How to start freelancing

Everybody wants to know how to get into freelancing. "Solopreneurship" is the hot new thing. Unsurprisingly, every now and then someone will show up in my Twitter DMs (or Twitch chat) to ask how to get started with freelancing. Then I have to recite my half-baked rabble about networking and taking a risk and so on.

So to seem like super smart person, I'm writing them here for you, benevolent reader.

Why (not) Freelance?

If you're reading this, you're probably already sold on freelancing. You know, you get things like control over your schedule, ownership of your intellectual property, agency in choosing work, a higher earnings potential, or maybe you want to start your own software company.

Maybe we should look at some reasons not to be freelance: long hours, instability of work/cashflow, managing money, managing expectations, difficulties qualifying for apartments, family turmoil and so on. You might hear about freelancers having "feast and famine" times.

Honestly, if you're not used to it, freelancing can seem super dodgy. There's real risk if you want to stay in the game. Apparently, during a dry spell last year, I tanked my credit score, and it's giving me trouble today. Worth it? Definitely, but it's not for everyone.

Taking a mitigated risk

As I alluded to in Crush it, Stop It, Profit, you're taking a risk. You need savings in the bank. When I made the jump to freelancing, I traded startup sweat-equity for a cash bonus. I wanted six months of "Toronto" living expenses before making the jump. How much you'll need is a personal question. I don't have a family to take care of, and I can (maybe) move to a smaller apartment. You might have a family and mortgage. Getting approved for a smaller mortgage might be tougher when you're newly self-employed, so think hard about the money situation.

I tried to play it smart by lining up a gig before quitting that startup, and I got fired from the gig after two weeks. Don't be optimistic about the money, be pessimistic, that way if the good or mediocre situation plays out, you're still ahead (unless pessimism gives you analysis paralysis). I still had the six months of savings plus a nice little payday for hustling for two weeks. Sounds like a win in hindsight, but at the time I was fucking scared.

Riches in Niches

I got fired from that gig because I sucked. It was a full-stack Django and React gig at a Unicorn startup. I never worked with Django before, but I wrote enough Python I thought I could stomach it.

Here's the thing, you can only really freelance/consult/contract in something you're good at. You're charging a premium and controlling your time. The value you provide has to be incredible. For example, you can't just take a programming language course and start freelancing in that language. You need specific expertise; you need a niche.

A vertical niche is a specific industry. The more specific, the better. For example: quantitative finance, robotic supply chains, and online ESL Teachers are all vertical niches. Typically, in tech, software companies attach themselves to a vertical, providing value and attaching so-called "tech" monikers: "fintech", "insurtech", "legaltech", and so on. So, if you know about specific problems a fintech company might face, you can solve those problems for money.

In my experience, it's more common for software developers to have a horizontal niche since we're solving one problem for companies: value creation (building a software product). A horizontal niche is some skill that creates value across verticals, in our case, building a software solution.

I learned this pretty quickly after getting fired. I got lucky and landed a Clojure gig. Clojure is a rather niche programming language I have years of professional experience with, and I was able to crush that gig, and it was my first taste of fixed rate work.

Ideally, for a freelancing niche, you'd have the intersection of you're good at it, you like doing it, and you've got a lot of professional experience with it.

Your first leads

Chances are your first leads will come from your professional network, or any network you have. The gig I was fired from came through an intro via Twitter acquaintance.

Second gig was through LinkedIn. Before that though, I reached out to a lot of people in my professional network. If not to hunt for leads, it was just nice to catch up with some former colleagues. If anything, they'd keep you in mind if they came across work.

Before and after making the jump to freelance, I reached out to people in the Seeking Freelancers thread on Hacker News. One of my biggest clients I met through that thread, but it took like six months for me to be the "right fit". Sometimes it doesn't happen all at once.

"Sales" can suspiciously feel like job interviews, but try not to think about it like that. People buy four things: time, money, reputation, and sex. Ideally, you're selling the first three. All things being equal, people buy from their friends, so go out and make a lot of friends. For example, when you bond over your love for a nerdy programming language with a prospect, you'll probably get that job over the person with rock-bottom prices.

Pricing

Obviously, I have a philosophy about pricing your freelancing services; I like to bill per project. You do not have to follow that philosophy. I just think it's the best model for getting to where I want to be.

However, in the beginning, you might opt to sell your time for money directly with a time-based rate , like when I got fired. I did an hourly rate. Some people do daily or weekly. Selling time-based rates feels easier since it's the default model in most people's minds. Positioning the fixed rate model takes a bit more effort which I'll go into in a future post (so get subscribed). Plus, most people don't know how to mitigate the risk of a fixed-rate project.

The fixed rate model sounds similar to value-based pricing, the pricing model every internet armchair entrepreneur bleats out in a comments sections. The truth is, value-based pricing doesn't exist for freelance software developers (or I'm just bad at pulling it off).

The idea is simple, Client X will make 100,000 dollars from what you deliver to them, so charge less than that, now you've got 50,000 for one week's worth of work. Because of the market rates for full-time software developers (ie, your principle competition), selling value-based pricing feels like a scam. Only people who can provide extraordinary value can do value-based pricing. So for a service business like freelancing or consulting, that means having a particular skill set (niche) that delivers said extraordinary value.

Now there are things you can do over time to increase your fixed-rate prices that I'll go into in that post on fixed-rate pricing I'm trying to tease out here, but my suggestion is either choose time based rates with a healthy margin, or take a stab at fixed-rate in the means time knowing you might get rejected quite a bit in the meantime.

Onwards

After a few sales calls for clients, you may realize getting leads to come to you is best, or at minimum people should have a reason to answer your emails. Having some kind of branding or marketing helps. Start writing, coding, tweeting, or whatever regularly to get attention. Keep at it. It's hard work.

Above all else, you just have start. Most people never do.