The Ruby Freelancers Show 002 – Keeping the Pipeline Full

by woody2shoes on February 7, 2012

Panel

Discussion

  • ChiliProject/Redmine
  • Website Contact Form
  • littlestreamsoftware.com
  • business/niche apps
  • libraries
  • getting involved in open source projects
  • Refinery
  • Fat Free CRM
  • Instructure
  • speaking at conferences
  • talk to other developers, have a community presence
  • users groups
  • referrals from other/larger firms
  • subcontracting
  • blogging and podcasting for lead generation
  • be an expert in your field
  • build trust with potential clients
  • the tiers of intimacy
  • do what you enjoy doing
  • job boards
    -but-
  • not job boards
  • compete not on price, but on qualities
  • recruiters
  • government contracts and associated suicide accessories
  • don’t work for equity unless you’re fine as an investor
  • vetting clients
  • define availability, timetable, deadline and rough spec
  • research the client
  • Obie Fernandez’ Master Services Agreement
  • Statement of Work
  • New Leaders Master Service Agreement (CC)
  • subcontractor agreements
  • if the client gives you a contract, it will be slanted toward the client
  • if you give the client a contract, it will be slanted toward you
  • considering a client “in the pipeline”
  • signed contract
  • deposit in the bank
  • determining sufficient deposit
  • deposit in escrow
  • does the client set off alarm bells?

Picks

Transcript

CHUCK: I have this awesome project, and I want you to work on it. I will give you 20% of the company.

Hey everybody and welcome to Episode 2 of the Ruby Freelancers Show. This is your host, Charles Max Wood. And this week on our panel, we have Eric Davis.

ERIC: Hey.

CHUCK: We also have Evan Light.

EVAN: Hello!

CHUCK: And finally, have Jeff Schoolcraft.  So this week, we are going to be talking about, like we said last week, about keeping the pipeline full. I think we all kind of approach it a little bit differently. I know Eric kind of gets a different lot of business off of ChiliProject/Redmine. And so that’s kind of an interesting draw, just because it’s from an open source project instead of putting yourself out there on the podcast. Do you wanna talk about how that works, Eric?

ERIC: Sure. I mean, it’s not really… there’s nothing really complex to it. A lot of people I think over think it, it’s just the idea of I got started working in a project, it was a fairly visible project. Did a good work in it, and basically say like, “I’m available if people want Ruby on Rails consulting.” And slowly over time, people started coming to me saying, “Hey, we want you to do some Redmine stuff for us.” I mean, it’s in Rails , so it doesn’t matter. And then over time, just started taking more and more of that work.

And I think about a year ago, I basically moved over, and I’m only doing work for Redmine or ChiliProject  code. And I know a couple have done it in the Ruby community, but it’s just the idea of like you are doing good work, you are putting your portfolio. And since it’s open source, people talk about it a bit more than it’s like a private project. And just kind of the basic promotion for business. And big thing for me, have a contact form on my web page. Every week, I got a couple of people email me asking me if I’m available to do work for them. So it’s pretty simple, it looks kind of complex because I’ve been doing it for three years now. But I mean, I can point out probably a couple other projects people can step in and do something similar.

CHUCK: What’s your website? Because I wanna look at the contact form real quick. It occurs to me I should have one but I don’t.

ERIC: Yeah, so it’s littlestreamsoftware.com. There should be a contact thing up on the top. Pretty visible link. And I think it’s my second or third most popular page other than the homepage. Honestly, I’m just using WordPress on the site, but that form is just a form. It’s basically like name, subject, body and then it has little a little category thing on there, but it’s just a way for someone to look at my site, be like, “Oh, this guy looks like he knows what he is doing. I’m going to send him an email.” But instead of having someone open their email client, they just type it in this form. And it used to send me an email and also send me a text message, but now I just have it send me an email, and then I reply to them and manage the project just like that.

CHUCK: Awesome. That’s a cool tip too. So I think it’s really interesting that you can get involved in open sourced project and then wind up getting paid to support it. Do you have any suggestions for people who might wanna kind of pursue that course, or get involved in different open source project that maybe they haven’t worked in, but they are familiar with the technology it’s built on?

ERIC: Sure. I mean first thing, you got to find something you are going to enjoy doing. Like I have always worked or messed around with bug trackers. I mean, ever since I’ve been doing software, I’ve been screwing around with them. So doing a project management system that had pretty high class bug tracker was like a perfect niche for me. And since it’s a project management system, it’s kind of businesses will use it, versus like say game where it’s not like a consumer level thing.

So any kind of business app would work good. You can do libraries. I think I can’t remember  the guy’s name, but he does… I think it’s like search engine kind of thing for Rails. He did some similar stuff. And I mean, a lot of apps needs search, so it’s kind of a good underlying library. You can pick this out. You can go through any of the SASS things you might subscribe to just as a freelancer, pick out like okay this is project management, this is invoicing and  see if there is an open source project out there, or if you will be interested in starting one. That’s a good way to kind of get some good visibility.

CHUCK: Cool. I like it. What other ways do you guys find leads?

JEFF: I mean, jump on the end of Eric’s response, so a couple other projects that are big right now, if you want specific names for projects that are big right now, I mean, Redmine ChiliProject is still pretty  big. I don’t know if it’s the biggest open source Rails app that there is, but it’s pretty close probably. But Refinery is another good one. It’s really popular right now and Fat Free CRM, that was getting a name change, but it’s been upgraded to Rails 3 something I think a while ago, right around the time it came out. And that’s still a fairly decent open source project. I’ve a gotten a bit of work customizing Fat Free CRM.

CHUCK: Yeah, there’s a company out here called Instructure and they have a replacement for blackboard if you use that at any educational institutions, and blackboards are actually really painful to use, but one thing that worked out there, was that they open sourced their solution. They haven’t open sourced everything obviously, but I’ve gotten quite a bit of work supporting that, just because I’m willing to jump in and I know Rails and I know how to deploy it. So yeah, it definitely paced off to get involved with some of these open source projects and make them work.

So what other ways do you guys find leads or clients?

EVAN: Well, I can repeat myself a little from I think the end of the last podcast, so I’ll keep it short. Speaking at conferences and running Ruby DCamp. Eric pointed out, and I agree. I’m usually not reaching potential clients; what I’m doing is I’m reaching second hand relationships. I’m talking to other developers, but what I found is that by having a presence in the community, people will occasionally send work my way. And it’s usually pretty decent work, so that’s pretty much all I’ve gotten most of my work. Pretty much just knowing people. In my case though, I’m a bit of an extrovert. I’ve been kind of quiet in this particular podcast, not on the first one, but  I have the tendency to love talking to other nerds, and so that just means he’s committed to get to know lots of folks.

CHUCK: Yeah, that’s another thing that I’ve noticed with the community things like other’s users group out here, which is not a conference I guess, but it’s the same kind of thing where you are making those connections with other developers. And the guy that runs the users group in Salt  Lake, he works for a consulting company that’s part of the Larry H. Miller group, which is a huge business entity out here in the Salt Lake area. And it turned out that they had somebody come to them that needed some freelance work done, and their consultants are all booked up solid, so they started looking around for another freelancer. And they are telling me of course, “We are going to try and recruit you.” And I’m telling them, “You can try.” Because I love freelancing.

But anyway, it just worked out because he was like, “Well, this guy is a freelancer, you should go talk to him.” And so, I just got a referral that way. And you know, it does work out sometimes where you’ve made connections with another coder, or made connections with another geek, and somebody comes to them and says, “Hey, I need help.” And they are like, “Look, I can’t do it for you. I don’t have time. I don’t have the bandwidth. I don’t have whatever, but there’s this guy that can do it for you.”

EVAN: I think what I’ve found to be especially beneficial is that I guess I knew a bunch of people who run between consultancies. And in a lot of these consultancies, they have a minimum sized project, because they have to support multiple people. They wanna keep their pipeline full. They wanna have projects that extend at least a certain amount of time and  costs a certain amount of bucks. And I’m much smaller. I don’t have those constraints, because I’m just me. So if there is somebody’s consultancy that I know that when they have a project that’s small, they just say, “Hey we know this guy and he’s pretty smart, or atleast seems like he is, and we can’t help you out, but he probably can.” So I end up getting referrals that way too.

CHUCK: Yeah, and that makes a lot of sense too. And it’s funny when you are talking about it, another light bulb goes off, and I actually know a lot of consultancies out here that do that kind of stuff, and I really should reach out to them and say, “Hey, look. If there are any little fish that come in your way, I’m happy to snap them up.”

EVAN: Yeah, it’s a huge win-win actually, because it means… because I don’t know about you, but I really don’t enjoy turning clients away. I don’t really enjoy telling people I can’t help them. And these other consultancies, it think they feel basically the same way, so they have the benefit in saying, “We can’t help you, but we know someone else who probably can.”

CHUCK: Right. And it makes sense too because they are providing a solution. It’s not that, “We are going to coat it up for you,” solution. It’s “This other guy can do that for you.” But it’s still, they are providing a solution, they can maintain that  relationship with the client. And then, if something bigger comes around, then they can get the referral. And if it’s another small project, then you may pick it up. But otherwise, they can snap that up to. So they do get to maintain that…

EVAN: Potentially. I find the least, somebody’s organization, they just tend to hand off the relationship entirely, which isn’t necessarily a bad thing either, because if you know… one other benefits of knowing other  developers or potential benefits is if something bigger comes down the pipe, well then  you can gather together a kind of team or co-op, and work on project jointly.

CHUCK: Yeah, but I guess what I was trying to say is either way, it’s a positive experience with the bigger consultancy. Are there any other ways that you guys tend to find leads?

ERIC: Another one, when I got started with sub-contracting, so kind of like what Evan was saying, talking with other devs and people like that. You know, one of the devs may have a project that would need say three developers for a month and a half, and they are also a solo developer, so they pull another people. And I think for the first year, or year and a half, probably half my projects where it’s like sub-contracting style, where I was working with another person and it worked really good. It’s like a good way to get experience and then later on, I had this network with all these people I worked with and all these good results and it’s easier to get like in the clients not a sub-contracting agreement, but an actual working with a client directly. Other than that, I’ve been pretty lucky. Like I’ve been writing and blogging a lot, and I had some products, but those typically don’t bring me that many leads compared to the open source stuff at all.

CHUCK: Right. It’s funny that you bring up blogging and stuff, because host Ruby Rogues and I’m hosting this podcast and the JavaScript Jabber podcast, and almost all m leads come from not blogging but podcasting, which is kind of a kin to it. And it’s funny to me you can sit down, and you can talk with a bunch of other guys about this stuff, you can kind of get a feel for where they are at, or you can just talk about what you know, and people get excited and you are the expert and they come and hire you. And that has really paid off for me. In fact, I had a client this last week, or two weeks ago, but he basically said like, “I’ve had a major deal go down with my business and I need to figure some stuff out before I can have you do any more work. And so, is it okay if we back off for a month or so, while I get everything in order.”

And so my time slowed down, and this week I’ve kind of been goofing off a little bit and I didn’t have his project to work on and I’d subcontracted most of my work. And yeah, it’s funny because this week, I mean, a couple of people got in. I had some free time, and they are like all over filling that time for me. But it really does come down to, “Hey, you talk about this stuff. You sound like you know what you are talking about.” And with large enough audience and enough attention, enough people listening, reading or whatever, you really can drive some business off of that.

And it’s relatively easy to get started. I mean, you can setup a WordPress page in half hour, and have all the bells and whistles in there, and start blogging. And within a few months, people will start coming to you, “Oh, you are the expert. Can you help me with this?” “Oh, you obviously know about this thing that you blog about, so you help me take care of it?” And you know, it’s kind of the same thing with the conferences where you are talking to geeks and not necessarily to the business people, but at the same time, it does pay off.

And I just wanna point out too that I have videos on teachmetocode.com, and that has actually drawn in the business folks, because I had one client, he came to me and he basically said, “I want a twitter clone , and I watched your video on it.” And so you can target some of that to the clients, rather than to the geeks and make it work that way.

ERIC: Yeah, I was going to say one thing. Like the big thing to keep in mind is especially if you are doing remote freelancing, you need to build up trust with your potential clients. So in my case, I do lots of work in community, I have 90% of my code is open source and out there, so people can actually try out like what I do for free without even talking to me. And so by the time they actually contact me, they build up this trust in me and they know that I can deliver. If you are doing your podcast, that’s kind of the same thing; they hear you talk, or doing the video, they see you know what you are doing and personable and all that, and they have trust for you.

Same for Evan, if he’s organizing a conference, he’s bringing people together, they can always see that trust and see that other developers put their trust in Evan. And so, it really comes down to trust and kind of making the client comfortable. And most of the time once they are comfortable, they will contact you and it’s a pretty simple process when you look at it like that.

EVAN: Can I get some … that says, “In Evan, we trust.”

CHUCK: (chuckles)

ERIC: Yeah, I don’t know where they’ll accept that.

EVAN: (chuckles) But seriously, I’m a little hesitant to rehash, but I think we talked a little bit about how this is just a form of social proof in the last podcast. Standing up in front of the audience gives you… maybe we didn’t talk about this. The conference gives you relationship with an audience. Doing a podcast, they can hear your voice, rather than read your work, so it’s a matter of… frankly, it’s a matter of intimacy, that just seeing words at the other side of the screen, is less intimate than hearing the voices less intimate than seeing a person is less than being the same room as.

CHUCK: Right, yeah that’s definitely true.

EVAN: And ultimately, you are building up trust, you are forming bonds with people. And it’s not necessarily just about winning business. I mean, I conferences because things piss me off, and it gives me something… (chuckles) it gives me some talks  but it also gives me reason to talk to people – which is good marketing too.

CHUCK: Yeah, I think there’s definitely that element to it too. I mean, Eric does the Redmine stuff because he really enjoys it. You speak at the conferences because you enjoy it, and I do the podcast because I really enjoy doing it.

EVAN: I didn’t ask to be on a podcast and you asked, so I get to talk at more people, and you know I like to do that.

CHUCK: (chuckles) yeah, I really have to twist your arm, didn’t i?

EVAN: Oh yeah. (chuckles)

CHUCK: But at the same time, I mean, you do something that’s natural to you. I’ve seen people go out and try to artificially generate this kind of thing by blogging or something that they are not good at, or they are not really into, and a lot of times, you can really tell. And so you really do need to kind of figure out where your niche is and how you wanna read out to people.

EVAN: Going back to last week, again, the Get Clients Now book really focuses on that. It helps you… this guy who wrote the book needs to be paying us right now, (chuckles) because we are advertising it so much for him, but it really is the recipe book for helping you distil what it is that or what ways would be comfortable and effective — maybe even enjoyable for you — to market yourself and those are always going to be the best forms.

JEFF: The author is technically a woman.

EVAN: Okay, so *she* needs to send us some kind of affiliation bonuses.

(laughter)

CHUCK: But it really is true. And there is definitely more to it than bringing the leads in. One other source that I wanted to talk about and maybe we can talk about how we handle things once people contact us, because I think that’s also an important in keeping the pipeline full. But where I found at least one client… actually there are two sources, one is job boards, and Jeff actually has a product that scours the job boards and figures out which ones are freelance and will let you know. And you have like Ruby and JavaScript  and iOS and a whole bunch of different ones that you can sign up for, don’t you?

JEFF: You have seventeen categories or so, and those are just the ones that I’m aware of. So somebody asks for C++… it was because I haven’t built like a natural language parser and hadn’t figured out what the job categories are, so I have manually decided what the categories are. So a bunch of designers are probably my biggest one; designer, copywriter, the Ruby Rails stuff, PHP, Django, WordPress — all that stuff. I mean, now it’s job boards have been the biggest thing for me. I go into all these job boards, click on a link that was or wasn’t visited and get ready to type in my email, and see it autocomplete and know that I already type already send something off of this dude.

EVAN: So I guess I’m going to speak or play the devil’s advocate all the way through. Can you believe this? Seth Godin — of all sources — maybe a little dubious really turned me off of job boards and that’s because I see job boards as what he would call “race to the bottom”; that most of the people who wanna hire off job boards usually are not looking for the best people they can get; they are usually looking for the cheapest people they can get.

And if we compete on price, then well, we are going to be making those kinds of rates Eric was talking about last week  — they are kind of laughable. Competing on price and the fact that  you compete on experience, on the background, on unique qualities, things that make you distinct, so that way you are not really competing, you set yourself apart. I think that that’s an important thing to mention, as far as marketing goes.

CHUCK: Yeah, there definitely is some of that. I have found that depending on the person who posted the job, you can convince them that they want you because of your experience as opposed to somebody else because of their lower rate. And in some cases, you can even explain to them, “Look, if you get a guy that takes four times as long as I do, and you are paying them half the rate, then you are going to spend more getting it done.” And the maintenance cost in the long run are going to be up there anyway.

EVAN: So let’s talk about that just a little bit more, because you mentioned how do we fill the pipeline. To me, that sounds like a lot of effort. And I’m going to fall back on things I was saying last time. So I guess as a “lazy” programmer, somebody is going to do what it takes to get the job done, but not going to try to do it smartly, I don’t wanna have to scrape and fight, in order to win every contract. What I really prefer is that people come to me and they are already interested in doing business with me and it’s just a matter of working out the details. And that’s how a lot of my contracts have been. So it’s been very little effort. And apart from one in the past, over two years, I really haven’t had any problems that way. And so when it comes to closing a client or it’s usually, let’s just discuss rate, let’s just discuss how soon you are available, let’s just discuss approximately how many hours a week you  think you are going to need me, how you are going to need me for — and that’s about it — that’s just dotting i’s and crossing t’s.

CHUCK: Yeah, I have to say that that’s generally been the rule for me over the last year at least. But when I first got started, it was like, I didn’t know where to go, so I was looking at the job boards and I chased a few leads that way.

EVAN: Now, I’m going to go back to what Eric said earlier though. I think subcontracting is an awesome way to start. That’s what I did too.

CHUCK: Yeah, definitely. The other place that I have found that works out, it doesn’t work out very often, but it does work out on occasion. My first major contract — the one that lasted for about a year before I finally just kind of fire them — was through a recruiter. And you know, that worked out. The rate wasn’t up where it is now and things like that. But when you are getting started, you kind of reach out to everybody. And somebody referred me to that recruiter, and it worked out that he had somebody coming to him, trying to find somebody to maintain their applications. It’s another resource, but like I said, I’ve only had it work out once and it’s kind of a fluke thing, because most recruiters are trying to fill full time jobs.

EVAN: Yeah, but like I said at the same time, we are talking about the state of if our business is great now, but when business is poor, then you reach out further. So I say you, but if business were bad, then sure, I would take great cuts. I would talk to whomever it is has work to offer, as long as it’s not working for the federal government ever again…

CHUCK: (chuckles)

EVAN: Just had to get it in there. I’m sure Jeff will agree with me. (chuckles) Come on, Jeff.

CHUCK: So they send you the pay check and something to slit your wrist with?

EVAN: (chuckles) Working for a government, yeah, and/or an explosive to blow myself straight to hell if neither of those two work.

CHUCK: Yeah, sounds fun.

EVAN: (chuckles)

CHUCK: Alright, so people come to you and they say, “I want you to work on this project for me.” What typically is the process for lining up the work and making sure that everything is going to work out? Because I’ve had people come to me and they like, “I have this awesome project and I want you to work on it, and I will give you 20% of the company.”

EVAN: (chuckles) Right. Well that’s one of the easy ones. If they start talking about equity stakes, that usually means they don’t wanna pay you. And I think we’ve all gotten that one.

CHUCK: Yeah. I usually tell them at that point if I wanna gamble, I’ll drive through Vegas…

JEFF: Yeah, equity stake or anybody that says, “I want something just like something else,” is always a huge red flag.

CHUCK: Yeah, the only caveat there is if they can give you, “I want something like this,  except for…” and then they can give you a major, unique selling proposition that makes it different enough, then yeah.

EVAN: Well, yeah if they have a niche spin on something, … are usually where the business is at. But even then, as far as taking an equity stake, even the most important thing to remember is what that means is you are becoming an investor. So they need to sell you as an investor. And if you take that, then it’s not payment you will incur on that company. So you have to consider, is this something that you would put money in if it was just a matter of asking you to give cash. Because in effect, that’s what they are asking. And my answer is almost universally no.

CHUCK: Yeah, same here. So somebody comes to you and they say, “We are going to pay you. We’ll pay you your rate, whatever it is.” So how do you start vetting them to make sure that things are going to work out?

EVAN: I’m curious to hear what everyone else has to say.

ERIC: So actually for me, I’m going to back it up a little bit. Typically, if someone else comes to me and says, “We want X.” X is like an idea or process automation or something, and typically, they have kind of a couple sentences, maybe a paragraph, so I’m like I have more than that. And right now, because of the state I’m in, the very first thing I do, I try to figure out the availability. Like, is this like could this be banged out in a week? Is this a month long project? Is this a six month full time sites thing? Mostly because I have very little availability. And that same time, I also try to figure out like are they on the deadline? Do they need this by end of February or something. If that’s the case, then it’s like, if those don’t match up, I pretty much cut them off and say, I don’t have availability for this, I can’t help you.

And then kind of what we talked about earlier, I actually have a list of people I refer people to, so I’ll be like, “Talk to one of these guys. They might have availability. They can hit your deadline.” So availability is kind of the first issue. After that, it’s kind of price comes up, but I haven’t had a lot of price resistance, but I think that’s mostly because I’m pretty much one of the top providers in the niche I’m in. The total cost comes up, but at the same time, doing what I’m doing, I have scripts I have a lot of automation, so that it actually takes me less time to do the same amount of work for things.

But a lot of the time, it’s just a couple back and forth email of like kind of a rough spec, not like full on technical specifications that you hear about from waterfall like, “What are we doing? What’s this going to encompass? How will this integrate with other things?” And then typically, I’ll get on the phone with them for an hour or so, and kind of chat through it. And I’m basically looking for like is this something I’m interested and something I could build for them?

If it’s like a Facebook clone, I’ll probably decline. I’ll be like, “I’m just not interested in it. I’m not going to devote my time to it.” But if it’s like a technical idea, it could work and I’m interested, then I kind of do a little bit of vetting on the business. Like is this company going to be able to pay me in cash? Are they going to be around at 6 months? Is this guy going to be a good person to or is it hard to get a hold of them — that sort of thing. I mean, I’ve heard someone describe it as like a courtship; you are going to be dating this client for however long it’s going to be, and you kind of want to do as much of it upfront, just so there’s no surprises down the line.

EVAN: If you are listening to this podcast, you need to rewind the section where Eric starts talking, and listen to it again, because this is almost the perfect distillation of what I do, but I wouldn’t be able to say it.

ERIC: (chuckles) And so I mean, we talk about that. And I mean, it eventually gets to a point where they are like, yeah, let’s move forward, and I have time and stars align and all that stuff. Basically, I have two contracts I send over. I got this idea from Obie Fernandez. I think he is selling his contract, but I got mine done separately. One is called the Master Services Agreement. I think it’s like ten pages of legal jargon, but it’s pretty much pretty fair and balanced, cover your ass on both sides of it. It includes an NDA and all the fun stuff you have to do.

But then, I have a second contract which is called the Statement of Work. It’s roughly two pages, and it’s some legal jargon, but it’s actually normal text I guess, I could you can read it and know what you are talking about. And the way it is the Master Services Agreement is like, if you are going to work with me, it’s a terms of service in a way. The statement of work is like, “For project x, we are going to try and do this, here’s our budget, here’s out timeline, we are going to use these libraries that  have these licenses, things need to be bought.” And it’s basically a way to make sure that two are all the same page.

EVAN: Let me stop you here just one second because I wanna say something here. Chuck already knows what this is like. I use a contract that’s based on a creative commons contract. I believe Chuck uses this one too when he started it. That was released by a company called New Leaders. I think that there’s probably newleaders.com or thenewleaders.com. Google them.

Anyway, go find their website and once you find the website, look through their website for contract, because they can have very nice Master Services Agreement that do creative commons, and they are cool with anyone coming along using it for their business. You might have to tweak it a little bit if you don’t live in California, but it’s pretty darn thorough. And while I’ve never had it read by a lawyer, as I said, it’s pretty thorough.

CHUCK: So just to jump in on this a little bit. I do use the same agreement. I did modify it so that you’ll go to court in Utah, instead of in California.

EVAN: (chuckles) Right.

CHUCK: And the other thing I did is I actually sent it to my attorney and have them look over it. And he came back and he said, “Yeah this is great. It covers everything you need to cover. I wouldn’t change anything on it.” And basically yeah, I was just like, “Here are the couple of questions I have about it,” and he was like, “Yeah, it’s all good.”

EVAN: So I was slightly more risky there in that I actually took on face that these guys have thoroughly enough.

CHUCK: Yeah, well I send it over to him at the same time I had him draw up my sub-contractor agreement. So yeah, I was already paying him to do something else, and I said, “While you are at it…”

EVAN: I actually point people to do something for me at that contract, and they just hand me this same contract.

CHUCK: Oh, really?

EVAN: (chuckles) Yeah, it works that well enough. I treat myself well enough, so it’s never been an issue.

CHUCK: Yeah I didn’t think it’d be a problem, but I just wanted something that basically said…

EVAN: Oh cool, Jeff found it. I got the link in chat. I guess we’ll have that for the show notes.

CHUCK: Yeah, but the subcontractor agreement is a little bit is like, “Any material I give to you is confidential and blah blah.” It covers me the other way, but. Anyway it’s worked up really well and I’ve had a few people ask me a couple questions about it  because it’s slanted very heavily in favor of the freelancer.

EVAN: Yeah, I’ve gotten it to. And so, rule of thumb, I don’t know if we talk about this last time, but when it comes to signing contracts, if a client gives you a contract, the contract is going to be slanted toward the client. If your give the client the contract, the contract is going to be slanted toward you. and that’s natural. So you wanna be the one giving them to contract. And yeah, I’ve had some negotiation over the contents of my contract before as well. I’ve only had one client who said, “We really would prefer ours.” And their contract was really very open and friendly in general, so I didn’t have any problem with it. And then I had another client where — or two, actually — where they have minor issues when they have the IT sections. And they were very reasonable ones. The contract doesn’t mention work for hire anymore, I don’t believe. And that’s generally how a lot of people hire folks like us.

CHUCK: Yeah, same thing here. I mean, there were few provisions like, I can put my name on it that I built it or whatever. I think there’s a provision in there that says they have to link back to you and things like that. There are like, I can’t do that. I mean, one of them was, I was sub-contracting for them so obviously they didn’t want people coming to me, they want people come to them. You know, most of it is pretty reasonable. People come to me and say, “Well, what about this? And what about that?” But yeah. So it’s pretty good. So at what point do you consider somebody in the pipeline, I booked out six months or whatever. Is it when you have a contract in hand and a deposit or…

ERIC: For me, I might ‘pencil’ them in, if they are like I gave them a contract they haven’t signed in, but they are like, “Yeah, we really want you.” And you know, the hours are there and I kind of give them first dibs if someone else come that wants that time too. But, until contract is signed, until I get a deposit, it’s up for grabs. Most of my stuff is very long term stuff, so we take about a month or two ahead of time and get the contracts ready. And so it’s like written in stone by time the date actually rolls around.

EVAN: For me, I don’t really have a pipeline. I don’t know if backlog, I guess I should say. Because most clients, when they come to us, they are not looking for people to work for them in the next three months or six months; they are usually looking for someone to work for them within the next month or today, basically. So I consider them a done deal when they’ve sign the contract and the deposit is in the bank. It’s that simple. That until I have any deposit and I have it in the bank, then we are not good to go.

CHUCK: Right, absolutely. Jeff, you are kind of the same?

JEFF: Yeah, pretty much the same.

EVAN: So all of us take deposits in advance?

CHUCK: Absolutely. Are you kidding? I made that mistake once.

EVAN: I don’t know if I was the one who helped cure you with that or not, but I’m curious… I mean, that, not the problem. I mean, I’m talking to you about deposits. I talk to lots of folks about taking deposits. What I’m curious though is when you guys take a deposit, is your deposit against your first invoice, or is it essentially an escrow until you are done doing business with them?

JEFF: I have Obie’s contracts, and the one he sold. And I think even the one before that. I’ve stolen, borrowed, copied them from a bunch of different contracts. And Obie’s is the one I use now, but his is the way his is set up is the deposits and escrow, used as final payment. Where if there is early termination and that’s paid off first, that’s used to pay off, and then they all bounce or whatever.

CHUCK: I’ve done it both ways, but…

EVAN: Geez Chuck, I didn’t need to know that.

CHUCK: (chuckles) Anyway, the deal is now yeah, I hold it in escrow till the end. Because like I said, I took one deal where I didn’t get a large enough deposit, and then I got burned. And now it’s a substantial chunk of work for two or three weeks at least. Basically, if you don’t have enough in your deposit to cover the upcoming check, then I stop working.

ERIC: I don’t really have a system for it. Most of my stuff now is long term clients. I have one I think it’s gone three or four years straight, a couple of gaps. If it’s a new client, I basically require a deposit. It’s either 50% or if it’s a smaller project, it might be 100% upfront. And then basically, I just apply it to the next invoice. By the time we go through a month, I typically know if they are going to pay me or not. Or on the level of like how good of a client they are going to be. The thing is even on my long term clients, the second they are late on their invoice, I stop work. So they kind of know that that’s there and they pay on time or pay early.

I had one guy who did it for I think six months; he would actually pay me I think a month ahead of time because it was kind of like a fixed amount for a month he knew it would be. But I haven’t done any escrow. I mean, it sounds like a good idea, but I haven’t had the problem of having a lot of work out there, and it not actually happening.

One part of it might be because in my contract, I own all my code, and I actually give the client the GLP license for it, because Redmine project is GPL and because I’m touching so many things in there, it’d be hard to kind of not have it in GPL because of the taint of it. So, worst case scenario, I would get rid of the client, keep their deposit as the partial payment, but I have this new GPL project I can use as like a side project or whatever and kind of use those as a promotional tool. So I mean, I have that. It’s not like I have to throw away the code.

EVAN: So I do exactly that, but I take in escrow, usually about weeks of estimated work upfront. Or if it’s a really tiny project, which is where I take the full upfront, it has to be usually tiny. I shockingly had a couple clients where, even my most recent clients, they said, “We’ve never had anyone ask for essentially an escrow upfront.”

CHUCK: (chuckles)

EVAN: Yeah, and my reaction is that, “Then your contractors aren’t thinking clearly.” (chuckles) And yet they still gave me an escrow. It’s not as big as I’d like, but at the same time, going back to Eric’s remarks earlier about vetting clients, I often refer to my sense of a client spidey sense, not that I really have a spider sense, but do they set off alarm bells for me or not. And if feel really comfortable with them very early on, then I’m willing to give them a little more leeway. Most of them I’m a little bit leery, a few of them, I’m downright nervous about. So the more comfortable I am, the less concerned I am about the deposit, but I’ll still want one. And the less comfortable I am, the more demanding I am that they give me a deposit. And if they are anxious or if they are having … about a deposit, then I just pass on them and I’ve done that.

CHUCK: Yeah, that’s usually a bad sign if they won’t give you a deposit.

EVAN: I agree.

CHUCK: Let’s go ahead and jump into the picks. Unless there’s something that somebody else wants to add. No? Okay.

I’ll go ahead and go first on this one. The first pick that I have is something that I use to respond to emails that are kind of I don’t wanna say a generic nature, but there’s something that I can respond to in the same way over and over, maybe with a few minor tweaks. And I use a program called TextExpander to handle all that. And basically what it is, is you just type in a sequence of letters, and then TextExpander will go in and immediately replace that with whatever text there is.

So for example, if I get an email from somebody who is saying, I would like to sub contract for you, then I’m trying to remember what the shortcut code is for it. It’s nnewsub, and then it basically gives them, “Here’s what I need to know about you in order to hire you.” “I’m not taking sub-contractors right, but I might have some work with later that you can do, so this is how I handle it,” and things like that. And it gives them the full deal.

Now, sometimes they email me with some of the information that I’m asking for in that email, so it’s nice that I can just pluck that in there and I can go in and delete the relative parts and take care of it. And that’s one thing. But you can also do the same thing with like new clients and stuff. And so, “Hey I want you to build this application for me.” You can have a standard response that says, “Hi, thanks. Here’s how I operate. Here’s what I need. Here’s how we are going to work. If you can get me this information, we can move ahead.” So really handy thing there.

And the other pick that I have, it’s not necessarily a product or something you can go buy, but I’ve been going to the local rec center and swimming. And I have to say, just exercising and just making time for yourself is a big, big deal, especially as a freelancer, you kind of get tied up with the work you are doing and everything else and it’s really easy to let some of these things slide, but you really need to be taking care of yourself, so that you are not out sick, so you don’t have other problems. So you can really kind of deliver the best to your client, so that you can just feel good about what you are doing. Anyways, those are my picks. Eric, what are your picks?

ERIC: I have one pick and then one tip after your thing. Exercise is good, and sleep.

EVAN: Dang it, you took mine.

ERIC: (chuckles) It’s a weird thing. Yesterday, I just wasn’t feeling good. I had to basically do invoices. I did that for half an hour, and then I set up a new backup system for my laptop, so it’s 30 Gigs of data that makes my laptop… I can’t use it, so I kick off a backup process and then I went six and took like a 6 – 7 hour nap. Today, I feel better. Like it’s get your sleep. Don’t try to like do the all-nighters. I mean, what is it, extreme programing or agile or whatever. The whole 40 hour a week. Don’t do over time. If you do,  cut yourself slack later. It’s a big deal, especially when we have to jump from dev to marketing, to running your business. And then you have the whole personal life — hopefully.

Kind of also same lines as Chuck, I set up a program called SaneBox. Sanebox.com. it’s a paid service. Relatively inexpensive, but what it does is it logs in to your email account, and basically cleans out your inbox for you. I don’t know how it works, it’s probably statistical stuff, but it kind of categorizes email. And what I’m doing with it is I have three folders, I have my inbox, which is kind of important mail. I have a sane later, which is kind of like what it thinks like, “Hey, you should answer this but you can do it later. It’s not that important.” And then I have one for sane news, which gets all my mailing list, all my weekly subscription stuff — all that thing.

And I’ve been using it for a couple of weeks now, and it’s pretty much saved me at least an hour a day of doing an email. When I started out, I probably have about 300 emails in like the to-do inbox, and now, I’m down to like half a dozen. And so it’s a good little service. I mean, everyone complains about inbox zero and stuff, and there’s a good way to get to it. And since it’s completely automatic, you don’t have to like run it on your Mac. It’s like a program that actually runs. It connects the server. So on my iPhone or on my iPad, on my laptop, I’m looking at the same data. So it’s pretty neat. I recommend it. Give it a try. I think Jeff said he was using it a little bit.

CHUCK: Cool. Sounds like something I should look into. Alright. Evan, what are your picks?

EVAN: I was going to say “sleep”, but Eric took that one. I’ve been using Other Inbox for the past 2-3 years now, which it sounds it does basically the same thing as Sane Inbox. This system has been around for a while, obviously. And that filets a lot of the garbage out of my inbox into folders in gmail. And that’s worked pretty well for me. So I guess while we are sort of on this basics kick of exercise — which I admit I’m utterly miserable about — getting enough sleep, which I’m all too good about. One sort of compensates the other. Sort of. Not really, but sort of.

The other thing I’ll add is don’t even try to work a 40-billable hour week. That’s just crazy talk. 40 billable hour week is pretty much murder. Anything more than that and you are just insane. I usually shoot anywhere from 20 to 30. And while that sounds kind of slack, I might have said this last week, when I’m working on heads down, I don’t really do much in a way of taking breaks other than maybe having some water or maybe getting up to  go to the bathroom or grab food when I absolutely have to have it. So I’m usually kind of burned out, I getting a nap or sleep after I’m done working. So again, don’t even try to work in 40 hour billable. That’s just crazy.

Otherwise, I don’t know that I really have any other picks. I already gave up the new leader’s contract that’s totally a huge pick for me, and obviously for chuck. It’s been very helpful. Otherwise, I can’t think of anything that’s usually critical. Okay, I’ll give one more. One thing that I’ve been using in the past months. Siri on my iPhone 4S. I use it to record reminders when I’m on the go. And most of the time, when Siri is not incompletely insane – which is to say that the Apple service is having problems of some source or when it’s not, which is most of the time — I can just say, “Siri, remind me to blah, blah, blah.” And we’ll usually get it pretty close. And I don’t have to think about. And it’s usually most helpful when I’m driving. So I don’t have to worry about typing something down. And I don’t have to worry about forgetting it, and I don’t have to dial up some phone number or some craziness. It’s just push a button or pick the phone and put it next to my head talk.

CHUCK: Nice. I’m jealous. I was all excited to go get an iPhone 4s when they came out, and Verizon had a deal in the past where you could get a new phone every year if you are on the primary line.

EVAN: And they changed it when they got the 4s.

CHUCK: Yeah, they changed it so I went to get it, and they were like, “We can’t give you this. You’ll have to wait another year.” And I’m like. “Ahhh!!!”

EVAN: Yeah, so my other pick now will be, don’t switch to Verizon, because I found my Verizon service to be worse than my AT&T service.

CHUCK: Out here, AT&T has been more headache than help. Verizon, I have never had a problem with.

EVAN: So if you are in Utah, pick Verizon. If you are in the Eastern Shore, Maryland — which I’m sure that none of you are — pick AT&T.

CHUCK: Good to know. Jeff, do you have any picks?

JEFF: Yeah, I got a couple. I was going to do Sane Box, but Eric did that one. I’ve been using it for a couple of weeks, and I think I went from… I don’t know what it said… I looked at it this morning, I normally get like 77-78 emails in my inbox, and now I something like 7 or 8 or something. So it did a pretty good job out throwing out newsletters and all those other junks that is generally not important. And you can train it to figure out how to do it better.

CHUCK: Yeah, I got a junk email about freelancing or something.

EVAN: Yeah, I get that same junk email too. Damn it.

JEFF: Just spam that guy. So the other one is, Preneurcast. It’s a podcast. Episode 39, talks about how to read a book. And they had Steve Cunningham on. And Steve Cunningham runs on service called Read It For Me. And basically, it’s like summarize or anything like that. It takes a book and try to condense into six or seven pages. So what they do is take it and create a video out of it — video summary of the book — and they try to boil it down to 6 or 7 main ideas. So they have a video you watch, and a workbook and a PDF you can download to sort of reinforce, take action on what you learn, so you reinforce your learning. But they had him on to explain how he actually goes through and reads book to get to a point where you can summarize them for other people. And so it’s interesting insight for me just to see how other people read books, because I read a lot and it’s more mental masturbation than anything else for me.

EVAN: Didn’t I use that one last week? We are going to try and go in here?

JEFF: Maybe.

EVAN: (Laughs)

CHUCK: I’ve always enjoyed visualizing that term.

JEFF: So that’s another pick. It’s quick listen. I forget how long it is, but I listen everything on 2x speed, so it took like 20 minutes for me to get through it or something like that, maybe. And then the Service Read It For Me, I signed up for the trial, but I got to get my username and password, so I can’t say anything about Read if For Me specifically, but it sounds like a good idea. They have a bunch of books that I’ve read or thought about reading in there.

EVAN: I have to wonder if the couple of things ever get lost in reading essentially cliff notes. You don’t have… reading a non-fiction book to some degree, you are forming a relationship with the author. And you wind up missing out potentially on that. And also, I wonder if in trying to distill all the content down, you are just getting the content, but you don’t really get the arguments backing it up.

JEFF: Like I said, I haven’t seen the summary, and part of the discussion was, you have to know what you are going in for when you read a book. So I mean, you don’t read… a lot of people read nonfiction cover, and I do that too, but  I mean, if you are looking for a specific bit of advice in at this point, CoffeeScript came out, anyone figures something out about CoffeeScript. There’s so much background in JavaScript behind CoffeeScript, that you can skip over a lot of that stuff. So you don’t need to do page to page of that and you can skim for the bits that you really need to focus on, or whatever the example is. HTML5 and mobile stuff. I mean, we’ve done angle brackets for so long, we just need to figure out what the bit is we care for mobile. And so you dive deep into that one part.

That’s part of the explanation. I mean, you don’t read from cover to cover. I have an idea of what the book is about before you go in, find the summary or create a summary by reading the first and last paragraph of every chapter, and then take notice when you are reading. But I don’t know. If for nothing else, it’s interesting to think about how you read non-fiction. Obviously if you are reading something   just for pleasure, fiction or biography or something, that’s a different story. But I think the interesting take on how to do it.

CHUCK: Cool. It sounds really interesting.

EVAN: Sign me up. (chuckles)

CHUCK: Definitely something to look at. Alright, well we are going to go ahead and wrap this up. I do believe we are in iTunes now. So if you go leave us a review, we might be able to get on the front page of like the technology section, which would be really cool. And that works off of subscriptions and ratings. And so if you go and rate us, leave us a comment, that would be terrific. And then obviously, go ahead and subscribe.

If you are on another device, then you can also subscribe to the RSS feed and use it that way. As I said last time, we are also going to try and get it in some of the other podcast directories like Stitcher and stuff, so if that’s your way of getting this stuff, then by all means, keep an eye out for it, and we’ll see if we can get it in there pretty quick. Other than that, if you wanna hire any of us, we’ll have some information on the show notes, and we’ll catch you next week!

{ 8 comments… read them below or add one }

warren vosper February 8, 2012 at 9:32 pm

I am a RoR developer with 5 yrs experience who went freelance a few weeks ago.

I wonder if you could expand on “money in the bank” by explaining how you collect payments (check?, paypal?, other?).

I love the detailed info you guys are sharing – keep it going!

Reply

Eric Davis February 10, 2012 at 4:53 pm

I collect payments by check, PayPal, and wire transfers. Typically my USA based clients pay by check and my international clients pay with PayPal or a wire transfer.

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Craig February 12, 2012 at 7:09 pm

So you all tend to not bill your clients for 40 hours a week, instead you tend to bill for 20 – 30 hours per week. I’m just curious, when you take on a project do they normally ask for “full-time”? If so, doesn’t “full-time” normally imply 40 hours per week?

I was recently talking to someone about a job and we discussed 20/hrs per week as “part-time”.

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Eric Davis February 16, 2012 at 7:00 pm

I have yet to see a freelancer bill at 100% (40 hours worked, 40 hours billed). In fact, that is a red flag for me that the freelancer might actually be an employee (a very bad thing tax-wise).

In my experience, when I work a 40 hour week I typically bill 20-25 hours. If I put in some overtime then I might approach 40 billable hours in one week but that is an extremely high amount (e.g. 80/hours worked). 50% billable time is a good average.

Some clients might be asking for someone “full-time” because they are actually wanting something like a contractor or a temporary employee. In those cases the contractor bills for every hour which is how they get to 40 hours/week.

(One common problem is that these terms are mixed and used in different contexts. I consider consultants/freelancers, contractors/temp-employees, and employees as separate groups).

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Mario March 2, 2012 at 5:43 pm

Hi all,

Great podcast! I’m eagerly awaiting the next one…

I have a question for Eric: he mentioned his use of the GPL license for his source code… what version, though?

Reply

woody2shoes March 5, 2012 at 9:19 am

I think it was v2. It’s Redmine that’s GPL licensed, which means that all of his enhancements to it must also be GPL v2.

I believe he mentioned that it’s in his contract just to avoid ambiguity with what he’s creating. (You can’t have a contract that stipulates that you’re closing the source and then use GPL licensed software.)

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Glen McCallum March 5, 2012 at 3:53 pm

Love this podcast.

You mention the deposit being held in escrow. Is there an escrow service that you use? or can recommend?

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Craig B March 5, 2012 at 5:27 pm

It seems that billable hours are about half the hours actually worked. What qualifies as “billable”? the obviously non-billable hours are doing the things to run your own business, but is the typical overhead of keeping the pipeline full, bookkeeping etc really 50% of a typical freelancers time?

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