Outlined in 2018 as a response to the most common objection we hear in sales. Still the most common objection, so here it is in full.
There are thousands of ways to get software built: a freelancer, a nephew who is studying computer science, an offshore team, a nearshore team, an agency, a firm like ours, a big consultancy. The rates run from a few dollars an hour to several hundred. We sit toward the upper part of that range, and prospective clients are right to ask why.
How the rate is set
An hourly rate is mostly what it costs to employ the person, plus what it costs to run a firm that makes them effective, plus a margin that keeps the firm in business through the slow months.
The first part is the biggest. We hire experienced people in Texas, we pay them well, and we keep them, because a team that has worked together for years is faster and makes fewer mistakes than one assembled last month. The second part is everything that is not the person: the strategist and designer who make sure the engineer builds the right thing, the QA that catches problems before you do, the delivery lead who runs the weekly rhythm, the security and compliance work that lets us say we are SOC 2 Type 2, and the tools. An offshore rate excludes most of that. You either pay for it separately or you go without it and find out later what it cost.
Why the rate is the wrong number
The rate tells you what an hour costs. It does not tell you how many hours, and it does not tell you what you have at the end.
A lower rate buys more hours, and the hours it buys are the expensive kind: rework when a requirement was interpreted literally, missed requirements discovered at the demo, management time on your side explaining things twice, and time-zone lag that turns a one-day question into a three-day one. A good share of our work is repairing projects that started with the cheaper quote, and the companies that hire us for those rescues have already paid the low rate once. The true cost of offshore development walks through the arithmetic.
The number that matters is the final invoice against a working system. That is what we ask to be judged on.
How we make the total cost lower
Three things, all of which show up in the total rather than the rate.
We work to a fixed budget with controlled scope. The budget and the quality are fixed, the scope flexes inside them, and we prioritize together every week. The number you agree to is the number you pay. A cheaper hourly rate with an open-ended scope has no such promise.
We validate before we build. Every new build starts with a VDP Sprint and every existing system with a System Evaluation, so the expensive mistakes are found while they cost a conversation.
We do it right the first time. Testing at every stage, senior engineers reviewing all the work, and the engineering disciplines that keep a system cheap to change in year three. The rate pays for those. The total reflects them.
The measure we use
Across the clients we have served since 2005, the measured return on our work has averaged 23 times the investment. That is the number we point to when someone asks why the rate is what it is. Not because the rate is low, but because what it bought paid for itself many times over.
If you are comparing quotes right now, Your hourly rate is higher than other quotes we have seen. Why? has the short version, and what custom software typically costs has the ranges by type of project so you can compare totals rather than rates.