Yeah, I'm actually the Head of Talent at a smaller startup and have worked here, larger startups, Google, Facebook, etc. I've considered starting an agency like this multiple times, and people as me about it quite a bit. I always just assumed the market was saturated with savvy people providing a better value proposition, but if the founders literally have no idea what the normal fee is (founder above claimed 50% is normal agency fee, even though the article itself correctly points out the normal fee is basically exactly what their fee is) and they seem to provide very little value, it makes me feel like I should get on this.
The fees at agencies vary greatly. You tell them how much you want to get paid hourly. They charge clients as much as possible and keep the difference.
Fair enough, but a founder of an agency saying that "standard fees are about 50%" is either an outright lie to get more business or just someone not understanding the business they run. Either one worries me.
I think its a misunderstanding or misuse of terminology. "Take" may refer too the difference of what the agency bills vs what the freelancer/developer is paid out.
E.g., agency bills at 50% markup (40-60% average in agencies in the technical space (I was a tech recruiter for 3 years)) $90 / hour to the company, while paying the developer $60 / hour.
Perhaps the founder is saying the agency is "taking" $30 from the developer, but this is a poor way of representing their service as comparative to third-party agencies and is not necessarily reflective of what the developer could make themselves directly with the company [1].
I can see why this is hard for 10x to get across, because stating "third-party agencies markup the pay for developers by 50%, we only mark it up by 15%" or "we take the 15% pay out of the developer," ergo, the developer needs to be negotiated higher in pay to make up that 15% fee.
[1] part of why companies pay the bill rate to third-party agencies is liability, taxes, ease of hiring/firing, avoiding SOW's and LLC / 1099 freelancers, etc.
Savvy developers will of course negotiate their fee's / pay upwards, but that is what 10x and others seem to be trying to take care of.
Its interesting, but misstated by the founder for "50%" take from the developer.
