YOLOPreneur Podcast S1E4: How 20 yo Kevin Unkrich makes $80/hr contracting

Audio here: https://anchor.fm/yolopreneur/episodes/S1E4-How-20-yo-Kevin-Unkrich-Makes-80hr-Contracting-e1cnn4

• What Kevin decided to do when he didn’t have an internship one summer
• How Kevin got started with his first clients for that summer (he had done some client work previously)
• Why Upwork/Contracting web sites are not good ways to grow a business long term [2:45–3:30]
• How to switch to types of work that pay more
• How to establish relationships with your clients to get higher pay
• How to cut clients and switch to higher paying clients
• How to find really good, high-paying clients
• Just get that first client to get the ball rolling
• Kevin’s new company http://burnchurn.io

S1E4–2018_03_20

John Simerlink and Kevin Unkrich

Audio starts [0:00]

[John]: Alright well thanks for doing this show Kevin.

[Kevin]: Hey John no problem.

[John]: Today, today we have Kevin Unkrich. He is a 20 year old at Ohio state at the Ohio state University. And he makes an $80 an hour contracting. I met Kevin about 4–5 years ago through a tech program in Cincinnati and did some internship with him at GE and then one day figured out that he has this contracting business. And he wants to share how he does this

[0:30] to other college students. So without further a due here’s Kevin. Kevin how did you get started at contracting? How did you get that first project?

[Kevin]: Sure. So what actually ended up happening was I came into college pursuing a biomedical engineering degree. So I thought I loved to do technology and medicine together. What ended up happening was that it was sort of a generalisation of both of those fields and I really wanted

[1:00] to specialise more in one. So I went to a course for computer science and at that time I was sort of behind the internship you know gravid job curve. And so it was a little too late for me to do that. And so that summer I was on and sort of refused to work this you know 9–5 sort of craft McDonald job I guess you could call it. And I decided I would take the skills I had already earned. I had done 2–3 internships

[1:30] at portion 50 companies luckily in high school like you mentioned and I decided take those skills and applied them in industry see if I could get clients and replace at least the same amount of income that I would get from working through the job with freelancing. And that ended up working really well. And I am getting on beyond that.

[John]: Alright. So you said one summer you are standing there you know you didn’t have a job for the summer and you

[2:00] start doing you know contracts. How did you start doing that? You pick up the phone and you call someone or you go to a website? I mean how did you get started doing that?

[Kevin]: Sure. The first thing I did was I talked to a lot of local contacts I had. Luckily I knew people you know starting business [inaudible]. Website and you know establishing and selling products online. And I had also worked for a few people

[2:30] sort of add hoc in the past. So I had some level portfolio starting now. Now when I started out it was sort of flow. I started doing work at very very cheap rates. Things like $12 an hour and just kind of like a sense to make the equivalent of a sort of traditional summer job. So that process really looked like reaching out to my local

[3:00] web presences or people who I thought could benefit from selling online. Or being found through search engines. Things of that nature. I found out pretty quickly that it’s a pretty exhaustive process. So you know it doesn’t scale very well. You can’t get a lot of clients that way. You can’t really push your rates. And you know there are systems out there like Upwork and Elance and Fiverr which I am also happy to give my opinion on.

[3:30] And so those are good ways to sort of get your starting jobs but not a way to really sustainably create a business or have a rate that’s pretty high for a long time.

[John]: Got you. Alright. So these first few months over the summer, you know your first few jobs. About $12 an hour. And then you applied that you used your techniques and you

[4:00] kind of changed clients and eventually raised rates. How did you…or when did you eventually raise rates to like 20 or 30 an hour and how did that process go?

[Kevin]: Sure. So basically that process looked like for a while I was working for companies that did web applications or just did basic word pressing. So that was right than at the beginning. And the

[4:30] switch really happened when I switched the type of work that I was doing for clients. So I switched to more like web application, full stack, web development. Service type programming versus basic word pressing and maintenance and things of that nature that really anyone can do. It doesn’t take a whole lot of specialised knowledge. So when I switched more towards this specialised customer development I was able to raise my rates at that time.

[5:00] Essentially because the basic word pressing stalls and things like that don’t take that much time those clients were turning up really fast. So when I switched to you know custom development and custom solutions and applications for my clients they are generally longer term projects that pay better and you’re able to you know establish a relationship with them and have a higher rate as well.

[5:30] [John]: Got you. And how long is your typical project with a client?

[Kevin]: Oh boy. So I guess at that time it was pretty short. I would say it was about 2–2 and a half months. For some general projects. The clients that I take on now are mostly really long term clients who I am doing

[6:00] work with and they will earn me a lot of work in the future and that makes things really easy on me because it’s really easy to work with them and manage my time and sort of have that process coincide with school as well. It’s also really nice because when you have these longer term clients you can make decisions on whether you want to pursue a higher rate or work with different clients. And when you find a client it’s really good. You want to stick with them. And because when you’re working for $12 an hour for cheap

[6:30] clients those are generally the worst clients to work for because you know they want things done as quickly as possible for as cheap as possible and it’s sort of a bad relationship there. They are just really looking for the work as opposed to working for someone who is looking for the value that you can provide. And you when you focus on the value you provide that’s when you can really raise your rate.

[John]: Right so how did you find these customers that care more about the value as opposed to you know

[7:00] the word press point?

[Kevin]: Sure. Sure. So largely I started like I said with the local community and there are systems out there like Upwork and Elance and Fiverr right that people are familiar with. And they can be OK for starting but ultimately they are going to prevent you from making the real money and they take a percentage of the cut which ends up being a ridiculously large amount.

[7:30] And it’s a really hard way to have a long term relationships with clients. So basically the best way to do it is to establish your personal grant network online. Find people and clients that will refer you to other people. There is definitely not one tried and true method. But once you sort of work on a few projects a lot of the times the way I find my clients now…At least the really good ones are through referral.

[8:00] Because people know when clients send and people have really good businesses and really good relationships with them and they’ll pass that on to you.

[John]: Got you. Alright. One question that keeps coming in mind is how did you get the courage to ask for higher prices? Because there is probably a market with people who are talented you they can make things quickly and with high quality and they are too afraid to charge more that $20 an hour.

[8:30] [Kevin]: Yeah so this is…that takes some time to get used too because you know at first like I said if you’re working for $12 an hour and you’re thinking ‘Oh this is so much better than you know working at McDonalds or working at the nearest coffee shop or something of that nature’. And for a while you know I like…At least for me I was happy doing that. And what I didn’t realise was that when you price based on the value versus your time

[9:00] you can get paid way more. You have to consider when you’re looking at your clients what the value is that you’re offering for them. So for example if you have a software for service business that you’re building pieces for and you can take a look at how many customers do they have and how many people use these features that I build for them. If they’re making…who know…50k monthly recurring revenue and you’re building out features of this application than it makes sense to start to ask for more money.

[9:30] Building at $12 an hour is basically just being ripped off. So you want to focus on the value you’re providing them. Maybe you’re working for i.e. an example that I did when I was raising my rates I worked for a moving company actually and the moving company was trying to establish their business online. They were trying to get leads so they could than in real life have them

[10:00] get clients of their own. And so you want to sort of focus on how much is one lead worth to this client. And if I can generate just one lead how much money are they going to make right? And then realistically look at how many leads you’re gonna get them. And price based on that. Determine your hourly rates based on that and your proposal based on that. Because if you base it just on the amount of time that you put in you’re gonna end up pricing lower and being less confident about your skills.

[10:30] [John]: Got you. So do you do hourly rates or let’s say like a lump sum rate based on the percentage of the amount of value you do on the business?

[Kevin]: Sure. So generally the way I do this is…And this is a pretty big discussion right whether you want to do a project based pricing or hourly based pricing. Generally if I am working for a client for a long term then I will set

[11:00] an hourly rate for them. It makes sense. If it is a shorter term project than I looked more closely at what are they really interested in building here because they are not really interested in ‘Oh I want an opt in form’. What they really are interested in is they want more sales for their business. Right. [pause]

[John]: Sorry I lost you. We lost you for about 15 seconds.

[11:30] Can you repeat the past 15 seconds you said?

[Kevin]: Yeah sure no problem. So basically all I was saying is it depends on the scenario. If it is a shorter time project personally I try to focus mostly on the value which is something like…Let’s say they want something as simple as the opt in form right. Then you looking at ‘OK what do they really want in this scenario? They want more leads for more sales and what is that worth to them?’ And then I will price the project based on that. But if a client that I have for a

[12:00] longer term then I generally set an hourly rate that makes sense for both of us. That is still you know equivalent on the value that I am able to provide to them and that they get out of my work. But provide more stability in the relationship such that we know how much things are gonna cost and how much time things are gonna take.

[John]: Got you. Alright now lets talk about Fiverr and Upwork Elance and those platforms

[12:30] you said you have some thoughts on those. What are your thoughts on those platforms?

[Kevin]: Sure. To put it very bluntly I think Upwrok and Elance and Fiverr are where freelancers go to die. [laughter] So basically it’s really hard to work on those platform because there’s all kinds of barriers to making money. From the fact that they’ll take 20% of whatever you make.

[13:00] To the client specifically who use these platform are really poor clients to work with. They want things to happen really fast. They want them to happen really cheap. They don’t understand the technical side of what’s going on and why you might not be able to build something in a certain way, It’s generally a very poor market for getting a freelance job. Having said that a lot of people end up plugging to these kind of platforms because they don’t know how to get clients.

[13:30] They don’t know how to get these higher quality clients that will pay them more and work with them and understand sort of the benefits and pit falls and freelancing and what it could provide for them. So I guess my advice for people first starting out is that Upwork and Elance and Fiverr they’re gonna have trade offs. If you’re looking to sort of build your portfolio and you’re looking to get your first couple of client they’re not the worst place to start but they’re definitely

[14:00] a really bad place to start. [laughter] They’re set up so that you have to do things like work really low paying jobs just to get history on your profile. You have to make sure that every client gives you a 5 start rating and says you are absolutely great otherwise you are screwed basically. If you rely on platforms like that for the majority of your income and your job

[14:30] and that platform ends up failing you because of a bad review or because they shut down than you probably lost your income stream. So it’s not a great way to go I guess it’s what I am trying to say.

[John]: Got you. Alright this leads to another question. How many hours a week are you working on a client work. I know you have personal projects and you also have school you know taking full credit. How many hours a week you work on clients?

[Kevin]: Sure. So I try to will myself

[15:00] to working a maximum of 20 hours per week on clients at work. So I generally and probably am working about an average of 15 hours a week. This is something that I could definitely maximise or minimise. Which is really nice about freelancing right. You can sort of control how much you want to work. When you want to work and that’s what makes it super possible and super awesome for doing it while you are in school. Because you know you work whenever you want. You choose your hours. If you

[15:30] have less flexibility on the kind of project you want to work on it would get to the point where I am at the very least…I have a lot more proposals than work coming in than I am able to take. Because like I said I am only working 15 hours a week. And so it’s also a really neat place to be. It definitely takes a lot of time and a lot of effort to get to a place where you have more work coming in that you can accept and that is also part of how you raise your rate right. When you have

[16:00] more work than you can take then you generally raise your rates and so such time as the work slows down and those rates are accepted at the rate that you can do the work.

[John]: Right. Let’s talk about that. Let’s talk a little bit. I know you said you are working on projects where first they’re paying you 60 and you keep telling them ‘Hey I want to work on other things I am gonna raise my rates’ and they are accept of it.

[Kevin]: Yeah yeah so this was something I was really surprised about early in freelancing in industry. For the

[16:30] first time I did I think I was working probably for $30 an hour or so. And I basically told the client like this kind of project work isn’t something that you know I really need in my portfolio. It isn’t something that is going to help me continue to raise my rates or continue to advance you know my business in general. And so you know I am basically cutting you as a client. And you can do that

[17:00] when you have enough work coming in that you can switch to a different client. And it was a longer term relationship. And so that’s why I was saying that instead of you know completing the project and than saying ‘OK let’s move on to the next client’. So basically what they told me was ‘You know the value that you’re offering us is so high that if you can pay you more than we want you to stay. If you’ll accept it than we want you to stay’. And so it’s just another reinforcement you know this

[17:30] idea that developers and people in general have priced themselves too low. They don’t focus on the value that they’re offering. And if you’re fortunate and you’re working with the clients that do recognise you know the value that you are offering. But the best place to be in is when you have the option to sort of let that client go and move on and have other work available. That will put you in a scenario where you have clients saying ‘Don’t leave we’ll pay you more’. So

[18:00] yeah that’s basically the one shorter version of it.

[John]: Got it. In that particular example when they’re paying you 30 what is the fee they are paying you after you kind of told them you didn’t want to work with them anymore?

[Kevin]: I ended up raising my rates to about $45 dollar an hour so it’s like 150% increase right which is crazy [laughter]. So that is pretty ridiculous. So you can tell when you’re in college and when you’re taking these jobs

[18:00] you are really fortunate because the alternative jobs probably don’t pay as well as you know some of these freelance jobs do. And so when you’re priced at $30 an hour, to you that might be like 3 times what you would make somewhere else but to them that’s like a fourth of the cost of like an agency or a developer that they would normally hire. And so hopefully you can push your price up and get it higher closer to a

[19:00] professional or something like that but it makes it really competitive for you to be able to get jobs and get a lot of them really quickly.

[John]: Right. How much do agencies usually charge per hour?

[Kevin]: How much do I currently charge per hour?

[John]: No how much do agencies charge per hour?

[Kevin]: Oh agencies. Oh that can vary widely. So generally if you work with an agency what happens is they hire or have

[19:30] talent on hand right. So they have a team of developers and designers and teams of that nature and you tell them sort of what your project requires and what the specifications are. And they might be paying their developers you know some hurly rate or salary and you are…they are basically acting as a no man for these freelancers. So you end up with higher rates. So what ends up happening is agencies will cost

[20:00] anything from 2–3 times as much as a freelancer might. But you have more structured project proposals.

[automated voice: hours not being recorded]

[John]: Alright sorry we lost connection was a second. Kevin was just saying that agencies charge about 2–3 times more than a freelancer charge. So you’re in these numbers you are saying that

[20:30] freelancers charge is what $75 an hour an agency charges 150–200?

[Kevin]: Yeah yeah I would say that sounds about right. It’s hard to put in a factor price on them. The other thing that agencies like to do is they like to base on a lot more on a project right. Because they know generally how long something is going to take. And they know what the…They

[21:00] know generally how long your project is going to take and they know what their developers are capable of and so that helps them price the project a little bit more effectively than a freelancer would. And so they can take on a work like that. Sorry I am getting a call at the same time [laughter]. I will turn it off. But yeah so that’s what agencies do. And so if you can move away from agencies and generally funded companies

[21:30] you know start off with things of that nature will hire agencies if they don’t have a technical co founder or something like that to manage their project and manage the application that they’re building. So yeah hopefully that answers the question. There was some technical interruption there.

[John]: Oh yes that will do. So let’s speak 5 more minutes. I just want to run down a few more questions. You know you are getting near the end of college.

[22:00] Do you see yourself doing contracting full time afterwards or working for a you know like a standard big company?

[Kevin]: Sure a good question. So one of the reasons why I got into freelancing and you know doing self employed work is because I am not a huge fan of this idea of getting paid for your time right. So I am more interested in getting paid based on the value that I provide.

[22:30] And so when you focus on the value being provided you know you might work at a business or a fortune 50 500 company where you save the business millions of dollars a year or you do some other kind of incredible work and offer all kinds of value to them. But really than you end up getting paid you know your salary or whatever it is. 60–100k just as a developer or something like that. And it doesn’t really translate to the value that you ended up offering that business.

[23:00] So I am really attracted to this idea of building my own business. Whether that is a boot trap independent business you see popping up a lot more now building software and service products and things of that nature or you know more of a traditional start up venture funded type of project.

[John]: Got you. So yeah let’s talk about that. I know you have some of your own start ups that you’re working on.

[23:30] One of them is called ChurnBurn [phonetics]. Can you tell us about that. I’d love to hear your thoughts.

[Kevin]: Sure of course. So a BurnChurn is a product that I built and the idea is that some business subscription businesses commonly lose customers very early in the process. So maybe for example you’re Netflix and you offer a 14 day trial and what happens is a user

[24:00] doesn’t have time to try your product on a 14 day trial. So they just quit. They decide ‘I am not gonna use Netflix. I didn’t get a chance to use it. It’s not worth my time’. So what my product does is it allows you to automate options and action that integrates heavily with your application. And the payment process or to like extend their trial or you know offer them a discount for a couple of months to stay on your product.

[24:30] And collect feedback to why they might be interested and exiting or turning off of your product. And by using all of this insight and just analytics and these automated options you can increase your retention rate so that you can hopefully also increase your overall revenue.

[John]: Got you. That sounds like a useful product.

[Kevin]: Yeah. It’s…It launched about I don’t know 2 or 3 weeks ago here.

[25:00] And we got more than 1000 businesses on board who already are using it and we’re seeing really promising results who are seeing a lot more money and retaining a lot more users.

[John]: OK great. And is that Burn Turn Ohio?

[Kevin]: Sorry?

[John]: What is the URL for your product?

[Kevin]: Sure. It is burnchurn.io.

[25:30] [John]: Got you. That is burnchurn.io? That is great Kevin. Two questions and we’ll move real quick. What are the tech stacks you have been using for your product?

[Kevin]: Sure. So that is a common question I get. Even for when I want to get into freelancing what technology should I learn. And so obviously the first thing is if you want to get into the web developing freelancing you

[26:00] are going to want to learn things like HT…HTML. CSS. JAVASCRIPT and basic tech side things. Generally what I use for my tech speck is I use Ruby on Rails[phonetics] which you know I get some things forward. It’s not part of that really new JAVASCRIPT framework but generally you want to shift things as fast as possible and I find it lets me do that. And then I also connect that with REACT [phonetics] on the front end.

[26:30] Which is really nice for you know working with components and reusable whatever reusable nature is going in. And than something like AMAZON web services to host and keep it really simple so that you can shift really fast.

[John]: Got you. Alright. And than the final questions is…I guess this is decided by you. What aspect would you tell

[27:00] our audience or college students who may be employees looking to do their own contract work?

[Kevin]: Sure. I would tell them…That’s a great question. I guess I would tell them to not be afraid to start. The hardest with doing all of it is getting your first client. And once you get past that first stepping stone it just keeps getting easier. I meet with a lot of people and talk to them about how they can get started contracting.

[27:30] And end up following up with them 3 months later and finding out that they really didn’t do all that much with the information. And the difference that I see in people that do end up using that information and being successful and the people that don’t are the people that look at the 2 options. You know freelancing and working for themselves and whatever the other option is. Working at the coffee shop down the street or not having a job or whatever it is. And they look at it and say

[28:00] ‘OK the alternatives of not being able to work for myself and have these clients and make this rate is just so terrible that I have to jump in and you know it makes me nervous and it’s hard to do. I am going to start contracting and start working.’ And so like I said it doesn’t really matter whether you’re working for free, pro bono or like $12 an hour or $80 an hour. Just get that first client and get working with them and that will definitely get your ball rowing. It will help a lot.

[28:30] [John]: Alright. That is great advice Kevin. Thank you for joining the show.

[Kevin]: Yeah I am glad to have been here.

[John]: I really hope to give one less farewell. You know take your word and apply them.

[Kevin]: Certainly. Certainly.

[John]: Alright well you have a nice day.

[Kevin]: Alright well thanks John.

[John]: Thank you. See you.

[Kevin]: See you.

Audio ends [28:54]