SXSW – From Freelance to Agency: Start Small, Stay Small

by Kate Brodock on 14 March 2009

Posted in: Conferences & Events

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“The web has always attracted mavericks and entrepreneurs, and a rocky economy makes the freelance life more desirable (or at least more inevitable) than ever. So what happens when your freelance business starts to grow? How big can you get without getting bad? How can freelancers and small teams compete with traditional agencies? Hip freelancers and cool agency heads will answer questions, compare experiences, and tell their stories.

Panelists:

Jeffrey Zeldman, Founder & Executive Creative Director, Happy Cog Studios (Moderator)
Roger Black, President, Roger Black Studio
Kristina Halvorson, President, Brain Traffic
Whitney Hess, User Experience Designer

Question: We planned this panel a year ago, before the recession, but when things were starting to slow down.  How did everyone start out working independently, how was the economy?

Zeldman: It was 1999, I wasn’t feeling like the creative process was clean, he wasn’t enjoying the agency life and how it worked.  I started Happy Cog in 2000 while the dot.com was falling.
Hess: August of 2008.  I had been freelancing since 2005, but got to the point where the gigs I was getting were bigger and more interesting and I had a lot more control and input.  I had more fulfillment than my full time job. If not now, when?
Halvorson: I lost my last job on 12 September 2001.  When I came up for air, there were no more jobs, so I had to make one up.  What do I feel really confident about?  I knew a little about a lot of things, but one thing I felt really good about was writing.  I started handing out business cards saying I was a copywriter.  I slowly built a client base that slowly gave me more work than I can handle, so I had to hire.  I know have 14 employees.
Zeldman: A lesson I heard there, pick someting you’re good at, and call yourself that.
Halvorson: If you can stand up in front of an audience and hold your own on a topic for 10 or 15 minutes, you can probably make money off that.
Black: Do what you would do anyway, and do it on your own.  A boss is going to get in your way.  We have a team of freelancers that we sometime collaborate on projects with, and pretty regularly, but everyone has their own website, etc.
Zeldman: Bring great people in on a project that will do the job well and pay them well.
Hess: When I started freelance, I wasn’t just doing what I do now.  I had an education in computer interaction, and I do a lot of that.  But a lot of people who came to me at first was end-to-end web development.  I wasn’t getting paid very much, so couldn’t pay someone who might be good at something like graphic design.  Finally I accepted that I am a good user experience designer, and I should position myself as that.

Question: Finding one and finding better clients.  How do we do that?  How do you get rid of bad clients?

Zeldman: For me, they were someone who read something I had written, and they contacted me.  So for me, I got myself out with writing or speaking.
Hess: I started out with family and friends.  That grew into their family and friends.  I had also worked for two bigger agencies, and I reached out to my network their, as those colleagues moved around and needed work done.  It became a referral system and it’s been really all networking.  There’s something that I know that they don’t know, and vice versa.  You become resources for each other.
Halvorson: I knew I’d have to go to these networking things and hand out business cards and it’s just not my thing.  There are other ways to do it. I built my business on food, who would turn down food?  I took people out to nice dinners, and would introduce what I do.
Black: Start small.  Many people think they have to work for a high-profile company to grow.  It’s not so.  You can start out small, and snowball.  You start building a portfolio.
Zeldman: There are different types of non-profits.  Those with money, and those without.  But some big names are really important regardless of the money.  I got Amnesty International, they didn’t pay much, but man did that work.  To a large extent, writing also makes a huge difference.  Write write write.
Hess: What I have is the process down pat.  You can demonstrate to people “here’s how I worked on this project.”  I’ve gotten the majority of my gigs through Twitter.

Question: Let’s assume we got clients and are getting money.  How do you get to a better paying client, or one more accepting of your vision, or get rid of a bad client?

Black: A lot of this is luck.  If someone sees something they like, they want it.  Some of the best sites I’ve done are for jobs I’ve been fired off of.  I was hired years after fired from Bloomberg, almost twice, and finally someone saw my vision, after years, and I nailed it.  The lesson?  Tell them what you think.  They don’t usually know what they want.  Give them your best idea, and someone will find it.
Hess: It’s about confidence.  When I was charging people less than what I was worth, I got shitty gigs.  When I started charging more, even though I was shocked at the sticker price myself, it displays confidence and your stand by your work.  People will pay.
Halvorson: People think they need to underbid themselves, and they charge too little to sustain themselves, and it’s a self-fulfilling prophecy.  I urge people to be confident in your prices, and don’t back down just to get a job.
Black: Ask about the budget straight up.  We ask the budget, and go 10% under that.
Zeldman: Moral – have faith in your process and your proposal.  The other moral, ask the budget.
Hess: Like in dating, being unavailable is more attractive.  They want you more.  They’ll keep trying to get your work, because people want to work with me.

Question: Mainly for Whitney, how do you structure your day as a full-time freelancer so you don’t waste time eating chocolate and doing laundry?

Hess: I’ve discovered that I work best at night, so I do meetings during the day, and then use my nights to do work.  I don’t really have a structure, I probably need to find one.  I work out of my house half the time, and then go to a coworking space (New Work City) the other half.  I love coworking, so I don’t work alone.  I’m self-motivated, and I structure my day based on deadlines.  I work best under pressure, I procrastinate, I get myself into crunch time and produce my best work.
Black: The great thing is that your sense of fun and your sense of work is much easier to handle.  It’s ok that you’re not working under 9-5 workday and you don’t need to feel guilty.
Hess: It tooks me a while to realize I didn’t have a manager, and that it was my decision.

[Transition] Let’s talk about when you hire someone.

Halvorson: When I had my first son, it wasn’t ok to be in meetings all day and work at night.  I needed to hire someone.  And now we’re at 14.  I’m really proud of the culture that we’ve made that takes these sorts of things into account.  It’s changed.  When we were 4, it was easy to go get lunch together, or go to Happy Hour at 4:30.  Now it’s not easy.  But we all decided on this culture from the get go.  It’s not sexy to run an agency.

Audience Question:  How do you finance an additional employee when you need to, and keep your funnel full and keep people on board?

Halvorson: It depends on how much risk you’re willing to take on.  We’re almost solely financed by cash flow.  Don’t hire before the work is there.
Black: The trick to keeping your pipeline full is to get your head out of the current project to recognize that you need to look for the next project.  Especially this year, you just need to get proactive.  Think about all the sales things you can do.  Blog, keep the contact open.

Final Points Covered in Q&A:

  • Collaborate with others to compliment your skills set.  You don’t need to do everything in-house, but leverage your community to give yourself the ability to say yes to every client.
  • Brand yourself: if it’s you, trademark your name.  Keep your logo.  Use the same style of writing.
  • Ownership structure: It used to be stock options, now I like the whatever profit you make, you split it (Black).  Whatever you do, talk to a lawyer who specializes in these deals. (Halvorson).
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