their heads and were in no way interested in updating their priors in light of the shit they were swimming in.
And yet, somehow, you gave them the most important time you had for their promises.
He says "trust your gut" about 12 times, but the whole lead up has 0 mention that he was worried he would not get paid. His only gut feelings seemed to be around tech issues.
> The faith was that if they could’t pay, they’d let me know because I was actively digging their asses out of a hole they’d dug, and doing so tirelessly and professionally, without complaint.
I get what the author is saying here. But it's a bad idea to treat one's work team with deep communal devotion in this way, as if they are a kind of dysfunctional family-- or, in the author's case, apparently higher in status than real family.
Doing this without proper remuneration creates a market distortion, and that is bad for capitalism.
I was owed billable hours from Stanford University but refused to do any further work until the outstanding invoice was paid. Their accounts payable department didn't want to, so I had to tell the client "sorry" and walked away. It's really weird because I didn't have a problem in the near past then and was even an FTE at one point. I'm unwilling to work for free or for imaginary, low liquidation preference equity of a worthless startup.
Ordinarily, I would sign master agreements and set PO terms up-front. Typically, the better customers would agree to very strict requirements / objectives for a particular time period for a specific price. Any deviations would require negotiation. Hourly is fine too but there must be regular milestone deliveries so that there's demonstrable value for money being conveyed rather than an appearance of a milking-oriented consultant. Expectations must always be managed.
There's no such thing as a company temporarily being in dire straits. These kind of companies are always in dire straits and crisis - it's a business tactic to not deliver and not pay. Just stay away, whether you're a customer, a contractor, an employee or if they want to be your customer.
In a fight between a piece of toilet paper backed by millions in legal spending vs a rock solid contract backed by nothing -- the toilet paper (even if it is used toilet paper) will win every single time.
> End clients can’t tell the difference between these bozos and me. I don’t know what to do with that information but it feels bad.
This is unfortunately all too common. It's hard for someone who isn't an expert in the specific field to separate a smooth grifter from a more typical sales pitch
no it isn't. why you did not sue them? success rate of international arbitrage (New York Convention) proces into China is 90% success rate. USA/EU companies who sue Chineses companies in China for breach of contract seem to be winning rates. Enforcement of USA curt orders do not need to go thorugh Chinese courts again, and are enforced by local authorities (local sharks) with success rate of 80% for foreign firms suing chinese firms. fees are also fairly low. case is straightfoward.
if author went and sue, likely he would get his money back.
The page is actively hostile to me using reader mode on my phone. It keeps resetting my scroll progress to the top of the article. This is the second time I’ve run into this (first was within the last two weeks).
I hope this is a bug in my phone’s handling of something and not intentional. Until I know otherwise, I’m treating sites where this happens as deliberately hostile for the same reason as always: ads. I use reader mode to escape ads that my ad blockers miss but also to avoid poor design or hard to read fonts and the like. My response is the same as ever: I closed the article.
Thanks for confirming. I was confident the first time because many websites are hostile to users. Seeing it again within a short window made my spidey-sense tingle.
I don't want to name what my quick Google search revealed, but if you search for augmented reality bus Beijing there aren't many options and it fits the authors characterization of their fleet consisting of ~20 buses.
OP wasn't ripped off, OP just forgot to define their contract. Like, entirely.
Nobody forced OP to work 11-14 hour days. Contracting 101 stipulates that you define your hours ahead of time. You come in, you provide your expertise, and you leave at the end of the day. Let the client's junior employees work long hours. Not your problem.
OP brought their own equipment, which is totally fine but "who provides equipment" is also in the contract from the start. OP should have made a list of equipment that the client will require to complete such a project and stipulate a client budget be set aside to cover any shortcomings as they arise.
The contract is where you define when you get paid. "Deposit is XYZ quantity, non-refundable. Contractor will be paid for the upcoming week in advance by X date. Failure to remit payment will halt work."
I understand that the point of this blog piece is that it was a learning experience for OP but this stuff is pretty obvious isn't it? This is pretty much what comes up when you google stuff like "how to get into freelance contracting." I'm shocked and feel bad for OP for letting things get this far. Sadly, they were not ripped off by anyone but themselves.
These types of situations are endemic to my industry, for better or worse. I wasn't intending to complain about the working conditions by way of making it seem as though any of those things were unusual — I was providing that context by way of saying I conducted myself as a professional does in these situations. I've been in this (immersive, interactive, creative tech) industry for 20 years and those conditions are absolutely expected onsite when commissioning, installing, or preparing for a live event. Refusing to work beyond say an 8-10 hour day would leave the project unfinished and we work on a 'show must go on basis'. With that said, doing this for 20+ days without a break is unusually grueling, even for this industry.
Back in my younger days I found a bunch of liberals who were claiming to run a software company. They were really into the social justice BS.
After about a month of employment, I was told I was being rude to ask for payment. Apparently they neglected to tell me that they actually only pay their employees 60 to 70 days after they start.
Of course the first red flag was them doing the 1099 dance for slightly above minimum wage. I had been forced to do that before, but guess what. They paid us every single week.
Quiting without notice was one of the greatest feelings with these clowns. By this time they had started to ask me to literally work for free. "Unpaid training". They stopped scheduling me for paid hours anyway, so no notice needed.
Right after that I worked for some conservatives. They paid me early. My first year I got a large raise.
There were some awkward moments like the CEO telling me who to vote for. But for the most part it was awesome.
I still consider myself to be very liberal, but I don't want to work anywhere that does a lot of virtue signaling. Your beliefs don't make you a good person, your actions do.
We’ve also learned this lesson the hard way. These are now the clauses we require in every project we do:
- Payment is due X days after receipt of invoice, or immediately after the consultant has addressed any quality issues, whichever is sooner
- Late payment shall incur interest at 8% above the BoE base rate and a late fee of 100 GBP as per the UK Late Payment Legislation. Partial payments on invoices shall apply to late fees, interest, and then principal, in that order.
- In the event of a late payment the invoice for the next deliverable shall immediately fall due.
- The consultant shall be entitled to shift deadlines on deliverables in the event of a late payment as a result of any work disruption, without incurring any liability.
- Payment shall be made in X currency, or an exchange rate at X date on Oanda.com shall apply.
- The client is responsible for any bank fees incurred by their, or any intermediary bank. In the event of a SWIFT transaction it shall be made with the OUR payment code.
- The jurisdiction in the event of a conflict shall be England and Wales. Neither party shall be bound by arbitration.
- The client and consultant shall both indemnify the other up to the total value of the contract and shall not under any circumstance be liable beyond X GBP.
We also no longer share downloadable links of our deliverables until they are paid up. They get a view/comment only link for reports/data etc.
We’ve found that clients that aren’t willing to accept these terms won’t pay you either way.
We determine the net days on the invoice based on the credit rating of the client. Ironically, the good clients pay within 2-3 days normally, and the difficult ones are very “long tail”. About 1% of contracts tend to fully or partially default on their payments.
We’re in a particularly credit poor industry but our average delay due to late payment is 23 days. Those clients where we stop delivery pay on average 11 days sooner than those contracts where we don’t stop delivery.
This is based on around 2,000 invoices sent over the last 5 years.
Oh and another lesson! Ensuring that each deliverable invoice is small enough that it falls under the simplified claims procedure (in the UK it’s 10,000 pounds) greatly simplifies collection.
It costs something like 80 quid to file for recovery in court and in our experience invoices are immediately paid up when a “Letter before action” is sent.
You burn the relationship, but arguably you probably don’t want it anyway.
> simplified claims procedure
I believe this is what we call small claims court in the United States. The threshold varies by state, but it is a very effective way to deal with recalcitrant companies both large and small.
I think the hidden advantage here isn't even enforcement, it's filtering
> - Late payment shall incur interest at 8% above the BoE base rate and a late fee of 100 GBP as per the UK Late Payment Legislation. Partial payments on invoices shall apply to late fees, interest, and then principal, in that order.
Do you mean 8 percent, or 8 percentage points?
The exact wording in our contracts and the government guidance is “8% plus the Bank of England base rate”.
They mean “percentage points”.
https://www.gov.uk/late-commercial-payments-interest-debt-re...
As I understand it, from our lawyer, is that this exact wording is automatically enforceable in UK courts and easiest in the event of a dispute. It’s also generally internationally accepted.
> Ironically, the good clients pay within 2-3 days normally, and the difficult ones are very “long tail”.
Why ironically? Isn't that exactly what you'd expect?
The ironic part is that the clients that don't need the looser payment terms (more time to pay the invoice) are the ones that get them
Kind of mirrors "it's expensive to be poor"
I took "good client" to mean, "is easy to work with/communicates well/knows what they want", not just "pays on time". The inverse being, the ones who don't pay on time were already a pain in the ass to work with.
It seems like none of these terms would have saved OP though
I think OP needed "emergency service is cash up front".
In a different domain, this is the painful lesson of almost anyone who tries to help people in a bind -- you can try to help, but yours is unlikely to be the advice that sets them straight, so you shouldn't get too invested with unproven or, especially, proven unreliable actors.
>> "emergency service is cash up front“
Neatly distilled I believe you are correct
It's worth keeping in mind that the only practical "saving" for the OP will result in not doing the job at all, since this client most likely doesn't actually have the money and never will.
It should be, oh, short-term rush job in a foreign country for a sketchy client? That is most definitely cash up front time. Oh, you can't afford that? Sucks to be you, not going to do it.
> A contract is toilet paper
It isn't, but you can't get blood from a stone and squeezing costs money.
It sounds like the entity that the contract is with has no real assets and/or is based in a jurisdiction which is hard to enforce judgements in. That's a case where you need to get paid up-front, which is the real lesson in this article.
> That's a case where you need to get paid up-front
Or at least in very small batches and with very short due dates.
One thing I learned from consulting is if you position yourself as the "fix your mess" guy you have to be very defensive. Ask for more up-front, and bail at the first sign of underpayment.
Be pleasantly surprised when a poorly run project is being run by nice, honest people. Prep for the opposite.
You're not just delivering expertise, you're stepping into a situation where incentives are already misaligned, expectations are fuzzy, and there's often a cashflow problem hiding somewhere
It sounds counterintuitive but from my experience it are often nice and (somewhat) honest people. They just came after whoever messed it up horribly in the first place and at some point they came to the conclusion that they need some external help.
Worked in the SF tech scene since 2010, and so many founders who I found through YC/HN and AngelList failed to pay me over the years.
Often paid late, but FIVE times, I never got paid at all, one time it was several thousands over the course of months and I almost pursued it in court, but in the end I took the L.
It's always these incubator types, they're the absolute worst clients. They have the cash in the bank too, they often just forget or feel entitled and don't want to back down.
NEVER work for a YC founder.
I'd say it's almost something of a rite of passage to get taken advantage of if you're young and working in tech startups. Usually this is in the form of abysmally low pay, along with "Sweat Equity":
https://en.wikipedia.org/wiki/Sweat_equity
Of course, the startup doesn't go anywhere, and your sweat equity never materializes, so you're left with just the pitiful pay.
I went through this in my late teens/early 20's, along with many friends.
> NEVER work for a YC founder.
I would generalize this to "don't work for someone whose ability to pay is based on a high-risk gamble".
There are certainly shady people who can pay but don't because they are greedy avaricious bastards. But there are also plenty of people who would like to pay but whose business venture fails and with it goes their funds.
In the author's story, they probably should have concluded fairly early on that a team that wildly incompetent was also unlikely to produce a product that satisfies their client. And if the client doesn't pay, no one gets paid.
Good lessons in here, but the part about giving up on legal action because they told him they’d dissolve the entity is questionable. This is where it pays to have a good relationship with a lawyer who will be up front about your chances and the cost of legal action. The sum discussed falls into the difficult range where it could take enough hours to try to collect that you’d be worse off than where you started if the lawyer can’t deliver anything.
However them dissolving the entity and moving their assets and IP around is also not free and will incur overhead, if they actually did it.
Threatening to dissolve the entity seemingly admits that they do have something worth collecting against. In my experience the companies who run out of money just tell you that they’re out of money and they also start losing key employees and your email contacts because they’re not getting paid either. If the company continues to exist and they’re threatening you to not sue, that might be a sign that they do have the money but they’re relying on intimidating contractors to not try collecting it.
Legal action is not free, so all of this has to be weighed.
EDIT: I should explain how I know this. Younger me took a job with a startup that got in over its head with spending but the CEO didn’t want the party to stop. His strategy was to stop paying any vendors and use the remaining cash flow to only pay past invoices for vendors that we needed something from (more work, more product) or anyone who looked like they were going to sue us. If someone got lawyers involved, they got paid. Needless to say I didn’t keep that job very long.
I don’t know this for certain, IANAL, but it seems to me if they’re threatening to dissolve the entity, that could open the owners to personal liability.
Definitely bring it up with your lawyer.
> I missed the month of May with my 2-year-old kid. My wife cared for a 2-year-old alone.
The weirdest part to me, receive a call and just get up and go? Priorities? Did you write this blog post from the doghouse?
I used to have an uncle who did emergency oil well repair. He'd get a call from his boss, then he'd be on the next flight to whatever remote offshore drilling platform or exotic dictatorship had need of his services.
Apparently doing emergency repair work can be extremely well paid.
(His wife was fine with it, but when there's great inconvenience for the family balanced by great pay for the family, you've got to get paid)
> The weirdest part to me, receive a call and just get up and go? Priorities?
The author does contracting in niche topics. When your contracting domain is uncommon you have to go where the work is.
You can charge higher prices for niche work and therefore tolerate more time in between contracts. This person may be spending more time not working and with his family than the typical FTE in this arrangement, even if the jobs occasionally require them to fly somewhere for a month.
You need a job to sustain a family. From the post it seems like author accepted the sacrifice for the amount he was supposed to be paid.
Reads to me like the author is trying to elicit some empathy. It just sounds like he was just fine leaving his family for a job. Not getting paid couldn’t have factored into that decision.
> It just sounds like he was just fine leaving his family for a job.
Or... maybe he needs income to exist.
He doesnt provide any context for that if so and if you look around the site, doesn't seem like the case at all. More like he just decided on the phone something interested him enough to bounce indefinitely.
They work within a niche space, as others have said, they follow where the work is, So they are able to charge more which I hope is able for them to survive in modern economy and be able to give more time to their family.
atleast that's my interpretation of it of how logic might follow if they are working in niche space, many people seem to be applying the logic onto themselves into completely standard situation, but I don't suppose that is the case here.
Hope this helps in genuinely understanding their situation, from my reading/thinking about it.
Never do anything on faith or as a handshake deal. Always ensure you get paid (hint: escrow is kryptonite for weasels). Trust everyone, just not the devil inside them.
Also, mandatory: https://creativemornings.com/talks/mike-monteiro--2/1
Back in my freelancer days, I learned this lesson the hard way, and I became strict about payments (half in advance, the other half required to turn over the final work). But when someone I'd known for years had an emergency, and needed their software patched over a weekend, I made an exception and delivered the work in good faith. And then they tried to get out of paying for it. I had to harangue them for months to get the check.
The lesson I learned is that it doesn't matter how long they've been your friend, when it comes time to pay, they may still try to stiff you. The value of your service diminishes infinitely after it has been performed.
> “Starting work without a contract is like putting on a condom after taking a home pregnancy test"
Choice quote from the linked talk (aptly titled "F*ck you, pay me").
Yes! I regularly share a link to Mike's talk - I was about to post it myself before scanning the comments.
I've started operating in really granular units of work. Like less than $1000 per. Cash on delivery. This won't work with all clients and all jobs, but there are places where it does work very well. Advantages include being able to avoid paper contracts altogether. Verbal agreements and a 4 column xlsx that is reviewed monthly are all that seem to be required with some of my clients.
If I don't get paid for one day of work, I will probably get over it in a few hours. If I don't get paid for six months of work, we will have a serious problem. The tighter and more incremental we can make the delivery process, the less likely anyone gets screwed.
If a party is pushing hard for long-term contracts or large up-front sums of payment, I would walk away from that transaction unless there was a literal golden goose sitting in their lap.
I am also trying to set granular milestones and get paid every 1000€. Not provide 20000€ work and then start looking for my money. I can live with a loss of 1000€, but missing 20000€ will impact negatively my mortgage and investment plan.
I have a friend who retired but still does some contract work. They were on salary their whole career and are not used to sending invoices and tracking down payments. One of their clients was late paying and my friend wasn't concerned, but I encouraged them to be diligent about insisting on being paid on time. I have been a freelancer for over a decade and in my experience, the further away you get from a bill, the less real it becomes to the person who owes it. They start forgetting what the project was, or worse, start questioning why they even have to pay for it. You have to stay on top of these things or they can spiral out of control.
Just for my own general curiosity, once a bill is overdue, how often do you nag the customer about it? Or does it look more like an escalation process? (Start out with a polite email, then a phone call, then a phone call to their manager/business partner, etc?) Do you ever "fire" customers who always pay, but always pay late and only after they've been reminded 3 times?
They get 30 days to pay. I used to start sending reminders if they were late by even a day past that, but I quickly learned that can unnecessarily embarrass or annoy some clients, so now everyone gets a two week grace period after the 30 days are up.
I send a gentle reminder just to my immediate point of contact to start. If that doesn't work, I start sending more business-like requests for payment every week, and I CC anyone I think might help make it happen.
I've never fired anyone, and everyone has eventually paid (knock wood), but there have been times when I assumed the money was a lost cause (though never five figures worth like the person who shared this blog post).
But more than once, I've had a client contact me and request new work, and I've had to remind them they still have an unpaid invoice. I'll tell them I can't start anything new until the old work is paid. They almost invariably blame the delay on their billing department, and the money eventually finds its way to me.
Sometimes you just have to get scammed to be able to recognize scams. Seems obvious to outsiders, but can be hard to see when you're in it.
Some favorites:
- No way they would actually screw me over! We're buds/they got me tiger balm/they paid some/I did them a solid
- Thin veneer of safe fallbacks that doesn't hold up under scrutiny. Legal or other 'repercussions'
- Endless delays and excuses (though it's usually too late by this point)
Yeah, a lot of it only becomes obvious in hindsight because each individual signal is easy to rationalize away
Actually sort of darkly clever– they turned OP into an unwitting investor.
Project goes well, he gets paid and they're best buds, and he doesn't even realize he was scammed (by intent). If not, well there's no point suing a failed company.
If you're in California, even if business goes totally kaput and runs out of money company officers are personally liable for any and all unpaid wages. Labor Commission Office will also include a hefty punitive sum to boot.
I don't think this makes a difference for independent contractors.
What's an "AR bus"? How can augmented reality windows work on a bus unless you are (a) tracking the passenger's head and (b) there's only one passenger?
Screens outside the windows (not on the windows) can provide parallax, no need to track heads. However, in this case:
> They were attempting to pull off AR effects on the transparent OLED windows of the bus without accounting for lens distortion, field of view, parallax, occlusion, etc., and were frustrated and mystified when things didn’t appear to line up. They were completely naive to what depth and scale cues are and how to deploy them.
Imagine two passengers seating in rows r10 and r11, looking at the target T
A. You need to know where a passager's eyes are to display the POI in the right place. Even if each rows gets their own and only screen you'll need to account for their head vertical position (different people are different height) and movement, hence the eye tracking.
B. If you share a window between multiple people you end us with a POI mess with informations displayed multiplied by as much passengers in the bus.
IMHO the only practical way is with personal headsets like [0] but then you don't need a bus: just use your foot or any transportation: it's AR and not VR.0 https://www.youtube.com/watch?v=SpoLdQpPcAc
Can you elaborate? It seems to me that unless the screens are that far outside that they are where the target object is, two people that are offset laterally wrt the target object would have to be displayed something that's offset on the screen.
So is it an actual moving bus or just a simulation of one? I have not heard of the concept before
Your blog is a treasure trove - thanks for sharing.
Do you still cut your own hair ;) ?
But yes us folks in the creative world can learn a few things from the corporate world when it comes to contracts and payment schedules. Mike Monteiro's talk 'F*ck you, pay me' comes to mind.
---
https://www.mikemonteiro.com/
https://creativemornings.com/talks/mike-monteiro--2/1
Be paid or don't work.
I am so deadly serious - do not continue working if your invoices are late.
You don't have to be a jerk about it, just explain to your primary contact that you need to be paid and you pick up tools again when the money has arrived.
BUT it is on YOU to properly negotiate reasonable payment terms. And if you don;t know or don't trust the client then require payment in advance until a stronger commercial relationship can be settled in. Do not be a baby - go research business contracts and payment terms.
Do not be afraid to lose business from companies that are squeamish about paying you - in fact actively avoid such companies.
Sadly this is true and lesson anyone who has worked freelance has probably learned - either that or I'd wager they no longer do freelance.
Its easy to say don't be afraid to lose business, but when you're starting out, the economy is rough or all you have are the one or two clients, that's a different matter entirely.
One thing I've learned is that you always have to do the leg work, you can't assume someone will do the right thing or keep their word.
Develop a system where even bad clients, can't do too much damage i.e. upfront deposits, milestone-based payments. You have to control cash flow risks, if you are gonna take risks know what risks you're taking and when to get out.
There are also bad suppliers who don't do their leg work. I've "fired" some companies who did great work for me because they couldn't be bothered to send a bill - I know I owe someone some money, but I don't know how much as despite begging they won't tell me how much or where to send it (I only have a phone number) - this bill could get larger, and they can come after me at any time for it...
Please don't be them. If you do good work make sure that you get your bills sent on time.
> Sadly this is true and lesson anyone who has worked freelance has probably learned - either that or I'd wager they no longer do freelance.
Sadly, while this is true, there are plenty of folks still doing freelance who have not learned this, and there always will be. It's just one of those lessons that quite a lot of people have to learn from experience, even after reading posts like this. The exact same reason why companies will continue to get away with taking advantage of freelance work.
>>companies will continue to get away with taking advantage of freelance work.
Think of ¡all the exposure! doing this free labor for us will give you! /s
or:
I'll cook you dinner if you do this days of work for me /serious?!
> Do not be afraid to lose business from companies that are squeamish about paying you - in fact actively avoid such companies.
My boss said that the ones who have negotiated the best deals are the ones that are late paying, complain about just about every bill and will write angry letters when my boss index adjust pricing.
He said it taught him to never offer a really good deal for a regular customer (ie where the upside isn't very obvious).
I'm not sure that's the best takeaway here, in that it gets the causation wrong. It's not the deal that made the customer bad, it's that the bad customer insisted on getting a deal, whereas a good customer usually knows what quality costs and is prepared to pay.
The takeaway here is probably that the fix isn't just "never discount", but it's to screen for the kind of customer who treats a good deal as an invitation to strengthen the relationship.
> strengthen the relationship
This is really the key. The "deal" has to have something for both parties. The vendor gets some kind of lock-in, prepayment, guarantee of future business, whatever it is, and in exchange the purchaser gets a discount.
The discount doesn't just come out of nowhere.
> It's not the deal that made the customer bad, it's that the bad customer insisted on getting a deal
That was indeed the point, guess I conveyed it in a poor way.
That's OK, it's clarified now.
This. A bad customer made a desperate situation worse because of their inexperience, neglect, shady motives, or a combination of the three.
Where I live the phone companies do this: you can get a discount every year by calling them and saying you will change companies unless they give you a better price. They always do and the only people paying normal prices are the ones who can’t be bothered to call them every year to request the discount!
And dealing with a lot of that crap is more trouble than many of us want to be filling our days with. Micro-optimizations I might have done as a student I mostly don’t do today.
In order to make out on this at my hourly rate, I would have to cap my phone time with the company to minutes. Single digit.
It's literally just not worth it. Time is the most finite resource that we all have.
These companies are scum. I don't want to be part of this march to the bottom of caring for your customer. Big companies are also different because of the firmness with which they are locked in to the purchasing infrastructure (among other reasons).
Sure, all major US cellular carriers are scum and abuse customers in similar ways. So you'll be part of the march to the bottom whether you want it or not.
It is possible to switch to a smaller VNO with better customer policies. But then your cellular data gets dropped during heavy network congestion, which is probably worse for most of us.
A professional knows what they're worth and what they need to deliver. On-time payment according on an agreed-upon schedule is table stakes. That's the most fundamental requirement. Nothing happens without that.
I guarantee you that if OP said, sorry, do this or I am going home, they would have done what needed to be done. Both in terms of payment, and in terms of getting their software and hardware houses in order.
It might have involved OP getting a taxi to the airport and being chased down at the gate, but it would have worked.
And even if it didn't, they would have saved themselves enormous time, money, and stress by following through on their threats if it didn't work out.
So true. And I'll add, no matter how trustworthy you believe the other party to be based on reptutation, relationships, or otherwise-- they should understand requiring assurances. The worst backstabs are from the people you know and who should know better. And a lot of people will justify it to themselves if they get in trouble. They will continue telling themselves that they are fundamentally good people and it just didn't work out as they rip you off for a lot of money. If they say the equivalent of "why don't you trust me?" that's a red flag.
I feel like it's easy in hindsight to say some tough sounding advice in the form of "be a hard-ass", but idk, I feel like there are plenty of real life cases that contradict this advice- taking a chance on a referral to work on something you find interesting. Of course the big-money clients will be fine with a hard-line stance and they have money to pay at the end, but that work tends to be less interesting.
OTOH, one other clear subtext of the story is the "savior" attitude of a lot of tech people, who think that, if they weren't using version control before, think, "oh, I'll just tell them about this great thing, and because it's much better they will definitely listen to me and implement it - it's only logical". But the harsh reality is that "better" things won't affect an org that went along that far and dug themselves that deep.
Never underestimate an org's ability to shoot itself in the foot, even if you think you know better. That includes getting your money from them.
And also: political organizations and churches always must pay up front.
Agreed. Another important lesson I learned when delivering code to a non-profit org, and them asking me to convert my final invoices into "donations" to the org.
>Be paid or don't work.
As an electrician currently self-stopped (for both non-payment & absenteeism, two months no contact, so far) I'm not budging. When you didn't show up for our last two on-site meetups (and still haven't contacted), I thought about filing a lien... but decided to just keep you from having tenants (by not finishing AC/water/electric). You'll get around to it..?
When I told this LLC/owner "you obviously aren't in a rush because you obviously aren't visiting the jobsite/me" I sort of expected him to show within a few days. Then a few weeks. And now we're entering a few months.
You have weeks of my punchlists (unresolved to do), I have weeks of questions (what do you want?) and you won't even do simple things like turning on power/water.
Fuck you, pay me.
[•] <https://www.youtube.com/watch?v=jVkLVRt6c1U>
And for a rush job, don't be afraid to demand half the payment up front, or some other good-faith gesture on the client's part.
This is all correct in principle, but in practice it's a lot messier
It doesn't have to be messy. A lot of the messiness is self inflicted by contractors who are desperate for work and would be better of just getting a regular employee job instead.
I can imagine the type of work you do heavily influences the chance of begin paid during/before work finishes too…
100% agree, and to add it can be tough sometimes to walk away from a cool project. I had worked on a project building scientific trial software, an app to review 3D lung scans, and an ML model to detect lesions in lung scans. It was really empowering, but after the first scientific trial the customer stopped paying their bills and ended up in back payment of $1M. My boss closed the project which sucked but it ultimately cost the company and people’s jobs. Just not worth interacting with bad people if they stop the agreement. There is most likely more money later but there is also money that is on time with other customers.
Your business is getting the money. Your business is not to fly around the world trying to engineer-mog the client. The OP has a bad ego.
"They don't even use version control..." Yeah? Get the money. The client are "carpetbaggers", yeah okay... get the money.
It's implied that they hired you because they need the help. But they also may have hired you because they need the help and you seem like a sucker they can stiff.
What if you’re a cofounder or founding engineer and the company hasn’t raised yet?
Unlike in the article where a contractor was promised payment and no payment was made, the cofounder here knows already that the company can’t pay until they raise funds, and has planned for this accordingly, by living off of personal savings or contract jobs. They also understand the risk they’ve taken on and are comfortable trading their time for possibly zero returns.
Evergreen advice from the design side: https://www.youtube.com/watch?v=jVkLVRt6c1U (Mike Monteiro: F*ck You, Pay Me)
Watched a couple of times, but I don't fully understand the message in this video. Can someone ELI5?
The message is to have a contract and insist on being paid according to the contract, and refuse further work until you get paid.
Have a contract that encodes "fuck you, pay me" into the terms. Ideally, have an actual lawyer take care of the contract and the enforcement. There's a lot of law-y stuff out there that won't hold up in reality. Mortgage companies don't take payment in excuses from your clients, so neither should you.
When you walk into a shitshow like this, the first thing you do is secure your payments. Anyone who is in such bad shape like how OP described it means that they are desperate, and desperate people will do and say anything to get help.
It is most likely going to not pay anyone so you need to make sure you're paid above and beyond anything else otherwise walk.
You forgot the middleground where there are thousands of laid off people who can do your exact job and undercut you etc.
These founders hire/fire through hundreds of us, they don't give a shit.
If you say 1 thing they don't like they go to the next.
That's not the middle ground. That's the other extreme, where people are desperate for work so they will say they can do anything in order to get work.
How many of those people have experience with augmented reality? Probably not that many.
$35k seems pretty low for this job. Hindsight is 20/20 of course.
The same founders who require employees to work 24/7/365 while they jack off to Hentai all day are the same ones who don't pay:
HockeyStack, Greptile, Velt all had problems paying me and all required 7 day a week, overnight, etc.
That doesn’t really sound like “being ripped off,” as opposed to “betting on a lame horse.”
The people behind this were irresponsible, childish, and exemplars of the Dunning-Kruger effect. They weren’t really hardline crooks. Crooks are probably a lot more organized.
I have gotten myself invested with similar crowds. There’s usually a charismatic spokesperson, leading the chaos.
They likely didn’t plan to rip him off, but paying him wasn’t really something they thought about. Real crooks put lots of planning into taking money.
> Multiple very junior developers were touching (binary, TouchDesigner) code and deploying straight to production via thumb drive, with zero version control. In fact, they didn’t know what version control was.
I suspect many startups fit that description. If they survive, then they usually pull themselves up by the bootstraps, eventually. Many of them collapse, taking everything with them.
I think you’re right and it’s fair to reframe this that way, in that in a certain sense, despite my naivety, I was the adult in the room and should have seen what they couldn’t.
But then given what I’ve learned since I think I can say with some certainty that this particular group saw the writing on the wall and were willing to use the skilled labor and time of an endless army of cannon fodder to try to staunch the bleeding or take one more long shot at getting final payment, and doing so without the agreement or awareness of the people they enlisted to the risk they were participating in.
I've seen similar, at a bigger scale.
When the wheels start coming off, morals are first over the side.
In some cases (think Theranos), it can go all the way into straight criminality. Most times, it just reaches the point where everything collapses, when the supports rust away.
> End clients can’t tell the difference between these bozos and me. I don’t know what to do with that information but it feels bad.
this is only getting worse with ai.
all the artifacts of good work are there but none of the depth.
The fact that this is so many words makes me worry the author underappreciated the main lesson: risk exposure.
When you go out of pocket - you are out of pocket and the risk is all yours. If that one thing was different then all the remaining risk is on the client - they don't want to do version contr - ok cool you still get paid.
Usually when you have to pay in to get paid out (outside of a direct investment scenario) it's a scam. The people who fall for the Nigeria Prince thing are operating the same way.
In such a situation (startup with unclear financial situation, foreign country) I would demand weekly payments. And if it is more than a week late, I would just leave.
There's not any incentives to pay you when they're in China and there's no legal recourse from the US. Even in the US suing is often times not worth it economically and getting someone to pay after a win is painful too if they don't just file bankruptcy. Escrow or upfront only is the best way to go.
The company was California-based, they were offering services in China. At least, that was my read. The contractor was also in California.
Honestly, this seems to be bad advice from their recovery services. Suing is 100% recommended here. There are plenty of lawyers that will work on a pro rata basis for account recovery in California. Sure, you lose a portion of your 35k; but you get more than you would have letting them get away with paying zero.
There's also laws in place to keep companies from "closing up shop" and opening in a new entity. It doesn't necessarily erase your debt (it can, but only in rare circumstances). And, even if they do get around it, it keeps them from pulling the same shenanigans going forward, in the state.
Not saying I know better but this contradicts what I heard from multiple collections companies with in-house legal - they all said suing would not be worth the ~$2,500 upfront fees and that the debtor would just vanish. The debt still exists so I'd love to think otherwise! Feel free to HMU if you have a specific lawyer/practice in mind ;
The debtor can't "vanish", they are either an individual or an entity with registered individuals attached to it. Obviously, their structure matters a little bit along with where they are incorporated. But if they are incorporated in California, their debt is 95% recoverable if they want to continue doing business in any way. As an individual you can go after garnishment and other relief. As an entity, it's similar but to their company/corporate holdings.
If they try to dissolve and create another business that operates in the same sphere/as a successor or with the same management team; the debt doesn't disappear, you just prosecute the new entity. With an added cherry of potential criminal prosecution, if they're particularly egregious about it.
People can 100% get around paying, that happens. But the judgement will remain on their record. This will make reincorporation difficult as well as just acting as a warning to future partners that do basic due diligence.
No one's saying it's easy to get the money back, but rolling over probably is the least desirable outcome (and probably why they've acted this way with so many people).
As to your collection firms, I can't speak to it. Maybe your situation is more complicated (e.g. registered entity out of state, unclear contract terms, etc) or they just don't want to go through with the hassle of doing more than they were hired to do (send nag letters and hope for easy turnover).
In the future, you can use it as a learning experience. Keep your deliverables under the small claims limit, do metered payouts, etc.
This was a California company and contract, but your comment does apply to their situation with their client
Sadly every consultant can tell you at least one (hopefully only one) story about clients who refuse to pay. Either outright, or with some excuse about you "not delivering", or they "not liking" what you delivered. I have one of those stories as well.
My SO has her own story - she ran into a guy whom she later found out does it as a policy: hires people, never pays, threatens to sue them if they publish their story. Her lawyer told her to just forget about it.
It's then that find out the limitations of our legal system: if the client is international, forget about it. If they're out of state, prepare to deal with an expensive legal process taking place where the laws may not always favor you. And even if it's local, and you won in a small claims court - good luck collecting.
I have periodic payments built into all my contracts, with the final payment taking place after acceptance tests, but before me surrendering all materials and code. I won't say this is a 100% bulletproof solution, but the alternatives suck.
> If they're out of state, prepare to deal with an expensive legal process > you won in a small claims court - good luck collecting
While these statements are generally true, it shouldn't dissuade anyone from pursuing these remedies.
Years back I took a small programming contract with a 'friend of a friend' that ended with me delivering what was asked and them suddenly not having any money, claiming the company was going under.
They were in another state. I filed small claims by mail and they never responded, so I got a default judgement without ever needing to travel, for under $500 in total fees. The judgement is worthless though, right? Probably...
Fast forward about a month and they had an investor willing to float the company for a while longer, but now my judgement is a giant wrench - the investor won't give them money as long as this is hanging around. I got the cofounders to jointly take on the debt personally (after consulting with a lawyer that this was possible - he didn't even charge for the consult!) and I vacated the judgement against the LLC.
A short while later the LLC went under anyway, but since I had both founders' personal finances under my thumb (which would allow garnishing wages, obtaining leins, etc.) I was able to recoup the entire contract amount from them personally.
I wouldn't have spent more than about $1,000 chasing that money down, but a few hours of paperwork and a few hundred dollars ended up making it easily worth my while.
Very very important to get something up front; sometimes half up front doesn't always work for long projects, but you can scope out tranches where if you dont get paid for the first section of work, you walk away.
Has saved me from wasting my time on loads of projects before.
Reading the thread, I think most of us who have worked contracts here have been burned one way or another
Contract terms can vary greatly depending on the situation and the company you’re working with.
Early/frequent payment terms are always good to have but you may not always have the leverage for it depending on where you’re at as a contractor.
Takes getting ripped off a times before insisting on better terms I guess. It’s like bombing your first job interview… you can prepare but it just needs to happen.
I don't know what it is about me, but I have a sixth sense for losers who will not pay. There's been a number of times where acquaintences have taken contracts I've turned down (against my advice too) and have not been paid. There's something about slick communicators that just activates my spidey sense.
And TBH, I have also had a few false positives. One contract I did not take (it was for a mix of equity and cash) turned into a 10B+ company, and I would have made enough to retire (again) on it over a 1-year contract. I didn't because the founder who called me just sounded completely clueless and was barraging me with marketing speak instead of explaining what he needed. I was so exhausted from his BS I just decided I didn't need the headache. (This is also a danger of having enough to retire ... you turn down a lot of potentially lucrative work because you just don't think the headaches are worth it).
In the grand scheme of things, other than that one big missed opportunity, I haven't missed too much upside by being so picky. And when I'm counseling colleagues about their unpaid contracts and conflicts, I'm always silently thanking the stars I have the luxury to say no. I know that's a priviledge.
No longer a contractor but I used to offer a 10-15% discount for paying upfront. Almost every client took this deal. Earned a little less but never lost sleep over payments.
Why not make your rate 15% higher than your desired rate?
That way your “discounted” rate is the rate they should have paid and they feel like they got a deal.
> They were carpetbaggers and dilettantes convinced by their own inexperience and the advice of a onetime VJ that they could pull off something I’d twice helped quote to be brought home by a cadre of hardened killers with shitloads of math and know-how at eye-watering prices. They were way way way over their heads and were in no way interested in updating their priors in light of the shit they were swimming in.
And yet, somehow, you gave them the most important time you had for their promises.
> I missed the month of May with my 2-year-old kid. My wife cared for a 2-year-old alone.
This wasn't because of the customer or not getting paid. This was the author's choice.
This reads less like a "got ripped off" story and more like a perfect storm of every classic consulting red flag showing up at once
He says "trust your gut" about 12 times, but the whole lead up has 0 mention that he was worried he would not get paid. His only gut feelings seemed to be around tech issues.
Yes, I guess also trust the situation when it looks completely wrong. your gut is not lying when it sees that as well
> The faith was that if they could’t pay, they’d let me know because I was actively digging their asses out of a hole they’d dug, and doing so tirelessly and professionally, without complaint.
I get what the author is saying here. But it's a bad idea to treat one's work team with deep communal devotion in this way, as if they are a kind of dysfunctional family-- or, in the author's case, apparently higher in status than real family.
Doing this without proper remuneration creates a market distortion, and that is bad for capitalism.
I was owed billable hours from Stanford University but refused to do any further work until the outstanding invoice was paid. Their accounts payable department didn't want to, so I had to tell the client "sorry" and walked away. It's really weird because I didn't have a problem in the near past then and was even an FTE at one point. I'm unwilling to work for free or for imaginary, low liquidation preference equity of a worthless startup.
Ordinarily, I would sign master agreements and set PO terms up-front. Typically, the better customers would agree to very strict requirements / objectives for a particular time period for a specific price. Any deviations would require negotiation. Hourly is fine too but there must be regular milestone deliveries so that there's demonstrable value for money being conveyed rather than an appearance of a milking-oriented consultant. Expectations must always be managed.
There's no such thing as a company temporarily being in dire straits. These kind of companies are always in dire straits and crisis - it's a business tactic to not deliver and not pay. Just stay away, whether you're a customer, a contractor, an employee or if they want to be your customer.
“A contract is toilet paper”
A little hyperbolic, but more accurate than not when laypeople think about contracts.
A contract isn’t a magic spell, it is a declaration of shared understanding that can be used for clarity and in legal proceedings.
If you think of a contract as a way to ensure you get what you agreed, yes, it is toilet paper, because a contract doesn’t remove counterparty risk.
In a fight between a piece of toilet paper backed by millions in legal spending vs a rock solid contract backed by nothing -- the toilet paper (even if it is used toilet paper) will win every single time.
A piece of contract toilet paper is still better than a bare hand shake agreement.
> End clients can’t tell the difference between these bozos and me. I don’t know what to do with that information but it feels bad.
This is unfortunately all too common. It's hard for someone who isn't an expert in the specific field to separate a smooth grifter from a more typical sales pitch
> A contract is toilet paper
no it isn't. why you did not sue them? success rate of international arbitrage (New York Convention) proces into China is 90% success rate. USA/EU companies who sue Chineses companies in China for breach of contract seem to be winning rates. Enforcement of USA curt orders do not need to go thorugh Chinese courts again, and are enforced by local authorities (local sharks) with success rate of 80% for foreign firms suing chinese firms. fees are also fairly low. case is straightfoward.
if author went and sue, likely he would get his money back.
> why you did not sue them?
Because they could just dissolve the entity and get away with it. Did you even read the rest of the article?
All this for a $35K contract, that sucks.
Who are they?
Wage theft is the most lucrative and least prosecuted crime in America.
FTA: China
The page is actively hostile to me using reader mode on my phone. It keeps resetting my scroll progress to the top of the article. This is the second time I’ve run into this (first was within the last two weeks).
I hope this is a bug in my phone’s handling of something and not intentional. Until I know otherwise, I’m treating sites where this happens as deliberately hostile for the same reason as always: ads. I use reader mode to escape ads that my ad blockers miss but also to avoid poor design or hard to read fonts and the like. My response is the same as ever: I closed the article.
think you got a bug my friend - this is a static site
Thanks for confirming. I was confident the first time because many websites are hostile to users. Seeing it again within a short window made my spidey-sense tingle.
Who are they?
I don't want to name what my quick Google search revealed, but if you search for augmented reality bus Beijing there aren't many options and it fits the authors characterization of their fleet consisting of ~20 buses.
Which they? The contractor, the project owners, etc?
And is who they are relevant to the lesson (stealing time/effort is easy to get away with, you need to protect yourself from that)?
Article contains this:
> I’ll happily tell you who they are - get in touch
OP wasn't ripped off, OP just forgot to define their contract. Like, entirely.
Nobody forced OP to work 11-14 hour days. Contracting 101 stipulates that you define your hours ahead of time. You come in, you provide your expertise, and you leave at the end of the day. Let the client's junior employees work long hours. Not your problem.
OP brought their own equipment, which is totally fine but "who provides equipment" is also in the contract from the start. OP should have made a list of equipment that the client will require to complete such a project and stipulate a client budget be set aside to cover any shortcomings as they arise.
The contract is where you define when you get paid. "Deposit is XYZ quantity, non-refundable. Contractor will be paid for the upcoming week in advance by X date. Failure to remit payment will halt work."
I understand that the point of this blog piece is that it was a learning experience for OP but this stuff is pretty obvious isn't it? This is pretty much what comes up when you google stuff like "how to get into freelance contracting." I'm shocked and feel bad for OP for letting things get this far. Sadly, they were not ripped off by anyone but themselves.
These types of situations are endemic to my industry, for better or worse. I wasn't intending to complain about the working conditions by way of making it seem as though any of those things were unusual — I was providing that context by way of saying I conducted myself as a professional does in these situations. I've been in this (immersive, interactive, creative tech) industry for 20 years and those conditions are absolutely expected onsite when commissioning, installing, or preparing for a live event. Refusing to work beyond say an 8-10 hour day would leave the project unfinished and we work on a 'show must go on basis'. With that said, doing this for 20+ days without a break is unusually grueling, even for this industry.
Back in my younger days I found a bunch of liberals who were claiming to run a software company. They were really into the social justice BS.
After about a month of employment, I was told I was being rude to ask for payment. Apparently they neglected to tell me that they actually only pay their employees 60 to 70 days after they start.
Of course the first red flag was them doing the 1099 dance for slightly above minimum wage. I had been forced to do that before, but guess what. They paid us every single week.
Quiting without notice was one of the greatest feelings with these clowns. By this time they had started to ask me to literally work for free. "Unpaid training". They stopped scheduling me for paid hours anyway, so no notice needed.
Right after that I worked for some conservatives. They paid me early. My first year I got a large raise.
There were some awkward moments like the CEO telling me who to vote for. But for the most part it was awesome.
I still consider myself to be very liberal, but I don't want to work anywhere that does a lot of virtue signaling. Your beliefs don't make you a good person, your actions do.
A bunch of liberals got into my walls and started chewing the wires.
You realize that your anecdote here is itself virtue signaling, right?
Because, I’m sure multiple people here could tell similar stories with the political leanings of the groups involved reversed.