Made a fast transition from thinking “Oh, I’d like to go freelance” to finding a niche to work in. That’s not easy or simple. Being a soloist is not for everyone. The undertone of a lot of my presentation here is that you may not actually be suited, intellectually, emotionally or in skillset to be a soloist. In which case, you should plan to discover as quickly as possible if that is true. Start with an escape plan, “If this doesn’t work by such and such a time, I will have three plans: hire someone else to do my stuff, or sell the business, or take a job offer.” When you get on a boat you have to have life vests and rafts, just in case the boat doesn’t work.
It is terrifying. It’s frightening to jump into this and have to deal with everything at once. It’s like falling down an open elevator shaft. Best cure for the fear you have is, on one hand your escape plan, on the other creating advisory relationships with people who are successful freelances. Not just an occasional chat, but in depth relationships, and you try to take what they say on board. Create a mentor/protege relationship, and if they give advice, really try it. It’s like the relationship you might want to make in a dojo, learning a martial art. When you don’t have experience, just do what the sensei tells you. Without you, it is like falling down a lift shaft.
It’s about business. You need cash in hand to start up, you presumably have a planning time frame, and during that time, squirrel money away to support you in the beginning. Approach this as a business, build a spreadsheet, know how much money you need and what you’re going to spend it on. Know how you are doing, what your burn rate is, and whether you can afford to take a trip to a conference.
Like a business, you have to have all three things working for you. Natural tendency is not to have all three, so if we’re going to be successful we have to work against our natural type and push ourselves to do things that don’t seem natural:
– performing the work and enjoying it
– networking skills, meet people, explain who you are
– money: selling yourself, invoicing.
If you sell something you can deliver and then hire someone else to do it for you, you’re not a freelance anymore, and that’s fine – it’s a good way out.
Some people are good at invoicing but aren’t good at networking, so never have enough work. Can be dangerous, because end up enslaved to the clients you already have. Can become a slippery slope as they demand more and more of your time, and it becomes like you’re employed but get no benefits of employment.
Examine your character deeply. Understand what you are naturally like, and where you weakness is and address it.
Have a plan for how your business is going to work that suits your character and how that all fits together. Branding, how you deliver value, your ethical moral stance, how you interact with clients. Has to be all of a piece, has to work together.
Ten Day Rule: I’m going to only be able to bill for ten days a month, and have to do all the other things that I need to do in the rest of the time. The rest of the month, however I spend it, also includes all the non-billable stuff like going to conferences, email, admin, etc. Much of that should be me marketing my thinking in order to get people to ring me up and ask me to do work for it.
You have to therefore divide the money by 10 and that’s your day rate. But you need those ten days, and to start with you won’t get it. You will also have to vary depending on client, so some pay more, some pay less.
Important thing: No Assholes Rule. Have been screwed over by clients, but as I’ve got older and less tolerant, have learnt a simple model which works for me. When they screw you over once, you quit and you never work for them again. Learnt painfully that forgive and forget doesn’t work. Once they’ve rationalised this evil thing, it gets easier for them every time. It doesn’t get better if you try again, so cut the loss, get away from them and find someone else to work for. Try to discover as fast as possible if people are, in fact, not nice. Initial engagement is a day or two days, and during that time I check them out – do real work for them, and I deliver that’s something that’s of value, but I can also decide if I want to go forward with them. If I have any inclination there’s a problem, I can back out.
Even though I’m filtering, I still end up in a situation where I have to let people go. One company, at the end of the first year, gave me a document with a NDA and non-compete clause as part of the stock option deal. Said he wasn’t going to sign it and said goodbye to the stock.
Get it in writing – write it down from the very beginning. Have an open discourse about what their expectations are, what their money expectations are. Don’t put it off – this is business. If possible, get a signature, and definitely try to get at least 50% of the money in advance.
Have published a blog post which is called “How I roll”, which is philosophy of what I’m doing and how to do it, things like “If I’m travelling then I will not live off hotdogs; If you want receipts ask for them in advance”. Very helpful to clients, gives them an idea of your expectations. Not everything should be negotiated from scratch with each client.
Look for client engagements in which there’s a strategic level of involvement. Have clients I’ve worked with for three years or more. You have to determine in your work based on what the duration should be. Make it seem that what you’re doing is as similar as possible to what they do. So, when working with a start up, talk about what it’s like to be a founder, actively looks for equity in a company.
Combos. A good metaphor is that you are an independent musician with a career as a a soloist, but that doesn’t stop you playing in a group. Get into a combo model. Your independent brand is very important, but sometimes it’s fun to get together with people. Fun to pull other people together to help clients. Can make it much easier to have a holiday if you have a group of people working together.
Am interested in equity, working with start-ups, often don’t have a lot of capital, but do have equity. “Advisory capital” – investing time in a company and would like to get a reward. Haven’t got anything big, but did get a cheque big enough for a car, but do have a pile of stock and some companies are looking very successful. But like a VC, I’m then looking at opportunities to see if they are going to make it, it’s not just how much money are they willing to pay me today. That may not work in every sector, and in some areas/sectors/countries it might even be prohibited, but it’s an interesting idea that almost anyone might be able to contemplate.
Main recommendations:
– Have an exit strategy. Some of us will be freelance until we die. Other people have other different endgames. Are you ever going to want to walk away from your consulting practice and what sort of a walk-away is that? Acquisition? Turn into a business? Transformational interim period and get a job? But start with those goals in mind. Get a business plan in which you have those deadlines in mind. It’s really not for everyone.
Q: How do you organise yourself?
It’s very variable. At the moment I’m on a tour to see a number of clients and go to conferences, but still in contact with clients in the US. Not partitioned, but does become neater when at home, when I’m more regimented in my life. I’m productive in my morning, so don’t want to pollute my mornings with interactions with humans. By 4pm I’m non-functional but can still do email. When I’m travelling, I’d prefer to have three half-days in the afternoons, but ends up being one and a half days in a lump.
Q: ?
The first skill is always being able to do your job. The second skill is networking, and that is where you learn new stuff, and the last skillset includes getting the money, sales, closing the deal, writing and getting the contract signed, paying your taxes – back office stuff. A lot of people are great at negotiating what they do, but they’ll never get the contract signed so they never start.
Q: You mentioned advisory capital? How do you decide that? Do you decide or do they?
It’s a combination. I’ve been very public about it, so they may have heard about it and I talk about it very openly about it from the beginning. Have to be very choosy about who to pick. I look for a team that’s got a great idea and a good team, and they’re just missing one thing – me. So it’s a very peculiar circumstance. But that means there aren’t many of them.