If you're a self-identified say, "Ruby freelancer", the value proposition is "I am an independent Ruby developer for hire". For staff augmentation gigs or applying for a FT position, this is all well and good, because whoever's hiring is looking for warm bodies with specific technical capabilities.
However, many companies are looking to solve specific business problems and might not know how. Simply hiring a developer who happens to know Ruby doesn't guarantee that the problem will be solved — it's a huge risk. It's sort of like saying, "all I need is someone who knows how to swing hammers if I want to build my wife and I's dream home."
Mitigating that risk means stepping away from the "<technology> freelancer" title and becoming a business consultant who happens to use e.g. Ruby to solve business problems. On your end, this is going to require less time spent thinking about the technology, and more about the path to solving the underlying problem at hand. From the perspective of a client, this is a much safer bet. And when there's less risk involved, clients are willing to spend more. And treat you more as a consultant. And you'll be happier, your closing rates will go up, etc.
It also works both ways, now that I am able to focus on just giving them an MVP I make recommendations along those lines. I can recommend that they use a Bootstrap template and they don't see it as "cheap design", but rather a "an affordable, clean interface that helps validate their hypothesis". Frees me to work on the business logic of what they want and the quirks of their application. I also make hosting recommendations based on who I know they are (people trying to get projects off the ground, so they are cash-flow sensitive).
The difference between the clients I get now and the ones I used to get are night and day, because there is no ambiguity in what the client wants and what I will give them.
Best decision from a "freelancing" perspective I have ever made.
OTOH a customer with a bigger budget who is looking for a more holistic solution may also want infrastructure provisioning and management, SEO and color scheme designed specifically to appeal to their target demographic. It's unlikely that any single person can do all of these things, at least to a level of quality that would justify a significant fee. So either you need a reliable bunch of subcontractors who you can retain for X days/month or you need to partner with somebody with complimentary skillsets.
However, what you're describing isn't really risk management, it's just marketing. You want a prospect to believe that you have the ability to understand their problem and help them to solve it, because that will determine whether or not you get the gig and how favourable the terms are, but the real risk in hiring you for that gig depends on whether you actually have that ability.
How is your current freelance shell company marketed? I'd love to see what that website looks like, and how you advertise it differently.
I can't imagine it's that difficult. People do it all the time for all sorts of personal businesses.
I haven't looked into it in-depth as I'm not at that stage yet, but I eventually plan to do the same thing -- although I hope to scale freelancing into a much bigger business if at all possible
However, it's not really a big deal, depending on where you are. In Texas, a Doing Business As certificate ($12), a bank account, and business cards are usually enough to be a "business".
For example, you say "Enterprise . Mobile . Web" but don't have a single example there. I tried to click on them, but they don't link anywhere. If I pay you, will I get a website like this one? Will it be completely static? If I ask for a webapp, will people have to interact with it through the company email?
Some more content (portfolio, pictures of your apps, tech/product/opinion blog, etc), some kind of branding (logo, etc), or social stuff (twitter feed/LinkedIn/testimonials) or something would be a huge help, because it'd help convince people that you actually did some stuff, and have been doing it recently.
Sorry if I sound cynical--it sounds like you've done some really cool stuff. And your portfolio page does reflect that. But it doesn't really come through on the business webpage at all. Maybe you're just too busy working on cool stuff to fix up your webpage :-)
Any advice welcome. Maybe we should turn this into a ask/show hn submission?
The thing is? I have no trouble at all getting freelancing or "contract" work where I'm paid by the hour, and where I'm expected to pretend like I want to be a full time employee.
I mean, other than the pretending, I have no objections; usually the work is easy and the pay is good.
The thing is, I like mercenary work, and I'm good at it (Most of the gigs I've gotten, well, they seem to be looking for someone who wants full-time work but can't get it without contracting for a while first. Generally speaking? I am better than most people who can't get full-time work, and way better than most people who can't get full-time work, but who can pass the contracting interview process.)
I have a business (and a business licence, and a corporation, and employees, and health +workers compensation insurance, and actually rather more revenue from hosting/VPS customers than I could reasonably expect to make from consulting) - but I still don't have whatever it takes to get larger or more monied companies to hire me as a company, rather than as a freelancer.
It's... odd, 'cause generally speaking? I don't hire people who aren't better than me. If you can hire my company, rather than me? even if you are paying rather more, you are getting a significantly better product.
Now, you could say, the primary difference is that when freelancing, often I use a body shop. Which could be the case; but more than once, I've had a manager call me back after I've left and negotiate a new deal (that he then takes to the body shop) so I guess I'm a little unclear on what value the body shop is bringing the client, so I have no idea how to go about replacing them for my corporation. (the body shop is bringing me value in the form of giving me access to clients who won't do business with my small company.)
Edit: note, I /can/ get gigs without a body shop, and flat-rate gigs, too... but... the people I can sell to directly? Generally speaking, they have... much smaller budgets. To the point where I end up making less money. A whole lot less money.
So, that's my problem; it seems that the body shops are only set up to deal with hourly work, and it seems that I lack something that companies with money need in order to do business.
I have been called unprofessional, and eh, I have a hard time arguing... but like I said, I do just fine; generally far above expectations when going through a body shop, and I /do/ have an infrastructure for outsourcing more of the professional bullshit.
To be clear, I'm not saying the body shop isn't bringing value to the customer... just that I don't know what that value is.
As someone who occasionally hires consultants to solve urgent problems for me, I would be nervous about hiring a company whose point of contact had a communication style like yours.
When I need a problem solved, I want someone who understands exactly what I need and who makes me confident that they will follow through and make sure I'm successful. Those people start building that confidence from day one by communicating clearly and making sure that I can understand them easily.
In contrast, your comment is verbose and uses a lot of non-standard punctuation. That makes it hard to understand you. So my first thought is "wow, I'm going to have to do a lot of extra work to make sure lsc understands what I need."
I have no idea if that is accurate. But if one of your competitors was easier to understand, I would probably pick them because I don't have the extra time required to understand you and make sure you understand me over the course of our whole relationship.
That makes sense. The thing is, I always thought that my writing was an advantage, not a disadvantage. I mean, it's not perfect, or even very good by English-major standards, but compared to your average salesperson, well, I think highly of myself. You know how some people enjoy the sound of their own voice? I enjoy my own writing.
The problem is that I'm writing for myself, not for the audience. Which is bad communication, even when it is good prose.
>In contrast, your comment is verbose and uses a lot of non-standard punctuation. That makes it hard to understand you. So my first thought is "wow, I'm going to have to do a lot of extra work to make sure lsc understands what I need."
Huh. I have always thought of most sales and management folks as not very good at written communication. Even when trying to convey complex ideas, usually their emails are all of two sentences, and often grammar errors make those sentences nonsense without context.
This lines up with what you have said, though. If they are communicating in two-sentence messages, maybe my three-page essays are not appreciated. No matter what the reason, they /do/ communicate in soundbytes, and my insistence on essays is... counterproductive.
If you are writing to communicate, and not just to read your own prose, the whole point is being understood.
More to the point, it's irrational arrogance on my part to say that folks who are better than I am at sales, which is essentially communication, are worse communicators than I am.
You have... significantly changed my opinion of the consulting situation and the direction in which I need to move in order to improve my business communication. Thanks.
I'm only commenting because I myself do this quite often. I'll be very verbose and break into parenthesis for almost no reason. I've noticed a trend lately in my writing that may help you: my verbose emails get largely ignored. I can ask for 5 things that are clear as day to me and get barely a response for one. I've often said the same thing in emails multiple times until the other party finally understands. This is as a full time employee talking to coworkers and partner companies. I would likely blow my brains out if this occurred with every customer.
It still happens now but I take the time to prune every email. I may take 3x as long writing multiple drafts until I can be concise and clear. One of my biggest pet peeves is repeating myself, second is getting a response confirming something I said 5 emails ago. The amount of wasted energy is soul crushing when I think about it and this is a daily struggle. I do write for myself but when that point comes when no one is really reading the response you give, you start to question responding in the first place. That's a terrible place to be.
This is something I have a hard time with; sometimes I want to repeat something that I think the other party is having a difficult time with, but often that just makes the document longer, and they don't read it.
Faking the full-time bit is completely true, does not make sense ... but then seems to be a necessity.
It's weird, 'cause I do think I'm unusually good as a temporary worker; I'm willing to tailor the time when I leave to something comfortable for the employer (whereas someone wanting a full-time job is going to jump at the request of a company that is willing to hire them full-time)
And because I'm looking at it as a temporary gig, Not only am I going to feel okay with it when you do let me go, I'm trying to set things up so that the person you get to replace me has an easier time of it; I pride myself on the ability to do things like train replacements. Hell, often I'll help you /find/ the replacement. (another thing that I can do well, but that so far I've failed to figure out how to monetize.)
By presenting yourself as an agency, you might signal a higher degree of professionalism and (theoretical) resources. You're more likely to get into serious contention for those Pepsi contracts. At the same time, you might be signaling yourself as being too big or too expensive for the thousands of smaller, more easily attainable, ad hoc gigs that really do want an individual freelancer.
And BTW - you really don't want large-scale engagements, the kind that routinely go to actual agencies, if you're not running an agency. Those gigs are designed for agencies with staffs and resources to deploy. There will be more volume than you can handle as an individual contributor -- including all the work involved in client management, reporting, schmoozing at the corporate HQ, etc.
Regarding taking on too large of a project should you wish to remain a one-man shop - all I can say is that the projects you turn down are equally as important as those you accept. You have to know both your abilities and the limits of what you can do as one person.
Also, I'm more of a Coke person.
That's how a consulting firm I used to work for got started, as a partnership of 5 (I think) developers. About 15 years later, they're now ~200 people strong.
I've always used my "Colin The Shots LLC" for freelancing. If I want to get contracts from budding startups, I go to startup events and introduce myself. I don't need to change my company name to reflect a lower degree of professionalism.
What should I answer when the clients ask who "we" are?
This post was interesting because my current boss had the exact opposite experience. He said when he dropped the "company/we" terminology he had been using and was upfront about how it's just him, his relationship with clients improved greatly. It probably all depends on the types of clients you have.
In technology, there's a general distrust of "general contractor" style operations. No one wants to hire a developer for $200/hr, only to have him turn around and send the work to an off-shore developer for $20/hr. In fact, most freelance contracts have "no sub-contractor" clauses that explicitly disallow this.
Because of this mistrust, some clients don’t even consider working with out-sourcing firms and instead actively seek out individual contractors. They want professional contractors (you should have a LLC, a tax ID number, real legal contracts, etc.), but want that professionalism to come with a human face. Any individuals that are trying to compete with the dev shops are missing out a big market that’s a more natural fit.
We’re actually running a startup (http://getlambda.com/) that represents professional freelance developers and helps them find precisely these sorts of hiring companies. If anyone is looking for help starting or expanding a freelance business, we’d be happy to chat about what we’ve learned.
Took a look at Lambda (good design work) - how do you differ from a good recruiter connecting freelance contractors with 6-12 month gigs?
Regarding Lambda vs recruiters: we're complementary. A recruiter is usually hired and paid by a company to fill a given role. We're hired and paid by a developer to fill his freelance calendar. We screen clients to ensure they're actually the types you want to work with, we negotiate on your behalf to get you higher rates, and help you brand/position yourself to get you more work in the future.
Not difficult to predict which route I'm taking now...
Purely anecdotally, I started freelancing a few months ago, and my experiences are very different. I live in the Netherlands. Here, relatively few programmers decide to freelance, and most who do clearly present themselves as a one-man company, not just as "a guy". It's also impractical to freelance without being registered as a business, so maybe the registration process helps some starting freelancers "flip the switch".
Also, I've never experienced anything like pity, as the OP describes. Much rather, people appreciate that I dare taking the comparatively high risk involved (I don't think it's a high risk at all, but many people used to a European-style safe job contract feel differently).
I am in demand enough that it's no problem finding remote projects and people who are super happy to find someone who has better than average skills, and to pay accordingly. Not to mention that I live in an inexpensive area of the US close to a tech hub but with flexible employment laws.
It's a lot less of a headache as I don't have to sell to folks other than the people who are, in turn, selling my skills. I just do the work.
While it cuts my rate by a lot (maybe 50% in most cases), that's a fine tradeoff for picking up a lot of risk and uncertainty.
The problem is that, as a business, I had to deal with scaling and bringing in more folks to do work if I wanted to grow or expand and deal with sales and marketing just to stay in business. As a freelancer I make plenty of money at my own schedule, but can't really make the next big income jump. I'm okay with that for the next couple of years (my kids are finishing middle school), though I imagine that at some point I will possibly get bored with the work and, at that point, try and return to being a "business".
On a related note, though, I also rent my house for similar reasons.
I remember being a hard ass about ensuring that our office was full of life whenever a prospective client came to visit. Even though my employees could just as easily work from the corner coffee shop or home, the idea is: A company with overhead and payroll is obviously doing something right and likely more permanent than this freelancer I met working from his house. Therefore, they're more likely to succeed.
The perceived risk of failure is the #1 reason proposals are rejected. You don't need a brick & mortar office or whatever to help mitigate that risk, but it helps.
As far as overhead goes - currently it's mostly the same, but part of my motivation to go the "company" route is the ability to hire someone else in the near future. Once that starts to happen there will be a lot more overhead to consider regarding labor costs, employee income taxes, hardware, etc.
* If an individual consultant gets injured, we'd have to pay the individual's worker's comp/unemployment benefits.
* When it's B2B, we don't have to worry about 'tax nexus'. If we're based in NY and hire an individual in California, we now have to register and pay some tax in state of California. Hiring a business erases that responsibility.
* The consultants who have a business are usually more serious and mature. Invoices are cleaner and the experience is more professional all around. Sounds cliche but it's true.
Edit: formatting
John Smith
CEO and President
John Smith Global Design Enterprises
And it's pretty obvious to a customer that if the "CEO" answers his own phone and they never meet any of the CEO's employees, they're dealing with a one-man operation that's putting up a fake front.
My motivation was listening to Gina Trapani (of Lifehacker, etc.) talk on the In Beta podcast (http://5by5.tv/inbeta/73) about how she and her partner in applying for a mortgage basically were having to leave out Gina's income because as a self-employed and 1099 contractor with multiple revenue streams her "career" is too complicated in ways that banks are just going to ignore/reject anyway.
I consider myself lucky in that I bought my home (and signed my mortgage) in the waning days of my time at a midsize company, but I don't expect to live here forever and with the way banking changed after 2008 I'm sure I'd have a very hard time getting a mortgage now even if I was putting down 50% of the purchase price up front.
I realize now that an elegant way to handle this type of situation is through an LLC where my annual income is a separate fact from the on-and-off-again nature of contract tech work.
Why's that? When I work with "John Smith, Designer", I'm getting John. When I work with his design studio, he might be billing me for work done by his intern or the guy he hires that isn't as good as John.
if not, well, you can simply just ask John if he's going to be the guy working on your stuff.
Being 'Designer John Smith' attracts companies hoping to lure you in as a full time employee eventually. This can be good for finding work when you don't decline the possibility of full time work, but can burn bridges when you decide to leave the client.
Being 'John Smith Design Studio' attracts clients looking to offload development to another company in order to meet deadlines and get stuff done.
If you want to be a solutions company then be prepared to be a salesperson as well as engineer. If you want to be a body for hire then there are hundreds of agencies that will do that part for you.
They're all assholes, but that's their job.
Also if you don't have a corporate tax ID and bank account, then some clients may insist on withholding taxes and pay you as regular employee, so that they don't look like they're trying to dodge payroll tax. Again this affects your ability to control your own salary and tax filing and you can avoid it by billing them as an officially registered corporation with checks written out to your company, not your personal name.
The corporation also helps if you bring on more people to help because you can pay them properly with tax withholding and everything is legit. It's not really that much work using an online Payroll service.
I definitely recommend it if you are earning more than a few thousand dollars per year.
I've found it very easy to attract and nurture leads.
When dealing with a conventional business however, everything changes. I need a corporate email address, a limited company name, VAT reg and everything has to be done in person. Even just getting a reply to my email is hard work.
Not to mention, even if I do get my foot in the door with an initial consultation, convering that into paid work is seriously hard work because i have to deal with things like being on an approved supplier list etc.
So yes, if your target audience is B2B (traditional) I'd agree, but if it's consumer or start-up - not so much.
This was a good example of how it can yield results when selling your services. It's also very valuable if applied correctly to many areas of life. As an employee, customer, a defendant in a legal case, when you are trying to attract a mate, etc...
The important thing to remember is "how do others perceive me?". Based on that "what can I do to change their perception?" Of course you need to figure out what image you want to project; that image is also situation dependent.
There's no reason not you really, the benefits are so numerious in how people perceive you.
Honestly, I thought a lot of people did this. I'm shocked that this is a novel idea to many freelancers in the comments. Branding is everything as a freelancer.
As a "freelancer who knows how to deliver and maintain software" I easily find clients who understand prototyping, prioritization, shipping features incrementally.
As soon as I try to market myself as "software company", every conversation seems to start with – excuse my language – estimating and budgets. What's more, they ask to estimate something vague, "oh and here we do some reports, maybe with charts".
I prefer estimating only small bits to inform decision at hand: do we refine the design so that it looks less "Bootstrapy" (2 days) or add referrals feature (3 days). And in my experience clients who embrace this style of work seek "freelancers".
I have a post somewhere here on HN outlining it if I can find it.. :)
The clients who hire me and have hired me are able to make the distinction between a 'cute' freelancer and a professional who will deliver.
I even know a lot of consulting companies who pretend to be a bunch of individual people, hiding the fact they are linked, and don't know any examples of the ooposite - an individual pretending to be a company - and i see no reason from a customer's perspective to prefer a company to an individual unless they have a job so big/diverse that an individual can't do it.
This might be is different from country to country but legislation is usually very different when you are freelancing vs contracting as a company. So even if the author doesn't understand it yet, when shit hits the fan he will (and I don't want to sound too harsh but eventually with companies it always will).
https://www.youtube.com/watch?v=iqUG2_cmZ6I
He talks about his "aha!" moment when he was broke and then realizes the people he meets would rather see him as a part/leader of a team, and not an individual.
The moments I refer to are between 32-36 minutes.
Thanks the article and the debate it inspired.
Tell me, was picking a company name that Google attempts to auto-correct a conscious choice? I couldn't get to your website just by searching for your company's name on my first try.
Follow up: About how long do you think it will take Google to recognize I am not making a spelling error and I am looking for your services?
Robert has just re-marketed himself by simply switching his workspace and by using a legal entity to represent himself.
These tweaks have had a positive impact on how he's perceived by clients, and how he perceives himself. And now we can sell more confidently, earn more money and have more fun. Win.