162 FS Restructuring An Agency with Matt Inglot

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01:23 - Matt Inglot Introduction

02:22 - Transitioning (Mistakes Made)

  • Scaling
  • Generalization
  • Fixed Overhead

04:13 - Specialization, Positioning, and Targeting Clients and Customers

  • Virtualization

08:30 - Pivoting to Being a Remote Agency

  • Getting Clients
    • Networking and Referrals
    • Inbound Marketing
    • Direct Outreach

13:34 - Running a Remote Team

  • Contractors, Subcontractors

16:55 - Company and Team Identity

  • Adding Overhead

26:57 - Scale

28:10 - Pricing and Billing; Recurring Revenue

30:18 - Recurring Services

  • Campaign Management
  • SEO
  • Building Email Marketing Services

31:16 - Prompting Change in a Business

34:52 - Specialization (Cont’d)

39:49 - Being a “Web Agency” / Calling Yourself ____

49:05 - Choosing a NichePicks

aText (Jonathan)Amy Cuddy: Your Body Language Shapes Who You Are (Eric)Sonic Pi (Chuck)Freelance Transformation (Matt)Kirk Parsley: America's Biggest Problem | TEDxReno (Matt)

Transcript

CHUCK: We lost Eric. Never mind.[This episode is sponsored by Hire.com. Hire.com is offering a new freelancing and contracting offering. They have multiple companies that will provide you with contract opportunities. They cover all the tracking, reporting and billing for you, they handle all the collections and prefund your paycheck, they offer legal and accounting and tax support, and they’ll give you a $2,000 when you’ve been on a contract for 90 days. But with this link, they’ll double it to $4,000 instead. Go sign up at Hire.com/freelancersshow]**[This episode is sponsored by Elixir Sips. Elixir Sips is a screencast series that will take you from Elixir newbie to experienced practitioner. If you’re interested in learning Elixir but don’t know where to start, then Elixir Sips is perfect for you. In two short screencasts each week between five and fifteen minutes, Elixir Sips currently consists of over 16 hours of densely packed videos and more than a hundred episodes, and there are more every week. Elixir Sips is brought to you by Josh Adams, expert Rubyist and CTO of a software development consultancy, Isotope Eleven. Elixir Sips, learn Elixir with a pro. Find out more at elixirsips.com]  **CHUCK: Hey everybody and welcome to episode 162 of the Freelancers’ Show. This week on our panel we have Eric Davis. ERIC: Hello. CHUCK: Jonathan Stark. JONATHAN: Hey. CHUCK: I'm Charles Max Wood from DevChat.tv. This week we have a special guest, and that’s Matt Inglot. MATT: Wow. You said my name correctly. Awesome. And hello. CHUCK: You want to introduce yourself? MATT: Yeah. Absolutely. I'm the owner of Tilted Pixel web agency that, as of September, will be 10 years old. And it’s business that basically started in university, and then life took me down the path of growing it. I basically messed up trying to scale it, terribly so, and then realized everything I did wrong, and restructured it is a virtual business. And basically, out of that and everything I've learned, I started Freelance Transformation, which is a blog and podcast helping other people in the consulting, freelancing space learn how to basically not make those same mistakes and how to build a business that actually is built around their lifestyle rather than controlling it. CHUCK: Very cool. So what were some of those mistakes that you made that you had to transition around? MATT: There's a laundry list, but I think that there was a key things. So for contacts, it started as me building websites out of my student housing basement apartment, and that was actually kind of awesome because I was making money in university, and not having to make burgers to do it. So it was that kind of early success that got me into thinking, ‘well, I need to open an office. I need to hire employees’. And I did that successfully for several years, but the problem is that I did all of that scaling without really understanding what it is that I needed to do to build a successful web agency. So I think if you want to narrow down in the few crucial mistakes, first off: trying to scale before you figure out your business model, but I thought I had it figured out. I think a huge part was we are very general. So if you needed a website and you had money, there was a good chance we could work together. And that turns out to not be the greatest approach. Right now, in 2015, I turned down about 80% of the leads that come my way. We don’t even try quoting on them, whereas before, pretty much if, again, you needed a website, had a pulls on a checkbook, I thought you were a perspective client. So we ended up chasing a lot of the wrong type of business. And the other thing that was critical was we had a lot of fixed overhead because everything was fixed like you had to pay rent, you had to pay your employees; landlords and employees don’t like it when you don’t pay them. And when you have a hugely variable income stream, then it’s very difficult to have a lot of very fixed expenses. CHUCK: That’s really interesting. JONATHAN: So what I’m curious – I’m always beating positioning drums and shifting from being a generalist to a specialist, so I’m curious what specialty you picked. MATT: That evolved over time, and it’s actually going to evolve more now. I do like to always be evolving. But it went from very general to – I realized the types of customers that we could help were the ones that really had a pressing need from their website to basically convert visitors either into leads or into customers. Basically, either we want you to come to the website and get in touch, or we want you to come to our website and buy something. And we got pretty good at doing that. And on top of that, we really wanted to target customers where doing that had a big pay-off for the client. So it’s fun to talk about all these things, but if that isn't worth a lot to the client, then they're not going to be able to pay us a lot. And that’s actually – that positioning has worked very well for us, but a lot of people, including myself, would argue that it’s still too general. So one thing that I’m doing now is I’m going to be moving across the country several thousand kilometers away, and because of this move, I want a fully virtualized thing. In the past, we’ve had a lot of local clients, and that’s been a huge client source, and going forward, I want it all be virtualized. And I think if I want to do that, I want a very, very much strongly strength in our positioning. JONATHAN: Got you. Even though you said that your positioning, currently, you feel is too general, you did mention before that that you have a stream of leads if you could turn down 80% of them and stay in business, so where you currently getting leads from? Is it just local word of mouth, or are you doing any kind of outreach or advertising? MATT: Yeah. That’s a very good question. A huge part of it has been networking and referrals. The good old fashioned talk, talk, talk – talk to a lot of people, talk to the right type of people and you end up getting business out of it; certainly being around for 10 years helps, but you mentioned, like I said, I thought my – I think my – our positioning right now is too general, so I want to do a lot more very specific types of marketing online. Right now, we do things like use Google Adwords, but again, it’s all very general. And the thing about trying to stand out online when there's so many different communities out there, so many different types of websites out there that if your positioning is we build websites that turn visitors into customers, it’s still very difficult to hone in on a specific area that you can promote online. I can’t make an effective Face – or a Google ad campaign, or a Facebook campaign based around that concept, but I could make a very effective campaign if I laser down further and said I wanted to: we’re not going to do this, but let’s say I wanted to focus in on realtors. Suddenly, I have a community that I can actually find messaging for and reach, and that’s the power of going deeper. JONATHAN: Do you have a group of clients that are in the same vertical right now, or one that you had have enough client in that you're like, ‘oh, these guys always have expensive projects’? MATT: Yeah, absolutely. So you're catching me as I work through this process, but most likely, what’s going to happen is we’re going to laser in on some form of online business because we’ve had a lot of success in that area, basically clients that sell something online, preferably something digital. So we have some success of membership sites, online courses – something where we can help you build an audience and help you convert that audience into customers. Because that’s simply a passion of mine, and I think it’s very important, of course, if you want to get up in the morning every day and be excited about your work to be doing something that you have a personal passion for. JONATHAN: Yeah. Sounds good. CHUCK: Besides positioning, what are the major things you have to do in order to switch from an ‘in-person, in the city, we can meet up with you, we can be in your office’ kind of agency to ‘hey, we’re all virtual and you're going to talk to us on Skype’, etcetera, etcetera? MATT: Yeah, absolutely. There's two aspects of it. I got rid of my office in 2011, so half of that transition happened 4 years ago, and I thought it was going to be this whole big thing. I literally thought that I was on the edge of just blowing up my whole business because I had to write this very awkward email to my clients and let them know that we no longer have an office. And aside from a few concerns from people saying, ‘hey, are you guys still going to be around? Are you going out of business?’ which are a fair concern, it actually turned out that it was very easy to push that button and get rid of the office and still maintain those client relationships, and most importantly, to be able to get new clients. So I've had no problems getting new business despite not having an office, but that said, we've still been local. So the next logical step is to work in a way where – I’m setting a goal for myself where I don’t want to acquire any client within 200 kilometers of myself, and I just want to do that to keep myself honest and basically make sure that I’m building the virtual structure that I really want to build. So basically, once I moved, if you lived too close to me, [chuckles] I might not take you on as a client. So how to make that successful and how to have your meetings over Skype and so on, well, I guess the first thing to finding clients, you can still do it definitely do it through networking and – not affiliates, but referrals and networking and so on. And there's two other main types of getting clients, I think. I think there's three main approaches. Networking and referrals absolutely still work. It’s a complete myth that they wouldn’t just because you're now virtual and remote, but the other two options, of course, are some form of inbound marketing where you do a content marketing approach of some kind, say, set up an email sequence, drive people to your website, get them to sign up for the email sequence, and ultimately, get into some kind of conversation with them about their needs. Or the third approach is some sort of direct outreach, such as a [inaudible] absolutely blew me away with his strategy for his business, which basically revolves around going out and finding buying signals. Finding companies that look like they might need your service, and his case, companies that have recently released apps to iTunes and emailing them. All of those 3 approaches, I think, work whether you're local or not. And I think getting that steady stream of clients, having a very specific way of getting clients rather than relying on luck is really important. And as for the mechanics of the operations, honestly, being remote helps force things to be efficient. It’s actually amazing that way. Clients get in the swing of it very easily as long as you guide them. Most of communication with clients is done over email. Some people use things like Basecamp. We use a tool internally for project management, so internal team communication is done via PM Robot, but we actually stick to email for client communication. There's a couple of reasons for that, but it comes down to that’s what clients understand. And then they will do phone calls. And for some more progressive clients, we’ll do Skype. But the phone is a tool that everyone understands and has been around for a very long time. So it’s almost like the problem doesn’t exist. It’s actually very easy to do it once you actually push the button and make the decision to do it. JONATHAN: I've been working remotely for a decade. I don’t have any local clients. So it’s a – it’s good to hear that. It works with not just me. MATT: Yeah, exactly. You're then living proof, as well, that it is not a huge issue at all. CHUCK: Yeah. All of my client, well – I've had local clients I found through the local community or they found me through the local community, but only my first client when I first went freelance ever actually had me come to their office. MATT: Wow. And that's it. CHUCK: Yeah. And I've never had an office where – I think I've had one client ever come to my house, and that’s it. MATT: Wow. [Crosstalk] I used to have an office and I used it. I had clients come over, but then I quickly learned that they actually preferred it when I came over to their place in most scenarios. They don’t want to have to make the drive. And then the next logical step is ‘why are we meeting in person at all?’ CHUCK: Yup. JONATHAN: So do you have employees – you mentioned that you had employees when you had the office. Is that part of the virtual setup, or are you just doing everything yourself? MATT: Yeah. I’m definitely not doing everything myself. It actually takes a lot of skill sets, I think, to run something like a web agency, and it’s hard to be a master of everything. So I definitely have a team. But over time, most of them – most of my team members have become contract workers. And right now, I really only have 2 employees; one of them is my admin assistant, and I have one other person that actually manages side SaaS business we have that’s like a really small percentage of the company. Everything else is all contract-based variable cost work, and of course, virtual. And actually, I’ll add to that – one thing that I've learned over time is it’s often times, if you want to be nimble and flexible and be able to change your business, or be able to go away, or just have that flexibility, it’s actually can be a lot cheaper to pay someone to hire hourly rate and hire them as contract versus to try to create efficiencies by hiring employees because of course, the logic is a contractor’s going to charge you more per hour than an employee, but promise, you have to keep writing that check to that employee, and suddenly, you're be holding to this fixed overhead that you have to meet, and if you have any trouble filling that employee’s hours, then suddenly, all those magical savings you are going to get with those economies of scale just evaporate on you. So it’s a very different challenge. The more fixed overhead you go versus the more variable cost you go. And you lose a lot of your freedom and options. ERIC: Yeah. That’s actually a big point because – was it 2008 or 2009 when the economy just decided to stop working? A lot of the agencies that I knew were they're closing up shops, or firing and laying off a lot of their staff because there's no work. The other agencies that had contractors or were subcontracting stuff out, they would basically finish up a large project and then just bring on a bunch of people. They take on smaller staff so they have a lot more flexibility and could actually last through it. And then, once the economy picked up again, they just started hiring those people back on. MATT: Yeah, absolutely. And I've spoken to a lot of agency owners – known agency owners, and just watched what’s been going on, and it’s exactly that. Agencies that are strictly built on a fixed cost model seem to either be experiencing incredible periods of growth or they're collapsing. And there doesn’t seem to be a middle ground with them. The ones that are really successful, like you said it, even if they have offices and a team and all that and so on, they have an aspect of contract work, as well. CHUCK: I’m on a web agency. I guess I don’t – I do, but all of the work that I've picked up, that I've handed off to somebody, it’s all contract. You’ve basically outlined the reasons for doing that very well. One thing that I ran into, though, is a lot of times, people come because they want me as opposed to wanting my company to solve the problem. So how do you fix that identity issue, so that yeah it’s my company, and yeah, people may want my company to build it, but they don’t come expecting me to do the work and then upset or disappointed when I outsource some of it. MATT: Ok. This has been my favorite question so far. I've approached this a couple different ways. So what I do currently is I basically see myself as the spokesperson for the company. My main roles are basically sales and account management, and then basically managing your company and making sure it’s all running well. But my primary hazard are sales and account management. So as much as possible, I try to be the person that my clients get to speak to, but a lot of the actual work then is done by my team. And I've modeled that off my accountant, for example. He’s a partner at BDO, which I think is the 5th largest accounting firm in Canada. And what I noticed over the years is oftentimes, he’d almost always be the one talking to me, but there were other people cc’d on that email and other people signing off on the work, and it didn’t take a genius to realize that there was a whole team behind that. And my accountant’s main job, really, was customer relations and making sure the customer felt understood and so on. So I see myself as being the one to make sure the client has a certain type of experience with a certain type of communication, but I’m not necessarily the person that, of course, does all that work. I just make sure that we have a firm strategy in place for each client and that everything’s going to go well, but of course, I can’t possibly be doing all that and doing the work. And that’s been working very well for me right now because I've purposely kept my company relatively small. It’s definitely a lifestyle business and it generates a tremendous amount of time and income flexibility, let’s say, where it’s possible for me to do things like travel, go to conferences. Last week, I wasn’t feeling very well one day, so I spent the morning just watching reruns of The Office and I didn’t have to feel guilty about that at all. But this is not a model that can scale to some level because at some point, you are not going to be able to be the person that speaks to all your clients. And at one point, I did do that, and that aspect of a business actually worked pretty well. What I did is I hired an account manager and she became the face of us, speaking as a – basically speaking as Tilted Pixel, and then I only came in once in a while.  And that was an adjustment period for clients – so back to your question – because they felt like they had built that relationship with me and not with someone else. And what I found was that was ok as long as the other person was doing a great job and we just gave the client some time to adjust. I think, sometimes as entrepreneurs, we make up problems in our heads. I was worried about that, as well, and I was also worried about closing my office – basically any big client-facing change we've made in our business, I've always worried about. I’m still worried about this cross-country move even though most of me knows it’ll be ok because I think we underestimate people’s ability to adapt and we invent these problems that don’t exist. If you ever want to put someone else in place with the correspondence, I say do it. Rip the band aid off and it’ll be ok. CHUCK: Yeah. But isn't that another form of overhead that you have to manage? MATT: Well, depends on what you want to do, right? Notice how that’s not what I’m doing. And that’s because I have specific goals for my business and I don’t want to add that overhead. But I don’t think adding overhead to your business, in general, is a bad thing if that overhead is proportional to your revenue. So if you get to the point where you have a tremendous amount of recurring clients, not feast or famine style of business, then it’s ok to add that overhead because you know that revenue’s coming in. It’s when the vast majority of your business expenses become fixed overhead, then it’s a problem. And the other thing, of course, is you don’t have to hire an account manager full-time. I did that and I still think that was a mistake. What I probably would have done is probably hired someone – yeah, I probably would’ve tried hiring someone part-time and more of a virtual assistant style first, and I’ll had that person handle the more nitty-gritty communication and nitty-gritty strategy, and I still would’ve focused on the big picture with the client, and I would’ve used that as a stepping stone before getting a full-time employee. So you definitely have options, and you're definitely right that you have to think very carefully about adding that overhead and what that means for the rest of your business. ERIC: You can also get them as a contractor. I've seen both account managers and project managers as contractors, so they're not full-time of your company. It is kind of a bit harder because they don’t carry your brand as much, but that is also a possibility especially if you have a large project and you just – it’s overwhelming to you or something like that. MATT: Yeah, absolutely. That’s actually a huge point, as well, that there are contractors that do exactly that. Or the other option is to bring on a partner. That’s another one of those gigantic business decisions, but there's people that do that. And bring on someone else because they're getting paid out of the profit of the agency versus being another fixed overhead where you have to pay them whatever crazy salary you promised them, and you have to pay them every two weeks. CHUCK: Yeah. I guess the other thing that I’m looking at here is – so I have some people that I could probably have do some of this work, but the issue is that when I get like a sales call or things like that, I guess I’m just not completely sure what parts of it I can outsource because they're not programmers; they don’t understand a lot of the processes that we go through to build and manage this stuff, so I’m not sure how much I could actually hand off. MATT: And see, that’s something that I originally struggled with, as well. I think we just have to face the fact that you have to find the right person for the job. And part of it also is just if you have all of this un-clarity about your business, and you might start wondering is maybe you need to specialize more, or you need to describe your services better. So there's a lot of talk about productized consulting, for example, and I don’t think everyone needs to do productized consulting. Our services aren’t exactly productized consulting either, but the more tightly you can define your services, the easier it is for anyone to sell them versus if you're talking completely custom, I think at that point, you basically have no choice; you have to get either a partner or somebody working for you part-time or full-time that really understands all that technical nitty-gritty. And that might even be a member of your team that has done programming or something for you, has worked for you for a while either, again, in contract or employee, but is interested in sales as a more outgoing person, and would be able to be that technical sales person. I also think we might be worrying about the wrong thing, too, because again, I’m not saying you can’t add that overhead to your business, that you can’t add that person to your employee; what I’d say is what’s really important is to make sure you have a steady stream of sales coming in and a very good process for doing the work for those people. And the best thing to be is be in a position – put yourself in a position where you can possibly take on all the sales that you have coming in. Like I said, I rejected a lot of the leads that come in; some of them, because they're not the right fit; some of them, because we simply don’t have room. And I think that’s ok because at that point, you know you're marketing is working so well that you can be confident in adding that person to your business and not having your business fall apart 6 months later because suddenly you can’t afford to pay them. CHUCK: Right. ERIC: Another thing to think about – my eyes opened – I guess maybe 2 months ago, or maybe a month ago, is I always thought of sales as like a lead comes in or someone contacts you or maybe you contact someone, and the sales processes from there until they sign the contract. I thought of that as the sales process, but as I started to read a lot more sales books, it’s actually a lot more stages than that. You have qualification where you're talking to them either in email or on the phone. And you have actual prospecting where you're just going out and trying to find people. You have negotiation contracts. So there's a lot more – it’s a lot finer grained than me as a developer first noticed. And even the heavy sales books, they recommend if you have someone who’s great at closing, very personal – able to – knows the products – in this case, the service – put them at the later stage and hire out someone who’s junior or even outsource. The early stage, I give someone’s contact to your website, you can have someone who’s lower skilled, not very vested in your company follow up with that through email and try to get lead questions to answer to try to qualify: do they fit. And then once it fits, then it passes on to your higher cost person or even you as the founder. That’s a good way that I’m actually – I might even try that myself being a one-person company. MATT: Yeah, absolutely. That's a tremendous point actually. You could definitely do that. It’s a little advanced, of course, but try it. You said you're a one-person business; try it and let us know how it works. JONATHAN: You mentioned scale a little while back, and you said something about how the way that you handle your business now – it’s a lifestyle business and it wouldn’t scale. But what did you mean specifically with the term scale? MATT: Scale in the sense of continuing to grow revenue in substantial increases; doing more projects – actually, specifically growing the client base substantially, not even revenue because you can always increase revenue by increasing your prices, but increasing the number of clients that we serve, increasing the number of people that work for me – because at some point, I become a bottleneck because right now I am the spokesperson for the company. I am the contact. That doesn’t mean that that couldn’t change in the future. I gave you a bunch of ideas for exactly how that could work, but I don’t want to reach that level of scale with that business at this point in my life. I am very, very happy with the whole idea of building a consulting business that enables a certain type of lifestyle, and I feel like that business has achieved that, and I don’t necessarily feel I need to create a 10-million dollar, hundred-million dollar agency. JONATHAN: So do you guys do project estimates and bill by the hour, time and material type of stuff? MATT: We definitely avoid billing by the hour. That’s, I think, a nightmare. What we typically do is we do a fixed estimate because we do a lot of web development and a lot of marketing strategy and things like that, so it’s relatively easy for us to come up with fixed pricing for that. And part of the advantage of focusing on very specific problems is you get very good at estimating that. So when I put together a proposal, I’m almost pulling in pre-programmed blocks of things that we’re going to do. I know how much I should be charging for design work. I know how much I should be charging for help with the strategy stuff. I know how much we’re charging for doing 5 pages that are long scroll format. So it’s actually very easy for us at this point because we have that benefit. And I also look for clients where I have a substantial chance at recurring revenue. Either some sort of ongoing services that we can sell – you pay us X dollars a month, or the other type of business that I guess not as many people talk about on this consulting podcasts and things like that is sometimes, recurring revenue can still be unpredictable, but can be predictably recurring. So when I get a client that has an online business and that website of theirs is their business that's how they get their income, I know that they are going to keep coming back to us for more and more work. I can’t necessarily predict entirely what that work will be, how much of it we’ll get every year, but I know they're going to keep needing to grow their business. So I've had 20,000-dollar projects turn into hundred thousand dollar plus relationships, so there's a clear recurring revenue path there. And I try to focus on clients where I think that path exists. JONATHAN: What sort of recurring service do you offer as a web shop? MATT: That’s a good question. We’ve done a number of things that – there's obvious things like campaign management of some kind, like paper click campaigns, for example, or some SCO services, but what I’m a lot more excited about is finding more recurring ways that we can actually help you manage your overall online presence. The integration of everything, like you need email marketing, you need this and that, and we don’t want to get into we’re going to write newsletters for you, I want to do more ‘how do we build all these systems in the first place?’ So you basically have this online machine that continues to bring you leads, continues to bring you sales, and help you set that up. And I've been working towards productizing that more, so it’s not one off service; it’s ongoing service that we can do for you. CHUCK: I’m curious; at what point – and this is a total change in direction, but at what point do you get to the point where you're saying, ‘ok, we need to change something here’? Is there some certain level of pain that you reach or –? MATT: With myself or with my clients? CHUCK: With your company. Prompting this whole change – it sounds like there were certain things that you wanted, but was there – were there specific things that it’s like, ‘well, I’m really tired of not having this thing that I want’, or is it ‘doing these particular things is painful so I’m going to shift away from them’? MATT: Sure. I’m a very introspective person and so because my business is my livelihood, and because in some ways, I am the business, oftentimes, it comes back to me personally, as well as to the needs of the business, and I like to really reflect a lot on my life, and one of my red flags are when I start waking up and realizing that I don’t really remember what happened last week, like every day has blended into itself and I’m just going through the motions, and I’m no longer excited by my work. The moment that starts happening, I know that I got to investigate that and see what’s up because we – I’m getting a little philosophical on you, but we all have so much time on this earth and we don’t know how much we have of it, and I feel like one of the ways we can measure how well we use it is by how much of it we can actually remember. And if every day is the same, your brain stops from remembering every day and it just becomes a blur. That’s a huge red flag for me. And then I just know I have to change something. I have to grow. Something’s wrong and it’s got to change. And for me, with the office, the specific moment was I think, there were many nights where I’d wake up in the morning in winter , it’d be 5am and I’d be going through Tim Horton’s, which is like the coffee place in Canada, and I’d be getting my extra-large coffee with milk, I’d be getting my cream cheese, bagel, and then I’d be getting into the office before anyone else, and then it’d be 7pm and I’d finally be leaving, and I basically wouldn’t see sunlight that entire day. And that was the trigger point for me as like ‘what am I doing?’ CHUCK: Was there anything painful you had to give up, or something that was painful to give up that you had to change to make this change in your business? MATT: That’s a very good question. You know what – it’s hard for me to answer that because I have really tried answers like we had an office space and it was really fun to have nerd fights in there because we had so much unused space. And nerd guns are fun. But truth be told, there's nothing significant that I miss about it. There really isn't. I definitely found out that I’m not the type of person that likes going into work, so for me, being able to work from home is just a huge, huge, huge benefit. That’s not true for everybody, of course, but for me, that’s amazing. I feel like I got rid of so many things I didn’t like that there's nothing significant. I had some fun conversations with the office cleaners, but again, [chuckles] I don’t miss being able to have those conversations. JONATHAN: I’d love to tie in two thoughts that you brought up at different points in the conversation. One is this recent thought of when you get that groundhog day type of experience where every day seems like yesterday. MATT: That’s such a good way to put it. Man! JONATHAN: Yeah. It’s just like over and over and over. And there's that. And then the other thing that almost – some people, I think, probably seems like perhaps cause for that, or could be a cause of that, is specializing. A lot of people, when I’m counseling them to become more specialized and less generalized, one of the reactions often is that they're afraid they’ll get bored; they’ll be doing the same thing every day. And I’m hoping what you were going to say is that specializing doesn’t cause that. I’m curious if that’s true – putting the words in your mouth – if that’s true, then why you think specializing doesn’t cause the groundhog day and that it’s actually caused by something else? MATT: I definitely don’t think it’s the cause of that. I think the cause of that is, for me at least, it was feeling stuck, feeling like I wasn’t actually reaching my goals, first of all; so just like there's people that work cubicle jobs and they're just bored of their job and dread going into work, and that makes every day feel the same because it’s just a day filled with dread because I think it was that. And not being able to reach other goals, as well, like financial goals. So I definitely think specializing could actually be an antidote to that because when you specialize, you get to – hopefully, specializing in something that interests you. If you’ve decided to specialize in something that you’ve later decided isn't really making you want to get up in the morning, then no matter how good you are at that specialty, you're never going to enjoy your life. In that case, by all means, please please please rethink and change because change is oftentimes easier than you think once you make that decision. But the cool thing about specializing is it gives you this amazing path for growth. Just because you're specializing doesn’t mean you're doing the same thing every day. You're not going to a bakery and putting glaze on 10,000 donuts. You get to dive deep into this specialization and keep getting better and better at it; keep finding new ways to innovate for your clients, to innovate for yourself, to deliver better results for them, to deliver better results for your company. It can actually be very exciting. JONATHAN: Cool. That’s my experience, as well. I was just curious if you’ve had the same sort of experience. MATT: Yeah. And I think, really, if you're – the problem to being a generalist, I’d say then, is it actually becomes harder to deep dive into anything because you have to be so good at so many things. So that could actually almost make it harder. JONATHAN: One of the things that I've found from specializing – I’m curious if you disagree with this, or if you maybe haven’t thought of it or not gotten to this point, but one of the things about specializing is that you get this flywheel concept where you just – all of your content marketing, all of your referrals and all of your testimonials and everything is just creating this flywheel that’s gaining momentum and gaining momentum and gaining momentum, you're becoming a bigger fish in this pond – this [inaudible] pond that you might have picked for yourself. And eventually, what starts happening is you start attracting gigantic customers that are in that vertical. And going back to the scale question, a good way to – or one way to scale a business without adding overhead or clients is to just start attracting larger and larger clients for whom you're providing greater and greater value, which you then charge for. Is that something that you’ve noticed happening? MATT: Yeah, absolutely. Spot on. The people that end up signing on the dotted line right now with us are people where when I speak with them, and I speak to their problems of their business, somehow, part of them really likes our comprehensive approach. We’re not here to build a website for you, we’re here to help you figure out your entire online strategy, and we’re specifically good at specific aspects of that, so the people that attracts are the people that need help there. It’s that simple. If you don’t care about this stuff that we’re talking about, you're not going to get filtered out, but for the people that do care about it, I find that I end up having a lot of the same conversations over and over and over. And it’s gotten to the point where I can look at certain types of websites, and off the fly, I can just tell you what’s wrong. And that’s – that flywheel concept, for sure, that specialization where the more of it you do, the better at it you get, the better the clients you get, and absolutely, it can definitely increase your revenues without necessarily increasing client count and increasing team count. JONATHAN: What do you call your agency now? It doesn’t sound like you call it a web agency. Do you have an [inaudible] kind of cocktail party, ‘I run a digital agency’ - what do you tell people when they ask you on like a barbecue or something? MATT: I say that I run a web agency that helps convert visitors into customers. And I just leave it at that. And you're saying, ‘well, do you call yourself a web agency?’ So this might change because things are always evolving, but the reason I gravitate it to the term web agency is simply because that is a term that naturally creates a certain expectation of value from the customer and a certain expectation of – basically, a certain type of positioning – certain expectation of certain levels of fees. One of the easiest things that you can ever do to increase your rates significantly is to stop calling yourself a freelancer because that’s basically the bottom of a rung. When people hear the word freelancer, they automatically associate you in your pajamas working from home, and they can pay you 20 bucks an hour or whatever it is – 40, if you're lucky – and as you start going up that value chain, then people expect higher and higher rates. And the reality is agencies are pretty high up there, so that’s why I chose that term. And I work in my pajamas from home. [Chuckle] JONATHAN: Nice. CHUCK: So should people be saying web agency even if they're only one person? MATT: Sure. Why not? This goes back to positioning. There are certain expectations  that you create with whatever terminology you use about yourself, and you need to make sure that you can live up to your expectations that you’ve set. One thing about agency is that it does imply a certain level of service alongside those fees. So if you're the type of person that is bad at client communication and is going to disappear for weeks on end, you definitely shouldn’t be calling yourself an agency. You should probably be rethinking your entire business. But you do set certain types of expectations with the language that you use. I’d be cautionary about that, but beyond that, I don’t see any reason why. It’s not the client’s concern how your business if structured. The client’s concern is the results that you provide, and if you provide agency-level, agency-quality work, then I don’t care if you're one person, or you're a team of a hundred, you can absolutely still be an agency. It’s all perception. JONATHAN: I agree with that. I think that’s fair. That’s the reason I call myself – I’m a solo player, and I would never call myself a freelancer. I call myself a consultant. MATT: Yeah. And that’s another really good term, by the way. It’s actually been a bit of a struggle for me because my podcast is called Freelance Transformation, and the idea of it behind the name is you're transforming from the word freelancer from the whole freelancer concept that’s why transformation is there. But it’s funny because you got a site called Freelance Transformation, but I rarely actually use the word freelance within the website. So it almost becomes an SCO issue because really, [crosstalk] – yeah, because really, it’s I want you to be able to relate with what I say, but I also don’t like you calling yourself a freelancer. I want you to start calling yourself a consultant right now. CHUCK: Well, that’s the thing, right? It’s even if you're a domain expert and you're going to come in and you're going to do the training, and you don’t really have a team around it because you don’t need it, they're paying you for your expertise, then you're a consultant; then you're an expert. You're a domain expert, not a freelancer. And if you're out there actually providing more of a service where you're building stuff, yeah, freelancer to me is somebody who goes and augments a team, or – and it can run the gamut from the ten-dollar per hour per person on Odesk all the way up to the 150, 200, 300-dollar an hour freelancer that’s going to come in and solve your problems. But if you're an agency, then you're – it does Joomla or Drupal specialist and professionalism. Consultants are the same thing. JONATHAN: I like what Matt said about setting out expectations, though. You just can’t slap a new name on yourself. CHUCK: Oh no. You have to live up to it. JONATHAN: Yeah. Right. MATT: Yeah. I think that’s critical. And when you bring up 300 dollar an hour freelancers, I hope at least they're not actually calling themselves freelancers. You can simply even drop that from your title. You can just say – if for whatever reason you don’t want to call yourself a consultant, which is probably wrong, you’d probably do want to call yourself a consultant, but let’s say you don’t, you can simply just say like you're a Joomla or Drupal specialist. JONATHAN: Yeah. Or just put it out there and call yourself an expert. People cringe when they see Drupal guru or whatever, but when you boil it down, you're right. You're a hundred percent right. It’s all about setting the expectations. And if you say I’m a Drupal expert, they're assuming – clients, I have to imagine, are going to assume a certain – you're putting yourself out there as an expert, so you better going to want to live up to that once we get on the phone. And of course, they're going to do what – a former boss used to call technical butt sniffing where they quiz you and see if you really seem like you know what you're talking about, and they’ll ask you who you’ve worked for and what you did for them and all that stuff. And if you're fresh out of college, and you're not really a Drupal expert, at least you only are in your mind, then it’s going to be an embarrassing situation and you're not going to – it’s not going to work. MATT: Absolutely. And there's some subtleties here now. So let’s say you are that person coming out of college. Yeah, if you haven’t spent the past 5 years studying Drupal in and out, maybe it might be a little tough to call yourself a Drupal expert. You read a book about it last month, but there's other opportunities to position yourself. You don’t have to be a Drupal expert. You can probably very quickly actually get quite good at, say, building specific types of small business websites. So you're out of college, you know Drupal so-so, so you're not going to go and label yourself as someone that’s mediocre at Drupal – ‘I’m a Drupal mediocre person’ – but you could label yourself as someone that is an expert at building such and such types of small business websites in Drupal; or even who cares that it’s Drupal; just you're very good at building jewelry store websites. And you can [crosstalk] – yeah, you can become an expert in that very quickly. JONATHAN: Sure. You could specialize in a particular vertical which you maybe you have been familiar with your entire life, like a jewelry store or [inaudible] hockey team, and you say, ‘oh, I make database backing websites for hockey teams’. And you're immediately going to know where to market yourself. You're going to know exactly how to write your marketing. You're going to know specific names of individuals you could easily find online that you could call up and do outreach to and just say, ‘hey, I don’t know if you're looking for a database back website, but I specialize in clients just like you and I just want to let you know about my stuff’ - that sort of thing. So you're not really calling yourself an expert, but you're specialized. You're specialized folks on this particular industry and that makes you stand out incredibly from the crowd. MATT: Yeah. Or even you are an expert, just not on Drupal. You're an expert on what makes a jewelry store effective or something like that. So we’ve moved the positioning from calling yourself something you're not, and let’s say you're a pretty mediocre at Drupal to relying on your other skills to create an entire type of expertise that could be fairly unique to you and which has nothing to do with your specific technical skills. CHUCK: Very cool. If people want to find out more about you or about what we’re talking about today, what are the best ways to do that? MATT: Absolutely. Probably the best way is freelancetransformation.com. There's a series of articles I've been writing, and right now, primarily a podcast. And I have to say the podcast has probably become its own little mini course consulting because just the sheer quality of guests that we’ve had on in the information that they’ve brought forward and the depth of it has startled me, quite frankly. The other way you can check me out is Tilted Pixel, that’s my own web agency, and you can poke around there and make your own impressions about what we’re doing well and learn from those, as well as see where, just based on this episode, where do you think we’re going to be changing our own things down the line as well. And of course, I can be reached on Twitter: @mattinglot. Those are the best ways. CHUCK: Awesome. One other question I have, and this is something that we’ve talked quite a bit about with Jonathan, but I’m curious to see what your take on it is. And you mentioned this when you were talking about going virtual is niching down so that you could make sure you bring the right people in. How do you choose a niche? MATT: That’s a super important question. The thing that’s worked best and the thing that I've been taught is to find people that have problems and figure out what it is that they're struggling with. So you're really looking for a group of people that I’ll have the same problem. It’s a group that you can actually feasibly reach, so if you're targeting Fortune 500 CEOs, for example, well, do you actually know how to reach those people? Maybe you do, but maybe you don’t. So maybe that’s not your ideal audience. And of course, you want it to be a group that actually has the ability to pay you; for example, small businesses. A lot of contractors, consultants – whatever – tend to start targeting small businesses, and I’m not saying that there's not an opportunity in small business, but small business owners may not necessarily have the types of budgets if you're trying to sell 50,000-dollar projects. So keep that in mind. And I think one thing that I've learned that is super powerful is when you find your niche, really speak to people in it. So really find out what their actual problems are. Don’t sit around on Google and just guess or read some article or something, but actually go out and talk to real people and learn what sort of language they use. And I learned this from Ramit Sethi and it’s incredibly powerful. So what you do is you figure how they think about their problems, and then when you're creating your training, your marketing, and so on, the language that you use should be identical to the language that they use, and that creates instant relate-ability and instantly makes them see that hey, you're the exact solution for their problem. But you can’t do that without that research. JONATHAN: It’s funny on that point. In my coaching, it’s the one thing I keep on telling everyone to do; and even in my consulting, the thing I keep telling everyone to do, and no one wants to do it is pick up the phone and talk to – if it’s a, say, user experience type of thing, I’ll say: just pick up the phone, go to Starbucks, ask people online, tell me about their coffee, and ask them about your interface. Have them use it. Call up some people. Or if you're a freelancer or a consultant, or you're trying to go that direction, call a few people, and no one wants to do that [crosstalk]. It strikes fear in their hearts. It’s like the most panic-inducing thing you can imagine. People just getting – just freeze up for a week. They’ll be like, ‘ok, how did it go last week?’ ‘Ah, I didn’t get around to it’. [Crosstalk] research online instead. MATT: Yeah, 100%. And it’s easy to do. That’s the other crazy part. It’s even easy to do online. I have so many Skype calls with people these days where the only purpose is really to chat with them and find out what they're struggling with. The internet is a big place and it’s incredible networking tool all on its own. So even if you live somewhere remote, you have no excuses. CHUCK: Alright. Well, let’s go ahead and get to the picks. Jonathan, do you want to start us off with picks? JONATHAN: Sure. I've got a software application software this week; it’s called aText – all one word, and it’s, for me – I don’t know if it’s a person or a development shop or what, but it’s from Tran Ky Nam Software – link to it in the show notes – and it’s basically like a text expander type of program that I've got installed in my main computer. And I've got all of my – all of my boiler plate emails and all those documents that you have to type pretty much the same every time, things like introducing to people over email that friends of yours or colleagues they should meet, or saying thanks for contacting me about possible work, here's a way to set up employment in my calendar, etcetera, etcetera. There's a dozens of this emails that I send a few of every week, and so I just load them into this aText program and you just type this whatever key command you set up and it’ll auto fill this huge full document. But what’s really cool about it is you can put placeholders in it, in each one of the documents, like a little slug, and when you do the keyword command, it pops up this window that allows you to type in things like madlib style like the person’s name, maybe the email address of the other person you're introducing in to, or whatever. And the fields are all linked together, so if you need to use the person’s name 2 or 3 times in the message, you just name the slugs all the same, and when you enter it, they all fill in the same way so you don’t have to type it 2 or 3 times. It’s really cool and you can embed snippets inside of other snippets. So I've got this one snippet that is the long-ish link to my calendar program that allows people to setup meetings with me, and I embed that snippet inside of a bunch of other messages so that I just have to update that in one snippet. If the URL changes or whatever, if I decide I want to call it something different, it just automatically up to date everywhere. It’s really, really cool. It’s 5 bucks. You can get it in the Appstore – the Mac Appstore, and can’t recommend it highly enough. I feel like my workload has decreased 10% a week just for using one program. CHUCK: Very cool. Eric, do you have some picks for us? ERIC: Yeah. I got one. It’s a Ted Talk by Amy Cuddy. It’s called Your Body Language Shapes Who You Are. I think I read about it in Kathy Sierra’s book, but it’s pretty interesting just talks about body language and how – not how; it’s just like someone sees your body, but actually how your body language and how you move your body affects – like your hormones and all that stuff. It’s pretty interesting. I think you can get some tips from that just of if you're going out in a sales call or if you have a client meeting, the way you present yourself – stand, sit – actually can make the call go a different way. So it’s pretty cool. CHUCK: Alright. I have a pick this week and that is Sonic Pi. It’s a programming pick, but basically, what it is it’s a really simplified – it looks a lot like Ruby. It’s based on Ruby. It’s actually a domain specific language that’s written in Ruby, but it comes with its own little development system. Anyway, it’s a really simple way of writing programs like music. And it’s really awesome. So I’ll put a link to that in the show notes. We also just did an episode for Ruby Rogues about it, and it’s way fun to play with. So I highly recommend you go check that out. Matt, do you have some picks for us? MATT: Yeah, absolutely. I hope people check out Freelance Transformation as much as status a bit of a self-promo of the reason I mentioned it is because there's 15 interviews with people right now, and they’ve all blown me away, and a lot of them are so relevant to what we talk to. But I also have another pick, and it’s also a Tedx talk. And this one’s a Kirk Parsley and Kirk is talking about sleep. The talk is called America’s Biggest Problem, and he makes this incredible impassioned point about the sheer benefits of sleeping properly, and more importantly, the absolute disaster that is not getting enough sleep. And it’s something that I've really taken to heart. And for quite a while now, I've actually been waking up without an alarm clock on almost all days. So I usually set my alarm an hour after I expect to wake up, and that’s my fail safe, but I’ll almost all days, I don’t actually wake up with it going off. I wake up and there's still 45 minutes to an hour before it goes off, and that was a direct result of having listened to this Ted Talk. It’s a little off-course from what we talked about, but at the same time, it’s incredibly relevant because if you're not getting enough sleep, then it’s very hard to make the kind of strategic decisions that you need with your business because your brain just – you can’t do it when it’s under constant sleep deprivation. That part of your brain doesn’t work. CHUCK: Alright. Well, I don’t think we have anything else. Thanks for coming in and talking to us, Matt. MATT: It’s been a gigantic pleasure being here with you all. And it’s been a lot of fun. CHUCK: Alright, well, we will wrap up the show and thank you all for listening.[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? We have a forum that allows you to join the conversation and support the show at the same time. Sign up at freelancersshow.com/forum]**

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