Charles: Hey everybody and welcome to episode 218 of The Freelancer Show. This week on our panel, we have Jonathan Stark, Philip Morgan. I’m Charles Max Wood from devchat.tv. We’ll just jump right into it. Jonathan suggested this topic. I think his exact words were, let me read it from Skype, “I’ve been on a tear lately about why people shouldn’t agree to project deadlines.” We talked about that but I can’t remember if we already did in the last couple of weeks which we haven’t. So deadlines, why are deadlines bad?
Jonathan: Let me start by saying that not all deadlines are bad but there’s a specific kind of deadline that I’ve been talking about recently. Deadlines that I don’t like stems from an agreement before a project starts. When you’re first talking to a prospect and you’re trying to put together a proposal for them and you’re settling on payment terms, long time listeners will know that I recommend asking for a 100% upfront. A lot of prospects will say, “Well, how about we do 50% upfront and 50% on delivery or sign off?”
That’s the kind of deadline that I think is a bad idea for the project. That is what I’ve been talking about. It’s a software project deadline that is set in advance before the project even started. In a typical arrangement with any kind of non trivial software project, there are at least 10 people involved. They’ve got yourself ,let’s say you’re the consultant or the developer, the freelancer and then you got the client, you might have some third parties that are involved that you have to deal with on the client’s behalf.
The notion that you could control any of those people’s responsiveness is ridiculous, it’s patently absurd. For you to say, “Oh yeah, this will be done by December 1st,” is just insane and it just sets a wrong tone for the engagement I think. If you do tie your second payment or any payment to that delivery date, then it creates at least a couple of problems. One being that it’s going to put pressure on everyone to sign off on the project before it’s actually done and it creates this sort of arbitrary incentive. It’s a phony goal. The real goal is to achieve the desired project outcome. If the deadline is arbitrary and is something that was put in place or something that was suggested by the client thinking that it will help motivate people because people seem to respond to achieving deadlines, that’s just bad for everybody.
Charles: I have a story.
Charles: The way you’re talking about it where you can’t control this, this, or this. I was like, “Yeah, I had that project.” I think it was two years ago, there was a company based here in Utah that there were other red flags too that I shouldn’t have taken the contract. They decided that they wanted to do phase one and phase two concurrently. I’m sure Jonathan’s like throwing up.
Jonathan: One comes before two. It’s kind of like a numbers thing.
Charles: We were the lucky ones so they were already rolling on phase one so we were going to work on phase two. Phase two involved interfacing with their bank which was Wells Fargo and it also involved interfacing with their payment gateway which was some company down in Las Vegas that I had never heard of before and there were a few other things that we had to get done. We had all of these people that were basically affecting our outcome.
When I was negotiating the contract basically, first of all it was hourly, so yeah you can choke on that too, Jonathan. When I was negotiating it, basically I sat down with the team lead for phase one and I said, “Look, phase two only involves these three pieces of code, classes if you’re a programmer, but these three pieces of code they were models in Ruby on Rails so don’t change those. Or if you’re going to change those, then let’s sit down and make sure that we’re working concurrently to make sure that your changes don’t affect ours.” They said, “Oh yeah, we’ll definitely do that.” And then about a month later they went and they completely revamped all three of those models and totally messed us up.
We spent probably an extra three weeks working the kinks out of that. Plus as you can imagine working with Wells Fargo to try and figure out how to do money transfers through their system which involved FTP and a file format that I still can’t remember the name of. That was basically a binary format because it was created back when you had to push bits over telephone lines and so it was really low bandwidth. It’s designed for all of that and they just hadn’t updated it.
By the time we figured all that out, we had promised to get it done by the end of the year. We started it in September or August and by the beginning of December, we had just barely figured out what was going on with Wells Fargo. Then the other issue was that their payment processor had an API but they couldn’t actually give us realistic documentation on it. They sent us the documentation they had and we had to basically figure out how to work with it from there. All of their programmers were java programmers so they really couldn’t offer us any help as far as how to structure the thing. The data formats weren’t what they told us they were.
We agreed upfront to getting this project done, but in all reality everything that could possibly go wrong, because it was out of our control, actually did. If we hadn’t promised that deadline, then we could’ve actually just sat down and said, “Look, here are the issues.” When we tried that, it was way too late. They were unhappy with the deadline, they were unhappy with the amount of money they had spent. In the end, we had just gone to the point where we were figuring out what we need to do with phase two to finish it.
Agreeing to the deadline, they weren’t happy about the money they spent but the deadline was just, it was like the final nail in the coffin, it was done. We came in and we did a bunch of work for free to try and make it better and eventually they just fired us.
Jonathan: The problem with the deadline is it’s a very binary thing. You either hit it or you didn’t. Once it’s out there, I don’t care how many caveats you put in front of it, it’s going to float up the chain to someone who wasn’t in the conversation and they’re going to say, “Oh, it’s going to be done on December 1st. We’re going to start making plans based on that fact.” They make other plans to whatever and move on to the next thing or do some big sales launch or something, and they’re understandably miffed when the deadline gets missed. Since in your case or in anybody’s case where they agreed to that, you’re setting yourself up for a failure. You’re setting the project team for a lot of anger, recriminations, finger pointing, and a lot of bad emotions because you agreed to something you have really no control over whatsoever.
The CEO of the client could not force all of these parties to hit the deadline. He could fire people, he can yell at people, he can do things all day long but he can’t even guarantee that that project is going to hit that deadline because there are too many people involved, too many unknowns. For one person on the outside to like say, “Yeah, I can control this.” There’s no way.
Now that said they’re a bunch of sort of caveats, I’ve learned in the last couple of weeks that people quickly leap to start against deadlines of any kind. That’s not the case. I’m talking about this very specific kind of project deadline that gets set before the project even starts. There are other kind of deadlines that I think are fine and do motivate people. When you have really, really short deadlines like weekly or two-week long sprints and there are very clear features or tasks that need to be completed that don’t involve lots of people. You get your task list for the week, there are maybe a couple of questions that need to be answered during the stand up.
You pretty much can estimate how long it’s going to take to do this one feature, most of the time. Borrowing the situation where like you said where the data format was undefined and they changed the models underneath you. That still happens but it’s reasonable to imagine somebody saying, “That’s going to take me about this long to create this controller and have it debugged.” Because there’s not a lot of moving parts.
As soon as you are sitting around waiting for someone else to get back to you, especially if they’re from the client—I need FTP information before I can do my next thing. I’m blocked, or I need access to the GitHub redo for the clients’ get up account. If you have any of those blocking things, the client is almost always the slowest party in any of this, I guess third parties are also pretty bad like Wells Fargo in your case.
In my experience, there’s never anybody at the client whose full time job is to get this project done. The consultant or in my case it usually is my full time job to get this client done, so I’m almost always faster than they are. They go on vacation or they get pulled away to put out some other aspect of the organization. It’s common for two weeks to go by and me to not have login information that I need or not have image files that I need.
I’m sure everybody listening to this has had this experience. If you adhere to my principles in general, you won’t care about this anymore because you’ve either been paid upfront or you’re going to be paid on a schedule that is disconnected from the delivery or the sign off or the completion or whatever you want to call it. It’s fine that the customers’ slow. If you didn’t commit to the project will be done on this date, and if it’s not done on this date people can start yelling at me.
Another thing that comes up a lot is timeline. Timelines are perfectly fine because they are, if done right, they are kind of like a list of things that we do know we need to do. The amount of time that you put in the schedule for each one of those things. If you imagine a Gantt chart with dependencies, it’s a very visual way to present the complexity and craziness of a project.
If you are on a weekly basis because you should have a lot of communication with clients’ during a project like this, on a weekly basis if you’re updating that timeline and it’s constantly in flux and you never initially agreed to the date that initially was at the end of that timeline, then it’s just so obvious to everyone that it’s an elastic type of thing and that’s usually where I present it is, the timeline. “This is the minimum possible amount of time that this thing will take. It will surely increase. There is no way it will not increase. It’s going to take at least three months to do this. As things happen, because things always happen, I will adjust the timeline so you can see how far it’s pushing us out.”
“You can make other plans. If you do have a big marketing push or sales meeting or something, you can watch and see how the project is expanding as we go through it.” That also puts incentive on them, most of the things will be their fault. It puts incentive on them for the higher ups to put pressure on the lower downs to either, “Hey, get that stuff to them.” Or the higher ups will say, “Yeah, we were going to have our lead dev dedicate to this but things keep coming up and we know it’s our fault.” If you’re having that weekly conversation around a timeline that didn’t have a date that you agreed to, in my experience that has solved all those negative emotional problems associated with a big software project.
Charles: One thing that I see here as far as what are the “what ifs” that I wanted to share because I definitely see what you’re saying. However, I’ve had clients come to me that basically said, “We have the big industry show coming up in a few months and we need this project to be done by then so that we can show it as part of our software suite or part of what we offer to our customers.” How do you deal with that where there actually is sort of a drop-dead, “It has to be done by then or we at least need to show something by then.”
Jonathan: Yeah. That’s my one big caveat. That’s the one time I will agree to a deadline, when it’s not arbitrary. There’s some immovable event like a presidential election or the Olympics or Sales Force you know their annual conference then you’re going to do a demo or techcrunch disrupt. These things do happen. I understand that.
In those cases, I will not agree to a specific scope of work. First of all, it’s highly likely that I won’t take the project. I need to have some reason to believe that an MVP perhaps not the entire thing but an MVP that I see is beneficial could definitely be done by that time or things that are solely within my control could be done by that time. I’ll say something like, “I understand you obviously came with the Olympics, you need to have this done before the Olympics so you’ve got this vision for the project. There are a million moving parts here that I have no control over whatsoever so I really can’t give you any guarantee that we’ll hit by then. What I could guarantee though is that I could have these three key features working and demoable on my server at my domain name and that proof of concept, if that will be good enough for your presentation at the Olympics or that techcrunch disrupt or whatever it is, then I’ve got enough control over those things that I could say, okay we can do at least this. We’ll try to do, we’ll try to get it on your server, we’ll try to get the ten top features instead of the three top features but I just won’t agree to any specifics of the scope,” if you see what I mean.
Charles: When you’re talking about those 10, I’m going to ask a dozen questions about this. Let’s say there is something like this where it’s a big conference, we send them hundreds of thousands of dollars because we’re going to bring customers in, high end customers that are going to pay us a lot of money for what we are offering. How do you agree to maybe those three features? How much margin do you put on that?
Let’s say it’s in three months, do you just commit to months’ worth of work just because you figured that margin is then plenty to make sure that you will absolutely deliver on those three features and then maybe features four and five gets slipped in there too or maybe not.
Jonathan: That’s a good question. Usually when I quote it, I’m quoting it based on the overall value of the entire thing being completed. I’ve never been on one where the project didn’t need to exist after the event. It’s always something like, like it could be something like we need voter registration thing for presidential election. It needs to be done in two weeks and after November it doesn’t matter, we can throw it out. I’ve never done a project like that. I probably wouldn’t.
Charles: Right so you quote the whole project…
Jonathan: I quote the whole thing.
Charles: But when you agree to the deadline, do you agree to just what you know you can get done or what you think you can get done in half the time because you know you’ll be able to get it done the entire time.
Jonathan: Yes, since it’s almost like two projects with the phase one and a phase two baked in. I’ll say, “Look, we’ve got three months before the event. I am highly confident.” We’ve had a conversation. We’ve talked about a lot of features. Of course, I’m also going to be talking about the ultimate goals and all that stuff but along the way you talk about features and their vision for the product if it’s like a SaaS or some kind of website. I’ll say, “Alright, I see your ultimate goal and we will not get there before the date.” In a situation like this, their timelines are always ridiculously aggressive.
I’ll say, “This cannot be done the way that you’re describing it in the timeline. If you want to get something before that date, we can prioritize these features together and I’ll start I think these are the most important features. I can get these done and host it on my server. Something I have control over. I can get these done and hosted for you, it might not be on your domain.” There could be a million things. “It’s the 20% that creates the 80% of the value. I’m sure that I can or I’m confident that I can get these done within three months two weeks out from the event or as the event approaches we’re going to do a code freeze or we’re going into QA mode because we want this thing to be rock solid for the presentation or whatever it is. At the end of that then we’ll get through that. I’ll be on call during the event to make sure if anything surprising happens that I can fix it on the fly. And then after the event, we’ll just pick up where we left off and we’ll get done to the end, the product will then be hosted your site. If we have to migrate users from my database to your database, okay fine.
The price that I would base it on is the ultimate value, I always do the same thing. It’s the annualized first year value of the project divided by 10. It wouldn’t be based on just hitting that one deadline and then stopping. It’s kind of like two phases, really.
Charles: That makes sense. I think I’ve been hugging the mic. Philip you were trying to get in I think at one point.
Philip: Earlier I was going to ask like I think it’s helpful to understand like why you do something that’s a bad habit. Jonathan why do you see developers agree to deadlines even if they know full well that they’re not realistic?
Jonathan: Because customers ask for it and developers typically don’t have the confidence to say no or they haven’t learned their lines, they don’t know how to respond to that question other than to say yes or no. I see it all the time. People are you know you could probably find this on clients from hell. There’s probably a list of these where somebody says some developers like crabbing online about the, “People are totally unrealistic about the deadline. There’s no way it could be done on it.” Well did you say no? “Well no, I need the money so I agreed to it.”
There’s a middle way which is to explain to the client, “I understand why you want a deadline but neither one of us is actually in control of it in a meaningful way. Instead, let’s talk about achieving the goals and achieving them on a timeline so you can have a sense of organization and a sense of control and you can see into the future a little bit, a quarter let’s say or two quarters ahead of time so you could plan.”
They have to set budgets, they have to decide who they’re going to hire, when they’re going to hire them. There’s a reason why they want to know when it’s done. It doesn’t change the reality which is that there’s no one person who can control it. Another big factor is that a lot of times clients are asking for a deadline because you charge by the hour and to them that’s like there’s some correlation that if they’re going to go past the deadline they’re going to go over budget.
Philip: It’s like a not to exceed.
Jonathan: Yeah, exactly.
Philip: Yeah, a soft not to exceed.
Jonathan: Yeah so if you take hourly out of the equation in my experience, clients are a lot quicker to agree to or are a lot less demanding about a specific deadline because they are no longer worried about the budget because you’ve given them a price and like, “Oh, this price seems fair. It would be great to have it done faster and it’s in Stark’s best interest to get it done faster because then he’s made more money in a shorter time so effective hourly rate is much higher and everybody wants it done faster. We’ll get it done as fast as we can.”
Philip: I feel like the deadline or the timeline discussion comes up before you’ve been hired and so it’s easy to see it as a part of being competitive for the job is agreeing to an unrealistic deadline. I think that’s part of the mentality and I’m drawing on my own experience here like this is going to help me get this if I can promise that it will be done quickly. It does seem to be kind of very inexorably linked with hourly billing and those concepts. Maybe if we exhaust this topic a little bit we might talk about negotiation. It just seems to be wrapped up in negotiation and maybe inappropriately because it’s not something that should be negotiated.
Jonathan: Right. The example I use is a bride coming to the wedding planner and asking the wedding planner to guarantee it will be sunny on her wedding day. It’s like, “I understand why you want that and I wish I could guarantee it but I can’t. You know what I can do, I can come up with six contingency plans for if it rains, if it snows, if there’s a sandstorm, if there’s a tornado and we can have all that stuff planned out if you want but I can’t guarantee you it’s going to be sunny.” It’s not that much of an exaggeration.
The deadline on any non trivial software project that’s going to take three to six months or longer. Unless you are going to do a massive waterfall planning phase upfront, there is no way, and even then I think it’s ridiculous. But still there’s this thing where humans just…
In order for management to make a decision on whether or not they want to go for a project, there could be timeline related or deadline related factors that invalidate the project. If you’re trying to capture some market opportunity that you believe is going to disappear in six months and you go out and either I won’t tell you when it’s going to be done or somebody says that, “Oh, it’s going to take longer than that for it to be done.” That might invalidate the reason for the project.
To your point about negotiation, is sometimes you should say no to clients who just either won’t budge on this or won’t see the reality of the fact that you can’t control it especially as a solo outsider. If they are just not cool with that then you’re probably not the right person for them and there probably is no right person for them so just say no.
Philip: Yeah. I think there’s a lot of sort of willful ignorance. If you really look at it from a logical perspective, it’s clear you can’t control when it’s going to be done. It’s too complex for that. It’s not an assembly line, it’s building something new that hasn’t existed before in a complex environment. Yeah, I keep thinking about that statistic about the percentage of IT projects that fail which is somewhere 50% and 70% depending on who you ask. It makes me think that something about this is related to that high failure of IT projects.
Jonathan: Yeah, there’s another statistic that’s roughly 50% of software projects go over budget by 100%. I think all of this is tied together. I think that the billing approach, you know if you’re billing by the hour, that has a lot to do with it. Failure statistic I think, a lot of times I think it’s just that gut instinct but a lot of times I think that in those cases a success metric hasn’t been clearly defined so it can only fail. If no clear outcome is defined, then it’s going to be considered a failure by the person who paid for it even if the goals that they requested were achieved, like if every little task that they told you to do, you did. At the end, it could still be considered a failure. They might not blame you but they might regret spending the money because it didn’t achieve some goal that they never actually stated.
I would say, I would love to know, this is probably not part of the data behind that statistic but it’s like well how many of these actually had success criteria. Probably not all of them. I’m even going to say probably not half of them which would explain why so many fail. If you don’t know what winning looks like, you can do nothing but fail. If you fail, the client’s going to regret having spent the money.
Charles: I can also see somebody coming to this and saying, “Well, I know that it’s not a good idea to accept this deadline because I have no control over it. However, I also really, really need the money so I’m just going to work my tail off and make sure that I hit the deadline.
Jonathan: Break the chain of abuse.
Charles: I know. It feels like such a terrible idea when I say it but here the problem.
Jonathan: That’s very real, of course. The solution to that is not to work your tail off and hit the deadline which again you’re still just rolling the dice. Basically, what you’re saying is I’ll take the risk and when it blows up in my face, I’ll just deal with that then. The solution to having to take on projects like that is, well there’s really two. One is to have some runway so you don’t have to take bad jobs and you know savings or cash flow or some kind of recurring revenue or something like that. The other is to have a pipeline that’s packed full of leads, cue Philip.
Philip: I was going to cue myself on that. I’m like, do I sound to people like a broken record but yeah. The saying, I don’t know who said it. Sales cures all ills basically, having more opportunities coming your way is a prerequisite to being able to negotiate on a position of strength. I’ve been on both sides of that and I can tell you if saying no means you’re not going to be able to make the next month’s rent or mortgage, you probably won’t say no even if you know you should. I’ve seen very few people who can do that unless they have savings or other opportunities they can turn to.
Jonathan: I know exactly one person who I’ve ever seen do this.
Charles: Do which?
Jonathan: Say no even when they needed the money. My name is not on that list. I’ve done it. Of course, I’ve done it. It ends up getting you over the hump. It’s a cash flow thing. It gets you over the cash flow hump until—your business could be doing fine but you need that money spread out. If I had a $150,000 a month at the end of the year, that doesn’t really help me in the previous March. You need that money kind of spread out and if for whatever reason you’ve got a house fire one year and I had to spend $50,000 out of pocket while we’re waiting for the insurance to come in, that was a rough year cash flow wise. It ended up being a totally normal year but I just a had a huge cost in the middle of the year and it was unexpected. Did I take stuff? I’m sure, I don’t remember specifically but I’m sure I would’ve been. If I didn’t take on a job even if it had red flags or whatever, I’m sure I would’ve. I’m single income household. You got to keep the lights on.
Charles: Yeah, there’s a lot of emotion that goes into it. You may not wind up being happy with it but I also can see that if you can avoid making the condition, that deadline condition of success if it all possible especially where you have less and less control over the project, then you’re going to be happier. But at the same time I can also see that sometimes you feel like you’ve got your back up against a wall and you have no choice.
Philip: That gives me a great idea for a future episode. We should cover some ideas for sort of bootstrapping recurring revenue or ways that freelancers who are in that terribly weak bargaining position could start to work their way out. I know the ultimate answer is get a better pipeline and increase the value of the services that you deliver so you can charge more for them but I bet there’s some pretty interesting kind of short term strategies we could look at that might be worth talking about. Anyway, that’s an idea for future episode.
Jonathan: I can take some of those that I’ve used in the past to deal with cash flow issues.
Charles: One thing I’m wondering is let’s say that you have a client and it’s a really interesting job. You really want to get the work. You think that there are some benefits to it but they are insisting on this arbitrary deadline and you’re not quite sure you can make it. Do you just say no, I mean is that the answer or is there more nuance to it? I’d be happy if I didn’t have to say no.
Jonathan: I would not agree to it. It’s a question of how much risk. There’s the sort of three dollar amounts that are associated with the project proposal. There is the cost to me, how much is going to cost, at what point do I feel like I’m losing money on this project. At what point do I wish I had not taken it? The least amount of money I’d take for this project is $50,000. It’s just not even worth it to me. That cost is totally subjective in situations. A month after my house caught on fire, the least amount of money I would take for a project probably dropped from $50,000 to $25,000 because I’ve got a different kind of motivation.
Cost to you is totally objective. It’s not the same all the time. It’s not just how much time is going to take you to do it. It’s how badly you need the cash flow. It’s how stressful the client is, that can increase your cost. There’s about five factors.
And then on the other end of the spectrum, there’s the value to the client, also a completely subjective situational number. It’s very squishy, both of them are very squishy but if they’re really far apart, then you can pick a dollar amount in the middle that is agreeable to both parties and that’s the price that you set.
Depending on the situation, I might say, “Okay they really want this deadline. That puts more pressure and risk on me and if we miss it, my life’s going to be basically hell until we finish because they’re just going to be freaking out.” But I’ve done that before back when I billed hourly when I was working in a firm. Every single project went over budget and over deadline, every single one. It was very rare for them to not go over. I know how to do it. It’s just a super drag. You have angry phone calls, but I can pay my contractor to fix the house. You just weight all that.
In a normal situation in a normal year, I would just say no. If I could not make them see the light and the way that I would try to make them see the light is to reason with them not that I am trying wiggle out of the deadline but just make it clear to them that it would be bad for them if everybody was operating under this assumption that this is going to be done on particular date because they’re going to make plans based on that date and that is a bad idea for them.
I would just really try and say, “Look, it is going to be detrimental to your business if I or anyone agrees to a deadline when this can be done because it’s crazy.” Back to the wedding planner, if we just sail through life, the bride just sails through the whole process leading up to the wedding knowing that it’s going to be sunny and then it rains and there are no contingency plans, that would be a disaster of a wedding because she was operating under a delusion.
That’s the approach that I’d take the client. You’ll be operating under a delusion if we set a date, a day that this will be done. That’s delusional and that will be bad for the business because you’re going to make plans on top of it and those plans will need to be postponed. If they can’t see the logic in that, then I would really prefer not to take the job at any price.
Charles: Yeah, that makes sense.
Philip: In practice when you do this, Jonathan, do you have projects that drag on for a surprising amount of time or just kind of unexpectedly? We’ve talked separately about being disciplined about moving stuff to version two to prevent scope creeps. I’m not really talking about that.
Jonathan: Yeah, that’s different.
Philip: More just like, “Wow, I didn’t expect that to take two years. I thought it would take nine months.”
Jonathan: Yeah, that’s happened to me once. It has happened to me once, it almost happened to me twice in 10 years or 15 like since 2006, so yeah 10 years. In both cases, it was a fixed bid. In the one case where it went on and on and on, I honestly don’t remember what the issue was. It just ended up being way more complicated than it appeared on the surface. I thought it was going to be a year long project and then I priced it that way. It ended being a two-year long project and whatever, I just had to do it. I made half as much money as I thought I would but still it was a really big payday.
The reason why it dragged on, this is going back so far that I only have a kind of impressionistic feeling for it of what it was but I could remember late nights writing some of the most complicated scripting routines I had ever conceived of. I think there was probably a bullet point requirement like we need this report to work and I was like, “Yeah, okay it’s just another report. It couldn’t take me more than a couple of weeks,” but it ended up taking me 12 months or something because sometimes the report will like change of fundamental like the fundamental nature of how you store the data. I can’t remember exactly but I remember being like, “Oh my God. This is a monster. This little requirement that I glossed over is a monster.”
That’s so rare. It’s so rare and I will also hasten to add that back then I would have agreed to a scope, a document that said it’ll have this feature, this feature, this feature instead of saying that this new system will achieve these goals for you. It’s possible that the report that I struggled with to created could have been solved in some other way to apply your sort of developer judo to it and say, “Oh yeah this report can be really hard. There’s probably another way that we can get this information, this knowledge to you that doesn’t require this report. Let’s talk about that.” Kind of do an end run around it.
Philip: Yeah. I think part of the concern about an uncertain end date is when can I, I think this applies for an agency with multiple people or a solo person. It’s like when can I start the next thing? That seems like that casted out on when you could start the next thing and maybe you just know when you know but what’s been your experience with that?
Jonathan: That’s where the timeline comes in. In the beginning, you’ll have a timeline and it will be growing very quickly. It’ll be expanding very quickly but that decreases over time. It tends to decrease over time so you start to get more and more of a sense of completion of roughly when it’s going to be completed. In general, I think scheduling software projects back to back is crazy for this exact reason. It’s just not a good idea. It’s like sit still for a second, start to achieve some of the value from this first thing. When you’re sure that the lake is frozen, then you can go on and play hockey but let’s not push it. You know what I mean?
Let’s not risk it and base a whole bunch of new stuff on this thing where the cement’s not even dry or the lake isn’t frozen. You got to wait for it to set. Some clients are like, “No, we gotta move faster and break things.” Alright, you’re not my client. I’m going to try to attract clients that have a going concern, not like a startup that’s just hoping to get acquired by Facebook and build these thing as fast as you can, fast, fast, fast, fast, and they’re constantly pivoting and changing direction and changing priorities. It’s a nightmare.
I like stable businesses that have good annual revenue and they know exactly what they want to do to turn the dials, to move the needles, and all that stuff. They’ve got a business. It’s been around, they’re doing $10 million in revenue annually and they know from experience that if they could decrease their churn, that would increase their annual revenue by $1 million if they could just decrease churn by 5%. You’re not going to get that kind of knowledge or self awareness from a business that some guy who thinks he’s going to make a fortune with an iPhone app and he wants you to swoop in and build it for him to his specifications.
Philip: And the good news is there’s plenty of those kinds of companies out there.
Jonathan: Tons, tons, tons.
Philip: There are about one company per 60 humans on the planet.
Jonathan: That’s crazy.
Charles: Oh, wow.
Philip: In the US, there are probably around 30 million companies, businesses in the US, and about 99% of those are small SMEs or SMBs and not all of those are startups. Again, plenty of fish in the sea that don’t have crazy expectations about timelines and that kind of thing.
Jonathan: Yeah, I did a talk in Las Vegas recently on positioning. I was kind of singing Philip’s song and just as an example, I used dentist as the vertical. Just out of curiosity before this talk, I know I was going to talk about dentist as my example vertical and I just did a search for dentist near me. There were 10 dentists within walking distance of the hotel that I was in. And then I did a search for dentists in my hometown, there we’re a hundred before I stopped paging through the results. There were hundreds in little tiny Province island and there’s something like 100,000 in the whole US which actually is fewer than I expected but still 100,000 in the United States. If you got a tenth of a percentage point of that, you’d have a killer year. There are tons of them.
Philip: Yeah, I can’t go into the math right now but a market size that has about a thousand potential clients in it, I’ll say for solo freelancers, that tends to be about the right size market so you kind of contrast that against the hundred thousand in did you say in the US?
Jonathan: Yeah, in the US.
Philip: You would have to specialize for that to not be too big of a market.
Jonathan: Yeah. You have to go – or the, you know whatever.
Philip: I was recently visiting my brother in Alameda and we walked down the street. I swear it was one block and there were like five or ten dentists on that one block. I’ve never seen anything like it.
Jonathan: In my neighborhood, there are a lot of dentists but they are all different kinds. It’s like oral surgeon, and orthodontists, and general dentistry. A ton of different kinds and I’m sure all have different needs. Like the orthodontists probably have a lot of kids, and the oral surgeon’s I’m guessing an older clientele. There’s a bunch of cosmetic dentists around too. I’m sure they all have different needs. I’m sure there are a lot of overlap but they have subtle differences between the dials that they want to turn on their business.
Charles: Another fun fact is that Utah Valley which is where I live which encompasses most of Utah County has the highest number of dentist per capita in the US. My dad picked the saturated market to move to.
Philip: Oh, you’re dad’s a dentist?
Charles: Yeah. That’s why I always use that example because I’m thinking about it on occasion, “Oh, if dad would just do this then it would..” Anyway back to deadlines, it’s an easy trap to fall into because you want to make your client happy.
Jonathan: Right. You want to make your bride happy, give her a sunny wedding day.
Charles: That’s right but you have to account for all of the risk involved.
Philip: Yeah, I think that was what I was getting at, that idea that it’s mixed up in the negotiation where you really are trying to package things in a way that’s attractive. But anyway, yeah we’ve covered that already.
Jonathan: There are a bunch of things that happen in the negotiation phase. It’s sort of that getting to know you phase that set the tone for everything. There’s a bunch of questions that are super common and I suggest to people too as I say learn your lines. Have an answer for these things like when someone says immediately what’s your rate or could you just give us a ballpark or when is it going to be done? These questions come up every single time and you just have to have your little pad answer and go with it.
If you present that to them in a reasonable way and not a sort of combative way, then you will raise their eyebrows. They will be like, “This person is different.”
One of my most retweeted tweets, more or less it says if you let your clients push you around in the sales process, it shouldn’t come as a surprise when they push you around during the project. Everybody complains about being pushed around during the project but guess what, you probably were a pushover in the sales process too. What that does is it sets a wrong tone first of all and second of all it probably in a lot of cases gets you into client relationships that you shouldn’t be in.
Good clients, clients who otherwise would have been good you can set the tone in a way that positions you as a trusted adviser and expert and authority and clients who are actually a horrible client and you’ll scare them away by not being a pushover during the sales process. It protects you against the bad clients and it makes your good clients more successful because they can kind of focus on what they’re good at and stay out of your business while you focus on what you’re good at. Everybody ends up being so much happier the whole way through.
This is something I don’t talk about much but there’s this emotional component to the kind of work that we do. It’s not billing by the hour, not agreeing to deadlines, it’s so much more cordial as the only word I can think of. It’s just nicer so it’s kind of intangible but it’s extremely black and white.
Charles: My brain is digesting everything you just said.
Philip: That’s what that rumbling sound is.
Charles: It doesn’t work very often so the gears grinding.
Philip: It feels connected to this larger issue in negotiating from a position of strength which is connected to marketing in a way that sets you up for that. I feel like we probably don’t have the time to really talk about the other sort of negotiating issues.
Jonathan: Yeah. Get back to the, are you an expert or are you a freelancer?
Charles: I think we did kind of go into when you’re negotiating, when you’re setting up the project that you explain why you don’t want to have that deadline, what the downsides are. Ultimately, I like the way that you explained it Jonathan where it’s not just, “Well, I don’t want to do deadlines because they’re hard or because I don’t like them.” It’s because you’re going to plan on that deadline and then something’s going to come up and we’re all going to be left kind of running around trying to make the best of a situation that we never thought we’d be in.
Jonathan: Right. Exactly. Of all the things that I advise people to do, if I’m explaining to you this is the way you should organize your business to maximize your happiness and your profitability and all that stuff, people will kind of tend to focus on that and they’ll just be like when they’re new to it and they start talking to a client they’re kind of like be, “I don’t agree to deadlines because Stark said that’s a bad idea.” But when I’m actually talking to a client, I never do this thing like, “Well, it’s just the way I do it.” It’s always because all of those things also are beneficial for the customer and that’s what I focus on when I’m talking to them.
So you know, “What’s your rate?” “I don’t have a rate because it’s bad for you.” “Well, when is it going to be done by?” “I can’t set a deadline because that’s bad for you.” I explain why and what that does is like this guy, if you can do a good job explaining it and it clicks with them it’s going to make them like, “Jeez, this guy totally knows what’s up and yeah we wanted a deadline but we also want somebody who knows what’s up.” When they go to these other people they say, “What’s your rate?” The people say a hundred bucks an hour and they say, “When is it going to be done?” And they say, “Well, it’s going to be done on December 1st.”
Now when they’ve spoken to me, it flips all of that other stuff into question. How do they know it’s going to be done on December 1st in light of what Stark told us? That seems crazy, how they can possibly guarantee that? The most hilarious thing in the world would be if they went back to those people and like how are you going to control these factors. It puts everybody else’s proposal or estimate into question when you have clearly thought it through more than anybody else and clearly put the client first more than anybody else instead of what everybody else is doing which is just saying, “Yeah I need the money. I’ll say whatever I want to get the money.”
Charles: Alright, let’s go ahead and hit some pick. Philip, do you have some pick for us?
Philip: You know I was thinking about this and I was like you know I don’t have any picks this week. It’s because I took some time off this past week.
Charles: Good for you.
Philip: Took Friday and Monday off. In fact, I’m doing that for August. I’m kind of compressing my work week into three days and take an off Fridays and Mondays. I guess that’s my pick, taking time off. You may say to yourself, “Philip, you seem like a successful guy who takes lots of time off.” And in fact, I have been working my ass off filling my business over the last two years. I have not done that. I’ve got an elderly dog. I like to do what I can to make sure the rest of his life is good so I haven’t travelled much.
I’m kind of a newbie with this and it’s awesome. It’s been very restorative. I’m just a week into it but I think it’s going to be very valuable. The interesting thing is that I think I get better ideas when I step away from things and I kind of get out of the fray. Jonathan says that before, “Your desk is for executing and your time away from the desk is for coming up with the ideas.” I can start to see the wisdom in that. I think I resisted that for a while but I’m coming around to it. That’s my pick for this week. It’s taking time off intentionally to kind of restore and get access to some of those better ideas that might be outside your field of vision when you’re in the fray.
Charles: Cool. I took a bit of time off last week too. I’ll talk about it in a minute. Jonathan, what are your picks?
Jonathan: A quick one this week which is the thing that got me talking about deadlines in the first place was a webinar I did last week or so, so folks can go to crowdcast.io/jstark and you’ll find the How To Handle Deadlines Without Agreeing To Them webcast. It’s free so you can check that out.
Charles: Nice. I mentioned that I took some time off last week. As many of you may or may not know I have been a cub scout leader for about nine or ten years. I’ve done some training. I actually help with the monthly training at round table which is where the leaders are supposed to go every month and get trained, get ideas, things like that.
I had never been to Wood Badge and Wood Badge is kind of like the pinnacle of adult leader training in boy scouts and so last week I went to Wood Badge and so I mostly ignored my phone. I mostly disconnected with everything. I did check in occasionally just to make things weren’t falling apart which they weren’t until I got back a couple of things weren’t working. But anyway, it was an amazing experience.
Most of the curriculum I found out was designed by Stephen Covey before he died. He worked with the BSA in order to make that happen and it was just amazing. If you are involved in Boy Scout at all, I highly, highly recommend that you go to Wood Badge. It’s a kind of leadership training I’ve seen offered in other places for $2,000, $3,000, $4.000 or $5,000 and the cost for a Wood Badge attendee is like $130. If you want to shortcut come of that and get involved, it’s terrific.
I also want to just pick the Boy Scouts of America. The place where I went, it’s called Tifie Scout Camp and it’s out in the Mountain Dell Scout Ranch which is above Mount Pleasant, Utah and beautiful up there. While you’re up there, you kind of get this view over the entire valley which is, it was just amazing place. I’m going to pick that as well. I’ll just stop there and then I’ll pick cool stuff again next week too.
One of the things I want to point out is that I have Angular Remote Conf, React Remote Conf, and Rails Remote Conf coming up so if you do any of those as part of your freelancing then go check those out. We’ll go ahead and wrap the show up. Thank you both for coming. See everyone next week.