So You Think You Can Freelance?

The life of the technical worker has never been better; they have strong salaries, low unemployment, challenging work, and modern black t-shirt benefits like ping pong, stocked kitchens, and flexible working hours. That doesn’t mean it’s perfect though and the media continues to detail the upward freelancing trend in the marketplace predicting 40% of the workforce will be freelancers by 2020. Will we be 100% freelance someday? Of course not and I suspect these stories are overplayed as I would have expected TaskRabbit to be in Minneapolis in 2014, or 2015, 2016, please give me TaskRabbitMPLS in 2017!

I think freelancers are wonderful for tech needs and I use them often for systems, DBA, and IT support work; any area where the level of expertise I need is greater than the skill set of my team or more commonly where resource constraints exist. It gets work done fast, done right if properly managed, and allows us to learn and scale simultaneously.  My past position in corporate IT even drew me to this model with hiring for full-time positions by starting as a contractor for 3-6 months as a test drive for both parties. Hiring is hard and if the super-tech HR systems for talent identification aren’t in place I would much rather do a contract-to-hire then do a straight hire; I think it is fairer to both parties as it allows time to feel each other out.

Okay, Okay. So you think you can freelance in the tech scene? I bet you can! If you are considering a move then here are some considerations for you to bring into your brain-space when you are making the choice.

  1. Why do you want to do this?
  2. What do you do well?
  3. Who do you know?
  4. How do you plan to charge?
  5. Are you a business?

Why do you want to do this?

Tech life has never been better. The marketplace is strong, tech is central to most of the domains out there and the offshore focus from the aughts has withered on the vine for most of us. Techie life for the full-time worker is solid, so how could it get better? For some its roles and responsibilities and career growth at your current employer but perhaps the grind of your workplace has reached a tipping point and you want to go independent, either for the chance of higher earning power or just to do something new and interesting. Whatever the circumstance know your why.

For me it was the opportunity. I had come back from my experiment in the wine-making world and joined my buddies startup to run the tech but our funding was so low I had to compliment my income with some side work. That’s what led to me starting my consulting company and 8 year run as a consultant. My why was opportunity and taking a leap.

What do you do well?

Its so important to know what you do well and what you don’t do well and then how you can market that story in your new venture. Are you an expert in a legacy stack like ColdFusion? Are you a user experience ninja? Product management, MySQL DBA, architect, AWS, training, etc. There is something you do well. I was raised in a project shop that worked on large accounts in e-commerce, CRM, CMS, and custom dev so I was able to consistently touch diverse areas and was always involved in the client meetings because one of my core skills is the ability to speak to the business and tech. When I started consulting I looked for projects where I could help be that bridge and lead the product/project to launch.

Related to this is what you don’t do well or what you don’t want to do. While I’m good at diagnosing the root cause of an issue I don’t support. I prefer spending most of time with the big picture view rather than being heads down all day coding. Most in our field are the opposite, figure out which you are and look for clients, roles, or contracts that fit your style. There is always more demand and flexibility for the heads down roles then there is for leadership roles and it’s a different sales strategy as well.

Who do you know?

So, really, who do you know? Also known as how are you going to find work? I was fortunate that my friend suggested I walk the path I did, he is much more of risk taker than I and saw that the risk was actually low and the need was high out there given my skill set and network. And he was right because a majority of my clients were either past colleagues or former clients! If you don’t think you have the network for that then you should consider focusing on contracting. In my terms, contracting is when you work with a recruiter or placement agency to find you contracts of variable length and compensation. That is how the majority of independents work. It’s a trade-off, outsourcing the client acquisition for a fee to the recruiter. My experience was as a consultant, again in my terms, that was where I found the client and made the sale either on a bid or time and materials basis, no middle person. The client acquisition process for a consultant is long and expensive but the hope is that your investment pays off for both sides via a long-term relationship measured in years and the financial upside is far greater.

A talented freelance coder easily can earn $100 to $200 an hour. –wsj.com

How do you plan to charge?

If you’re a contractor you will be talking in terms of rate. There are two points of negotiation there, the rate you are paid from the recruiter and the rate they charge the client. Your challenge is to understand the difference and work to know all the data. That delta between the rates is what the house takes and the recruiter may be incentivized to maximize that gap (often the case). Recruiters are well versed is discussing rates and odds are you are not; expect to feel some level of discomfort the first time you explore this area, it’s okay, work through it. One of my first experiences was where a recruiter was trying to pay me $35/hour and at that time I didn’t know rates but I knew it felt really low for my level of self-perceived talents! I ended up passing because it just didn’t feel right, eventually you’ll learn rates. Also, there are shops that are transparent with their practices and will just tack on a flat fee to your expected rate…if I were contracting that is who I’d work with. In Minneapolis that would be a shop like DevJam.

If you are a consultant you have more options. Rate or time and materials is common and I would bill monthly. Over time my rates got quite high and some clients wanted a price break and for them I offered blocks of hours that they could purchase at a reduced rate, this worked because I was prepaid and was willing to take in a bit less for a happier customer and reducing the rate of payment default. Earlier in my career I worked more on a project basis where I would bid on work with written proposals. That is normal for most consulting shops of any size but given my solo focus and lack of interest in growing into a consulting shop I moved away from those. Either way you will have times where you are uncertain if you can charge a certain dollar amount or if you should discount in order to ‘secure’ the work. To that I say good luck, it takes reps and resolve and there isn’t a crystal ball; just know what you are worth.

Are you a business?

You better be! My dad owned a bar and restaurant when I was growing up and Minnesota had Dram Shop rules that made it a bit too easy to bring lawsuits against providers of alcohol.  My father let me know the importance and necessity to separate business assets from personal ones. You won’t be subject to the level of risks as a bar owner but you should still protect yourself and besides its easy. Go to your state’s department of commerce website and register yourself as a LLC. Yes, you can overcomplicate it and go to Delaware like the startup sites will advise but why make it hard. I advocate to keep it all easy; spend the $50 and come up with a basic name that won’t cause embarrassment. I used JD Laboratories because my first two initials where “JD” and I had a chemistry degree in addition to computer science so I thought that made me sound smarter, perhaps, who knows it was way back in 2004!

Next, use a credit card specifically for business expenses, it’s so much easier when you do bookwork. You can also set up a business banking account if you want or use Quicken, Quickbooks, Freshbooks, etc for invoicing and tracking your P&L (Profit and Loss). This can easily be used to fill out our schedule C on a tax return. You could go with a S corp and do a corporate tax return but IMHO its much more a pain then it’s worth unless you have employees and real growth potential…but this is just to be independent!

Good luck with your endeavor. I had 8 years of consulting that were professionally enriching. In the end I went back to the workforce as I was more intrigued with the roles and responsibilities part of the equation that larger orgs offered. But consulting bought me a house and my masters in software engineering, brought 3 startups, offshoring experience, travel and a ton of pride at being self-employed.

MBA – that Sprint is D-O-N-E

Yes! My latest bout with formal education is over and gone as I finished up my last course, negotiations, over the condensed January term. I had thoughts going in to the merits of a MBA and have thoughts coming out too which I’ll draft in the future but for now I want to celebrate this with a picture.

Courses___Trello

 

I’ve been a trello user since its inception and brought it into every client opportunity I’ve had and organization that’s employed me. And in the world of tech where agile / scrum is the word I leveraged the same style to tracking my MBA education. So the MBA sprint is over as the image shows. I’m not sure if a course would be a story or an epic and I won’t put on my product owner hat since I play one at work everyday; I’ll just celebrate and figure out what’s next.

The Misperception of New Technology – Big Data Edition

Big Data is the answer. It will provide the new customer insights to propel your company to the market leader and do so faster, cheaper, and utilize your existing resources. I’m sure this claim smells a bit to you and with good reason. There are adages for a reason and if “it seems to good to be true then it likely is” seems fitting in this case.

It’s easy to leverage buzzwords in our daily conversations, sales pitches, and marketing materials without really understanding what they mean. Some of today’s buzzwords like “Big Data”, “The Cloud”, “Software-as-a-Service” (SaaS), and “machine learning” are commonly used in interchangeable ways. For example if you’re a SaaS based company with traditional hosting in data centers are you cloud-based or not. If you are then what happens if you transition to AWS? Are you more clouded? I joke to show that there are always gaps between what words mean and how they are actually used.

I’m walking this road today because of an article in the Wall Street Journal titled “The Joys and Hype of Software Called Hadoop” (http://j.mp/1qZFiAO) and what noise I think it is. The primary point of the piece seems to be that Hadoop and many Hadoop based companies like Hortonworks haven’t been able to meet the expectations of the marketplace and while I don’t dispute that because its always easy to wag a finger at technologies I think the article only touches on the bigger point of using the right technology for the right thing in the right way; and that point is the inherently tougher solve in today’s enterprises.

Big data offers many advantages over traditional technologies like databases and data warehouses. First is the ability to horizontally scale which allows a faster, cheaper (both in hardware and licensing) way to expand your capacity than traditional vertically scaling options in SQL-based worlds. Second is the inherent flexibility of how data is represented and modeled allows for the possibility of combining disparate data sources in interesting ways and often in quicker implementations. And this is where the sell is.

When I decided to make a change from my consulting practice in 2011 I made the choice to seek out a position in a traditional corporation. The purpose was clear. While I had worked with large clients in my past I had never worked in a large organization, I always assumed it wasn’t for me but I knew I had a large gap in my understandings of the working world and I wanted to shore that up. Second, I was considering building enterprise software in the future and wanted to understand my future customer. That was a unique and interesting experience I’ll comment on another day but for this topic I’ll say that I saw huge opportunities for data mining that were not being taken advantage of.

Banks by nature have so much data about their customers that could be leveraged including demographics, spending patterns, location-based data, and life events but the bank I worked for wasn’t close to leveraging all this data. Why is that? First, they were having a difficult time with their warehousing strategy and were backlogged on all those initiatives. And whenever a new one came in it had to be reconsidered against the Master Data Management strategy and then normalized for warehouse operations. If that was ever completed there was then writing the queries and trying to have the business understand what the data meant in the normalized fashion so they could explore it. By that time the budget was slashed and moved to some IT project that was required under banking regulations and the warehouse was never in a state to provide insights.

Big Data feels like a solve in these instances. Leadership can cite how the warehouse team doesn’t produce and look forward to the words “faster” being put into practice but that misses the larger point that the organization isn’t able to deliver their projects today with technologies they seem to understand. That leads to this quote from the WSJ piece, “The dirty secret is that a significant majority of big-data projects aren’t producing any valuable, actionable results”.  And to this I’d say why end there? Aren’t there a plethora of statistics showing how IT projects in the enterprise fail?

Even if a company implements a big data solution it still needs to understand that they will likely have a shortage of the right talent. Newer tech isn’t understood as well by those immersed in older tech and if your workforce isn’t readily adaptive in capability and buy-in you’ll have issues. Also, the problem is far greater than technology because even if you have the data in place you still need the right people with the understanding of the business and marketplace to deliver the insights.

Another adage is that there is no silver bullet or panacea for your business. Whether its agile, outsourcing, offshoring, NoSQL, mobile, or any other buzzword the keyword is leadership. Leadership to have a vision which leads to a plan for how to leverage the right tech at the right time to solve the right thing.

When Should You Outsource? HBO Gives a Example.

Outsourcing is far from a new topic in business and there are many depths to which a company can leverage outsourcing to optimize its business. The Wall Street Journal had a recent article around HBO titled “HBO to Use MLB Advanced Media for Stand-Alone Streaming Product” that I found to be a great example of a company understanding their core competencies and deciding to outsource accordingly.

HBO is the leader of premium TV/cable networks. The invented the segment when they introduced original programming to cable and have recently made waves with their plan to create their own streaming service. They opted for this strategy because HBO operates as a premium service that is only available to cable and satellite users and they saw a risk to their model with the growing trend of people ditching these services for streaming only options like Netflix and Amazon Prime. From the article we learn that the orginal intent was to build out their technical capabilities to support this streaming model by ramping up their tech teams by an estimated 200 people. They’ve recently opted out of this strategy and decided instead to partner with MLB Advanced Media for this work.

There are details we don’t know but it sounds as if there was some disagreements about whether the streaming operations where important enough to be in-house. Granted we don’t understand the costs or details but I’d still contend this is an excellent example of a business understanding when a project/task falls outside their strengths and to outsource it. Technology is amazing, I’m in it and I love it, I’d want to build this platform and own it but that doesn’t mean a business should hold all things shiny and new.

At my current company we leverage outsourcing in areas that are far from our core competencies such as: data center support, video creation, and copy writing. There are some areas where I don’t think we should leverage outsourcing and that deals with defining plans and key internal processes. That is one area where I think a business must spend the time to understand how it currently operates and how it should operate to achieve business goals, at least at a high-level. Once that is done the outsourcing of nitty-gritty can be much more effective because you still own and understand the overall vision.

One example from my past of when to not outsource, at least on the basis core competencies and doing what you do well, is the advice an entrepreneurial friend gave me when I was running my software consulting business years ago. I was knee deep in a busy cycle and trying to juggle existing clients, projects, and trying to find time to bid on projects. Time was in short supply, I was stressed and he suggested I outsource everything to offshore teams.This technique had been applied by my friend as he started building his wealth years earlier and I respected his advice but knew it wasn’t for me.

Up to that point I had outsourced a few, very specific and extremely detailed bits of work to offshore teams but never had I gone as far as he was suggesting.  For me to outsource all of these tasks would leave me to focus on the management of all the projects with offshore teams which isn’t something that brings me joy (I could of course outsourced that as well). Additionally, the rest of my focus would be on landing new clients to be able to leverage this new ability to scale but selling is something I’m able to do but that doesn’t mean its a core competency of mine.

So in short I’d be trading what I did really well at that time in my career for areas that either don’t bring the satisfaction or weren’t areas of strength. In my case the outsourcing didn’t work and I’m glad I didn’t pursue, even at the potential cost of my current net worth.