At the start of the year, I decided to move away from freelancing on an hourly rate basis and focus on getting fixed-price projects with an option to subcontract. That way, I could just work on the parts I enjoyed and subcontract out the rest. I’d also get paid more when I was working efficiently, whilst being hourly doesn’t reward efficiency at all. If you can accomplish in 10 hours what others can do in 30, you can make a lot more money with fixed pricing.
So, I tried a couple of things:
- I bought a course for $149, DoubleYourFreelancing, which talks about how to focus on the monetary benefits for the buyer when selling your services. The idea is if something you build for a company will make them $100K in revenue in a year, you can justify charging $50K for it even if it’s only going to take you a 100 hours for you do it ($10K at $100/hour). It also makes a lot of good points about outreach, sales conversations and cold emailing.
- Paid for leads through Workshop, which costs $229 per quarter (works out to roughly ~$1/lead). Workshop was definitely a service worth trying. It helped me focus on contacting potential clients and getting better at that rather than scouring the web for leads. But I’ll be cancelling it now, because it doesn’t really give me any leads that I can’t find from AngelList (which has email alerts), and Hacker News monthly threads.
- Read some books on cold email, cold calling and sales. The best is one that have yet to finish: The New Conceptual Selling by Miller & Heiman. More on this book in a bit.
Unfortunately, the results of all this sales and experimentation over the last few months weren’t encouraging:
- 90+% of my income continues to come from hourly gigs ($120-$160 an hour, each project is 10–20 hours a week). I’ve done 4–5 flat-rate projects so far this year, and I’ve lost money on all of them based on my personal hourly rate. The opportunity to sub-contract and work with copywriters, illustrators and other developers has been great though.
- 90+% of my income continues to come from clients that began as warm introductions from friends (second-degree connections). Yup, not one of the cold emails or meeting people at networking events in NYC or responding to posts on AngelList or Hacker News really turned into large projects. Some small ones yes, but nothing significant.
This is not to say that this will always be true. The real issue here is that the cold leads don’t have large enough budgets. I need to target larger firms and companies. But these companies want to work with agencies, not solo “freelancers”. I haven’t done a good enough job of marketing myself as an agency.
And I do know friends who have worked with clients that are outside their network, so it is still worth pursuing these sales, but I’m definitely not banking on these sales.
Without the knowledge gleaned from reading good sales books, my sales approach was just all about the numbers. I didn’t differentiate between high quality leads and low quality leads. I just chased all of them. And so I made some mistakes that caused me a whole lot of frustration:
- I had a 45-minute phone call with a startup founder in the Bay Area, discussing everything about my software background and his product. But only at the end, did we talk about rates. The dude offered $50 an hour, even though I’ve been consistently finding work at $120+ an hour. I was pissed off at having wasted my time.
- After a 30-minute initial meeting with a lead, I spent a 4/5 hours making a beautiful design proposal including a low-fi mock-up for their new homepage. Once I sent over that proposal by email, I never heard back from them. Not once, even after several missed calls and follow-up emails.
- Spent a couple of weeks with a potential client (a friend, in fact) discussing price and features, and even looking at competitor’s apps, only to have this person eventually decide to outsource this project to their existing contractors instead.
These experiences are frustrating. And they made me less enthused about the business side of freelancing. But after reading The New Conceptual Selling, I have a much better understanding of what I did wrong during these situations.
According to the Miller-Heiman sales framework, a sale requires increasing levels of commitment from each party. The deal has to be a win-win from the get go, from the very first email, not just after it closes. In all the instances above, I was pissed off because I put in much more energy into the sale without the client reciprocating. With some analysis and reflection, I could have easily seen that these clients were not a good fit much earlier in the sales process.
On a positive note. I recently reached out to a lead who’d posted on a job board. He wanted a refactor of his mobile app codebase, and wanted to know how much a fixed-rate contract would cost. We came up to an initial agreement where he paid me $250 to spend a few hours looking at their codebase and to come up with a itemized cost for the refactor. Based on the figure I quoted, the client decided he couldn’t afford it, but overall this was a very positive experience. There was strong commitment from both parties, and if he could have afforded my price, we would have continued working together on a larger contract. A real win-win situation.
Going forward, I’m going to do a better job of screening leads, and focus on bigger sales with a sales process that’s based on increasing levels of commitment from both parties. With a well-defined process like this, selling is actually enjoyable and so, I’ll do more of it rather than procrastinate away from it.
