071 iPhreaks Show - Freelancing

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Chuck and Jaim talk about being on your own as a freelancer.

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JAIM: Freelance is a dirty word, though. CHUCK: Why is it a dirty word? JAIM: Because it starts with ‘free.’ [This episode of iPhreaks is brought to you, in part, by Postcards. Postcards is the simplest way to allow you to feedback from right inside your application. With just a simple gesture, anyone testing your app can send you a Postcard containing a screenshot of the app and some notes. It’s a great way to handle bug reports and feature requests from your clients. It takes 5 minutes to set up, and the first five postcards each month are free. Get started today by visiting www.postcard.es]**[Work and learn from designers at Amazon and Quora, developers at SoundCloud and Heroku, and entrepreneurs like Patrick Ambron from BrandYourself. You can level up your design, dev and promotion skills at Level Up Con, taking place on October 8th and 9th in downtown Saratoga Springs, New York. Only two hours by train from New York City, this is the perfect place to enjoy early fall at Octoberfest, while you mingle with industry pioneers, in a resort town in upstate New York. Get your tickets today at levelupcon.com. The space is extremely limited for this premium conference experience. Don’t delay! Check out levelupcon.com now] **CHUCK: Hey everybody and welcome to episode 71 of the iPhreaks Show. This week on our panel we have Jaim Zuber. JAIM: Hello, from Minneapolis. CHUCK: I'm Charles Max Wood from Salt Lake City, and this week we’re going to be talking about freelancing. JAIM: Wait, when did you move from DevChat.tv? CHUCK: Oh, I left that town a while – no, I'm just kidding. I don’t know. I'm trying to decide if that’s a good intro or not, so maybe people can fill me in. Should I promote DevChat.tv? Eventually, all these shows are going to wind up on DevChat.tv. JAIM: Aha! CHUCK: Or should I just – I don’t know. I have some other stuff in the works too, but I don’t know how interesting they are to people on this particular show. Anyway, freelancing. We’re talking about freelancing. You're a contract guy, right? JAIM: Yeah, I've been an independent developer for a little over five years. CHUCK: And I have been for almost five years. JAIM: So combined, ten years of independent development experience. Wow. CHUCK: That’s right. Wow, that sounds really good when you say it that way. JAIM: That’s right, and that’s pretty good for two people, because a lot of people get into it, realize, “Oh this is hard” and things go wrong and they go back to getting full-time jobs. So if you can do it, string a few years together, you're doing pretty good. CHUCK: So why do you say it’s hard? Because I mean, some parts of it are hard; some parts of it are really nice. JAIM: I think it’s difficult because I was always an employee. They give you a cube, they give you a computer, they tell you what to work on, and you work on it, and you get good at doing that, and you step out of that where you're doing new things and you have to develop a new skill set and it’s completely orthogonal to the development skill set. You can program things; you can create classes and applications and websites and things like that, but that is almost a minor part of what needs to be done as independent, because you're managing a whole lot of other things. CHUCK: Yeah, I mean there are definitely some parts of it where –. Like bookkeeping – not my favorite thing to do – and how do I track all this stuff so that I can make the most out of my taxes, which is not something that I necessarily am an expert in. JAIM: Right, definitely. Do you set up a business? Do you not set up a business? What are the differences? Does it matter? CHUCK: Yeah, exactly. By the way, for answers to those questions I highly recommend you go talk to an accountant. JAIM: This is true. CHUCK: Yeah. JAIM: But you should probably start a business. CHUCK: Yeah, probably. It’s worked out for me well that way. And I think for the most part, if you are going to go freelance, you want to do that. I also want to point out that I talk about this a lot on the Freelancers’ Show, so if you are interested in that, you can go check them out. I have a lot of advice, but what I'm really curious about is a little bit more along the lines of, “so I'm a freelancer but I do mostly web stuff and not mobile stuff.” I don’t know how much web stuff you’ve done; I'm wondering what the differences are. JAIM: Sure. I rarely call myself a freelancer; I don’t like the term because it has free in it and people expect things of you for free, which doesn’t work if you're trying to run a business. I do consultant or independent developer, just as a way to not necessarily differentiate myself, but to say “This is what I do; it’s a business.” It kinda sets a little higher expectation of what they can get out of me, or what I'm hoping to provide. CHUCK: Paid-lancer. JAIM: PAID-lancer. I am paid [chuckling]. The first thing you do, you pay me. Alright? CHUCK: Cost-you-money-lancer. JAIM: Yes. That’s a little negative, but I like where you're going with it, so that’s fine. CHUCK: Yeah, that’s definitely –. JAIM: Some differences – I haven’t done a lot of web stuff. My HTML and JavaScript is passable, but not that great. I've done more backend stuff before iOS – I should maybe back up a little bit. I mean, I'm always embedded in client work, so C and C++ - that stuff was old hat to me for a long time. That eventually led me to doing more Windows and .NET, more client applications from NFC to Windows Forms. From there, I did more backend. A lot of it was .NET, that type of thing. But going to iOS – that was – I should back up maybe. I did Winforms for quite a while until that went away; people didn’t want that anymore, so I had to do web stuff and kinda backend enterprise stuff for a while. I got okay at it; I was pretty good at it, but when I got the chance to do some iOS work, I got into it and I realized, “Oh, this is the stuff that I've been doing my whole career” – more client development applications. It shares a lot more with desktop development than it does with website development, web application. So that’s a big difference. I think the patterns that you're used to building a web application are very different from a client application. CHUCK: Mm-hm. Is the business all that different? JAIM: It depends. I mean, there are different levels of consulting and freelancing. I guess freelancing is kind of its own thing, but if you look at the consultant thing – I started off doing staff augmentation, where I would just bill myself out for months at a time to one company. They would pay me; I would work 40 hours/week for them, and that’s why I got started with consulting – because I was kicked to the curb around 2009, in the downturn where a lot of people were sent into unemployment. I was one of them, and I figured I'd just step in there a little bit and just take out a contract just to keep things, keep some money coming in until the market improves, then I'd figured I’ll find a new full-time job. But it didn’t work out that way. I found I actually liked the change of pace, moving to new things every three to six months. But talking about staff augmentation, that’s kinda one element of consulting scheme, where you're working with a team with a company. Most times, you're generally on-site, although you can do some remote things, but a lot of them you're ending up as part of a team, showing up every day, doing work, and they pay you by the hour. You get sick, you don’t get paid – that’s how it goes. Take a vacation, you don’t get paid. But in general, if you can keep yourself relatively busy, you're making a good chunk more than you would be as a full-time employee. What I've been doing over the past year or two is switching more to more project-based consultancy where I'm doing more solutions. They're coming to me for more high-level work, and that kind of overlaps a little bit with what a freelancer would do versus a consultant. I still consider myself a consultant because they're consulting with me to solve problems, but the tool I use generally to solve those problems is writing code, developing iPhone apps. CHUCK: Yeah. One thing I'm curious about because it seems like in the web space most people I talk to, they are dealing with more along the lines of the staff augmentation, or even if they pick up a project – which is mostly what I do; I like picking up projects; I don’t like doing the staff augmentation nearly as much – but a lot of them still are working hourly. You put in so many hours; you get paid so many dollars. One thing that I have seen, or at least have perceived in the iOS space is that a lot more often, people seem to be doing it on contract bids. They’ll say, “I will build your app for $10,000” just to throw a random number out there. I don’t know how realistic that is for what kind of app. Then they work out the details – this is what's going to be in the app, blah, blah, blah, blah, and then they collect a certain percentage of it upfront. They may collect a certain percentage at the end, maybe some in the middle, but it’s a fixed rate. It’s not going to vary if they spend another couple of hours working on the app. JAIM: Right, yeah. That’s getting into project-based development, where a company needs a problem solved. We’ll solve it by creating an application, and you give them a bid, estimate it and say, “It’ll take this long.” [Inaudible] I don’t do a lot of fixed bid projects. I’ll give them an estimate and say, “I’ll block out this time.” I don’t do a lot of work where I would guarantee it’s going to be $10,000. There are generally too many variables upfront, especially if you're working with the existing systems. Are the APIs ready to go? Of course they always say yes. CHUCK: And of course, they never are, right? JAIM: Right. It’s like, “Oh yeah, it’s just CRUD.” Well, it’s probably not just CRUD; there's probably some joins you had to do, and you need this extra information to get something in a format that’s Mole-friendly. Generally, I’ll provide some kind of estimate and also allow some caveat saying, “Okay, I'm assuming that these things are done, or they can be changed in a reasonable amount of time if I highlight something. CHUCK: Yeah. There are definitely things that kinda vary from project to project, and you never get all the details up front. I mean, there's definitely risk inherent in that. I mean, the tradeoff is that if you vastly overbid your project and they're happy with the result for what they paid, your effective rate for your time is much higher. But yeah, a lot of times, there's just as much downside. You go over by that amount, and then it’s a little harder to eat I guess where you have to put in more time than you initially allotted to it. JAIM: Yeah. That goes back into one of the skills you mentioned before about what's different being a developer and being a consultant, being a freelancer? It’s just managing that – making sure the client has expectations of what they're going to get, along with a relative budget, but you're also managing all things that don’t happen, that you expect them to happen. How do you manage that relationship? Because giving a fixed bid upfront, “Okay, that’s Waterfall development.” How well has Waterfall development worked in your world? CHUCK: [Chuckles] Yeah, but the flip side is that a lot of times, they're stuck on a particular budget, or they have some other limitation that really kinda forces them into having that be the best fit for them, and so sometimes you really do need to accommodate them that way. But in those cases, I usually stack the risk deck much more in my favor so that if something does go horribly wrong, I'm not out another however much time I allotted to the project without getting compensated for it. JAIM: So if you’ve got a client that has a set budget, which happens – we’ve 10 grand, 20 grand, 50 grand to work on this, and they want 15 grand worth of features. How do you manage that? CHUCK: Usually, I’ll give them a bid. If it’s 15 grand worth of features, I'll probably bid them somewhere in the neighborhood of 20 grand, if I feel like it’s particularly risky. Because it depends on the features that they want put in, and it depends on what my experience is. There are a lot of things usually in a project that I can look at and say, “Yes, that’s a thousand dollars’ worth of work,” and I know that I'm going to hit pretty dark close to a thousand dollars’ worth of work for it. And then there are the couple of things that are the outliers, that it’s like, “I've never done this before” or “I've done something like it but it’s nuanced enough to where there's some risk in it for me,” where I'm saying, “Okay, I don’t know – it’s probably going to be one to two thousand dollars for that particular thing, or 500 to a thousand dollars, just depending on the size of it.” And so I will build in a buffer in there for the worst-case scenario. And I figure I won’t hit worst cases in all of them, so I don’t bid out my absolute worst case estimate, but I do bill at higher than what I think it’s going to take, realistically, to do, because there's always something. JAIM: Right. There's some little thing and – part of the solid methodologies that we’ve been learning over the past 10, 20 years is that what you ask for is probably not what you want. You can say you want these things, but when people see it, they have changes. So I try and leave room for that in the estimates. What I really found interesting, what I try to do is do kind of an agile workflow – not capital A but small a agile. Two things in small iterations, get them to it, get that part complete, let them see it that they want to make changes, they can do it early in the game before it gets too far into it. I've talked to some people that have had pretty good success with it, but it’s not very widespread. I think the industry is very focused on “Okay, make a bid. Protect yourself and make it a fixed price bid.” CHUCK: Is that what you're seeing? JAIM: Yeah, most of the iOS developers who are consultants or contractors, it seems like that’s what I'm seeing, and it’s just because most of the businesses they're working for, like I said before, are in that position where they said, “Okay, we’re willing to spend x dollars on having an iOS app for our product.” And so they just make sure that their bid comes in around there, and then they just do it for that price. The happy middle-ground that I've seen some people work out, and I've seen that work too, is where they effectively have a weekly rate. If you do a fixed bid, you have to lock in the features. So you say, “This is what I'm going to accomplish” in great detail so if you don’t deliver everything they want, but you deliver everything in the statement of work, then you get paid. You can go after them and you're going to get paid, otherwise, you don’t. But one thing I've seen work is instead of doing that, they have a weekly billing. What you do is you say, “I cost three grand a week.” My work week looks like this, you'll be the only client I'm working on for that week, and then you can be a little bit more agile about it because at the end of the week, you sit down and you say, “Here’s what I did this week.” And then you can get feedback and you can tweak the requirements based on what you’ve learned over the last week building a project. Then you're not locked in on a design that may not be what you want when you get to the end. JAIM: Definitely. I've definitely tried to move forward into a weekly-type arrangement, or we can get a rough outline of what kind of features they want, and I’ll say, “Okay, this will talk about this long. If you make a down payment, I can start working on it at this time, in this future, which allows me to lock times out and not get overbooked. It’s been a challenge; I haven’t really been able to pull off weekly billing completely, but I've been able to get down to one or two clients a week for most weeks. [Crosstalk] This week is an exception – yeah, and this week is the exception. I've [inaudible] five clients today. CHUCK: Oh. Lucky you! [Chuckling] Yeah, that’s always hard. I don’t know if we’re really doing justice for freelancing. I'm kinda curious, how did you get started freelancing? [Crosstalk] Someone to take this job and shove it? JAIM: Well, so like a baby eagle sitting in its nest one day – one day the mama comes and just throws you out of it and you're on your way to the ground. I was laid off in 2009 along with a big chunk of the company and just had to figure out a way to keep money coming in. I was looking around for another full-time job, because I was always the full-time guy. My dad told me early on when I was looking for a job, he says, “You know, get in there, do a good job; stay there for a number of years; it will look good on your resume. You'll be seen as reliable, and you'll be able to find another job when you want to. That was always my approach from the beginning of my career. Until about 2009, Mister Reliable Employee gets kicked to the curb. I was looking around for another full-time work – and I did Winforms back then, which is about as valuable as Winforms is right now. That’s the .NET’s, the kind of Windows application thing that I did five, ten years ago. I was good at it; I was the guy who could solve a lot of problems. I was a good developer – I knew object-oriented stuff, I've done C++ for a long time and did C# - but that wasn’t quite what people were looking for anyway, so I was just like, “Okay, if I could find a job –” I was looking at, at least, a $10,000/year pay cut just because in 2009, the market was pretty bad. So I figured, “You know what? I'm just going to pick up a contract.” I ended up working with one of the local staff aug consulting companies and was able to find a contract where they needed someone who knew a little C++, do a little C#, could do some database stuff, and I got in there and kinda liked it. From there, I did more staff aug type of work, initially through local consulting companies. One of the first things you can do, if you wanted to get into consulting, there's tons of people out there trying to find new work, so if you don’t have a great connection, you have a first [inaudible] of people that are looking to connect to you with some company that would like to work. That’s what I did until I realized that some people around me didn’t go through these middle men. They had headhunters in the consulting companies and they found their own clients. I was like, “Oh, that’s cool; how do you do that?” They were like, “We get out there, you network, and you talk to people. They know who you are, and when they need some work done, they think of you and you bring them in there.” And so instead of giving 20, 30, maybe 40 bucks an hour to a consulting company, that can go in your pocket, so that’s one thing that I tried to do. I did that pretty successfully as staff aug; I was able to go without going to the consulting companies or the headhunters for a few years until I realized, “You know, if I'm going to step it up a bit, I'm going to need to break out and do more project-based stuff and be more of the consultant and the expert.” That’s what I've been doing for the past year or so, and it’s going pretty well. I've been fully booked into the next month or two, so it’s going pretty well at a rate I'm pretty happy with. CHUCK: Awesome. I want to tell my story a little bit, too. I was laid off in 2010, so yeah, baby eagle, throws you out of the nest – all that stuff. I was pretty happy in that job; I had a few other jobs that seemed like the jobs I liked. I couldn’t hold onto – they'd either wind up laying me off or they would change and become the job I didn’t want to keep. Or I would wind up in a job I didn’t like, and they'd want to keep me forever and ever and ever. Anyway, I got laid off, and I had been thinking about going freelance for a while, or at least starting my own business, building my own product – something like that. Anyway, I had gotten a bonus and severance so we were okay for a little while, and I talked to my wife about going freelance and she totally freaked out. And so I said, “Okay, well, I've got this contract.” I found a contract pretty fast, and it turned out that I completely underbid everybody else and that’s why I got it, but that’s another discussion for another day, or maybe we can talk about setting rates here in a minute. And it was staff augmentation; it was for a consulting company out here in Utah. I was working for them and looking around for other work, and I had a few other people help me find other contracts, and I finally went to my wife and I said, “Look, I'm tired of winding up in these jobs where I wind up losing them or not wanting to keep them after a certain period of time, so I'm going to be really picky and we’re going to live on this money that we’ve got sitting in the bank and see how things go.” By the time I found a job that – it actually turned out to be a 15 grand raise, and that is if I got all my bonuses at my previous job. By the time I got that offer, I had two contracts that I was working and was in talks with several other potential clients – it just worked out. And so I looked at my wife and said, “I am paying the bills with the freelancing, so I'm going to stay freelance,” and she was okay with that. JAIM: Yeah, you’ve highlighted a very big step in that progression – getting your spouse on board. CHUCK: Oh yeah. JAIM: That’s huge. If you're fighting that battle at home, you might as well not do it. Get a sit-down and explain the pros and cons. I went through the same conversations – every three or six months when my contract would come up, I'll be out interviewing, networking, trying to find the next lined up work, and it took me away from being at home and being a husband and things like that. We sat down and said, “Well, here’s the tradeoff. If I get a full-time job and I had to do this type of thing, I probably should just as kind of a career maintenance [inaudible] because I think as people tend to find out in industry, just because you have a full-time position doesn’t mean you have stability because this is an industry that changes.” You have an illusion of stability, but that’s not how it works. It’s interesting – in your case, you actually had to live off some savings for a while while you made the jump. How did that conversation go? CHUCK: Well, the thing is it wasn’t money that we had put into the bank; it was actually money that I had received. So right before I got laid off, we had done this major push, the kind of major push that you do once in your career and say never, ever, ever again. We were working 80-hour weeks for a month, but got this huge bonus, and it was like six grand or something. And then I got two weeks’ severance on top of that, and so we had a good month, month and a half’s worth of money in the bank to live on while we figure this stuff out. By going out – it wasn’t a conversation of “Let’s take our savings and live on it,” but it was, “We got this money from the last job when I got laid off, so we’re going to live on that and figure this out.” It wasn’t a conversation like, “hard-earned money that we’d been putting away for a while.”  It wasn’t that hard a conversation; it was really just, “Alright, this is more or less a big severance check while we get this stuff figured out.” JAIM: Yeah, another big lesson that I learned is what Net 30 means [crosstalk]. I started off, when I finally went independent and started my own company, I'm like, “Oh, great. I’ll be making more money, it’ll be fantastic, and I didn’t realize or didn’t quite calculate that if you say Net 30 and you bill once a month, it could be 60 days before you're actually getting a check. That’s one thing to figure out if you're looking to make the jump. You might be making more money, but there might be a gap before you actually get paid. CHUCK: Yeah, one thing that I found helps with that is if I get a deposit upfront, because that can soften things a little bit. You have to be a little careful with that because if your last invoice doesn’t absorb the deposit, then a lot of times you wind up having to pay them back, and if you’ve spent the money, then that can get you in trouble. But then at least you have something for those 60 days while you figure things out. I actually bill Net 15, and I bill the 15th and 30th, 31st – whatever the last day of the month is – and that seems to work out pretty well. Though I've been really looking to going to weekly billing where I actually bill for the week upfront, so it’s like, “Okay, you're going to buy another week; I've set aside so many weeks for you” and then I can just move people up in the queue if they say, “No, I'm not going to buy the next week.” JAIM: Definitely, that’s the model that I'm working towards. Most of my work for the past three or four months has been paid up front. I’ll block off this time for you; I can block it off when I get half of that payment. That’s been working pretty well, and that [inaudible] you from leaving a huge buffer. I mean, you still want a buffer at least three months of living expenses, just so you can be comfortable and not get forced into taking projects or gigs that you don’t want. CHUCK: Absolutely. JAIM: Keep working on things that are moving your business forward. But definitely, get a buffer. That's one thing I learned early on. CHUCK: Yup. And there have been times where I haven’t had it and had things slow down, and that’s no fun, so you definitely want to do that. JAIM: Yup. That’s when you're cruising oDesk for PHP jobs, you know [laughter]. Seven bucks an hour? I’ll take it! CHUCK: Yeah. Anyway, I'm a little curious. How do you set your rate? JAIM: A lot of people ask me this, and this is the million-dollar question if you're going off on your own, like, what should I charge? CHUCK: It’s a million dollars? JAIM: It’s a million dollars. It’s a million-dollar question, so if I had the answer for you, it might be worth a million dollars. But I tell people, talk to people. I think people start from the wrong perspective. They're like, “Okay, well I was making $90,000 - $100,000 – and if I worked 2,000 hours then I can make about the same amount of money at 50 bucks/hour. This is wrong. This is not the way to set your rate [chuckling]. CHUCK: That’s bad. JAIM: That’s bad; it’s very bad advice. I set my rate – I get out there, I talk to people. What are other people making? People that have experience with me, when you're with similar-type clients, and for staff aug, that’s one range. If you're working with a consulting company, that’s a different range, because they're taking 20, 30, 40 – they can be taking 50% of your paycheck and you wouldn’t know. But I also talk with the consulting companies in town, people that are doing iOS development – the good ones – what are their rates? Do you know the people that are actually doing the work? I know who is doing the work for the companies in town and I said, “You know what? I provide a good value at this rate compared to what a lot of the other companies are doing.” There are some really good development companies with some really solid people and I've worked with those companies, but there's a lot of people charging the top rates that just have good sales people going out there, and people who are actually doing the work are average at best. I found I can kinda set my rates along the top end of the consulting companies, and I'm doing fairly well. CHUCK: Yeah, I tend to tell people the same thing. You go talk to the people out there, especially other freelancers, to find out what their rates are and then just compare it, you adjust it for what you can do. I also really like what you said about the salary thing, and generally what I tell people is I'm like, “Okay, you need to sit down and you need to figure out not just what your salary was, but take into account your benefits, take into account the other things that you now have to pay for because you're a freelancer such as your equipment, et cetera, and then once you got that all figured out, then you can actually break that down so that you can figure out what you have to make in order to maintain what you’ve got JAIM: Right. CHUCK: And then a lot of times you'll find that you can get a rate that’s higher than that, but at least then you know if I go below this, I'm going to have to start cutting stuff out of my lifestyle. JAIM: Right, and do you think you can work 52 weeks? This is wrong. You're working 47 weeks, because you got 10 days of vacation – first, the average stuff: Thanksgiving, Christmas, and you're probably going to take a vacation three weeks off. What you don’t figure out is you have to wait a week or two to sign a contract because you thought you're all ready to start and something messed up the contract and you're waiting two weeks to get that signed. That’s something that happens, and your rate has to kinda build that risk into it. I talked to a lot of companies, and they're like, “Oh your rate’s too high.” I'm like, “Okay, what did that previous guy worked for?” “Well he worked for this,” and it’ll be like half my rate. I’ll look at the code and I'm like, “Okay, well I mean this code is reasonable. It’s not like they went off into some terrible developer; he was a reasonable developer, but what they were billing him was not a sustainable rate, because they miss week or two at work, and also they can’t pay the bills, and that’s when the full-time job starts looking very [crosstalk]. CHUCK: [Crosstalk] same paycheck every however often. JAIM: Right. The people that are not charging enough to have that buffer are the people that get out of it. “Yeah, we had this guy, but he can’t work for us anymore.” “Well, there's probably a correlation there.” But that’s part of the coaching process. I think a big deal is just find the clients that understand there are opportunity costs of non-working software [chuckles] because if their business is not hurt or if their software doesn’t work, it doesn’t matter what your rate is; you're still costing them money. CHUCK: Yup, absolutely. And one other thing that I really just have to – I say this all the time, but the most important thing you can do as a contractor is communicate, and if you're communicating your value well, if you're communicating what you got done, you're communicating why things are going to be late or why they're going to be done ahead of time – communicate, communicate, communicate – then a lot of times you can actually get around a lot of these things, at least during the contract. When you're actually doing the sales and overcoming those objections, you have to either find companies that understand why it’s worth it to pay you what you're asking for, or you have to help them understand that, and that’s where the things that Jaim was talking about come in – have them really understand what it costs them to not have their software work. JAIM: Definitely. I like what you said. And I think I got this from you – ABC, Always Be Communicating. CHUCK: Yeah. The traditional ABC is Always Be Closing, but the thing is that sales, your contracts, everything else that you're doing – it all really boils down to communication. A good salesperson is a good communicator; I mean they communicate the value of what they're offering, and they communicate it in such a way to where it becomes a no-brainer for them to buy it, and that’s something that you have to do. And this is something that I really want to address, and it’s something that I address when I talk about freelancing, especially when I'm giving talks about freelancing, is that sales isn’t about tricking somebody into giving them money for something or selling them a lemon –. A lot of times, sales is associated with these people who talk really fast and who are really kind of oily, sleazy, snake-oil salespeople, and the issue is that those people really, especially in this day and age where you can actually go and look them up on Google and find out if they're a scam, you can find out pretty darn fast that somebody is selling you garbage. When it really comes down to it, what it’s going to take is communication. If you can sit down and you can clearly articulate, “Here’s what I offer, here’s what I do, here are the problems I solve, here’s the solution you're going to get, here’s why it makes sense for you,” it won’t matter so much what your price tag is because as long as it’s a reasonable return on investment for them, you can ask them for $100, $150, $200/hour, or $3,000/week, $5,000/week, as long as it’s within that tolerance for them and they see that the pain’s going to go away or the problem’s going to be solved, or the solution’s going to be built, they're fine. Really, what it comes down to is communication. If you're worried about sales and you’ve done any kind of project proposals or convinced your boss to let you work on a new project or anything like that, you’ve basically already done selling. The only difference is that with your boss, the price tag was my salary for the weeks I spent working on this, and in the case of freelancing, you actually set that price and you convince them to pay it. JAIM: Definitely. How much effort, how much time do you actually do in the sales process? CHUCK: That’s a trick question in the sense that – some things are clearly marketing, and some things are clearly sales, and there are some things that are kind of in between that can kinda go in either way. If you're talking about sales from the time I get an email or phone call from a potential client, it really depends on the client. What it really boils down to is how long does it take me to understand what they want, and to articulate to them the value that I offer. Sometimes things are really complicated, or there are some hoops that they have to jump through on their end with their boss or getting approval, or this, that or the other, and so sometimes I really have to do some in-depth work in order to get the client. In other cases I talk to them over lunch, and then I get a phone call back saying, “Alright, we decided to hire you.” So it just depends, but what it really boils down to for me is that I want to get to know them, I want to build a relationship with them. This isn’t just about finding out what they want and telling them I can give it to them, but actually building a relationship with them, acting like they're human, treating them like they're human, because they are – and I really work better with people that I like and identify with anyway. Once I have that rapport, once I have that relationship and we actually start working on something together, that’s when things start to pay off for me. I mean, on a per-client basis, it’s really hard to say, but at least a few hours for every one that I get. And probably a few hours for every one I don’t get, too, but –. JAIM: Where do you find time for that? How many hours are you billing versus doing an overhead in sales. CHUCK: Right now it’s kinda weird because I'm actually working more on products for my business than actually trying to find new clients, and I'm kind of on a lull. I've got a couple of people that I'm doing work for on open source software, and so it’s just kind of maintenance stuff here or there. I spend probably an hour a day just trying to find a new client, but yeah, I try and follow-up with people every week, or maybe a little less often, depending on where the relationship is and what they’ve got going on. Yeah, I probably spend several hours a week. I'd probably wind up billing 15 to 20 hours a week when I've actually full-on working, but you also have to realize that I do a lot of marketing in the podcasts and things like that, so. The podcast – I probably spend 6-8 hours a week, podcasting. To be honest, that’s really what I enjoy doing – writing code and showing people how to do it. I'm starting to try and move more that way, which is why I've been working on DevChat.tv and why I've been working on some of the things that I've got going on. But yeah, I'm usually billing 15 to 20 hours a week, and then I probably got 8-10 hours into marketing, and then I spend a couple of hours every week doing all the business stuff – the bookkeeping and this, that and the other. And then I try and sped about four or five hours on sales every week. That’s actually talking to prospects or emailing old clients, potential clients, current clients that I've already identified. I work on other things, so I'm working on the infrastructure for DevChat.tv or working on other projects that I think are going to pay off one way or the other, and so I spend a lot of time there. JAIM: Yeah, you definitely highlighted one important point for freelancing, especially if you're moving beyond the staff aug thing – don’t figure you're going to work 40 hours/week. There's too much overhead, and if I billed in a full 8-hour day, the last thing I want to do is start writing emails, chatty emails, and doing business-type stuff. I'm fully booked at 30 hours/week, that’s where I try to be – in the past month or two I've been over that, but I've also backed off on a lot of the more marketing and sales type things. But so far, I have enough inbound stuff that it’s going fine, but I definitely don’t want to work 40 hours/week or be billing 40 hours/ week. A lot of times when we talk to a client, like, “Yup, we want you for 40 hours/week” I'm like, “Well, hold on. Let’s take a step back,” because if you had a full-time job and if you're putting 40 hours, how much of that time is wasted, generally? How much time are you actually doing actual, real development work? I think most people –. CHUCK: If you're being honest, half. JAIM: Right. A meeting is what you have to go to, which take all your attention span for two or three hours, so that’s wasted. But if I'm really focused, I can get as much done in five to six hours as I was doing eight hours. That’s one thing you had to [inaudible], you're probably not billing 40 hours/week, so make sure your rate is at a point where you can work less hours and still get stuff done, [crosstalk]. CHUCK: I have to clarify with – when I said, half, what I meant by that was I've always been in a position in the companies that I worked for even as a developer, to where people were coming up to my desk a lot, asking questions and talking to you and stuff. This is one of the big pluses for me with freelancing; it’s like, I shut my door, I turn off social media and I don’t get interrupted. But I'd get interrupted so often that I was lucky if half of my time is really productive. JAIM: That’s pretty common. I think as you become a freelancer consultant, you can kinda use that to your advantage – up the rates, lower the hours and still keep money coming in. CHUCK: Yup. But again, it’s billable time plus whatever else it takes to keep your business running. I'm also curious, you said you have plenty of leads and stuff coming in. How do you find your clients? Is it mostly referrals at this point, or –? JAIM: Yeah, I talked about the lesson I learned getting into the staff aug thing where people I knew were getting direct clients by just going out there and networking, knowing the developers in the community. I've been doing that for years – going to meetups, user groups and things like that, so I've got a pretty good network of local developers in different areas. So if they know someone who needs an iOS developer, a lot of times, they get referred to me. That’s one way, but I think a lot of it’s returning business – people that know I do a good job; I've worked with them in different capacities and done a good job. Now they know I'm doing iOS stuff and they're like, “Oh, let’s have Jaim work on this.” I think last year, when I kinda stepped away from the staff aug role, I made a point to reach out to the better consulting shops, the dev shops, around town and say, “Hey, I'm here. I'm this person; I can do iOS development” and I get ahead with conversations with most of the ones I reach out to just from a cold email. One of the clients I'm onboarding this month was a referral from that, and there's a different company that just doesn’t have the bandwidth to do any iOS stuff, so they just passed on the referral to me and said, “Talk to this guy. Talk to Jaim.” So it’s a mix of things. I'm out there, speaking at conferences – things like that – that just kinda raise your profile and helps build credibility. If your name bits flow out, they Google it; good thing to show up versus ranting on Twitter over something. CHUCK: Very nice. And that’s kind of what I do too; I get out there in the community and talk to people. One other thing that worked out really nicely for me, I used to do a video series called Teach Me To Code; I'm actually going to start it up again here within the next few weeks. What I did there, I'm changing the approach a little bit, but what I did there was a blend of ‘here’s how you use this feature of whatever programming thing I was doing at the time,’ so I have some on Backbone, CoffeeScript, Rails – lots on Rails – and there were a few in there that was, ‘here’s how you build this app in Rails.’ And I can’t tell you how many leads I got after that. If it was a popular type of application, I mean, Twitter clones – I still get, every once in a while, somebody emails me and says, “Hey, I saw your video on how to build a Twitter clone and I want a Twitter clone. I pick up that work and do the work for them. That was very handy because I had non-technical people watching a technical video, and then saying, “Well, that’s what I need.” JAIM: So quality of leads over that – how would you say? CHUCK: Almost every person that emailed me I wound up closing. JAIM: Awesome. So good projects? CHUCK: Yeah, it worked out really well. Another one that worked out for a couple – I didn’t get as many leads off of it, but they were high-quality leads. The reason why this works – the social media or new media stuff, the podcasts and stuff –. I had a podcast called Rails Coach and I would just talk for five to ten minutes about some concept with Rails, and I got one or maybe two leads off of that that I closed. Again, they listened to it, they started picking up Rails; they found my information helpful but decided that they didn’t have the expertise and weren't going to grow to have the expertise to do what they wanted within the time frame that they were wanting to launch and so they'd contact me. JAIM: Right. While you were talking about – I've heard referred to as inbound marketing, which is a very good thing to get rolling. I haven’t done that much with it; most of my stuff is referral-based. People know my reputation, know I do a good job, know I'm easy to work with, but if you can get leads out from the wild, from people coming to you saying, “Hey, solve my problem,” that’s a great thing to be in. How did you learn how to do that? Or did you just kinda build these things, did the podcast and people showed up? CHUCK: I got into podcasting – there were kind of two things that got me into it. One was I was working at the time in QA for a local company here called Mozy – the do online backup – and my coworker, with whom I shared an office and worked very closely, bought one of these new little contraptions called an iPod and started listening to these weirdo shows on the Internet called podcasts. He started sharing some of them with me and I was like, “Well that’s really cool, but I don’t have an iPod.” He was like, “Oh, you don’t need an iPod; just listen to them on iTunes.” I plugged headphones into my computer and downloaded iTunes and started listening to podcasts. And then a friend of mine, his name is Eric Berry, he started a website called Teach Me To Code – I just mentioned that a few minutes ago – and he was putting out these videos and he recruited a bunch of us in the local community to make videos for Teach Me To Code. I made one – I think it was just one video for Teach Me To Code for him, and then I emailed one of the podcasters that I was listening to and said, “Hey, I want to start a podcast,” and he encouraged me to do it and was actually the first guest on my first podcast. And so I started that podcast, and then Eric – he decided that his interests were going a different way. He got into Groovy and Groovy on Grails, and most of the people watching the Teach Me To Code videos were Rubyists, and so he came to me because I was already running a successful podcast and said, “Hey, do you want to take over Teach Me To Code?” and I was like, “Sure.” So I did videos for Teach Me To Code for another two years, so that’s how I got into both the video and audio aspect of things. I think the videos are really kind of the more hands-on things that people latch onto in the code space, and it’s very easy to do visual things that are really cool, for people who aren’t technical, and I think that's where it paid off there. But yeah, that’s how I got into it. I had people that influenced me one way or another, and then I decided to take the leap and try and do it myself. JAIM: Very cool. [Inaudible] What are ways you could do inbound marketing? Open source is one way you become known. Are there any other things? CHUCK: Well you talked about going to meetups. Are you talking mainly code meetups or business meetups? JAIM: I started doing mainly code meetups; I think the first level of developing your network, I would say, is to meet other developers – people that are doing  similar things. Start off with your iOS developers, who they are – those are great people to know – but also who the rest of the people are. Who’s with the backend stuff? Who’s doing the Rails? Who’s doing .NET? Who’s doing the front end? But above that, you got people that are starting businesses, trying to run businesses, who have different sets of problems. I think, the more you can introduce yourself to those type of people, the more you can kinda raise the level of what you're doing from being just a coder to being someone who’s solving higher-level problems. CHUCK: Yeah, and that’s something that I'm starting to do a little bit more. For example, a lot of my content is aimed toward developers, so I have a very healthy developer network. However, I really want to attract people who are starting their own business and doing business-type things and so I've actually been focused much more lately on aiming my inbound marketing stuff at business people. I'm going to start blogging again and writing blog posts about how to manage tech in your business, or how to hire freelancers, or answer questions that my target market has instead of answering questions that my current audience has. And at the same time, I'm definitely working on products that are aimed more toward the audience that I currently have. But do those kinds of things – you get out there and write blog posts that explain a concept that one of your current clients was struggling with, or you get out there and write a blog post on how to do something right that they often get wrong, or if there's some big thing in the news, say, a whole bunch of famous people had their photos stolen off of their phone – just to pick something out of the air that may have happened recently. You can write blog posts around that, or in around web security and things like that, and just take advantage of that so people are thinking about, “Okay, well that service –.” I think the current theory is that it’s iCloud, which is Apple, so if Apple can screw up their security, or last year it was Adobe with the passwords, right? If Adobe can screw up their password stuff, then how do I protect my stuff? How do I protect my customers’ information? And so you can talk about that. You talk about encryption and explain what encryption is and how it’s used. They may not be technical enough to implement it, but just knowing that you understand that and understand the concerns there is a big deal. Or if you want to work with medical people – I mean, I went to the doctors’ office the other day, the ophthalmologist, actually, and I learned my vision isn’t as good as it used to be; I actually had to get glasses. Besides that, I was talking to the lady at the counter and she was like, “Yeah, you got to fill out all this information” and so I filled out the information. One of the forms was, “Fill out this form to get access to our patient portal.” Of course it was a paper form, you know, “Write your password on this paper form.” Yeah, that makes me feel good. Anyway, I handed it back to her and I said, “So you have a patient portal?” She’s like, “Yeah,” I said, “Are you trying to make Meaningful Use?” And she looks up at me like, “Oh, you know a little bit about that, do you?” Meaningful Use is a standard that the government put out and is rewarding businesses that need it, and is finding businesses that don’t, and so if you can talk to these technical concerns that they have –. Because Meaningful Use is specifically about them using technologies, medical practitioners using technology, and so if you can speak those languages, if you can talk about the concerns that they have, then a lot of times they’ll come to you because you understand their problem already. So this inbound marketing stuff and the content marketing is what I usually hear it called can really pay off for you if you can – because it’ll drive traffic in, for one thing. If people are out there googling “Meaningful Use” or whatever website, a dentist or something, and you can handle that, you have a blog post that rings for that, then you get them on your site, and once they’ve poked around and read a little bit and it’s very obvious that, “Hey, this is a consultant site and he actually builds systems like these,” then you can solve that problem. JAIM: Definitely. I think the people that are making very good money – probably twice what the standard dev shops are making – are people that have picked a niche and they own that niche. If you want a website for a dog groomer, you go to this person, because they understand your business. That’s an example from my friend Gypsy, but it illustrates – like if you understand the medical industry and what they're trying to solve, then you're their problem solver. If finding a niche [inaudible] that’s a way that a lot of people who are doing very well with hourly rates are doing. Just have a niche, you own it, and you’re the person they go to. CHUCK: Yeah. I mean, even if you want to do just general business stuff, you'll probably attract a few folks. But yeah, it pays off. It’s easier to be targeted if you are doing your content in this space that they live in. And so if you have the niche, yeah, it’s much easier to rank; it’s much easier to get that attention. Anyway, are there any other aspects of this we should talk about before we get to the picks? I can think of a few, but I don’t know if we really have time. JAIM: I think there's a lot of stuff we can cover. I think this is a good part one. CHUCK: Awesome. Yeah, maybe we’ll do this again. In the meantime, if you want more information about freelancing, go over to freelancersshow.com – you can spell that with two s’s or one, it works either way. Go check out the content over there; we’ve been doing that one for about two and a half years, and there's just a ton of stuff. So if you're interested in going freelance, go check that out. The other thing that I want to throw out there is on October 9th, at 10 am mountain time, I'm going to be speaking on Airconf, which is Airpair’s conference. It’s an online conference, and I'm going to be speaking about – I'm going to be doing an introduction to freelancing. I didn’t want to just give that talk here, because I wanted to hear what Jaim’s experience was, but I’ll be doing that and I'm happy to answer questions and things if you want to get a hold of me. I'm pretty sure Jaim is open to having you ask him questions too about freelancing. JAIM: Definitely. CHUCK: Alright, let’s go and do the picks. You have some picks? JAIM: Sure. I'm going to share some resources that have really helped me get my brain around how to build a consulting business and how to level up what we do, because we start off as developers, but the skill sets we need to work as an independent developer or a freelancer can be quite a bit different. One of the books that I really liked is Flawless Consulting. It’s by Peter Block. It’s a fairly old book; I think it was originally written in the ‘80s and it’s not specifically tech – it’s for any kind of consultant. He defines a consultant as someone who does not have direct influence over the project, so you have to use your skills to influence. You don’t have a direct line of command over people you’re working with; you don’t have employees. If you are a manager, you have employees, they do what you say, but as a consultant, you're coming into a situation where you have to kinda influence what gets done, but you had to work with all the stakeholders who actually have all the power to make the decisions. It’s a fairly dense book, but it’s something that I go through quite a bit. I’ll read through a chapter, he talks about how to onboard a client – how do you set the initial meeting? What do you do? You do things like, say something positive about the arrangement, say, “Ah, I'm excited to work with you. I've never worked in this industry” or “We’ve never had a chance to work together.” It gives a lot of really useful tips on how to handle the whole consulting engagement, so it’s a lot of really cool stuff. I haven’t gone through the whole thing, but I've gone through parts of it and I use it quite a bit. Second thing I use is another very old book; I think it was written in the ‘30s – How to Win Friends & Influence People by Dale Carnegie. This gets thrown around quite a bit. But if you're a consultant and you haven’t read this book, you need to stop what you're doing, go to the store and pick it up. If you're working with people, this is great. It really gives you the tools and insight on how to talk to people about things that matter to them, because we’re used to talking about things that matter to us, to developers – clean code, things like that – which, most of my clients can’t sell clean code. Things like that. So if you're working in the consulting industry, I highly recommend How to Win Friends & Influence People. The third thing that has really helped me over the past year, I think he’s been on the Freelancers’ Show, but I've been getting a lot of value out of Brennan Dunn and his series of – he’s got a podcast, he’s got a free newsletter, and I'm a member of his Freelancers Guild. I joined last year sometime and I've gotten a lot of value out of it. He provides a lot of good info on a lot of things that we’re talking about – how to create content marketing, inbound marketing; how to take what we do to the next level. I've gotten a lot of use out of his ecosystem, so check it out. Those are my picks. CHUCK: Yeah, we’ve had Brennan on the show before. A few things that I want to mention really quickly, we also talked about weekly billing and value-based pricing on the Freelancers’ Show, so we’ll put links to both of those in the show notes. JAIM: Oh I want to pick the Freelancers’ Show too. That’s good. That’s good stuff. CHUCK: Yeah. I also want to bring up Getting Things Done by David Allen. One of the things that if you get into freelancing, you'll figure out pretty fast that the two major challenges are figuring out marketing and where you want to be at so that – the niche is part of marketing, in my opinion. The other thing you're going to figure out is that time management is kind of a big deal, and so Getting Things Done is a super, super way to get started. I tend to use the more electronic versions of things; he tends to advocate more of the paper and pencil kind of stuff – just find a system that works for you, but honestly, it’s a great place to get started. And then finally the other pick that I have is I have the ScanSnap 1300i that’s sitting on my desk. I kind of ignored GTD for a while – Getting Things Done – and so my inbox got piled up, and by piled up I mean took over half of my desk. I went through all of that stuff and I've been kind of going paperless. Anyway, I've been scanning stuff into my computer and this scanner is just awesome. The software actually allows you to scan stuff in and pick where it goes. So I scan something, and then I reach over to my computer and I click on the Dropbox icon because that’s where I'm putting it, but you can put it into Evernote, you can put it into just a regular pdf, you can scan it to – there are a couple of other options, I don’t remember what they all are – but it’ll scan into pretty much anywhere you want to scan it to. So ScanSnap 1300i, I’ll put a link to that in the show notes as well. It’s not a flatbed scanner – it has a feeder on it and it’s not very big at all. Anyway, loving that. And also finally, I've got this program called IP Broadcaster. It’s on my computer; it’s an Apple app, and what it does is it puts my IP address up in that – what do you call it? The toolbar at the top, and so I have it set so that it displays my WAN address, which is my Internet address, so that I can see what my Internet address is, but it’ll also tell me what my Ethernet address is. Just stuff like that. It just checks periodically and updates itself automatically. If I head over the coffee shop, I can hook up to the Wi-Fi there and it’ll change. I've done some remote pairing where I've had people need to get in to SSH into my machine on a guest account that’s all locked down, and so I just go into dyndns.org and change it, and then they can just SSH directly at me. Anyway, those are my picks. I don’t think there's anything else, so we’ll wrap up and catch you all next week![This episode is sponsored by MadGlory. You've been building software for a long time and sometimes it gets a little overwhelming. Work piles up, hiring sucks and it's hard to get projects out the door. Check out MadGlory. They're a small shop with experience shipping big products. They're smart, dedicated, will augment your team and work as hard as you do. Find them online at MadGlory.com or on Twitter @MadGlory.]**[This episode is brought to you by Code School. Code School offers interactive online courses in Ruby, JavaScript, HTML, CSS and iOS. Their courses are fun and interesting and include exercises for the student. To level up your development skills, go to freelancersshow.com/codeschool]**[Hosting and bandwidth provided by the Blue Box Group. Check them out at BlueBox.net.]**[Bandwidth for this segment is provided by CacheFly, the world’s fastest CDN. Deliver your content fast with CacheFly. Visit cachefly.com to learn more]**[Would you like to join a conversation with the iPhreaks and their guests? Want to support the show? We have a forum that allows you to join the conversation and support the show at the same time. You can sign up at iphreaksshow.com/forum]

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