144 FS Remote Work with Mike Hostetler

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Chuck chats with Mike Hostetler about remote work.

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[This episode is brought to you by Audible. Audible is the first place I go to keep my business skills sharp. They offer over 150,000 books on business, finance, planning and much more. They also have a great selection of fiction that keeps me entertained when I'm just not up for some serious content. I love it because I can buy a book, download it to my iPhone, and listen while running errands or at the gym. Get your free trial at freelancersshow.com/audible]** [This episode is brought to you by Code School. Code School offers interactive online courses in Ruby, JavaScript, HTML, CSS and iOS. Their courses are fun and interesting and include exercises for the student. To level up your development skills, go to freelancersshow.com/codeschool]****[This episode is brought to you by ProXPN. If you are out and about on public Wi-Fi, you never know who might be listening. With ProXPN, you no longer have to worry. ProXPN is a VPN solution which sends all of your traffic over a secure connection to one of their servers around the world. To sign up, go to ProXPN.com and use the promo code tmtcs (short for teach me to code screencasts) to get 10% off for life]****CHUCK : Hey everybody and welcome to episode 144 of the Freelancers’ Show. This week on our panel – I’m the panel – and I’m here with Mike Hostetler. Sorry I messed that up. MIKE: Hi everybody! CHUCK : Do you want to introduce yourself really quickly? MIKE: Sure! Hi everybody. As chuck explained, I’m Mike Hostetler. I am a java script developer turned CTO turned freelancer currently working out of Chicago, Illinois; and I’ve been freelancing for several years. Currently consulting, sort of freelancing and excited to talk about a whole bunch of different things today. CHUCK : Awesome. I think the thing we booked you for was remote work. MIKE: Yep! CHUCK : So, let’s just go ahead and start there and then I’m sure there are other things that are interesting to talk about. I mean, you’ve done quite a bit and so – Yeah! If we run out of remote work talk then we can talk about something else. MIKE:**Yeah, I’ll give you a background to get things kicked off. Five years ago, I set out to start a company that was completely remote. Now, five years ago – you have to take yourself back; this was not a normal thing. It’s not super normal now but it was more abnormal five years ago. We started a company where not only could everybody work from home, but we specifically designed and built the company in such a way that people could move around; they could move anywhere. We sort of made this rule that if our laptop died (we were carrying around backpacks or whatever your bag was) – if your laptop died you can be back up and running in any role in the company in two hours or less. It goes – it takes the remote idea further and further than anybody had taken it that we had known of to date.**CHUCK : I love it. MIKE: And it was really cool. We went on this wild ride and figured it out along the way. CHUCK : I really like the idea. I think if you’re just a solo guy like me – I guess I’m not a completely solo guy; I do sell other people’s time, too – but if you’re just a freelancer, you don’t have anyone else in the company, you pretty well are there, I hope. Your machine goes down, you load in, restore from back up, install a few programs – you can at least function until you get everything else plugged in. MIKE:**Where infrastructure and where all the services that we regularly use now as freelancers are today, yeah! That’s a realistic assumption. Which is great from a company perspective because as we started out on this journey, we made the jump from just a bunch of freelancers working together into a company. And the distinction between the two that I – and this is by no means official – was we had people reporting to me that had two extra levels of people reporting to them. We did not have a flat structure (nothing wrong with that) but we had four levels. And four levels is key because if you have somebody reporting to you, you’re usually in communication with that third level from one to three, but when you get one to four, you’re don’t really talk to those people. It’s like a degree of separation, and we had to figure out how this looked, how it worked at that scale. And it was very interesting along the way.**CHUCK : So, how do you get to the point that you can do that within a company? MIKE:**So, specifically regarding scaling, and scaling to that size of a team, the way that I viewed it – the way I planned it out and as I looked at it as – there are common activities, common principles that apply at each level. And my glasses that I look at companies with and I run companies with is companies are full of humans, and humans are these creative, complicated – just people. And when you stick them in a room together, you never quite know what’s going to happen. So, you have to assume that we’re not machines who just, again, follow some programming code. We come with all of this context the rest of our lives that happens outside of work. Two-thirds of the time we sleep, we have a family, we live in a community. All of this stuff happens and the humans bring that all to work. That’s the first thing. So when you then scale through the levels of an organization, you start with the human relationship between levels one and two. And that human relationship is one person is in authority over another. Why are they in authority? Well they are in authority because they have a greater responsibility. The person at the top is responsible for a wider range of things than the person at the next level down. And again, that’s okay – that’s how organizations work. So when you do that, it is the job of that person – that leader – to make sure that everything (and this gets into a little bit of philosophy, it’s a servant leadership philosophy) – but it’s their job to make sure that the level down from them is clear what the expectations are, understand what dates those expectations need to be fulfilled by (if there are dates), and then have all the resources they need if possible (resources are always tight). When you set that up, that’s the base; that’s the mechanical side. The other side of it is the culture. And the culture applies at every level of the organization, but people higher up the chain are the ones who set and define the culture. So, if you have a well-defined culture, for instance – and appendTo, one of our things that we – the cornerstone of our culture is work-life balance. I have the kids and I as the leader, the owner, the entrepreneur, I was not willing to put the company ahead of my family. That you’re an entrepreneur, we have to fill hours, all of those things. You have to work hard but there’s a point where you don’t want to work hard and then wake up in ten years realizing you let other important things go. So that manifested itself in things like, “If you can spend and extra hundred dollars and get a plane ticket home from a conference the evening after the conference or the next morning (which you’re paying hotel so it’s a win-win), do it because you can get home to your family faster; or set regularly scheduled work hours and maintain a balance so you’re mentally fresh when you come in to work so you don’t work too long of hours so you’re too exhausted to do your job well. We preached and lived out this work-life balance. That’s the culture side. The culture goes everywhere. The hierarchy is all about setting expectations, leading, equipping with resources and then monitoring performance. And we set up a little simple system there and then provided feedback loops down the chain to equip people to be successful.CHUCK: That’s really interesting. I’m curious what kind of systems did you put in place in order to make sure that people could (at least to whatever degree they could) maintain that work-life balance. Because I know that something that a lot of freelancers really struggle with is “How do I find that balance? How do I meet the expectations that are on me?” And yeah, because it seems like it comes and goes. Sometimes I’m really good at it, and sometimes I’m not.**MIKE:**Totally. The first thing that I do personally is I set a budget. It all comes back to money. That is the scorecard. That is the point system. That’s what it comes back to. Personally, I in a scenario (like a freelancing scenario) what I did and I’m revisiting this now is I just put my head down and I just bulldoze through. I put my head down and I ignore – I shut off those other parts of life. I’ll lock my door (I have a close-door office – a locked door to my office) and just go and just work! Because I – you just get those blinders on. So, I set a budget because that gives me the overall view. I’m big on spreadsheets. Spreadsheets provide (especially Google Docs – the new version two of their spreadsheets tool) a great way to collaborate and share information collaboratively with other people. So I build a lot of my systems using that. And I have a couple of things, but the first is I have a budget. We worked on two weeks sprint (which I should actually tell you about another tool I developed, but maybe we can make some of these templates available in the show notes) but I work off two weeks sprint and I budget for how much money I needed to earn in a two-week sprint. First, to cover all of my expenses so I have a sheet that list out “Hey, basecamp is here, Github is here”. And I put that all on there, I add it all up, add my salary and I come out with a number. And then I go back and, let’s say, you take your number and divide that over 26 periods. And here’s what I should be aiming for. Now, put the budget to the side for a second. I want to tell you about something else I came up with to find that work-life balance. Pet peeve is a little bit of a soapbox, but I hate our calendar. The Julian Calendar, as it’s called, was created by a pope some time a long time ago.CHUCK: [laughter]**MIKE:**And I think it’s really – it does not fit in my brain. I have this big pet peeve that I really don’t like our calendar. Especially in a company scenario, the months are uneven. That’s the dumbest thing ever. I understand leap years. I understand all of that and I’m sure people with and astronomy background will tell me that I’m wrong but I just I don’t think in uneven periods. Trying to report that is all weird. Many a systems programmer has probably cursed pope Julian at some point in fighting dates. So what I did, I just said, “Forget this!” I’m going to make a calendar myself on two-week periods – fourteen-day periods –and the length of that period is fixed. So my year – my new year’s day – was actually yesterday and it goes Saturday night to Sunday morning. And I have 26 fourteen-day periods in a year. Now that’s not exactly 365 days. (I’ll get to that in a second.) It’s 26 evenly spaced periods of two weeks – a “sprint”, we called it – in the calendar year. Now I cut that in half, and you have thirteen sprints left. Now thirteen sprints, again, is an odd number and what are you going to do with an odd number? So I actually – going back to my budget, I budget to work for twelve weeks– twelve sprints – and take the thirteenth sprint off. One week for vacation, one week for getting the team together or going and doing something fun in June or July. And then the second half of the year, I take two weeks off for Christmas and New Years.CHUCK : Right. MIKE: So I work two batches of twelve sprints over a given year and I budget for it as a freelancer. So I’m earning enough cash to – over the entire calendar year. Now, you have to deal with the extra days that accrue. Every six or seven years, you need to add an extra week in to keep it on schedule. But it generally works out really well. We actually had to add one last week. Last week was our orphan week. But this has actually been incredibly helpful for me to maintain that balance because I’m on a consistent cycle. I know when my quarters ar;. I plan everything around that. And I know that if I can earn in the first half of the year, I have more room second half of the year. I have quarters – six sprint quarters. So again, doesn’t fully match our calendar year. I have dates cause you have to match up with our calendar dates but I just work off of a different schedule. That consistency, one, it reduces mental ram. It gives me a tool to plan against to plan against – to build my business against – my freelancer business against such that I can maintain this consistent pace and make sure I’ve really built-in those two-week cool down periods every year. Which is a month off, right? When we work as freelancers, your work doesn’t always fit into a 40-hour work week like somebody in an office. It’s 45, 50, 55, 60 sometimes because it ebbs and flows. And the way you have to deal with those ebbs and flows is build-in the cool down time. That’s how people do it. So I have templates for this. I’m actually – it’s on my list to blog about my – Mike’s crazy calendar. I may throw in my budget system in there as well. We can link those in the show notes, or on my blog at mike-hostetler.com. CHUCK : So, I’m wondering though. How do you deal with things on the regular calendar like birthdays or holidays things like that? MIKE: I just – you add them in there. They fit. The sprints go down to – instead of ten business days, they go to nine business days. CHUCK : Oh, okay. MIKE: Yeah, we just – just like normal. We ran this schedule in appendTo for five years. We didn’t do a great job of taking off the two-week cool downs. The idea hadn’t formalized to that point. We just ran 26 periods and we slowed down significantly during Christmas. But in my new freelancing company, I’ve already set this up and anybody who works with us or joins us follows this schedule. CHUCK : That’s really interesting. I might have to go ahead and try it. I think it makes a lot of sense just in the sense that it’s, “I just do the consistent thing”. MIKE: Because we work hard. Freelancers work hard. Right? CHUCK : Oh yeah. MIKE: You get right down to the bare metal of “If you don’t work, you don’t eat”. CHUCK: [laughter] That’s so true.**MIKE:**And then you get caught up in it. So then you go two years later (like I did the first when I first started doing this of “you work through every holiday”.) You work through Memorial Day – what is Memorial Day? Christmas, you take a half day or you answer emails in the afternoon. If you have kids, this works. I mean, let’s be honest with it: we’re in a heavily connected society. And I think it’s going to take a bigger – you need to carve out bigger chunks of discipline. I actually got this idea from Brad Feld when he first got married. If you don’t know Brad Feld, he’s a VC in Boulder, Colorado. Great guy. He runs a blog. It’s been a really big blog called Feld Thoughts (Feld.com I believe and it’s something else in the show notes). He went to MIT and went through his first company. And his wife got mad at him because he worked too much. No kids so different situation than mine at the moment. His wife got upset with him justifiably so but it’s often his excuse is the startup life. But he didn’t want to get divorced. So what he did I thought was incredibly clever. And that was twice a year, he took a full week off – just build it in. Build it in so everybody knows. Twice a year took a full week off. And then, every quarter, he took his wife away for a four-day weekend. And it was still that intense schedule because it’s much harder as humans to – we work at a given pace. Everybody has their own normal pace and that normal freelancer pace is often you’re at your own red line. If you go over too long, you get sick. You balance back. Everybody knows how to balance that in their own way but often times, it’s more than 40 hours a week. (That’s a dream.)**CHUCK : Yeah, absolutely. You’re talking about getting sick. I got stressed, I got busy, and then I almost got pneumonia. And then the “almost pneumonia” got me shingles - that’s been my last two weeks. There were things I needed to get done and they just didn’t happen. MIKE: They didn’t happen. CHUCK : So it is – it’s this pipe dream. You’re either going to take the time or you’re going to be made to take the time. MIKE:**Yep. And we – here’s an interesting lesson learned about appendTo. We organized ourselves to set up the billing structure to be a 32 hour week. So we only book people to bill 32 hours a week. Now, it seemed a great idea at the time (I think it is a great idea; it comes from a good place), however, the implementation of that idea, we never quite nailed. And that is, what do you do with the extra eight hours? (Think 32 billables is about right.) And then, what do you do with the extra eight hours? And then not only that people work more. So you don’t – why would you tell somebody to go home at 40 hours? If you’re working at your own personal – everybody has their own beats per minute, their own pace; slightly different. Mine is about 50-55 hours a week. That is a very sustainable pace for me. Now that’s a bunch of different types of activity. Some intense, some less intense but that’s where I end (I’ve tracked myself enough). Desktime.com – cool tracker. I think it’s a rebrand of another one that was around but they’ve done enough. DeskTime just tracks everything that you’re doing. You can actually get these really cool graphs of how much time you’re actually spending at your own machine. So I install it on my work machine and it tracks my time transparently. And 50-55 hours a week, that’s my normal pace. If I work less, I get frustrated. If I work more, I get stressed, sick, tired and then I lose time with my family because I’m in bed. So what’s better? Everybody needs to find that normal pace and then find that balance. And that balance ends up looking a little bit different for everybody.**CHUCK : How do you know if you’ve hit that balance though? Do you just track it and then it feels right or it feels good for a while? MIKE:**I think it’s a tracking thing. You have to collect data on yourself –observe yourself. I’ve always been a big proponent of self-observation through objective means, that’s why I like DeskTime. Before I started freelancing, I actually made it a game, a single player game to track my time and give myself positive or negative points compared to the types of activities I wanted to do because I was really bored at my job. And I used that to get this self-awareness of what I was spending my time on (there’s a lot of different ways to do that but again DeskTime is a great one). Once you find that balanced productive place, I thing it actually can be a disservice to hand people “Oh just work 32 hours”. I think by giving them that number, it gives them a target to hit a minimum; and once they hit it, it’s rare to have somebody go beyond it just because, again, go back to human nature. If we’re given goals, we usually hit those goals and don’t go beyond it.CHUCK : So, as far as working from home goes, I just want to dig in to that a little bit more. MIKE: Sure. CHUCK: So first off, one thing that I run into occasionally (not super frequently but it does happen occasionally) and that is I have clients that object: they want you on site, they want you to be under their thumb, they want you to be doing things their way. How much of that do you give into and how do you sell them on having somebody remote where they can’t watch you and know that you’re doing the right things all the time?MIKE: I say “No”. CHUCK: [chuckles] That’s what I do but–**MIKE:**Right. I mean I think that that’s – that really is the only answer. So interesting because appendTo, we said “no”. I have appendTo, for those who don’t know, we sunset the company last year. There’s a big story to it but we decided to close it down. There’s a lot behind it. Maybe we can switch to that topic and I can add a little bit more color to the story but appendTo was an operating company. I have another company called Epic Creative, which is my company – that was me. AppendTo was designed in order to bring other partners if necessary. And working out of that now – and especially being here in Chicago metro, I opened up the door back up to being on site. And I’m working on a client now where I’d spend a day with them. And I did that intentionally to – when appendTo shut down, I had this goal of spreading my wings as wide as they can go to get back and experience some the things that I haven’t done career-wise in several years. I’ve been working from home for eight years. And never – I would go on site for small things. Maybe a week at a time and that was it. And I’m with a company that I go down there every Tuesday and they have not had success with on-site. And it’s been a great case study to understand why and understand the balance. On the whole, I would say that I still am a firm believer in that – in remote working does work 90% of the time. That last 10%, and we never got this right in appendTo because we didn’t invest in it (frankly, which was a regret and something I will be doing differently going forward), but there is something very important that happens when two human beings meet face to face. I subtly – which they’ll probably listen to this podcast now and they know who they are – I subtly been introducing and testing the waters to see if we could to a little bit of remote work with this Tuesday client in different ways and just test some things out to deliver them value but to show them a different way to do it. Because I think the problem is their work style necessitates being on-site, which again, nothing wrong with that. You have to start with a remote work style. Some companies do; some companies don’t. And then, this is the other balance: if you start with a remote work style, really need to make sure you’re investing in face time. I think a minimum twice a year with the people you work with on a daily basis. That face time, that sitting down, working side by side, seeing people’s work styles is almost like this – greases the wheels of workplace friction. And looking back at appendTo now, I see opportunities we had and people I would see regularly. We see each other – conference or on-site consulting and there was a group I saw on a regular basis so I felt very close to versus the others who – the role was such that we just didn’t. And I do regret not investing in that as a company for everyone because I don’t think we were – it was something lost that I would definitely change. So if you do commit to go on remote – if you’re a hundred percent remote – that face time is absolutely necessary. I think I had a minimum every six months of working together for a week. That’s what I – my rule of thumb at the moment. That’s a very new and evolving component of remote work for me but that face time is critical.CHUCK : Now when you say face time, you’re not talking about video chat right? You’re talking about “in person”. MIKE: In person, getting them together, working side-by-side on something you both care about and yeah doing that, getting the side-by-side work time together. CHUCK : Gotcha. So actually working together. MIKE:[crosstalk 26:56] Yes, side-by-side.**CHUCK : So it’s not “Okay we’re going to hang out at the amusement park together”? MIKE: Correct. I think that working side-by-side, you need both. You need to have the fun. And you can – I wouldn’t say you need to work full time all day, eight hours a day like you would normally at home. I – in going onsite to this Tuesday thing, I found myself being incredibly more productive and effective working from home, I will say that. And that’s been a good reminder. But, again, that’s not a bad thing too because you’re building social – calling it grease is kind of weird. I need to come up with a different word for this. “Friction remover?” “Social capital?” I don’t know. I have to brainstorm that one out but interesting stuff – interesting stuff. CHUCK : So, one thing that I struggle with sometimes when I’m working from is just getting distracted. I think the desk time thing will highlight some of that because it will say, “Hey you!” I’m just barely looking into it but it looks like it tracks what you’re on and what you’re doing so it will tell me, “Hey! You’re on Skype.” Which is I’m talking to you. But if I’m doing something else, then, it will tell me that I spent so much time on whatever website or something, I’m guessing. MIKE:**Correct. And if you install the chrome extension (I use Chrome; there’s Firefox and all that stuff too), you can actually get the title – each title of the sites that you visit. So if you go to Facebook, it’ll track Facebook separately, which is pretty convenient. I hate Facebook but I’ve had a couple of Facebook groups that I’m a part of that are incredibly valuable. I have listed Facebook as a unproductive app, but I give myself a free pass on that one to make sure stats stay high.**CHUCK : Right, that makes sense. So you just track it and then you say, “Okay, I got to spend less time on this.” MIKE: Yep. CHUCK : “This is my time suck. Make it go away.” And so then, you cut back. Is there a way to tell it, “Hey, I wasn’t on the work time right now so I–”? MIKE: There’s a private time. You can log it as private time. It’ll just record it. CHUCK : Okay. MIKE: Cool app. CHUCK : Yeah, very cool. Do you have any techniques though for people who are working from home? You know, the boss isn’t going to walk by. You know – whatever – for me, as long as I get all the work done for my clients are happy. But I would like to get more work done. So how do you stay productive when you’re at home? I mean, I shut the door, I lock my kids out so that’s kind of solved. MIKE: Yup. Closed door. Understand you have your goals and what your measurements are because hours worked does not necessarily equal dollars in a freelancing business. So I go back to that budget. It is okay if you work 20 hours a week to hit that budget. That’s completely valid outcome depending on what you want to do and understanding your goals. You have to again get back to that self-assessment and if you need to be in an environment where you’re only productive if the boss walks by, two things will happen. One is if you jump in as a freelancer and you need to be in that environment and you have the sales – you don’t do the work, you won’t get paid – and then you’ll find yourself in a Maslow’s hierarchy of needs situation. Either you’re going to get by on less, which again, viable outcome right? Or you’ll start working more and it will naturally happen or you need to go find a different job environment. And you do well. You’re the type of person that does well in a different environment and that could be from potentially not getting the sales. What you do specifically isn’t in demand. I’m assuming we’re not talking to just programmers here. CHUCK : Right. MIKE:**It’s okay. It really is okay. I think freelancing is the future and having those freelancing skills are really valuable and they’re valuable to any employer. I specifically and particularly look for people who have six months plus freelancing experience because as employees, they prove to be fantastic employees because they understand that environment – those pressures – and have dealt with them and lived with them for an extended period of time. [crosstalk 31:16]**CHUCK : It’s funny you say that because I’ve met plenty of managers and business owners who won’t hire people who’ve been freelance because they’re afraid they’re going to leave. MIKE: Oh really? CHUCK : Yeah. MIKE: They’re only afraid that they’re going to leave if they don’t know how to deal with them. That’s the manager’s fault. CHUCK : I agree. MIKE: I love freelancers. I love it. It’s the future. It really is the future in my opinion. CHUCK : I completely agree. I think more people are going to be in a position where they can be more productive out of the office than in the office and I think that’s where we’re going to wind up. MIKE:Cool stuff. I think economically as companies, it comes down to “what does employment look like?” First you need to understand the purpose of the company. The purpose of a company is to make money. That’s a very okay thing. How does a company make money? Generalizing a little bit, there’s a couple of caveats with B corps and some different stuff. I have a really great talk on this called “Our relationship with work is broken” that I gave at DevLink last year so I got to heavily footnote that statement. But generally, the purpose of a company is to make money. So how does that happen? There’s management who organizes the work and there’s people who actually do the work to scale these hierarchies of people. And at the end of the day, most freelancers have figured this out. If you provide value consistently – value doesn’t necessarily mean deliverables, it doesn’t necessarily mean hours – If you provide that value consistently, you get more work usually. If you help push that organization forward in some way, that’s usually valuable. And then – that’s the bedrock of what the relationship looks like between the employee and the company. If you understand that, you train people to perceive and see and judge how that works, how that looks. The rest of the – what we typically drape on as the employment relationship is just trimmings to dealt with people who don’t know that bedrock principle. It’s “come to work”, “move widget from spot A to spot B” and “do this thing”. The interesting thing is that robots and automation – those “move widget from A to B” – is getting automated. What is going to be left that robots will never be able to overcome (Mark Andreessen has a bunch of cool stuff on AI and singularity and Peter Diamandis as well, if you read any of his stuff) is what robots will never be able to overcome and they never ever come close to this with AI is human judgment. Human judgment is how you provide value. If you get into a role where most of what you’re doing is providing your own judgment to complete a task and doing that all day long, you’re generally providing value. Machines don’t write code because it takes judgment to write code. It does.CHUCK: Yeah. MIKE: Human judgment – that’s one thing will never be automated. Neural nets, none of that stuff ever gets close. That’s why I’m not worried about singularity. Created things – this goes back to why I named the company Epic Creative – created things cannot create something more intelligent than themselves. So it’s a – I’ve got to dig up the name of the scientific principle behind this – but if they can’t create something more, you can create AI that follows a really complicated decision making structure; it could teach itself things but it can’t replicate that same experience and judgment that a human imparts into it. So as a freelancer, you go back and you focus on giving them your judgment, giving them your experience and if you’re new to it, just soak up everything you can and learn and then offer your opinion. Wait to offer your opinion in situations where it’s really necessary. As you grow, as you learn, you’ll to get better and you’ll be able to offer your opinion and add value in bigger and bigger ways. That’s why people higher up the chain get paid more money because they’re providing more value. And at some point, you reach a point where your value is not linked to and hourly rate because hourly rates only go so high. You get up and into oil worker or oil consultant rates of four or five hundred dollars an hour or even high skilled lawyers of 500 to a thousand and hour which is crazy amounts of money. Past that human beings check out, you have to come up with ways to earn money where you’re more scalable than your hourly rate. But that’s more of a different talk, I think. CHUCK : Yeah. So I guess the next thing I want to go into. I want to get back into the productivity think for a minute. MIKE: Sure. CHUCK : So let’s say I start tracking things. I can see my time sucks but – so I get rid of those. I get rid of all the things I’m wasting time on. That I’m spending time on that aren’t paying off at least in the sense of the obvious ones like playing video games or something stupid. How do I get more done? How do I make my hours count for more? Yeah, we talked about value. We talked about what that is. We talked about some of the judgment calls that you make and that’s a lot of the value but how do I make that count for more dollars in my pocket or more work done for my client? MIKE:Good question. So, I’ll make a couple of some assumptions in answering this because, especially in a service based business or freelancer business that we’re talking about here, what does that look like? Again, assumption in a freelancer business, let’s say – let’s assume that you have 40 billable hours a week. (We’re going to leave those to previous conversation that we had out of here about doing more and your balanced hours whatever.) Leave that aside for a second. You’re working with just 40 hours and your billable rate is 100 dollars an hour. Which I’m guessing that is for a programmer about average.CHUCK : Probably. MIKE: So your max that you can earn in an ideal week is $4000 a week, $16,000 dollars a month or two sprints. Remember my month, okay, that’s four weeks. Every single month, it’s awesome. You should totally check out those calendar. For $16,000 a month, how do you earn beyond that? How do you earn more? I mean there’s a couple of different ways. This gets into the business side of freelancing. The business side is one, you come up with a contract – that hundred dollars an hour; two, deliver a certain amount of agreed upon value to your customers. Okay, so you could raise your hourly rate. CHUCK : Yes. MIKE: But there’s a ceiling to that. The high hourly rates I know of right now especially in technology are either archaic technologies like COBOL and FORTRAN, super cutting edge technologies like NodeJS. But there, to get a good rate with Node, you have to have either significant open source investment or there’s something else that gives you that kind of value. You can hire more people and expand horizontally. When you do that, you take on a management and overhead burden. Both business operation risk wise; and management is a separate skill: if you’ve never managed people before, look at it as a separate skill that you have to learn because that’s exactly what it is. That again they’ve – that’s what an MBA is to some degree, learning how to manage people. Or you can get into products and the value of the product is centered around not the hourly rate but the intrinsic value of the product to the person that’s buying it. Now that is how companies get big. Very few companies truly get big based off on just billing hourly. There’s a few: Accounting firms, big big consulting firms like Accenture. But their business model make them work are very cut throat.  As freelancers, you’re probably – you’ll do well at maybe one, two three people. Expanding past that without pulling on this extra skill set is difficult without that management expertise. The last thing is – so the alternative is to get into products. Products are a tricky beast and I have made several attempts myself. I can’t claim success in any of them yet, quite frankly. Part of that is focus. There’s a lot that goes into that rather than the intrinsic value. I’ve never really raced after it full time because I chose the middle route and appendTo ended up being about 35 people of sharing hourly rates back and forth. For the immediate future, I’m back in the hourly rate game but I’m using the tools we’ve discussed in this podcast. I’m doing it a little bit differently    such that I’m budgeting properly. I’m not just earning as much as I can. I’m working on scaling out and building out products. The most important thing I’ve found in understanding and nailing down products is nailing that value proposition and again, that’s a completely different subject ballpark to go into. But when that value proposition is nailed, then you just need to go find your market. Once you find your market, you effectively market your product to them. Products don’t last forever. That’s the other fallacy of “I’ll just get something going and I’ll be rich”. You may make some money but you probably should still calculate your hourly rate going into it because time is the only thing that we’re all consistently bound to. And it just comes down to how effective we are. And if you’re dollars per hour – what’s your earning rate per hour, the only way to get over as a freelancer 200, 250, 300 dollars an hour is to effectively scale yourself through an organization by learning management or through a product where the product gets big, you have to learn management anyway. So it’s an interesting road to go down. CHUCK : Yeah, very interesting. Alright. That’s definitely a road that I’m looking at going down right now as well. I know you have a hard stop coming up so we’ll go ahead and get into picks. Do you have some picks for us? MIKE: There’s a great article - I’ll just mention the picks that I had as I went through the show notes. Feld Thoughts, the Brad Feld’s blog. If you’re looking into this management side or entrepreneurship, it’s a great place to start. Desktime.com – DeskTime is the app that I use to track my use to track my own productivity and time. And the templates that we discussed. I’ll look at making those available in the show notes and on my blog as well here in a couple of days. So, that’s my picks for now. CHUCK : Awesome. I’m really excited to see those templates. I guess I’ll just share some of the tools that I’m using these days. One of them is Backblaze, which is just a backup system. It’s just a way of backing up your stuff. It’s pretty inexpensive and I really like ‘em. So I’m going to pick Backblaze. And I’m also going to just say this. It doesn’t really have anything to do with anything. This week, it’s CES. It’s consumer electronics show. I’ve gone the last two or three years and I just couldn’t make it this year. Partially due to my health and partially due to just other things going on so I’m kind of sad. So I’m going to pick the consumer electronics show and plan on going next year but yeah those are my picks. MIKE: Cool. CHUCK : Well, thanks for coming Mike. It was fun to talk, I got a lot out of it. Hopefully, you and the listeners also got a bunch out of it. MIKE: So, appreciate it and looking forward to the next show. CHUCK : Yeah. Catch you everyone next week. [This episode is sponsored by MadGlory. You've been building software for a long time and sometimes it gets a little overwhelming. Work piles up, hiring sucks and it's hard to get projects out the door. Check out MadGlory. They're a small shop with experience shipping big products. They're smart, dedicated, will augment your team and work as hard as you do. Find them online at MadGlory.com or on Twitter @MadGlory.]**[Hosting and bandwidth provided by the Blue Box Group. Check them out at BlueBox.net]**[Bandwidth for this segment is provided by CacheFly, the world’s fastest CDN.  Deliver your content fast with CacheFly. Visit cachefly.com to learn more]**[Would you like to join a conversation with the Freelancers’ Show panelists and their guests? Wanna support the show? 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