206 FS Moving from Solopreneur to an Agency with Gavin Ballard
01:51 - Gavin Ballard Introduction
- Shopify 02:29 - Going From Solo to Agency04:23 - Realistic Expectations; End Goal12:47 - Niches15:00 - Marketing for Flexibility and Working With Other Team Members17:12 - Changing Roles
- The Freelancers' Show Episode #200: 200th Episode: DevReps Makeover! 26:38 - Finding People
- Upwork 29:32 - Financial Changes34:10 - Managing Your Pipeline38:52 - Choosing a Niche in a Larger Ecosystem43:00 - What if it’s a mistake?44:49 - Starting an Agency Picks
- ScreenFlow (Philip)
- Philip's Positioning Crash Course (Philip)
- The Society of Mind by Marvin Minsky (Reuven)
- Reuven's Regexp Crash Course (Reuven)
- Trello (Chuck)
- Gravity Forms (Chuck)
- Zapier (Chuck)
- Ruby Remote Conf (Chuck)
- Brian Cardarella: Lessons Learned - Three years of running a software consultancy (Gavin)
[This episode is sponsored by Hired.com. Hired.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 $1,000 when you’ve been on a contract for 90 days. But with this link, they’ll double it to $2,000 instead. Go sign up at Hired.com/freelancersshow.]
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CHUCK: Hey everybody and welcome to episode 206 of The Freelancers’ Show. This week on our panel we have Philip Morgan.
PHILIP: Hello, hello.
CHUCK: Reuven Lerner.
REUVEN: Hi everyone.
CHUCK: I’m Charles Max Wood from DevChat.tv. Quick shout out about Ruby Remote Conf if you're interested in that. This episode will probably come out right before it starts. So anyway, just making you aware.
We also have a special guest this week and that’s Gavin Ballard.
GAVIN: Hello all.
CHUCK: I failed to say that in my best Australian accent. Do you want to introduce yourself?
GAVIN: That’s alright. I’ll do it for you.
Hi, my name is Gavin Ballard. I’m an Australian. However, I live in Sweden. So any Swedish travel tips that you're able to write in and ask me. I run a small agency called Disco. We’re remote based; couple of people in Sweden and then around Europe and the world. We’re really focused on developing applications for Shopify. If you're familiar with Shopify, we do pretty much exclusively work with custom build for that. And I think that’s it. That’s my intro.
CHUCK: The topic on the docket today is going from solo to agency, and I will tell you that this is something that I failed miserably at. And so I’m curious to see what advice you have. My focus is different these days, but yeah, what did I do wrong?
GAVIN: I guess I’m wondering at the moment what am I doing wrong right now, and I’m certainly in the very early stages. So I mentioned – actually I don’t think I mentioned it in the intro, but we’re about 3 full-time equivalent people at Disco, so we’re still very much on the very early stage of building an agency. And so there's a lot of mistakes that I’m making at the moment and expecting to make a lot more, but I thought it’d be really interesting to chat to you guys and talk about what's evolved and why it makes sense to start transitioning from solo to agency, and even if it’s a good idea; if it’s working out or whether it’s a good fit because I think for a lot of people, freelancing is a pretty great thing to do. And even though it maybe seems like it’s stressful at times, from my experience, making the transition to starting to hire people and being responsible for others and things like that comes with a whole another set of problems.
CHUCK: Yeah. So let’s just start with why you would want to do this. I went freelance, and after a few years my father-in-law kept telling me “well, you should hire people and then you won’t have to work as much and you’ll still be making plenty of money”.
GAVIN: Your father-in-law is an optimist.
CHUCK: Yeah. And as I started doing it, I figured out that what really happened was I wound up doing more of the sales and project management and somebody else wound up doing more of the coding. And so it didn’t necessarily cut my hours so much. In some ways, I think if I could’ve built a larger team I would’ve made more money, but ultimately that didn’t quite work out for me.
So what is a realistic expectation? Why would you want to make this transition then if you're not going to get necessarily more money or more time out of it, or at least in the beginning you don’t?
GAVIN: Yeah. I think it makes sense to have some sort of end goal that you can only really achieve with a team. So for me, working in the field that I do with Shopify apps, what I’m really interested in is ultimately transitioning more and more away from client work and more to building our own apps that we can sell and essentially having a product business. And that’s a long road and it’s going to take a while before we can actually do that, but to do that and build the sort of apps I want to build and be able to support or maintain them, that’s the sort of thing that you need a pretty good team for. It’s not the sort of thing that I think is easy to do as a solo person is running a suite of apps. So that’s my major rationale behind it is having this thing that I need to be able to do, or that I can really see me doing with a team.
And another thing that I think at least is part of my reasoning – I don’t know if it’s good reasoning or not, but I guess my background is as a developer, I’m interested in building things, and to me, an agency, a business is another thing to build. And so I’m interested in working out how to do that with a business – how do you start hiring people, how do you start putting in organization processes in place, and even though that sounds pretty boring, and [inaudible] it is pretty boring, I guess it’s not a challenge, I guess.
So I think that having some sort of idea of why you might want to make that transition is useful rather than just being like “oh well, I’m a freelancer and I've got more work coming in than I want to handle”. I guess the next thing is to start an agency. Doing it for the sake of it doesn’t seem to be a great strategy.
REUVEN: That’s what I did. I started out as a freelancer and I had more work than I knew what to do with, and I said “oh well, I guess that the natural thing to do is hire people”. So I started hiring one person and I got up to – I think it was up to a total of 5 people working for me, and in the bottom dropped out of the – in the dot-com implosion of 2000, and then I had to lay people off. And everything, everything about that whole thing – finding people and then having to find enough work to keep them paid and then laying them off left quite a bitter taste in my mouth.
So I do have some working for me now, but it’s on a very different basis. And [inaudible] to you for getting it to work, but I am curious to know what the structure is. Are you partners or if you hired employees?
GAVIN: No. Officially they're contractors because we are remote for legal reasons. It makes it really tricky to hire people from an Australian company overseas, so we have to basically do it on a contract basis and make sure that we’re not fooling [inaudible] of any Australian employment rules, which so far we haven’t. So neither of them are partners in the business, so I own it a hundred percent and that’s working pretty well to date.
But it is like if you think that working as a freelancer and making sure that you get enough money in the door to pay yourself every month is stressful at times, then certainly the biggest thing that I struggle with at the moment is I have this base number that I made to make sure it comes in the door every month, which is 3 people’s salaries. And if it doesn’t, then I’m in trouble basically.
So far, I haven’t gotten to a stage where I've had to skip my own paycheck, but I can imagine that could happen. It’s definitely still not out in the woods in that respect having to worry about that.
CHUCK: I did that a couple of times. It wasn’t fun.
GAVIN: No. I can’t imagine it super fun, and if you're a freelancer, again, you can do that; you can not make your own payroll and you're the only one that suffers from it. But when I’ve worked with other agencies, when I was a freelancer or a contractor, if I was on the other side of that and someone didn’t make payroll for me, then that would have put such a bad taste in my mouth. I just would never want to work with them again. So I think it’s something you definitely have to – you just have to avoid it. If you don’t do that, then you're certainly just letting yourself down and business isn't going to work.
CHUCK: Yeah. I do have to say that I did let the folks that had been working for me know “I haven’t been paid yet, but here’s your money”. And so I’m working on getting paid myself, but you work and you shouldn’t be penalized for it. And that builds some loyalty, but it really sucked.
GAVIN: Yeah. I don’t even – as I said, I’m lucky enough to haven’t had to worry about that yet [inaudible]. I don’t know if I would want to tell the employees that that was the situation. That might get them a bit skittish if they were worried about getting paid the week, the month after that or something, but –
CHUCK: Yeah. I was just letting them know the contract had ended. I was pretty much done to having them work for me at the time, so there wasn’t that concern. It was just I was letting them know “hey, I have a collection issue. Here’s what I can pay you now”. And for most of them, it was everything I owed them. And then the people who I thought would be more understanding, it was like “I’ll get you the rest next month”, which I did.
But it was no fun. And by communicating that the next time that I did get a gig, they were totally willing to come out and work for me because they knew that I would do whatever it took to pay them.
GAVIN: So winding back a little bit to when you said – when you were talking about which route you could go down; maybe build – you build out an agency because it seemed like the logical thing to do, I guess. Looking back at it now, do you wish you’d done something differently?
CHUCK: The real thing that I ran into with my setup was that sometimes I could find work where it clearly required me to build a team. And that worked out well as far as going toward agency. The problem was that I would get into the thick of that contract and then I wouldn’t find another contract that would support a team. And if I brought – so I would bring in a bunch of basically solo jobs and then I would farm them out to the team that I had, and then my clients would get frustrated because either I wasn’t working on it or they felt like “well we could have hired this guy and not paid you an overhead on him”.
And so that’s where things fell apart. During sales it was hard because a lot of times people would come and they would want me to do the work, which I couldn’t always do, and sometimes it would fall apart because of the other thing where they’d hire me, I’d tell them I was going to have someone on my team working with them, I would do all of the project management and work between the client and my developer on my team, but in the end they would be frustrated because “well, we could’ve just hired this guy and paid him less”.
GAVIN: Mm-hm. Yeah. Do you think maybe you could’ve avoided that or would a viable alternative have been to just flat out reject any work that was coming in that was too big for one person to handle?
CHUCK: I could’ve done that. I think honestly, at this point looking back on things, I think it would’ve made way more sense for me to just focus on one way or the other, either “ok, I’m going to take jobs that I can do on my own” or “I’m only going to take jobs that it makes sense to have an agency work on”; in other words, there's so much work here that I need a team. And that way, I wouldn’t be handing out jobs that legitimately somebody would be wanting to hire me to do the work myself; it would’ve been understood “hey, this is a big enough load of work to where clearly you're going to hire other people to do some of it”.
And if I admitted to “ok, here's the minimum size project we’re going to take”, and then focused on that and specialized a little, which is another thing I've learned since then, then I think I would’ve been much better off. And I think that’s probably why it works for you in Shopify is that you're focused in on a specific type of work and you know what a project looks like that it’s successful for your team, and I didn’t have that.
GAVIN: Yeah. Having a very specific niche is quite useful. Just Shopify itself is a big enough pool that it seems like a niche, but it’s actually quite a big market and it’s growing. And we started out doing very much anything to do with Shopify. So we were building up people’s front-end themes or getting them set up on Shopify. But since then, we’ve focused more and more in just doing the application development side of things which is a small niche again. And I guess it’s more lucrative nature, I would say, because application development projects are typically bigger jobs than something where you're just doing a store setup or a bit of theme development. And there's not that many people that are going to say “we just do Shopify app development”, so that’s been pretty helpful. And it’s also half development sort of stuff that it does make sense to have a team rather do than one specific person.
I do have a few problems with what you're talking about with people expect – or clients expecting me personally to be doing a lot of the work because a lot of the inbound leads we get through my personal blog that has my name attached to it and a lot of the stuff that I do in the Shopify [inaudible] very much my face on it. So a lot of the time people are, I guess, expecting me personally to be working on things, which isn't always the case. But I guess I can [inaudible] people early to this stage that where we’re small enough that any project that comes through, I’m still in the stage where I’m project managing it, I’m doing everything that comes through, so it’s very much my fingerprints all over it.
CHUCK: Yeah. And I would make some of those guarantees. “It’s my project. I’m involved in it. I’m not just going to hand it off and not be involved, but I’m going to be checking the quality. It does have my name on it. I do take this seriously”, but on occasion it just wasn’t enough. They wanted me and they were unhappy that they didn’t get me all the time.
GAVIN: Yeah. I guess it’s all part of how you market and what process you set up for your clients in terms of setting their expectations and making it really clear about how a particular project is going to run, which of course is easy for me to say. In reality, our processes around that constantly need improvement and I’m constantly trying to work on those, but we’ll get there eventually.
REUVEN: Yeah. I've definitely had this sort of issue over the years. And even now with my sole employee that certainly when I had a bunch of people working for me, I found out I was very good at marketing myself and very bad at convincing people to come to my company and work with the guy who’s working for me. So what sort of marketing do you do that gives you that sort of flexibility that allows people to feel comfortable working with your team or anyone on it?
GAVIN: It’s just a classic bait and switch. I lure them in with my name and then – [chuckles]. No, I try to make it as clear as possible that you are hiring Disco, the agency, not me, Gavin. Still, I guess I am the main point of contact for all major leads coming through. As I mentioned, we get a lot of work through content marketing, so posts I've written on my blog. Most of the work that we get is either through that or word of mouth referrals. And usually the word of mouth referrals are people referring me personally because I’m the person that has been dealing with the client all the time. So even if someone else actually did the work, all of the word of mouth referrals would be “oh, you should talk to Gavin”.
It’s definitely tough, but generally what I've found is that if someone else is actually doing the work, and we try to get our clients really closely involved to the [inaudible] apps we build so that the client is in-out GitHub raising issues, commenting, talking to the actual developer who’s working on the particular issue. So once that starts happening and they say “oh, the work’s actually getting done, things are happening”, and they're chiming in and offering advice or commending on pull requests and stuff like that. I haven’t known anyone be upset and come back to me and say “hey, we thought we were hiring you and instead this other guy is working way on this stuff”.
So I don’t think it’s being a problem for us yet. If it does, I guess I’ll have to [inaudible] saying maybe work on making it more clear in our onboarding process that that’s what's happening rather than it being “you are hiring me for this project”.
CHUCK: One thing that I want to get into is – and this is something that I ran into and I struggled with was my role changed when I tried to build a team and do the agency thing. I self-identified as a coder, and it’s taken me a long time to get over this. And we've talked a little bit about this with Marcus Blankenship regarding people getting promoted essentially to management and then it’s like “yeah, but I’m a coder and I’m now a fraud because I don’t code everyday”.
For me I struggled with it because I really did want to write the code and I wanted to be that technical expert, and I felt like I was sort of letting people down and letting go of something important to me and letting go of my roots. Do you find that you face that very much, and how do you get around it?
GAVIN: Very very [inaudible]. Mentioning Marcus is – everything that he writes on this has been really really helpful to me. I’ve read all of his articles, been to a couple of his webinars and connected with him through an online course I’m taking. So it’s really been helpful to have his input on a lot of this stuff.
But yeah, it is really really difficult especially if your background is technical and a developer and you tend to be a bit of a perfectionist like I am, so to let go of the code being exactly the way that you would write it, maybe it’s a little bit different and it takes a lot to get over that. I don’t know if there's any really great strategy for that apart from just having the time [inaudible] of coming to a stage where you're like “I don’t actually have time to review this and [inaudible] excruciating data and provide feedback on every single little thing” and just having to do it a couple of times and let it go. Maybe there's no strategy that you can use that helps with that.
One thing I've found helpful is to very much document the different roles that I’m undertaking. So like you said, when you're starting out, you learn a lot of that. So I’m still doing development, I’m still doing project management, I’m still doing invoicing. More and more of that stuff is getting slowly split out. I have a bookkeeper, so soon she’s going to be able to do all of the invoicing and things like that. But what I've found useful was documenting those roles independently so even though I was doing them all, I would write out “ok, this is the bookkeeping role and this is what you're responsible for and this is what you have to do”, and that’s part of a bigger process document that we have for all the different stuff that happens in the business.
But breaking out those roles so that when the time comes to actually chisel that off and hand it off to someone, that’s a much easier process because it’s well documented and also means that when you're switching between those jobs day to day, it’s easier to know what you should be working on because if you're looking at that document, say “ok, I’ve got my project manager on at the moment, so all I should be doing is looking through the task and making sure everyone’s got something to work on, making sure that the client is updated on the status of this project, and don’t even think about clicking that link to go and check that pull request on GitHub because that’s not your job right now”.
So I think being able to mentally separate those roles is really really important especially if you are in a position like I still am, and maybe you still were where you're still actually doing some development as well as trying to manage everything else at the same time.
CHUCK: Yeah. I have to say my focus has gone from finding clients and getting work and doing work to – at this point I spend a lot of my time making the podcast and scheduling stuff for the podcast and doing the online conferences, and so my total business has shifted. I’m not in the business of writing code anymore.
But I do have coders that work for me along with other people, and for me the transition has been – and this is going to sound really really trite and really dumb, but what I did is I changed my title from podcast host and developer to CEO. And so what that’s done is it’s forced me to say “ok, is this something the CEO would do?” And my answer is “well, yes if crap is on fire, then yes, the CEO will do whatever it takes”. But otherwise, “who should be doing it? Who should have this job? Who should have this role?” and you talked about that. And that way I can say “ok well, Mandy should have this role” – Mandy is my podcast producer and personal assistant – “or I need to find somebody to have this role”, and so I hired a bookkeeper.
And because I’m taking those things and looking at it and saying “yeah, this is stuff that the CEO does not do in the company”, it’s forced me to look at things and say “that’s not my job. I’m doing the job now because there's no one else, but I need to find somebody else”, and that’s put me in that position where it’s now “ok, I am not the developer. I’m capable. Sometimes I jump in because I need something done, but that’s not my job”.
GAVIN: That sounds like a really good strategy. I’m still a little bit torn personally about whether I wanted – I think realistically, I should be looking for ways to get myself out of the day-to-day coding, but as a developer that’s what I liked; that’s what I liked doing.
What I think my next step is finding a project manager because that’s the stuff that I’m not great at and that’s the sort of stuff that I don’t want to be doing, and I feel like if I've got that role carved out and worked that in tiles, and I’m doing it at the moment, but if I can find someone else to give that specific role to, then I can spend my time where I think I’m going to have the most leverage on the business which at the moment, I think, is doing the stuff, trying to find new clients, doing the sales, doing the marketing, onboarding new clients, looking at the business as a whole, etcetera etcetera, but also considering the size we’re at still being available to help out with development.
But in the situation where I’m just a resource rather than I’m both the project manager and lead developer and things like that, I can just be – 2 days a week you can assign me however you want, but it’s up to you to decide what I’m working on and what I need to get done in that time because that’s where my big sticking point at the moment is the mental contact switching between managing projects and developing and all the other fun stuff that you have to do when you're trying to run an agency.
REUVEN: Back when I was in college, I was the editor-in-chief of the student newspaper for a year or maybe it was a semester. And I was also the most experienced writer [inaudible] as a student in your final year. So I was the most experienced writer and every week or twice a week, I would choose the hardest most important story to write. Why? Because, well, I was the most experienced writer. And so what would happen, every week I was the [inaudible]. I was the reason the paper was not getting out on time because I was insisting on writing these stories.
And that lesson was completely lost on me. I didn’t realize how much frustration I was causing to other people until years later when I had employees and I realized “you know what, if I've hired the people, then I need to be able to step back. I need to be able to let them do the work and not interfere and do other things, whether it’s bringing new business or talking to clients or doing my own work and letting them do what they want something independently”. And that has worked out much better not surprisingly.
CHUCK: It’s funny. It sounds a lot like the conversation we had in episode 200 with Mandy and I. “Do you trust or do you – you can do the work, but that’s not the point”.
GAVIN: Yeah. It’s also if you don’t give that high-level work to other people, then they're going not going to grow and they’re not going to be challenged in what they're doing with you, so they're less likely to want to stick around and keep working for you, and then they’ll not going to get better as developers themselves. So you're sort of cutting yourself twice if you're hogging only the biggest and most challenging bits of work for yourself.
And what I've been trying to be really conscious of is not taking on projects that I wouldn’t personally be interested in working on myself because I think if it’s something that I wouldn’t want to do myself, then why would another developer be necessarily interested in it, and because realistically, there's always a very real possibility that I will have to do it myself if some disaster happens and suddenly the development team gets whacked out and then I’m the hook for the project; then I am actually going to have to sit down and do it. So trying to keep that in mind has been – again, it’s tricky especially when you have these payroll [inaudible] now, but some so far I've managed to avoid saying yes to anything that’s made me feel too compromising about principle.
CHUCK: Well the other thing is you can only – so I only have so much capability for certain types of work. I can only get so much done during the day. So if I want to accomplish everything that I need to accomplish, I have to have other people involved. There's just no other way around it.
And I find that that’s the case in a lot of different businesses. They're just – that’s the way it is. That’s where you're at. And so if you can’t find people you can trust, then you can’t move ahead in that way. But there are people out there that you can trust. There are people out there who will do a good job for you. And so if you're hiring the right people, then there's no reason why you can’t achieve what we’re talking about here.
GAVIN: Mm, Yeah. That probably is [inaudible] to one of the other things that I think would be interesting to talk about, which is how to find these people. Any tips that you guys have –
GAVIN: I’d very much appreciate – very much appreciate it. Upwork. Mm, ok. Have you had success with that?
CHUCK: I have for not-programmer things. For example, I've had video editors that I found on Upwork. Our transcriptionists for the shows are on Upwork. But hiring programmers, I've had hit or missed. And so some people have turned out really well. I have one developer that’s been working for me for 3 years or something now. But then at the same time, I've had others that they worked out for a while and then did something terrible or did something inexcusable, I should say, where they mouthed off to a client or they did terrible work and I had to let them go. But it’s just – yeah, I don’t know. I don’t know that you can really completely know without hiring somebody and having them do work first.
GAVIN: Mm. For someone – I mentioned before that I’m, I guess – a project manager, I guess, is my sticking point at the moment. So do you have any recommendations on how I might be able to seek out someone that might be good at that role and what – so for a developer, I have a process that I followed. I have a test project that I know inside out that I can give to people, and we run that like a paid test engagement. I see where they get stuck, whether they ask questions, how well they communicate – that sort of stuff. But for – when it comes to something like project management, how do you test for someone being a good project manager?
CHUCK: I've never hired one so I don’t know. With any other job, I give them very clear expectations as far as what they want and I usually give them a test project if I can. And usually, if you have a clear idea of what you want them to do, then you can at least ask leading questions that will get you to the point where you're like “oh ok, this person can clearly do what I want them to”. And then it’s just a matter of “can I work with them?”
GAVIN: Yeah. I’m just trying to develop a strategy of how to do this, but I think I’ll have to work out similarly to how we do interviews for developers and have that test project – have something like that lined up. It’s just – it’s a little trickier when it comes to – again, because it’s not something that I’m naturally good at or that I feel like I’m naturally good at is the process of managing and scheduling projects. I think it can be really tough to interview someone who you don’t really know what their job looks like or [inaudible] done like. In a similar way that I imagine non-technical people have a difficult time hiring, say, a programmer or a developer, that can be really really difficult to evaluate the work and probably you are right that the best way to do it is just to get some work under the belt and see how things work out.
PHILIP: I’m always curious if there's like a valley – like a profitability valley you have to make it through to make that transition from solo to agency. Did your margins go up or down or are you seeing profit go up or down as you make this transition?
GAVIN: Yeah. In terms of if there's a valley, then we’re definitely at the bottom of it at the moment or at least I am personally. Yeah, if I stayed on the course – if I decided to just stick with freelancing and stay as a solo shop and done all the classic stuff that you guys talk about all the time when you stay as a freelancer – double merits, be more [inaudible] with my clients, etcetera, etcetera – then my personal income would be over double what it is right now.
CHUCK: Yeah, but still wouldn’t you be doing those things anyway?
GAVIN: Yes. I think definitely in terms of – I think one of the good advice around things you should do when you're starting an agency is very much exactly the same as what you should be doing when you're freelancing in being more [inaudible] with your clients, etcetera, etcetera. I just think that some inefficiencies baked into the [inaudible] process of having people that means that 3 people working in an agency does not necessarily mean, at least in my experience, does not mean you get 3 times the income of a high-end freelancer. So in terms of the personal profitability for me, it’s definitely not at the same level as it would be otherwise.
In terms of margins, I think the rule that I've heard around the traps in terms of what you should be making on people who are working for you is around 60-40, so whatever you're billing someone out at to be working effectively, and give yourself enough margin to be profitable. That should be giving you about 60% of it and you should be keeping 40. I know some agencies that are more on the 50-50, but 60-40 is what I shoot for, and that has worked out pretty well.
I think that looks sustainable as we grow and hopefully again, as we grow and get a bit more efficient at running projects through our pipeline, [inaudible] is still probably a bit up and down in terms of what percentage of hours are actually billable for the developers at the moment. It’s probably not where I’d like it to be, so once that sort of stuff gets fine-tuned, I think at least in theory, it should be – we should be in a position where I’m able to raise my salary and get closer to that number where I’m back to where I would be if I was just sticking around to freelancing.
PHILIP: That’s great. All those details are just – I think the part people don’t see when they think about the rainbows and unicorns of having a staff or having employees; that’s great.
REUVEN: I should add, by the way, that I also have a 60-40 split with my employees. It’s interesting that you came up with the same thing. But because [inaudible] employee and then a contractor have to pay benefits on top of that, and I’m ok with that because I really value him and he’s amazing and great and helps me a lot. But my accountant thinks that I’m nuts. And he says “you should be earning much more from your employees, and you are not getting enough out of them”. Now, my accountant also keeps losing staff because he doesn’t pay them enough. [Laughter] I think there's a correlation here that he’s missing.
GAVIN: Yeah, that’s interesting. I’m glad to hear that 60-40 is where you're at as well Reuven. And I think ideally, I would actually like to have employees rather than the contracting situation where I’m in at the moment mostly because I think that would actually tilt the scales in terms of – you're paying someone as a contractor, you are having to compensate for the benefits. And just naturally because the work is a little less certain, I guess, from their perspective, you're paying it slightly higher rate. I feel like I’m in a position where we could lock down with these people as employees and that could potentially work out well for everyone.
On the flipside, it is I guess nice as an employer having a bit more flexibility in the sense that if everything does go south and we have 3 months of no work coming in, then I’ll be more flexible in terms of I don’t have to worry about paying heaps of severance pay or anything like that especially as I’m in Sweden. One of the other contractors, he works here; he’s in Sweden. And the level of work or protection in this country is expensive to say the least for employees.
PHILIP: Speaking of that possibility of having to lay somebody off, I’m curious if you’ve learned anything about managing a pipeline. Because I bet even for people who don’t have a team, there's probably some takeaways you’ve got. You're trying to move a bigger needle, but it’s the same thing. It’s like how do you make sure 3-6 months from now, you’ve got work?
GAVIN: It’s probably one of the things that again I need to work on. I’m assuming I’m a lot better at it now than I was a year ago and that the pressure or the fact that you have people that you need to support certainly makes a big change in how seriously you take that sort of thing.
So we have about 3 months’ worth of work booked out at the moment which is pretty good. Obviously, I would like to extend that out in terms of how we do that. One of the great things about the work we do in the application development thing is that they're very rarely pants-on-fire, the-world-is-crashing-and-burning, this-needs-to-get-done-tomorrow sort of project. So usually when clients come to us, they're actually – they're not expecting work to be done the next week. So we can say to them “we’re looking to book this in. We can do that in 6 weeks, in 8 weeks” or something like that and whereas for some types of work, I feel like that pushes the client off to a different agency or a different firm. Mostly clients need to be ok with that.
I mentioned before that I do a fair bit of content marketing. I've never thought of it as content marketing. I've always thought of it as just writing blogs about things that I’m interested in. And so I get a fairly consistent stream of inquiries through that, so that’s something that I think that keeps working even when I’m not out actively looking for clients or anything like that.
We have a lot of material that’s focused towards other developers and other agencies in that space. I have a course on building Shopify themes. I have a course that’s in progress on building Shopify apps. And so while those products are targeted at other developers rather than ultimately our clients, it does mean that it gets into the hands of people who run agencies. And so for example, a lot of the work that we get that’s referral-based is from people who are running agencies that do, say, Shopify store setups or Shopify theme build out or things like that, but they don’t have app development experience. And so because we've been in it for [inaudible] course and all the material they refer us – refer the clients through to us.
So I feel like those are the two main sources of client referrals, and I both think that we don’t need to be actively maintaining, so I think that’s probably the best thing we've done in terms of getting an ongoing pipeline of work coming in. Again, always lots of things to do to improve that and get out to a wider audience, but that so far seems to be the best way for us to have a marketing pipeline coming in without having to spend too much time actively chasing, checking out leads.
CHUCK: And your content is focused enough that the people that you want to attract are finding it?
GAVIN: Yeah. When I first started writing about Shopify stuff, there was very little that was out there. It’s becoming a bigger market, so it’s becoming unique to have more content being written, I guess, to stand out. But like I said, if you're a Shopify agency or a Shopify developer and you're interested in building apps and you Google, then either my name or Disco will be in the Google search results for most things that you're searching for, or you're running to me in one of the Slack channels or the forums or something like that. So [inaudible] spread it pretty wide, [inaudible] it wasn’t necessarily a conscious strategy on my part. It’s just a side effect of being really interested in the space and being involved in it for quite some time.
And yet generally people who are interested in Shopify development tend to find us and that’s actually been a really – because as I mentioned, a lot of those stuff we've being creating and putting out there is developer-focused and has also been a really great source of inbound leads when it comes to hiring developers. So I've had one of the contractors who’s full time with us reach out to me and said “hey, I’m really interested in learning how to build Shopify apps. Would you like to have coffee sometime?” and I was like “sure, I’d love to talk to you about Shopify apps” and that just – it just worked out in terms of having someone reach out to me at exactly the right time when I was looking to start growing.
PHILIP: Well if you're in content marketing success story, can you walk me through the process of choosing that niche within the larger Shopify ecosystem? I’m curious what's the first thing you saw where you said “you know, I think there's something here. I think this could be a way we focus our business”.
GAVIN: I wish I could give you some high-level – this was a – choosing Shopify itself was me just completely falling into it really. I had a friend that wanted to set up an online store, and this is maybe 7 years ago or something, and I helped him out. We used – we decided to use Shopify for some unbeknownst reason, and I just started playing around with it from there.
When it came to niching down really hard on the app development side of things, realistically the thing that made me think there was something there was someone asked me to build an app for him and offered me money for it. I thought “well, ok sure”. And I guess that it has always been more appealing to me. My background is a software engineer rather than a designer, more a front-end developer per se, so that was something that I was more interested in.
And I guess at the same time, I was also saying almost to everyone else that was working with Shopify was focused on the setup and the front-end development side of things, and there was almost no one who was exclusively building apps. So I guess there was a little bit of intention behind it in that I saw that at least one person was willing to pay for this app and no one else seemed to be offering it as a service exclusively. So I thought “well, let’s try and see if we can get away with running a business exclusively doing application sort of stuff”.
PHILIP: So it sounds like you – you saw a hole on the market and you got some really nice validation in that someone paid you and you saw the connection between those two things. I’m curious if it was ever at any point, there was any fear involved like did you doubt whether that would be a good idea to narrow down or how did that part of it work?
GAVIN: I did and I still do, to be honest. More and more larger agencies are adding app development to their portfolios. They’ll do everything from the front-end development to the setup to the app dev as well, so that is certainly, I guess, a bit concerning. So I’m thinking maybe I do need to think about going back in generalizing and offering those – all of the services in order to compete.
But then my – Philip Morgan tells me no; niche down, hold tight [chuckles]. So it’s definitely concerning. At the same time, I just feel like no one in that space can build apps as well as we can right now because it’s all we do. I don’t think any agency has built as many as we have. We certainly have a lot of experience with a lot of different types of apps, and we can do it pretty efficiently.
I think I’m happy at the moment to stay focused where we are with the app development, and if that changes [chuckles], I’ll ring you up and say “Philip, it’s not working”.
PHILIP: For the time being, you can probably run circles around the larger competitors.
GAVIN: Yeah. That’s what we’re trying to do, and I’ll stick with it for the moment. It’s a growing market, Shopify; it’s certainly very aggressively expanding, so even if these other agencies are starting to become more of that development work, then we can niche down even further, I guess, and say we’ll tackle the big enterprise app development jobs that an agency that’s been developing apps for 6 months just has no hope of being able to deal with the complexity or something like that. So it’s certainly something I think, but hopefully not something that’s fatal.
PHILIP: Yeah. Thank you for that.
REUVEN: I’m wondering what it would take – and the answer might be you don’t know or you're hoping never to get there – but what would it take to convince you “wow, this was really a mistake”? You said already that your personal income has gone down in the hopes obviously that it will go up by a lot. Obviously this is not just for fun. This is to have a successful business and we’re all hoping you get there, but what would it take for you to say “you know what, boy, this was really a bad idea. I should go back just to working on my own”?
GAVIN: I think that if after – basically if things stagnated. So after a year, if we came back and did this podcast in a year and I was in the same position with the same revenue numbers, the same number of people working on the same sort of projects, then I would feel like maybe I’m not doing this right or something else is wrong. So I think it would be more that rather than any particular revenue number or personal income number would be more of I felt like things weren’t moving forward.
Certainly I’m not expecting that I’m going to be able to get back to freelancing personal income in 6 months, in a year. Hopefully it will happen at some stage, and then I will also have the asset of the business itself, which by that time will hopefully have some assets in the form of these apps that we’re planning on building. But yeah, I feel like it would be more just feeling like nothing’s happening, the business isn't moving forward, and not necessarily having that be [inaudible] hire 10 people last year like “what's happening”. I think I’d be very happy having a smaller sized agency. But if the type of work we were doing started to feel like it was stagnating, I think that would be the biggest red flag for me.
CHUCK: So if somebody decided “you know what, I think this agency is a great idea for me”, what should they do? Do you have 3 things that they should think about or implement to get started?
GAVIN: In general, I would say basically all the material out there that teaches you to be a better freelancer – this podcast, Brennan Dunn’s material, Philip’s stuff – anything that’s focused on streamlining your processes as a freelancer, streamlining the things that you do as a business owner, I think they're completely a hundred percent applicable and maybe even a prerequisite to starting to make that transition to become an agency. The more you have your processes locked down, the more you have a system for your onboarding and dealing with clients, the more you're charging, the easier and easier it’s going to be to start writing an agency.
Another thing that I think is really powerful that I’m only just realizing is – and I knew it in the back of my head, but until you actually sit down and live it, it never really gets highlighted that much, which is how you saw recurring revenue is in a business especially when you start hiring people and you have a base number of dollars per month that you need to spend in payroll. So when I say recurring revenue, for us that includes the revenue we make from a couple of info products. I mentioned the courses earlier, but also I was in the context of an agency lumping retainers in that.
So if you're able to develop relationships with clients from the very – and setup your relationship with the client from the very first meeting to looking beyond the initial project and try and work out at how you can help on an ongoing basis and try and work out what sort of retainer package might be appealing to them. If you can lock that down, then it’s a great great way to give yourself a bit of covenants in the fact that you're going to be getting X number of dollars in for a month and that certainly makes things like hiring someone a whole lot easier to do because you don’t have that nervousness around hiring.
CHUCK: Alright. Well, let’s go ahead and get to some picks. Philip, do you have some picks for us?
PHILIP: I do. I have been recording a lot of videos of me doing stuff on my computer lately for various reasons. And this was reminded how great Screenflow is. So that’s the desktop screencast recording software and it’s good for even dummies like me. So that’s my first pick.
I want to remind folks that there's an email crash course that I offer on positioning. If the idea of doing what Gavin mentioned and picking a more profitable area of your business to focus on is interesting, you can find that at positioningcrashcourse.com. That’s it. Those are my picks for this week.
CHUCK: Alright. Reuven, what about you?
REUVEN: First of all, I’ll just echo what Philip said about Sreenflow. I've used it for a while. I used none, but none of the fancy features and it works like a charm. It’s just great.
So my picks are – first of all, Marvin Minsky who was a famous computer scientist, thinker, inventor; amazing guy – he died just in the last month or two. And so I started looking through some of the things that he wrote, and he has this amazing book called The Society of Mind which talks about how the mind works, human thought. Every chapter is one page and it’s a really simply presented theory of how the mind works that’s very very accessible and interesting and really can change the way you think about yourself, other people, teaching children – you name it. So definitely highly recommended.
And the other one is – I think it was last week on the show, we talked about having landing pages and crash courses and so forth, so I’m going to put in the finishing touches on regexpcrashcourse.com. I’ll put that in the show notes that you don’t have to stumble through trying to spell RegExp, which is RegExp of course. And that’s an introduction to Regular Expressions in an email campaign [inaudible] email course that can try to help people who don’t know about them but want to learn about them, learn about them. Anyway, that’s it for this week for me.
CHUCK: Alright. I've got a couple of picks here. One of my picks is something that I've been using for a while, and I’m sure I've picked it on the show before, but I've just fallen in love with it all over again, and that’s Trello. If you don’t know Trello, it’s kind of a kanban style board and it’s pretty awesome. You can setup whatever workflow you want in it.
I've actually been using it for a couple of things. One is for onboarding guests. So I’m going to start having them fill out a form on the website and that’s actually going to drop into Trello. So it’ll drop it into Trello, I’ll have their whole profile and everything in there that they fill out along with any suggestions they have for other guests on the show. And that’s all being done with Gravity Forms on WordPress and Zapier, and so I’m going to pick those as well.
Gravity Forms basically creates a feed that Zapier can pull from and then Zapier puts it into Trello, and it’s pretty nice. They also have integrations for Facebook, they have integrations for Twitter, they have integrations for hundreds of hundreds of other things in Zapier, and it’s really handy. So just putting that out there and letting you know that that’s out there.
If you do Ruby, I’m going to also mention Ruby Remote Conf which comes out – I think it comes out the week after we record this. So if you want tickets, you got to move quick. It’s at the end of June. But we’ve got some fairly notable Ruby folks speaking. That includes Sarah Mei, Phil Spitler, Justin Collins, Marcus Blankenship – all of them have been on the Ruby Rogues podcast. Den Chandler – I think he’s been on two. Ryan Francis. Still working on a few other folks that you’ve also heard of before, I’m sure, and really looking forward to some awesome talk. So if you do Ruby or you want to learn Ruby, then this is going to be terrific. And yeah, those are my picks.
GAVIN: Yeah. And I've got a couple just to chime in. Firstly, to back up what Philip and Reuven said about, Screenflow is excellent. If you're looking for something that is a little more lightweight, I can highly recommend a service called Lookback which is at lookback.io and it’s really great for doing really really quick screencasts, and then they automatically upload and hosts those videos for you. So I use it all the time for demoing stuff to clients. It just take a couple of minutes, so I highly recommend that.
And then the other thing I thought I’d just quickly recommend was a series of blog posts by Brian Cardarella who – it’s very appropriate to the topic of today’s discussion – he founded an agency in Boston called DockYard, and every year he writes a recap on those lessons learned over the year in starting an agency and building it up. And so it’s really interesting to read through those year by year and see what changes. He’s really upfront with things like numbers and hiring and firing and mistakes that they made, so I thought that would be really interesting to anyone who’s thinking about building out a consultancy or an agency or anything like that.
CHUCK: Alright, well, people want to follow up with what you're up to Gavin, what do they do? Where do they go?
GAVIN: The best place to find me is on Twitter. I’m @gavinballard. You can also find me at gavinballard.com or [inaudible] Disco is at discolabs.com.
CHUCK: Alright. Well, we’ll go ahead and wrap up the show. Thank you for coming Gavin. We’ll catch you all next week.
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