From Geek to Peak

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A lot of gonna-be and wanna-be consultants/freelancers ask me if they should be pursuing a niche. They may be web application developers, for example, but they wonder if they should only be coding tools for the blogging platforms, or working within a certain industry vertical.

My instinct is always to say: HELL YES , niche away. Somebody once said that in niches there be riches, and I’ve found that to be very true in the last seven years. The more I specialize, the higher I can set my fees, the more sophisticated the customer, the more focused the pain points, the shorter the sales cycle.

My thinking is, why should I compete with a whole bunch of other generalists for the tiny scraps of food thrown out into the main square when I can stand up, enter the fine restaurant, go upstairs to one of the private rooms, and eat like a king with only a few other colleagues, none of whom I’m particularly afraid will try to stab me in the back?

Matt Gillogly once defined a niche as a place where you can do your thing without fear of competition. I think this pretty much covers it. Remember, the term niche comes to us from the study of nature. Biologists and naturalists have shown time and time again that living creatures (whether plant or animal) always find some way to survive in their niche. They adapt to the heat or cold, presence or absence of water, amount of predators or prey, amount of sunlight, whatever. A rose is a rose is a rose, but show me a rose that is bred to grow in a dry desert area, and I’ll show you a rose that’s different from an English country rose.

So how do you pick out a niche? Like I said in the intro to this piece, most of the people reading this blog will have one big advantage (or disadvantage, if you choose to look at it that way). They want to be technical consultants or freelancers. Most of them will become technical writers/copywriters, designers, or developers/coders of some kind. A few of them will become strategists or architects. Another little group will be drawn toward the world of people or project management, or process improvement. A very small group will be able to do two or three things well, and be in demand as designer/developer combos, or writer/developer.

However, sometimes this level of niching isn’t enough. Here in Austin, we were able to gather 40 people for a wekend of iPhone development with just two weeks notice. Most everyone in the room knew something about PHP, Rails, HTML, and Javascript. A few had Java and C in their toolkit. We only had two weeks notice to pull this group together. One could almost say, given just this little anecdotal bit of evidence, that Austin is probably CRAWLING with developers.

So how to niche? Well, a good way to niche is to pay attention to what your current customers (or prospective customers) are complaining about. What are their main pain points? What do they complain about over and over about? Do these complaints all group or cluster together? For example, in the 1990s, the big pain point in web site management was easy publishing systems….hence the rise of the CMS and blogging platforms.

What if you don’t have customers yet, or don’t have easy access to people who can express a business problem? Or you’re just simply burned out from taking on customer requests? Walk into whatever room in your home you use to store books and magazines. Take a quick inventory. Are there any cases in which you have three or more books, magazines, newsletters, or other publications on any given topic?

Now take a look at your email and rss subscriptions….same thing goes. Are you subscribing to three or more feeds on security? Performance? A particular language? What about your browser and social bookmarks?

Now think about your schooling, both formal and informal….not just the classes you took in university, but all the workshops, webinars, teleseminars and things you’ve taken over the years. And I’m not just talking about the stuff related to your job either. Add all those little stand-up comic classes you took, and the workshops on laying tile, and the yoga classes, and the jogging clinics. These all count. Do you see a pattern?

Conversely, do you wish to see a pattern? Maybe you want to go back and take more Jiu Jitsu classes, learn more about that industry. Hmmmm, is there any way to bring what you do (mad Ajax skillz) to the world of martial arts? Maybe not directly, but certainly with just a little work, you might find yourself being the number one go-to guy for front-end work on any martial arts ecommerce site.

Now think about all your favorite brands. I like Saucony running shoes (they make extra-wide shoes for my extra-wide feet), Pentax cameras (the K1000 was my first SLR, and now I own a sweet K100 digital SLR), Apple anythying (MacBook Pro, iPod shuffle, iPhone, iMac), and on and on. Do you have a close affinity with any brands? How about the tribes of people who follow those brands? Is there a way that by talking the inside lingo you could bring your talents to bear with that group?

What about your hobbies and interests? My wife and I keep a tidy and productive vegetable garden, and we enjoy camping out and dancing. And sometimes, campy dancing. The first thing we documented in our environmental blog was how we built our vegetable garden . Not exactly a money-maker, that blog, but it was fun to write about it.

The list is unending. One day you’ll be out with friends or jogging the nature trails and it will hit you….BAM! Of course, you should be focusing on X companies who have Y problem….and here you’ve had Z approach that will totally change everything! And then you’ll be on your way to fame, fortune, and glory. If nothing else, glory.

Unless you’ve been living in a cave, you know about the demise of Pets.com. Its downfall, and its sock puppet mascot, became a symbol for an entire era of business stupidity. Being someone who was actually working in the dot-com industry at the time, I thought it was pretty amusing, and never did I give a second thought to the people behind the Pets.com effort.

Have a read-through of this post by Julie Wainwright, former CEO of Pets.com. She’s now CEO of SmarterNow, and is confronting some of those old ghosts of Pets.com failure after an eight-year hiatus. Here’s a little piece:

First some background, I was the CEO of Pets.com. In case you haven’t heard of it, Pets.com and its mascot, the Sock Puppet, became the symbol for the dotcom bubble and its subsequent bust. Some have even charged me personally with bringing down the U.S. economy. Pets’ short period of success was fueled by positive press about the company and myself. Pets received even more press when it failed.

As the public CEO, I failed, and it was a very public failure. In fact, I was labeled one of the biggest failures ever.

Whatever you may think of Julie, her company, the dot-bomb era, whatever, please read this extremely courageous, transparent piece. It doesn’t matter if you plan on creating a world-spanning startup or a home-based consulting business. The mistakes she acknowledges are universal ones, and looking over the list, I acknowledge having made the same mistakes (boy, did I ever)

The only difference is scale, really. I’ve never had anyone laugh in my face because of my mistakes. Doesn’t mean that I don’t punish myself when I see my own face reflected back to me in the mirror.

Read the Story Here

I take notes in these composition books with graph paper–its easy to draw pictures, take notes, whatever, while I’m talking to a client. Over the years, whenever I’d fill up one notebook, I’d just put it into a banker’s box and grab another blank notebook and keep going. After seven years in business I had 10 of them tucked away.

Today I went through them really quickly and came across some notes I took on November 13, 2004 at a National Speakers Association event here in Austin. If you don’t know Alan Weiss, well, he’s a personal hero of mine. He’s probably best known as the “Consultant to the Consultants.” His book Million Dollar Consulting is pretty much required reading if you want to make it in this business.

Needless to say, when he came to town, it didn’t matter how much it cost to go see him, I was gonna go see him. Alan talked about a number of topics that day, and here’s the rundown/summary. It won’t come close to doing him justice, but there you go.

The key to succeeding as consultants is talking about value. We must make an emotional connection because only through emotion can we incite our customers to act. Making a purely logical or cerebral play will only get them to think–we want them to write a check.

There are 3 requirements in this value scenario:

1) The value proposition itself - in other words, what is the outcome for the buyer?

2) A clear identification of the guy who writes the check.

3) A clear strategy for reaching that person who writes the check.

It’s important to note here that perceptions inform behavior. If you see yourself as a vendor, you’ll act like a vendor. If you see yourself as a partner, then you’ll have a completely different VALUE PLATFORM on which to stand. In other words, lack of self esteem is the single biggest obstacle to success.

The secret to raising fees? No secret at all…just raise them! If you’re bringing value, who cares? At some point, by the way, fees lead value. For example, if you are brought in to speak to the managers of a company about problem X, and you’re being paid $50,000 for that event, do you think they’ll sit up, take notes, and pay attention? Of course they will!

But what if you’re doing it for $500? Do you think anyone will even show up? Or will they send their assistants? You betcha.

Here’s something else that hit home for me that day: consulting is a process, not an event. The value is often in the process, not just the outcome. I’ve experienced this many times–I’m hired to do one thing, and in the process of doing that thing, I notice something else that needs attention, and doing just a little bit of work solves an even bigger issue.

What about value-based fees? If you’re not familiar with this concept, it’s being paid for the outcome or value of the service, not the time and materials or by the project. Asking for value-based fees (and getting them) is seen as the holy grail of the industry. After all, there are only so many billable hours per year, and only so many projects one can take on, so therefore it follows that you’re putting a cap on your revenues unless you break out of that box.

So, how do you get to a place where you can charge value-based fees? The key here is identifying where value happens. Value happens in the outcomes. So you have to know what those outcomes are, and establish metrics for figuring out if you’ve reached them (or missed them). Finally, you have to get the client to articulate to you what those values are.

Let me give you an example from my early consulting days (okay, it was only 2003, but it feels like a hundred years ago). I was working with a Fortune 500 firm that was trying to put together an internal sales portal where they could publish information. I asked them why they wanted to do that, and they said they didn’t want to keep sending out all this sales collateral to all 300 sales offices around the world every time there was a change in an existing product or a new product launched.

I asked them why they were doing that, and they said they didn’t have a good way of tracking who had received which collateral, so everyone got the same care package Fedexed to them every month. I asked them how much that cost them, and they said it was over a million dollars, probably 1.2 million.

So I said, “What if I can make this go away basically forever for forty grand?” Now, at the time, the biggest job we’d ever done was $5,000. Forty thousand seemed like a crazy figure to me, and in fact, I was getting a bit nervous as the marketing manager leaned back in her chair and thought about it.

She apparently made up her mind right then and there, because she stood up, extended her hand and said, “Show me how you’re going to do it.”

Immediately I knew that I should have asked for $100,000 or $200,000, but that was just due to my inexperience. The point is, I ended up spending 100 hours or so on the web portal (at the time I was charging $75/hour, so that was $7,500) and got to take a lot of this money as profit.

By the way, this approach only works if you’re dealing with the buyer–the guy or gal who signs the check. Nobody else matters. Nobody else can make things happen. Alan Weiss pointed out that “Bureaucracy is the triumph of means over ends.”

In other words, its much more important that everyone fill out the blue form first, followed by the green form, which is then faxed to a certain place, then signed by Person X, who then distributes it to departments A and B before it gets final approval from a subcommittee on Y. Meanwhile, you just want to go directly to the person who can hire you or approve your budget.

When dealing with this kind of organization, your best defense is to change the stance from “Should I do this?” to “How do I do this?”

Now you may hear some objects from those who are nervous about buying your value-based fees approach. They may say that there is no money, or that the timing isn’t right, or that they really don’t need it right now but it all comes down to the fact that they don’t trust you.

Listen: there is always money! There is always budget! They can find the budget if they think the problem is big enough. It’s your fault if you can’t figure out a way to get at it.

What isn’t often discussed about value-based fees are the pros of the approach:

• Fees are capped
• There aren’t any hidden gotchas just because they decide to pick up the phone
• They’re dealing with a principal in the business (you)

Remember…lack of trust is the “hidden objection” in almost every case…they just can’t tell you that. They can say that they don’t have budget or the timing is off…but what they really mean 90% of the time is, “I don’t know if I can trust you.”

David Seah’s Portable CEO is a thing of marvelous beauty. The idea is to have a list of concrete actions (each with their own assigned values) to keep you on track and safely away from all those other distracting things you FEEL YOU MUST DO as a freelancer/consultant.

In other words, what this little ingenious tool does is help you focus your executive energies on moving your career forward

Each task on the list is a concrete step that will make your career better, such as doing billable work, writing an article for your blog, or doing some self-promotion work.

The next step in the program is to track how many 10-, 5-, 2-, and 1-point activities you do daily, and to set an arbitrary goal for each day. You can keep track of your progress with another handy little form.

Yes, this sounds silly, but I’ve been doing something like this for several years. Do whatever feels right, as long as it helps you stay focused!

CHECK IT OUT HERE

Recently, I asked my LinkedIn colleagues a simple question:

What is the single biggest mistake you made in your first year of business?

The answers I got back were very insightful. I’ll summarize/paraphrase some of the better ones:

Giving it away for cheap (or free). Pricing yourself too cheap is a huge mistake, but one that everyone seems to make. It’s only afterward that you recognize your own value. Raising your prices is really the only way you can keep the really bad clients away, don’t ya know?

Not paying attention to operations. You may hate all the banking, invoicing, and tax stuff, but you’d better get your head around it. Doing a good job only requires a little bit of your time, and with a part-time bookkeeper (or in my case, an extremely savvy spouse) you can keep the wheels of business turning. Believe me, you don’t want to experience the pain of not getting paid because you were late with your invoices.

Growing too fast. All the business books tell you to market your brains out, get the customers in the door, hire lots of people, set up an office, expand that office, et cetera. But what happens if you’ve got no systems down? Or your product still needs maturity? You’re stuck with lots of irate customers and systems that have to built on the fly.

Not having a focus, or allowing fear to be your focus. Listen, it’s easy to go into panic mode when you don’t have the big paycheck. I know. But you have to master it. Otherwise, every single decision you make will come from a place of fear, uncertainty and doubt. And that’s not good for you or your business. Instead, it’s easier to live and work from your own values. More on that later.

Being a perfectionist. Yes, systems are important. Yes, process is important. Yes, quality work is important. But you have to get things out the door. Everyone understands that sometimes its better to get a good prototype out there and then iterate. Being a perfectionist is sometimes worse than being a complete slob.

Postponing tough decisions. I can’t tell you how many times I should have just fired that problem employee, or walked away from the terrible client, or not agreed to work with such a scummy business associate…but every time, I postponed the tough decision. And every time, I should have just gone in and cut my losses. I learned how to do it, and so can you. Your life will be better after you take action.

Cash is king. Especially if it is in your hand. You can’t pay the bills with profit. Once you learn that cashflow is the number one thing, everything else is easy. Sorta.

Enjoy.

For those of you who know me, two interesting facts stand out.

1. In high school and college, I was a pretty avid runner, holding records in the 800-meter and 1500-meter runs, and able to routinely run a sub 19 minute 5K.

2. At age 35 (a few years back) I tipped the scale at 250 pounds. Running a mile in 12 minutes was a miracle.

Painfully aware that I was headed down the same unhealthy path as my father and uncle (heart trouble) and aunt and mother (diabetes) I decided the day after Thanksgiving 2007 to start running again. I ran a mile every other day for a few weeks, then kicked it up to 2 miles, and by New Year’s was running a very slow 5K every 2-3 days.

I stayed at that level for about six months, never getting my time below 30 minutes. I participated in a 5K race/run on Flag Day (June 14, 2008) and clocked in a disappointing 32 minutes, but was really murdered by all the hills downtown. In fact, to my chagrin, I had to stop running twice in the last little stretch because I just wasn’t expecting all those damn hills.

But well before this race, I’ve had this obsession with running a 5K in 30 minutes or less. No matter how many times I ran the course in my neighborhood (hills and all, but apparently not enough hills to compare to downtown) I couldn’t come close to a 30 minute time.

So my friend and running buddy Nada (who is a budding triathlete, incidentally) suggested that I change up my routine. Instead of running 5Ks in the neighborhood, just start running in one direction for 20 minutes and then turn around. Ideally, you’ll make it all the way back, but even if you don’t, you’re building up your endurance.

After a few weeks of that, she said, start bumping up your time until you’re turning around at 30 minutes.

So off I went, running for 20 minutes and then turning around, and doing that every other day for a week or two. Then last week, I bumped it up to 25 minutes on the turnaround, and did that a few times. Once I ran at high noon, which sounds crazy for Austin in July, but it was okay, I made it through alive.

Last night I got home really late from work and was just jumping out of my skin. I needed a run so badly, but I only had a very small window to play with. So I took off on a 5K, my first since mid-June. I clocked in at 29:51.

The lesson learned? If you want to hit a goal, stretch yourself in training. Train past the goal, and you’ll eventually hit it. How does this relate to the SOHO business owner or freelancer? Well, it’s simple really. Whatever goal you set for yourself, go the extra mile beyond it.

• If your goal is to make 100 cold calls this week, make 200 calls.
• If you goal is to land five Fortune 100 clients, go for 10 or 20 instead.
• If you want to book $10,000 in fees this month, try to land $15,000.

After a while, if you stretch yourself enough, you’ll see that the original goal isn’t quite as unattainable or difficult. I certainly felt that way on my run yesterday. I remember thinking, “Why did I think this distance was so hard to run before?” And it’s simple–after you run for an hour at a time, running for just a half hour isn’t a big deal at all.

Social bookmarking has become my constant companion these days. Any task that involves online research means using that friendly little Del.icio.us widget in FireFox or Safari.

For those of you who don’t know what social bookmarking is, or have never visited Del.icio.us (the best known social bookmarking site), the idea is extremely simple and therefore extremely powerful. Instead of hording away your bookmarks in some private cubbyhole, you tag them using the Del.icio.us service and share them with the community at large. You can even add little browser widgets that let you bookmark things you run across to make this task easier.

When you come across an interesting page (such as this blog post), you can bookmark it and then tag it using keywords. For most pages, Del.icio.us will provide you with recommended tags, including a full set of the tags you’ve already used in the past. You can also add comments of your own.

Another extremely useful way to use Del.icio.us is as a search engine. If you’re interested in a certain topic, run a few keyword searches and see what others have bookmarked. It’s an easy way to explore a wide range of topics. You can easily add anyone else’s bookmarks to your own personal set. 

How do you keep them organized? Easy enough–you can sort them alphabetically or by frequency, view them as a tag cloud, and even bundle tags together to form more pleasing arrangements.

Give it a try, see what you think. Check out my tags at http://www.del.icio.us/myerman

Yes, that’s right, I’ve made plenty of pennies helping companies establish blogs, online campaigns, and microsites–not to mention social networks, et cetera, et cetera. 

For the solo freelancer or consultant, though, there’s some value to the old-fashioned high-touch (as opposed to new-fangled high-tech) approach. For example, meeting prospective clients face to face, shaking their hands at a social gathering, reading their body language at a conference, sharing drinks at a networking hour, or giving a talk to a group of colleagues can advance your career in ways that a more automated email campaign or LinkedIn profile can’t.

Furthermore, I’d argue that taking it slow can reap huge rewards no matter how you conduct your marketing efforts. For example, if you attend a networking event, having three 20-minute conversations with new people is better than having twenty 3-minute conversations. Having three fantastic testimonials on your web site is better than having ten mediocre ones.

In the end, I find it amusing that all of our terrific 21st century technologies just make it easier for us to conduct business like in ancient times: it all comes down to relationships and communication. In the old days, if you wanted to buy from a trader, you went with the guy your friends and family trusted. You made a name for yourself as a businessman by delivering on your promises, one job at a time.

It’s easy to forget that in this hyper-quick world of blogs, social network sites, and 200 emails a day.

My little consulting practice, Triple Dog Dare Media, just turned seven this summer. In my mind, the business celebrates a birthday every May 1st, because that is when I left corporate serfdom to strike out on my own. My wife, however, reminds me that our date of incorporation actually happened closer to June 15th, so I compromise and just say “we turned seven this summer.”

In any case, it wasn’t until the company’s sixth birthday that I realized how truly miserable I’d become. This is probably a funny way to address the topic of business ownership and freelancing in a blog such as this, but I believe in being honest above everything else.

Don’t get me wrong. At the time, I could have been judged successful in just about any outward way of measurement. I had lots of clients, lots of business, cash flow was good, projects were rolling in regularly, and life was good. I had an office, three or four employees, about half a dozen contractors, and days chock full of meetings, emails, phone calls, and everything else a business owner might want.

Except happiness.

You see, I had spent the previous five and a half years single-mindedly going after a specific task: building a business. Unfortunately, I was building the kind of business that every one else wanted me to have. The experts said I should do thus and so, and I did it. My fellow small business owners said you must have an office and employees and overhead and go after increasingly bigger projects, and I did.

Then one day, I said, “Wait a minute!” I wasn’t doing stuff I loved. I was working with a bunch of clients I didn’t respect, working on projects I had no love for, merely to meet payroll for a group of employees I’d come to deeply dislike. And I’m sure the dislike was mutual by that point.

So I declared a do-over. I fired the clients. I fired the employees. I sublet the office space. And for the next year, I concentrated on building the kind of business I wanted:

• Smaller projects
• Less overhead and HR hassles
• More meaningful contact with customers
• More focus on results instead of billable hours

Is my way the only way to go? Certainly not. But it is my way. And it is aligned with my values. Not anyone else’s. It only took me six years to realize it. Thank God I’m so smart!

My advice to you is to figure out what your values are, then go build the business you want to have. And ignore everyone else who says different.

My name is Tom Myer. For the past 7 years, I’ve run a web development consulting firm called Triple Dog Dare Media. I’ve worked as a lone-gun consultant, as a contractor, as a partner with other folks in my company, as the head of ad-hoc teams, and as a manager of employees. I’ve subleased office space, rented my own space, and worked out of a converted office space. I’ve worked on small jobs that lasted an afternoon, led teams on six-month projects, and been “that guy” that comes in for a day or two to provide an assessment and flies out.

Throughout all that time, I’ve been approached many times by many wannabe, gonnabe, and oughtabe (and just a few people who were merely curious about my lifestyle but had no intentions of ever following through) freelancers/consultants. They wanted advice, ideas, and to buy me coffee or lunch. I was always glad to help. Mostly I was just stunned that anyone wanted to hear my advice.

This last year, I was approached by my book agent (Neil Salkind) about some off-the-beaten-path ideas. I’d just finished writing a book on CodeIgniter for WROX and had some other titles under my belt. The very same day that I started talking with Neil, I received emails from three total strangers seeking advice on how to become a successful freelancer.

None of these three, like none of the folks before them, ever wanted to start a restaurant or retail store or even a traditional high-tech software company with outside investors. They were Javasacript geeks, PHP ninjas, HTML wizards, and QA geeks who were tired of slaving away inside a dreary cubicle, or who were facing certain layoff or downsizing. They wanted more flexibility and balance in their life, and they wanted to make some real money with their skills–but they wanted to avoid all the pitfalls (like financial ruin) that they may encounter. And all of them were terrified of the M word…marketing.

I forwarded these notes to Neil and said, “Listen, this keeps happening to me. Why don’t I write a book about this and start a blog over at myerman.com as a companion piece?” Ten days later, I had a contract in hand to write a book, and so now I’m retrofitting what was once a personal web site into this blog.

The focus will always be on the technical professional who wants to create a thriving, balanced, and profitable freelance or consulting practice. If you want to start any other kind of business, or if you have a non-technical focus, some of these concepts will help you, but the focus will be on the geek.

Why? Because geeks are (generally) very smart people with their own strengths and shortcomings, and so far not a lot of attention has been paid to them.

Here’s what the book’s going to cover, in brief:

• How to tell if you’re ready to become a freelancer
• How to run through some effective self-assessment
• What kind of fees should you start out with
• How to figure out your specialty or focus
• How to put together an effective one-page marketing plan
• What you need to do before your first day of business
• How to get business in the door
• How to survive your first 30 days
• How to survive your first six months
• How to survive your first year
• How to grow your business

What this book isn’t:

• A dreary manual that trots out the same old advice about incorporating
• A scary book on how to make cold calls
• A fear-mongering book about the perils of financial ruin
• A rah-rah tome that would only benefit the most outgoing and extroverted

As I start writing the book, I will continue to post materials here, as well as provide opportunities for subscribers to tune into teleseminars and other materials. More later!