Top Tips for Freelance Developers Chasing Financial Independence

Julian Molina
Mar 19 · 10 min read

Freelance developers have the entrepreneurial gene, but may be aiming too low in a market hungry for talent.

Image © igorstevanovic, shutterstock.com

As a lifelong entrepreneur with a background running a software company, I’ve always seen freelancing as a stepping stone to financial independence.

Being your own boss, picking the clients you want to work with, choosing the projects that truly interest you… it all makes perfect sense and builds towards your personal freedom.

Of course there is risk involved.

Like with any entrepreneurial activity, as a freelancer you have no security in the form of a paycheck that would allow for meticulous financial planning.

Needless to say, freedom comes at a price, or in the words of Eleanor Roosevelt…

Freedom makes a huge requirement of every human being. With freedom comes responsibility. For the person who is unwilling to grow up, the person who does not want to carry his own weight, this is a frightening prospect.

Indeed, you may be your own boss, but you’ll still need to get your ass out of bed every morning to start coding and get things done in a timely fashion under no one’s supervision but your own.

That said, responsibility is not the main challenge you will face as your career advances.

The real challenge lies in finding the way to take freelancing to the next level.

The thing is that if you keep freelancing as your a-game for the long run, it is highly unlikely that you will ever achieve financial independence.

Financial independence requires transitioning to, or at least complementing with, a business model that would generate some form of passive income.

Active income, that is, the revenue from your work providing development services, will only take you so far.

Financial independence is something you build for yourself — unless you were born in wealth — so you need to craft a plan for your own transition.

Moreover, there are plenty of threats for freelancers looming in the face of a maturing globalized economy and the current trends shifting the workforce towards the fast-paced, quick-turnaround gig economy.

The main threat for freelance developers in strong economies is the increasing offer of development services from people in weaker economies, made available globally by freelancing and gig platforms.

Freelancers in NYC, LA, Zurich or London openly compete on a price basis with people living in places with one-fourth the cost of living.

Winston Churchill once said…

A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.

Paraphrasing the master politician, I would say a regular folk sees threats in change; an entrepreneur sees an opportunity in every threat.


Talking Change: The Open Source Crypto Landscape

But that is certainly not the only outcome of new tech…

Open source projects in the crypto space have been building global networks whose combined market value peaked at $800 billion in 2017.

“As the adage of the entire internet once went, “I just replaced your entire industry with 100 lines of Python code,” that’s exactly what we’re doing with bitcoin.” — Andreas Antonopoulos, The Internet of Money

Guess who the stars in most of those projects are? Indeed, developers!

Many open source projects in crypto operate like open startups.

They are open in the sense that they are welcoming of talent, in the understanding that the more hands help turn the wheel, the faster the wheel will turn in the shortest span of time, lowering everyone’s risk and increasing the odds of success.

They are startups in the sense that, unlike the majority of non-profit open source projects building cool libraries or apps, the crypto industry offers very efficient solutions for monetizing the produce of open source development: crypto economies.

A well designed economy around the products, services, solutions or benefits accessible through the network plays a part in the emergence of network effects: the more people use the network, the more valuable the network is to everyone.

Savvy open source developers looking to join an open source project often look for those at an early stage, as they tend to offer better opportunities for developers to make an impact with their contributions, make their voices heard and build their reputations.

This is particularly true in crypto projects. Here is why…

Crypto projects have an edge over regular open source projects in the sense that they have the ability to implement monetary incentives using the network’s native crypto token, which is eventually traded at crypto exchanges for “real” money.

Developers working with the project often earn incentives payable in project tokens.

In early stages, when the network has little traction and few users, the network’s crypto token has very little value — if any.

Because the token is worth little in early stages, early contributors often get a lot more tokens for the same kind of work people will contribute later on, once the network builds a user base and significant traction, driving the increase of the value of the token.

This is indeed quite fair. After all, early contributors take more risks than late contributors.

The implications of earning tokens of a crypto project at an early stage vary with the design of the token itself and the properties it may have built-in, together with the design of the underlying network economy.

In many crypto projects, owning project tokens may entail owning a stake in the business, rights in the project’s governance (such as voting rights) or even rights on the network’s revenue.

And here, of course, is where future passive income may come into play.

In a way, deciding to work with an open source crypto project is pretty much like investing in a venture.

Like with any investment, it is certainly important to understand what exactly you are getting into, whom with, what you will be helping to build, and eventually make an informed assessment of the risks and rewards involved in the venture before committing too much time and effort.


What to Look For and What to Avoid in Crypto Projects

Needs to Make Sense

Find a project that is solving a real problem that a specific segment of the market is suffering from with severe pain.

The more painful the problem, the more important the project will become to the suffering segment, and the larger the segment, the more valuable the network will become through network effects.

If the project seems to be disassociated from reality, solving a problem that no one cares about or that doesn’t produce significant pain, chances are such project will never get traction.

I admit I have personally made that mistake, with disastrous results: a stunningly beautiful product praised by numerous experts in the field, that no one actually needed.

If the project seems to be looking too far ahead in the future with a grandiose vision of a completely different world and doesn’t seem to have a solid connection with the present, chances are some other project will solve the more immediate problems and win the race at the starting line.

“Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment”— Buddha

Also, find a project that offers something of value to you. Becoming a user of the network is the most compelling way of getting involved and becoming a part of the community.

Analyze the project beyond the technical solution.

Is there a sensible go-to-market strategy in place?

Is there a reasonable plan to bootstrap the community and get things rolling?

Stay away from projects with the naïve build it and they will come approach. It may have worked for Kevin Costner, but business is not a Hollywood movie.

Check the Team

Good.

Then, next in line is finding out who is behind the project.

If you are new to crypto, I would suggest you stay away from anonymous leaderships.

Photo by Javardh on Unsplash

While there might be valid reasons for someone to want to remain out of the picture, there are also many obscure ones why someone may choose to do so.

If you want to stay clean and away from the path to getting scammed, being able to deal with real people putting skin in the game and their reputations in the line is quite desirable.

Does the core team have the combined expertise required to pull the project off?

Do core team members have the entrepreneurial drive to go through the harsh times the project will certainly encounter?

Do they have skin in the game?

Are they working in the project full time?

You want to find a project whose core team is deeply committed to the cause. Weekend warriors have a lot less chances of winning the battle when the battle is fought during market hours.

Then go and take a look at their community.

See if people hanging out in their community chat are friendly, well-mannered, welcoming and the chat is free from trolls. Projects that get infested with bad actors are seldom a good bet. Ask a few questions. See if the core team is active and responsive within the community.

How are Contributions Valued?

“Show me the incentive and I’ll show you the outcome” — Charlie Munger

The research you are going to do at this stage is not only important so that you understand what you might personally get in reward from your work; the incentives scheme of a crypto project is one of the most important factors conditioning the success of the project in the long run.

A good incentives program is designed to attract contributors in early stages, but also to keep them engaged in the long run.

Projects only get so far when they persuade people to perform a few tasks to collect a bounty, only to see them leave as soon as the bounty is paid. That is not the right approach to bootstrapping a project. Too much time and effort is put in on-boarding people that will never become actual drivers of the project, but only temporary workers.

A well conceived program will bring together a core community that will inevitably end up with skin in the game, as incentives are aligned with the long-term success of the project and designed to hook people in for the long run.

The program should be designed to empower contributors, putting them in decision-making positions, turning them into active crew members, instead of mere helpers.

Indeed, a project looking success straight in the eye is a project whose early community of contributors is committed to crossing the chasm on the same boat, with everyone on board rowing in the same direction.

Bear in mind that whatever incentives you may collect in the form of project crypto tokens will probably be worth very little or nothing during the early days. However, participating early on in a project with chances of becoming the next unicorn in the space might be all you need to do to reach financial independence in the long run.

Remember, at the end of the day, it is the network with the most users that will get to dominate the space and become the most valuable.

That is why placing your bet on long term contributions makes sense.

Jumping ship too soon would put the potential capital gains of your investment in the hands of third parties.

If every contributor gets in the project with the short-term goal of collecting a few tokens early on and move on to the next project, then the boat will simply be left to drift in the confines of the abyss and never make it to shore — and everyone’s tokens would be worth zero in the end.

A good incentives program discourages or outright prevents that sort of behavior, for the benefit of the project and the protection of the pioneers that see and share the vision.


Taking the Plunge

And if you do find a cool project that checks all the boxes, there is nothing but gains to be extracted from the experience, even if the project never makes it to unicorn status.

You will meet extraordinary people; visionaries with an otherworldly capacity to come up with ingenious solutions; pioneers with the drive to create something from scratch and leave their mark; idealists who get out of bed every day and decide to make the world a better place.


About My Own Project

I’m a lifelong entrepreneur and co-founder of Superalgos.org, an open project building a Collective Trading Intelligence aiming to outperform traditional investment companies.

You may join our Telegram and use our existing trading intelligence to trade with your own crypto assets, free of charge. You may also participate in trading competitions where trading algos get open-sourced after each event so that the community may improve them and put them back to compete again, unleashing a relentless evolutionary process.

We are currently on-boarding DevOps, UX/UI Designers and Web Developers with experience in React apps, GraphQL and Node.js.


If you liked this piece, you will likely enjoy this other piece where I discuss specific opportunities for developers in my own project, Superalgos: We Share Our Trading Intelligence, You Help Us Develop it Further

HackerNoon.com

how hackers start their afternoons.

Julian Molina

Written by

I’m a lifelong entrepreneur and co-founder of Superalgos.org, an open-source project building a Collective Trading Intelligence.

HackerNoon.com

how hackers start their afternoons.

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