Using the freedom that entering the gig economy provides, we’ve found ways to create the perfect lifestyle for ourselves. We can work how, where, and when we like, and we can progress our career in any direction we choose, eventually becoming an online “superstar,” capable of charging big fees to complete high-caliber work.
Now it’s time to look forward. How are you going to develop your career from this point forward? And what future forces might impact the way you live and work?
Scaling Your Business
Were you to set up another type of business with employees and conventional physical assets, then your goal at this point would be to start scaling that operation in order to earn more.
For most companies, that would mean finding ways to sell more products and services, while spending less time and money to produce them. That might mean implementing automation and force multipliers, then investing more money into marketing.
So, let’s say you have a business buying and selling clothes. You find a wholesaler, buy 50 jeans in a bulk order, and then sell them on via eBay and your own website for a profit. This yields a 150% profit. What next? You keep some of that profit and then you invest the rest into buying 100 jeans. You know they sell well, so the risk is minimal. You do the same thing over and over, investing in more jeans each time, until eventually you begin to expand your product range and you create a more fully comprehensive e-commerce site. Scaling.
Suppose that you next invest in some advertising and branding and now have an online clothes store. You are selling so many items of clothes that you need to hire some people to help you sell them. Then you invest in a warehouse. Then you invest in ten warehouses and TV ads. Further scaling.
This is an example of the trajectory, roughly, of most successful businesses. Up and up!
But if you’re providing a service as a freelancer, then how can you possibly scale your production? You can’t keep doubling your output: you’re only human, after all.
We’ve discussed one method in Chapter 5—by working more quickly and efficiently via the “transhuman business model”—but this is, ultimately, limited to what you can accomplish in a day. Likewise, we’ve seen that you can charge more for your work over time, but that’s still going to have a cap on it: there’s only so much you can realistically charge on a regular basis for your programming skills.
So, does that mean you can’t scale your gigs? Does that mean that you’re never going to go global and become a millionaire by working in this manner?
Well, that depends . . .
Methods for Scaling
Here are some of the best methods you can use to scale a service-based business.
Hiring
One option when it comes to scaling your business is to start hiring people to help with your workload. If you have more and more orders coming in and you’re not able to keep up with them, then you could hire someone to handle some of that work for you, pay them a certain amount per day, and then make sure there’s a bit of profit for you to skim off the top.
This is scaling because you can repeat the process over and over in order to continuously expand your business operations. The downside is that it brings with it a lot more administration and complication. If you are hiring someone, you’re going to need to sort out a lot of paperwork, take on more expenses, etc. Not only that, but to make sure you have work to assign to them, you’re going to have to work extra hard to keep a steady stream of orders. This means aggressive marketing and juggling of tasks, which in turn requires even more investment and might also require the hiring of yet more people.
And where will these people work? You may find you quickly need an office to rent. And insurance.
Quickly this can get out of hand, which is fine if your ambition is to be a big CEO, but is far removed from the gigging we started out with!
Service Arbitrage
Hiring someone to handle your increasing workload is an awkward fit because it is a strategy from the old way of doing things. In the digital economy, we do things a little differently!
Specifically, what makes a lot more sense is to start offering gigs! In other words, look for people who are doing the same thing you’re doing but charging less, and then outsource some of your work to them.
- 1.
Look for a client willing to pay $500 for an app.
- 2.
Look for a service provider willing to create that app for $400, without taking credit.
- 3.
Manage the communication and keep the $100.
This is called “service arbitrage.” Of course, the amount of time it takes to manage that communication is going to be a fraction of the time it would take to actually build the app yourself, which means you can take on countless more jobs and countless more freelancers, multiplying the amount over and over.
Finding people willing to provide the work for less is, of course, the main challenge. This is often easier than you might think though. Use the same sites that we looked at for advertising, but now from the perspective of the buyer. Consider their experience and qualifications, look for examples of the work they’ve completed, and read their reviews (more on this in the next chapter). Often, finding a good coder who charges less will mean looking at someone from a country where living expenses are lower, or a student who is doing this as a hobby.
Alternatively, you could look for a “white label” service, a company that will provide a service without asking for any recognition. For instance, you can find white label web design companies that build websites precisely for this kind of purpose. You can stick your logo all over it (hence the metaphorical blank or “white” label), and they wholly expect you to sell it on for more money. They’re happy with the arrangement because they get a steady flow of work at a price that works for them, and it works for you because you can sell their work on for a profit.
Likewise, we’ve mentioned how you can use other services—such as a VAS—in order to help you find clients and streamline those other aspects of the work. If you’re a web developer, then you might outsource specifically the parts of the job you don’t like: you handle the Drupal and hire someone else to design the logo.
You can take this as far as you want. Either keep hiring others as an option in your back pocket for when you’re stretched or you want to avoid doing a particular part of the job yourself, or go all in and remove yourself completely from the creative work and instead simply become a middleman.
Do keep in mind that the latter option isn’t quite as stress-free as you might imagine though. Inevitably things will go wrong: services will let you down with late work or poor quality, clients will be difficult, and the sheer amount of e-mails you’ll be bouncing around can get hard to manage. If you’ve built a list of clients that regularly hire you for work because they’ve grown used to your reliability and quality, then they might notice a drop in that quality and look elsewhere. Some clients may explicitly object to subcontracting.
I tried this for a while with a website called IWantYourWords (specifically I would buy unused content that people had lying around on their computers and then find buyers for it), but ultimately, I opted to give that up and return to actually doing the work myself (the site is now defunct). The idea was effective in theory, but the amount of admin involved was quite overwhelming and I didn’t find the experience overly enjoyable.
Teaming Up
Or, why not take the spirit of sharing and gigging even further and create a situation where no one is “in charge” as such? If you want to expand your business, take on more clients, and avoid being overrun, then another option is to team up with someone else! Sell them on the merits of the kind of work you’re doing and then encourage them to work alongside you.
If you’re a coder, then you can become two coders. Then you can simply divide the work between you. Or, if you’re a coder, you could look for a designer to handle your user experience (UX). You can now benefit from the unique skills that both of you bring to the table, and you can that way take on a more diverse range of clients and projects. Or why not find someone who is good at marketing to help you sell whatever B2C product or service (e.g., coaching or proofreading) that you’re selling?
And actually, this opens up a whole host of new possibilities and opportunities. Maybe you don’t want to quit your 9-to-5 job just yet but would like to expand your growing business. Then why not divvy up a full-time job’s worth of stuff to do between several of you?
Likewise, if you’re working full time, you can call in friends and other professionals to work occasional weekends or evenings and let them keep the income. There’s no requirement for them to “commit” permanently, or to match you in terms of hours. If I get overloaded, or if we need a little more household income, my wife will often pick up a little of the slack for me.
They say not to mix friends and business, and of course there are some risks here. Then there’s the simple fact that you no longer have total control over your business.
But there’s also something very fun about being “in it together” with a friend. This also works if you want to set up forms of passive income or create other, more conventional business models. If you want to grow a website or YouTube channel, for instance, finding a few passionate people to help you do it can make a huge difference.
My advice is to try and keep it pretty casual at first. If you have made no strict commitments to one another, then there is no reason for either of you to be upset or offended. If this grows into a serious business with the two of you, then you can look at creating much more defined roles.
Note as well that this is another scenario where using collaboration and project management tools will come in handy. Only now you get to decide how and when you contact one another.
Productization
Another option if you want to scale your business is to productize it. That means taking whatever it is that you sell as a service and finding ways to turn it into a product.
We’ve already looked at ways you can do this. For instance, if you are currently selling web design services, then you could productize this concept by creating a CMS (content management system) that can be installed by anyone with a single click. This way, you have removed yourself from the equation. pNow you are selling the same end result, but with no need to be as actively involved in the process. You can still offer to set it up if you wish or to customize that base software. Or you can sell the installation files on their own.
And if this business model sounds familiar, it’s exactly the thought process that Matt Mullenweg and Mike Little used when they built WordPress.
WordPress is essentially software as a service (SaaS). Other examples of this include things like Asana, Slack, Feedly, Salesforce, Copyscape, or Hootsuite. All of these are web apps that act as tools to help customers and clients achieve more. Such tools can generate revenue through monthly subscription fees or other models, and this way you can automate your own services. This is a brilliant option available to programmers in particular—though the tool you build could work in any industry. Don’t have coding chops? Think about how you could productize your current service this way, then find yourself a programmer.
Franchising
Another typical method that bigger businesses might use to scale up is to franchise themselves. This means that they “loan out” their brand and their methods to other entrepreneurs and small businesses. One well-known example is KFC (a.k.a. Kentucky Fried Chicken). KFC franchisees pay a license in order to use the secret recipe and the KFC name, and this then al-but-guarantees a certain amount of custom. Meanwhile, KFC profits from the thousands of stores around the country using their branding!
While you won’t be able to do this overnight, there is a chance that if you are exceedingly good at your job, you may eventually get to the point where your name alone carries clout - think of someone like Chase Jarvis. If you build recognition for your brand (and ideally you use a more marketable trading name), then you might find that people will pay to use your logo when they sell their services. It’s not a strategy that is terribly common on the Web, but this chapter is all about charting new territory!
Growing Personally
I’ve already touched on how you can increase the amount you’re able to charge by constantly adding to your portfolio and your résumé. This way, you can gradually increase the quality of the gigs you receive and the amount that you charge.
But building up a portfolio is only one way to do this. Another way to go about it is to focus on developing your own skills and acquiring qualifications. Want to write about a different topic? Then why not get a quick qualification in that subject?
Want to offer a different type of coding? Then do an online course in PHP, or in Unity development. Or get a book.
You can easily add to your own repertoire of skills using a number of on- and offline programs, many of which offer legitimate qualifications at the end of them!
Working online gives the freedom and the time to stay in education and to build up a mega résumé that will be hard for people to ignore. You can then bring in higher-paid work and even charge huge fees per hour as a consultant.
Introducing: The Digital Polymath
Not does working online allow you to build a huge resume, but the Web itself also makes it more possible than ever before for to learn huge amounts of information. The rise of the gig economy is one huge repercussion of the Web and our always-on communication, but I suspect that the “digital polymath” might be one more.
A polymath, or “homo universalis,” is someone who dabbles in a wide range of different subjects, skills, and areas of expertise. The prototypical example that we hear about most often in this context is Leonardo da Vinci: painter, scientist, inventor, writer, astronomer, botanist . . . the list goes on. Da Vinci would have a LinkedIn page to make the rest of us weep!
But during da Vinci’s time—the Renaissance era—it was much more common for someone to have multiple areas of expertise like this. Those in a position of luxury would often spend their time painting, reading, writing, and even conducting their own experiments. Anyone could make a significant contribution to almost any field.
So where have the polymaths gone? What changed?
For one, we now have far more comforts and forms of entertainment. With computer games, Netflix, and television always beckoning, it’s much easier for us to simply crash out and relax when we finish our working days. Then there’s the fact that most of us work harder and for longer. There is less poverty, but that also means that there are fewer aristocrats able to spend their days idly reading and creating. Most of us get home from work completely exhausted and completely spent. Unfortunately, that work is not often creative or challenging in a manner sufficient to help us keep expanding our minds.1
And then there’s the fact that every field has developed to the point that it has. In the earlier days of physics, you could read a few books and generally be brought up to speed. Today, becoming an expert in any scientific, artistic, or other field can take a lifetime of study. Several doctorates later and you may stand a chance of making a contribution to the very specific field of “gaze direction in primates.” We have been forced to specialize.
But the Internet changes all of this.
For starters, the vast majority of us now have access to all the world’s information. We can learn any subject as easily as we can type a well-phrased question into Google. And the amazing thing is that many more of us really are expanding our horizons as a result. Many of us will watch TED talks and YouTube documentaries, take online courses, and use sites like Skillshare ( www.skillshare.com ). Listen to the way that some YouTubers talk about computer games or films, and you’ll realize there is a level of understanding and appreciation here that was absent before—understanding and appreciation that can undoubtedly be applied to other fields.
Then there’s the cloud and automation which can pick up the slack and help us achieve more. And the best place to see how this can impact the way we work is in the world of game development. Go back to the ’80s and you’d find that anyone could create a successful computer game like Arkanoid. Games used very simple graphics, because the ZX Spectrums and Tatung Einsteins that ran them were only capable of very simple graphics. The games were necessarily short because the amount of stage that a Spectrum cassette could hold was roughly equivalent to 2MB.
Every game was an indie game!
Then we saw the advent of 3D graphics. We saw games gain orchestral soundtracks, cutscenes dubbed by professional actors, and levels that spanned the equivalent of miles. In games like Shenmue you could search every drawer in Ryu’s house! There was no possible way that an individual could handle the sheer volume or complexity of the work necessary to compete.
But then the indie game came back. Partly this was due to a renewed interest in original games that took risks that big studios were unwilling to entertain. But partly, it was due to the fact that indie developers gained access to tools like Unreal Engine and Unity2. These tools and others like them provided developers with ready-made game engines that included all the physics and complex calculations required to power a 2D or even 3D game. At the same time, they gave developers access to stores where they could find useful assets like 3D models, animations, special effects, and more. 3D models can now also be downloaded for free from community websites. If you need music, then you could ask a willing creator to make something with FL Studio ( www.image-line.com/flstudio/ ). Or you could outsource the process and get someone to make it for you on Fiverr. Not sure how to scale a bitmap? Just ask someone on Stack Overflow for the quick answer.
In other words, outsourcing, crowdsourcing, automation, open source software, and powerful tools can all now take the place of a huge team. That means that a single programmer with a vision can once again build something amazing. The more skills you develop and the broader your knowledge, the more you’ll be able to accomplish this way.
And this is also true for freelancers. One person really can build an incredible website, edit a professional-looking video, and manage an entire online marketing campaign.
The same is true in many other fields, which is to say that you no longer need complete knowledge of a field in order to make a valuable contribution or to create something amazing. You can work with others online, you can use tools, and you can pick and choose the skills you need to develop.
And working in the gig economy will meanwhile give you the time and the incentive to develop these skills and to become a digital polymath. This is not only a very valuable and noble pursuit in itself that can help you to contribute far more to society and gain a far greater understanding and appreciation of the world you live in, but it is also quickly becoming a necessity if you wish to thrive in the gig economy . . . or even traditional employment!
The people in traditional employment that are the most expensive and that end up enjoying the highest salaries are those who receive investment from their companies: the ones who get sent on management courses, who are taught new skills, who earn new qualifications, and who are asked to head up important projects and departments. All these things help those people to create amazing résumés that let them move into higher-paid work, or charge more for what they can do already. This is more important than ever at a time when salaries often aren’t increasing at even the rate of inflation. You need to do something else in order to stand out and get ahead. And that goes double for those of us that are self-employed.
Accelerated Learning and Online Resources
How exactly do you go about developing the skills to become a digital polymath?
The first tip is to make sure that you know the resources you have available to you.
I already mentioned Skillshare, which is a sharing-economy take on the idea of online courses. Anyone can create classes, and anyone can take them. Then there are other sites such as Udemy ( www.udemy.com ), Udacity ( www.udacity.com ), Code Institute ( www.codeinstitute.com ), Teachable ( https://teachable.com ), Codecademy ( www.codecademy.com ), Coursera ( www.coursera.org ), Treehouse ( https://teamtreehouse.com ), and others. Many of these are coding-based websites, but for non-techies there are plenty more resources out there. YouTube is likewise a surprisingly useful resource, with lots of completely free tutorials that will walk you through everything from video editing, to website creation, to electronic engineering. If you want to gain this information even faster, try watching those videos on 2x speed (click the gear icon below the video, click Speed, and choose 2). You can pull the same trick with audio books from Audible ( www.audible.com ). Audiobooks and podcasts are perfect for multitasking, by the way, as they allow you to listen and learn in the car, while jogging, or when chopping veggies. If I’ve been asked to write about a subject I don’t know, then I will often watch a YouTube video or listen to a podcast while I’m driving or cooking, so that I’ve got plenty of ideas to work with when I sit down the next day.
And if you prefer learning from books, then you can of course find a huge number of excellent resources at Apress.com!
If you’re interested, then consider looking into accelerated learning techniques. These are techniques used to help you learn complex subjects much more quickly, often by changing the order in which you learn individual elements, or breaking up your time spent learning.
For instance, the AnkiApp flashcards app ( www.ankiapp.com ), which began life on Linux but has since made the journey to many more platforms, is a fantastic tool for learning pretty much anything you can think of. This is a simple flashcards app but one that utilizes two strategies that have been demonstrated to enhance learning in several studies: active recall, which is required to retrieve the knowledge you have learned, and spaced learning, which involves taking strategically timed breaks in order to enhance the value of repeating the same tests. The best part is that you can easily download ready-made “stacks” of flashcards provided by the community that enable you to learn pretty much any subject you can possibly think of!
There are also plenty of books on the subject of quickly absorbing information. Tim Ferriss describes the DiSSS method, for instance, in his book The 4-Hour Chef. This is an acronym for Deconstruction, Interviewing, Selection, Sequencing, Stakes, and basically provides a framework for learning in a particular order. One of the most interesting suggestions here is to start at what would normally be considered the “end” when learning and then work backward. So you might learn how to get some in check when playing chess, or how to lead when dancing and then work backwards from that point.
In his book The First 20 Hours, Josh Kaufman explains the importance of framing your learning by having a goal or an ambition in mind. I always advise people NOT to try and “learn Java” but instead to learn how to make a calculator in Java. Or a notepad app. Or a simple game. As any programmer reading this will know, you never completely master a programming language but rather just learn the amount that you need and then look up the rest as it comes. Having that end goal in mind helps to motivate, structure, and guide your learning, which in turn makes you ultimately much more successful.
Or how about the Feynman technique? Named for physicist and author Richard Feynman, this technique involves gaining true depth of knowledge by making sure you are able to explain the topic in simple terms. If you can’t, then you identify where you are stumbling and you revisit. This forces you to engage with the information, to relate it to your own life, and to build connections with existing knowledge (which also enhances memory). This is one of the reasons that I find writing about a subject to be so beneficial when it comes to learning it—a perk of the job for me!
Using different modalities and sensory learning can help a lot, and is made all the easier thanks to YouTube and the Web. My university experience became much easier once I discovered I could learn topics like neuroscience from YouTube!
If you combine these strategies with the immense resource that is the Internet, if you learn how to correctly phrase a Google search, and if you develop your speed-reading skills and your ability to grasp the key lessons from a book quickly (you haven’t read everything in this book up to this point, have you?), then you will find that you can gain new knowledge and skills immensely quickly. Matrix-style .
Oh, and all this also means that I reject the argument that you don’t have enough marketable skills to enter the gig economy: as we’ve seen, it is perfectly possible to simply acquire such skills! In fact, while this is something I probably shouldn’t be proud of, I was once hired to write an e-book on Python before I actually knew how to code in Python. I used the techniques just described in order to learn to the point where I was able to teach other people! And I did this in short enough a time that the gig was still profitable for me.
Don’t worry if this seems impossible right now; you’ll find that, just like anything else, learning new skills online is something that you will get better at with time. It is a skill in itself, after all: a skill that unlocks all other skills.
The Other Side of the Coin: Hiring and Working with Freelancers
Expanding your own skill set is one option for continuing your growth going forward. Another is to leverage the help of others and to outsource.
If you intend on getting into the world of “service arbitrage,” then you will find yourself in an interesting position: getting to view the gig economy from the perspective of those who are hiring. This is a completely different ballgame and actually something that can be a useful learning experience in itself if it teaches you to better understand what it is that your clients are looking for and the challenges they face.
At one point, I tried buying and selling copywriting in order to effectively outsource the bulk of my own work (a successful experiment, but one that ultimately proved to be a little soul destroying). What I found when trying to hire writers, though, was just why I had been so successful providing this service against the competition.
Those who would charge very low rates but often speak poor English and/or people just trying to make a quick buck with no real interest or understanding for the topics they were asked to cover
Students, entrepreneurs, and others that would start out very well but ultimately get bored. Flaky types who would hand in work late, or fail to communicate at all.
What I also recognized during this time was just how important it was to hire writers that understood (and ideally loved) the topics they were covering. This experience allowed me to hone and refine the service that I was offering, thereby increasing my wage and enabling me to better understand my position when negotiating pay and terms. I would highly recommend this, if only as a thought experiment in your own industry. Just take a look around and imagine that you are trying to hire someone. Which ads jump out at you? What problems do you see? Where do you look first?
Hiring Freelancers for Businesses and Entrepeneurs
While most people reading this book will be interested in entering the gig economy as freelancers, there is also a good chance that some people are reading this from that alternative perspective: learning about a marketplace from which they can hire professionals. And of course, there’s always the chance that if things go well as a freelancer, you might expand your operations to the point where you do need to start hiring.
Here are a few tips to help you find the right people to work with.
Look at Previous Experience
This is the most important consideration. How long have they been working? Are they willing to show you examples of their previous work? What skills and traits do their previous projects demonstrate? Do they have accolades or recommendations from previous clients?
Make a Small Order
In this book, I recommended against freelancers doing “sample work” for free. However, there is nothing wrong with putting in a small order to a freelancer first to find out if you can work together. Order something that is representative of the kind of work you’re going to be looking for but that won’t cost you much and won’t take the freelancer long. This way, you’ll quickly see if they’re at least capable of delivering the kind of work you need.
Consider Communication
Communication is very important in any business interaction, but this is even truer when you’re working with someone online. When you start discussing your project, you will likely get a kind of “vibe” from the person you’re speaking with. Either they’ll put you instantly at ease and you’ll feel like they are listening to what you’re saying, or they’ll leave you wondering if you’re going to get anything even resembling what you’re looking for. Go with your gut instinct; it is correct more often than not.
If possible, speak with the freelancer directly. Meet them in person if you can (this limits your choice but is a big advantage, especially for projects like large coding jobs) or have a Skype call if not. You can learn a lot more about a person on a call than you can from some e-mails. That said, keep in mind what I’ve advised in this book about communication overhead. If your order is small, then it is unfair to expect your freelancer to find time to call you (especially if they’re working on the move), and a call is not a great use of your time either. For a massive project, aim to still keep calls brief; friendly but to the point. Respect their time, and you’ll find they are much more likely to stick with you!
Trust Your Freelancer’s Expertise
One of the most frustrating feelings as a freelancer is when a client won’t listen to reason: when they order jobs that won’t help them achieve their goals and might even hurt their organization. Freelancers want their clients to do well, because that reflects well on them.
And that’s why it can be very frustrating when a client wants an article with 10% keyword density (meaning that every other word is a keyword and the content is unreadable), or when they want to continuously make tweaks to a web design to the point that it is completely different from what the designer originally delivered.
Freelancers get it: it’s your website and your brand. But why hire a web developer at all if you won’t listen to their recommendations regarding what will look good and be effective? Experienced web designers know what they’re talking about, typically have designed hundreds of websites before, and have valuable tips and insights that can help your brand to look amazing. Remember: you aren’t designing this website for you; you’re designing it for your customers. And unless you’re a professional designer too, chances are that the person you’re hiring has a better idea of how to do this. In fact, they benefit from being emotionally removed from the project.
Respect Their Job Description
One more thing: don’t ask your SEO writer to “collect a list of e-mail addresses from potential business partners.” That is not their job description, and it’s actually very insulting. Hire freelancers to complete work that they specialize in, don’t get them performing menial tasks that fall outside their expertise.
Hash Out Details
During initial communication, know what are you looking for. It’s important to make sure you both know precisely what to expect in terms of turn-around times, revisions, updates, and so forth. If the provider is forthcoming with this information, then you won’t need to chase them up. If they’re not, then make sure to ask precisely when you can expect to get your work, what tools they use, what will happen if you don’t like the work you’re given, and so on.
You Get What You Pay For
While there are exceptions to every rule, a general rule to follow is that you will get what you pay for. Don’t expect to work with a consummate professional that will be absolutely dedicated to your project if they’re charging the equivalent of $3 per hour!
Great Talent is Hard to Find
Finally, recognize that great talent that is professional and committed to your work is hard to find. In other words, if you are fortunate enough to land upon someone who is going to go the extra mile to finish your projects, and who always delivers on time . . . if you manage to find someone whose working style gels with your own . . . don’t let them go! A high-quality service provider can be a huge asset to your business, so make sure you treat them well and, if possible, try to fold them into your workflow as much as you can. Be good to them, and they will be loyal to you.
Exit Strategy
As you grow and improve your business, you might consider scaling in order to increase your income exponentially. Failing that though, you might consider another option: selling up and moving on.
Having a destination in mind like this for your business trajectory is what’s known as having an “exit strategy.” Here, of course, the strategy is selling as a way to exit your business.
This might give you pause for thought though. How do you sell a business that doesn’t have any tangible assets? (Or even financial assets if you’re a sole proprietor?)
A client list
A list of freelancers
Your trading name/company name/intellectual property
Any tools you have built
Your website/YouTube channel/social media presence
In short, you can sell off anything that might be of use to someone else trying to set up their own business. If you’re a coder and you own a company called Coding For You (that you own the trademark for), with a series of social media accounts that collectively have millions of followers, a thriving website and blog, and a massive list of repeat clients, then that is going to potentially fetch a decent amount of money. On the other hand though, if you have one or two direct clients who hire you because of your personal skills—and you trade under your own name—then you’ll struggle to sell. This is something to consider as you build your business if this is your eventual exit strategy, and even if it is only one of several options you are considering.
This is also why gradually removing yourself from your own operations as you scale up is such a smart move.
Calculate the total sum of all tangible and intangible assets
Use the traditional (and somewhat inappropriate) method of calculating your net profit per year and multiplying by five
Calculate the value of a website by looking at the number of inbound links, the amount of content, the niche, and the ranking
Calculate the value of a list of clients by roughly assuming that one lead = $1
Use online tools that aim to calculate the value of a website
None of these methods is perfect at the best of times, and they become particularly unhelpful when you’re trying to calculate the value of a sole proprietor business. It is hard to measure just how important you are to the operation, and of course you aren’t going to be a part of the company anymore!
Another alternative method is to look for an investor who is willing to buy the business and take you on as the manager and employee. This might be helpful if you’re looking for a cash injection and want to minimize risk (while sacrificing some control, of course).
Passive Income for Tech Entrepreneurs (and Others)
If you want to increase your financial independence even further, give yourself even more freedom, and make your business all the more resilient, then another strategy you can use is to set up sources of passive income.
Passive income is essentially income that you earn passively—that is, without working. Passive income is money that trickles in even when you’re sleeping or traveling the world, making it very useful for the lifestyle design options we discussed in Chapter 8. This doesn’t mean “money for nothing,” but rather it tends to mean earning money today for work that you did days, months, or weeks ago; working hard today so that you can profit tomorrow.
Create a website with advertising on it. You’ll be paid each time a visitor views or clicks an ad, even when you’re sleeping.
Create a YouTube channel with advertising.
Publish a book. This will result in a one-off payment, similar to but different from working for clients, but it will also yield a recurring income as you earn royalties from book sales. Plus, it is VERY good for your résumé and LinkedIn profile. People tend to assume you are an expert if you have written a book.
Sell a digital product. This might mean selling an e-book from a website landing page or on Kindle, or it might mean selling a WordPress plug-in, or a Unity prefab. You could sell motion graphics for After Effects, or you could sell music via Bandcamp.
Sell a mobile app, piece of software, or computer game.
Create an online course to teach other people coding, web design, SEO, working online, or any other topic that interests you.
Create a SaaS offering, such as an online tool.
Creating passive revenue streams will serve as the perfect accompaniment to the gigging lifestyle. For one, it means that you can take days off and still earn some money. At the same time, it means that even when you have no new clients biting, you’ll still be earning something (and have something to work on).
As we’ve seen, your overall wealth and “value” isn’t tied precisely to your “salary,” and this is another perfect example of that: a passive income stream could perfectly offset the decision to work a little less!
Selling an e-book via a sales funnel, selling a mobile app, or creating a YouTube channel/website should be a lot easier for you if you have the experience of working with clients to provide the same services for them. In other words, you have the “inside scoop” and you know precisely what makes a successful product online. So, there is nothing stopping you from accomplishing that same thing for yourself.
This is a tip in general: pay close attention to the business models employed by the people who hire you. This might provide some valuable insight!
Even a relatively small website with a few ads on it could bring in $50 per month, which might not be huge bucks, but it’s still very welcome!
Selling Leftover Materials
It’s also often easy to set up passive income streams using only materials that you’re already creating. This way, you are often selling the tools you’ve created and materials to other creators via a B2B distribution platform of some sort.
Let’s say for instance that you are tasked with creating some kind of web design or logo design that utilizes a 3D model. Once you’ve made that 3D model, you can arrange it as part of your image and take a “snapshot” that will become the design element for the client. But at the same time, you can then reuse that model by uploading it to a site like TurboSquid ( www.turbosquid.com ) or 3DExport ( https://3dexport.com ). Likewise, you can use an image of the model from a different angle, perhaps with some different colors, and make that into another client’s logo design, where relevant.
It’s important that you clear this with the clients first and make sure they know that you will be recycling an element that you used to create their image (though it won’t necessarily be recognizable). Usually, there is no real reason why they should mind.3
Maybe you’ve been hired to create a video for a client to help them sell a product. In this scenario, you might end up creating filters and presets that you can use to make the video look more professional. In this scenario, there is absolutely no reason that you can’t use those creations in future work to save yourself time, or even sell them on sites like VideoHive ( https://videohive.net , part of Envato Market).
As a programmer, it is a huge mistake if you aren’t reusing portable classes, libraries, and methods that you’ve written to perform useful jobs. And if you think in a modular manner as you create the solutions, you’ll have more reusable tools to sell or to make future work faster.
WordPress themes
WordPress plug-ins
Code libraries
Classes and methods
Photos (on Shutterstock and iStock)
Video footage (Shutterstock)
Unity prefabs
If you’ve written blog posts for a client and you clear it with them first, you could even put some of those articles into a PDF and sell them on the Kindle Store as an e-book. A client wants exclusive copyright and isn’t willing to play ball? Then suggest splitting the revenue, or alternatively giving them a discounted rate in exchange for giving you the rights to reuse the content offline.4
Alternatively, why not write into the contracts for your clients that they will have exclusive copyright for the next two years? Most will think nothing of that, but it means that in two years’ time, you can start selling those e-books and apps for yourself!
Finally, keep in mind that you can also use content this way that has been rejected, or that never gets completed. If you’ve written half of an app for someone who eventually decided they would go with another developer (it happens), then why not use that as the starting point for your next gig? Or why not see if you can turn that app into something of your own that you can sell?
Essentially, this comes down to efficiency and looking for opportunities. But if you’re savvy and you remain on the lookout, you can find ways to gain additional, recurring profit from a vast number of your gigs. And if you do this, then you’ll bring in a small amount of additional income that will help to provide a safety net and give you more leverage when charging your clients.
Better than that though, it could eventually grow into a large additional income that may allow you to pick and choose only the very best gigs. And at this point, you may find you’re able to gain even more freedom in the way you design your workflow and lifestyle. Maybe you could give up gigging entirely and live purely off passive income?
This is another “exit strategy”: using the gig economy to grow passive income streams until you can stop working altogether. And as far-fetched as it might sound, there are actually plenty of people who make a full-time living from selling apps, e-books, courses, and more—so that they can travel the world, volunteer, or generally live the life they want to live!
Gigging vs. Passive Income
You might now find yourself with another question: if it is possible to make a living entirely from passive income, then why set out to do anything but that in the first place?
What advantage does gigging have over creating products yourself to sell?
A few actually . . .
First, gigging is a strategy you can use to generate money almost immediately, and in a far more reliable fashion. Conversely, creating a website or successful app that is able to generate an ongoing income is something that can take years and years of work—and that has no guarantee of success. You may find that after working for years on an app, you only ever make 20 sales. You could build a blog that still only has 100 visitors a day after years of promotion.
Meanwhile, gigging means finding work, completing it, and very often getting paid that night. This is why using gigs to “bootstrap” other projects is actually often the best strategy of all.
Bootstrapping
One of the massive advantages when it comes to working online in the gig economy, from my perspective, is the opportunity to work on side projects. Not only can working on side projects help you to further your career and hone your skills, but it could also end up leading to even bigger opportunities.
Online courses (teach people how to program on sites like Udemy, Skillshare, or Teachable)
E-books (sell them from your own website and landing page, or through distribution platforms like Kindle)
Apps
But maybe it’s not just about the income? Maybe you want to bootstrap a project that you’ve dreamed about for years? Maybe you want to build a website? Maybe you want to write the next great American novel? Perhaps you’re an inventor!
So, you may choose to look at your “side hustles” not purely as ways to earn extra money and gain more financial security but as being focuses in themselves and opportunities to earn even more income than you could do through gigs.
In this case, gigging still plays a very important role. Specifically, gigging gives you the ability to spend more time focusing on those projects than you would otherwise be able to afford.
This is “bootstrapping,” which refers to one’s ability to pull themselves up “by their bootstraps.” In other words, you’re funding your project or business idea by investing in yourself, and you’re working to bring in that money. You might gig four days of the week, for instance, so that you can spend time and money on day five to work on other projects. Maybe it’s that project that will ultimately be where you make it big, but gigging gives you the flexibility to make that happen.
And remember: you don’t need to get your sense of purpose from the work that brings in the same money. If you never turn that passion project into a money maker, it doesn’t matter!
The Future of the Gig Economy
There is no shortage of people willing to declare that the future of work is online. It is commonly said that more and more people will soon work from home, and that a lot of conventional jobs will become obsolete as robots and programs step in to do the work for us.
Right at the very start of this book, we discussed some of the reasons that companies choose to hire freelancers over taking on staff. One major reason is that it reduces their overheads, their admin, and their risk. Another is that it enables them to choose from a far larger and more distributed pool of talent.
These forces will continue to persuade businesses, and soon, more and more companies are likely to turn to online entrepreneurs rather than going through traditional channels to hire their staff.
Other factors will also contribute to the trend of using freelancers. Collaboration tools and freelancing platforms will inevitably improve, for instance. In the future, I highly suspect that we will collaborate in virtual reality offices where we can sit right next to a team member in another country and discuss ideas with them as though they were right there. Even better though, we’ll be able to draw on the air in front of us to share and explain our ideas, and tap into cloud computing to utilize a literally limitless amount of processing power. And when it’s time to focus, we’ll rocket to a beautiful location free from all distractions.
Speaking of VR, what about the impact that VR training and remote operation could have? Imagine being able to learn a complex skill using virtual reality—something that NASA, DARPA, and other organizations are already implementing. And what if you could then control a robot via a similar VR tool in order to operate a forklift, fly a drone, conduct an orchestra, or even carry out complex surgery? The number of jobs that can’t be learned and handled online is only going to shrink going forward.
At the same time, the capabilities of individuals will greatly increase as a result of better tools and learning resources, just as we discussed earlier in the context of the gaming industry.
It’s now more affordable than ever to invest in a high-quality camera—most of us already have one built into our smartphone. Tools like Adobe Creative Cloud make professional-quality video editing possible for everyone. Why hire a studio when an individual can create an ad that looks just as professional?
Google and Microsoft are providing individual coders with access to cloud computing, machine learning, and powerful APIs. A single web developer can create something incredibly by using open source tools like WordPress or Drupal, and by leveraging tools like Adobe Illustrator.
We’re seeing start-ups increasingly overtaking larger businesses thanks to their improved agility and speed. Where it takes a big organization months to implement new systems, individuals and start-ups can adapt on an almost daily basis. David is repeatedly taking on Goliath and wining, with the Internet acting as the great equalizer, leveling the playing field at every step.
And there are social and economic factors too. People are living longer and are more likely to work for multiple employers across multiple different industries. We no longer live in a time where it is normal to take on a single job and work that job for a lifetime.
If it has already become commonplace to switch jobs every few years; how long before we ultimately conclude that it’s better not to be tied to one job at all?
Then there’s automation. Automation is going to drive this trend even further. It is predicted that as we move forward, programs and robots might replace hundreds of millions of jobs. This doesn’t just mean manufacturing jobs either: it means anything that doesn’t require human creativity and empathy. Data analysts, checkout assistants, fraud investigators, and many more will lose their jobs to the rise of the machines.
Gigging vs. Sharing
The sharing economy also has close ties with the gig economy. The idea of exchanging a service for cash directly, or for another service, is all about decentralizing markets: removing the need for big organizations that maintain monopolies and force things to be done in a certain way. By providing a service directly, you remove the middleman. Prices can be driven down, and industries are disrupted. The companies that survive this will be those that are able to adapt by outsourcing, and by listening to consumer demand.
Traditional taxi firms and hotels have struggled against the likes of Uber and Airbnb because they simply aren’t able to offer the same value and convenience. An individual has no overheads. If they already have a car parked in the driveway or space in their holiday home that isn’t being used, then any money they receive will be additional to their current income.
Nor are larger companies able to adapt as quickly to changing technologies and markets. Governments are stepping in to try and level the playing field - making it harder for companies like Uber so that traditional taxi firms stand a chance, but it is too late: Pandora’s box has been opened and we’ve all had a taste for just how affordable and easy travel can be. And the same thing is happening in business, only not everyone has noticed yet.
We are in what many people are calling the “Fourth Industrial Revolution.” Technology is developing at a pace that is forcing businesses to adapt. We’ve seen the fall of physical CDs in the music industry, we’re seeing shops close on main street, and countless companies are investing big money to try and replace their own staff with programs and machines. If you think Uber is disruptive for the taxi firms, just wait until driverless cars become commonplace!
What happens when we all own 3D printers in our homes, capable of manufacturing furniture, ornaments, electronics, and more? Why buy something from Ikea and pay for transport, storage, branding, and countless other overheads, when instead you can simply buy an STL file from someone online (or swap it for a bit of code) and print it out yourself at home? Apart from anything else, think how much more unique our decorating will become!
Again, we’ll be cutting out the middleman. At this point, the only thing of any real value will be the 3D designs that we download online. Only creativity and inventiveness will hold any value.
Not even the brightest futurist could tell you precisely how all this will play out. At this rate, we might even reach the singularity before we all have a chance to adapt! All I can tell you is that you are in the right place right now. That developing your skills and learning to provide direct services of your own, learning to thrive in the gig economy, is the very best shot you have at future-proofing your career prospects.
Future-proofing Yourself
Learning to sell skills online is one crucial step, but there are other forces also at play here that will determine the types of work that we will be able to sell.
Specifically, creative work is likely to be increasingly in demand, while anything that could easily be automated is likely to fall out of favor. The simple fact of the matter is that companies are looking not only to replace their employees with freelancers, but also to replace the need for anyone to do the work at all. That’s where automation will come in.
There is a chance that some of us will be the Blu-ray discs of the jobs market. That is to say that we will replace the traditionally employed (just as Blu-ray did indeed replace DVD), but not before automation has had a chance to jump in and replace us (just like streaming replaced Blu-ray before it really fulfilled its promise).
The threat that our rising breed faces will come from tools designed to replace the need for us to work at all. This isn’t just a threat for the gig economy, but even more so for traditional jobs. As machine learning improves and computing power grows, more and more jobs will soon be able to be carried out by computer programs, leaving less and less space for the rest of us.
It might sound bleak that so many jobs are going to be lost to more-capable machines. But my hope is that someday we will reach the point where the economy can run itself as computers and machines run “algo-businesses,” manufacture cars, drive taxis, and handle customer service calls. Governments will need to introduce universal basic incomes5 for the rest of us to live off. Again, the only work that will have any value will be creative. People will write books, paint works of art, and create cool new apps because they want to. The only economy that will remain will be the sharing economy. And the only way to provide value will be to offer what makes us uniquely human. We will work because we want to.
Of course, the machines might have already burned the Earth to the ground before this utopia has a chance to transpire. And if not, that would only come after a significant period of difficulty as many of us are left without work and with no provisions yet in place to manage the crisis.
The best thing we can do to protect ourselves meanwhile is to make sure we offer the kind of work that is very hard to replace. And that means creative work. Manual labor can easily be handled by a machine. So too can any kind of rote activity such as data entry or analysis, or even anything that involves simple interactions with members of the public. All the things that we discussed could be sidestepped through process fixing or automating in previous chapters.
But true creativity is still something that will elude AI for a while. If not indefinitely.6
How do we define creative work though? You might expect that programming would be the first job to fall to the rise of the machines—as you’re literally speaking their language. In fact, though, coding is for the most part a highly creative process. It’s about problem solving and coming up with novel ways of doing things. Not only that, but someone has to actually write the programs that are replacing the jobs!
Creative work includes problem solving, ideation, and creating novel and unique works. At its most fundamental, creativity is often described neurologically as being the unique combination of disparate ideas. And this is another reason that learning a wide range of subjects and skills is so valuable.
So, programming, writing content, design, consultancy, marketing, and anything that involves a deep understanding of human psychology is likely to be safe. Play to these strengths and develop these aspects of your game and you’ll remain in high demand. Why do you think I focused on psychology, programming, digital marketing, writing, and personal training?
And at the same time, learn about the very tools that are threatening you. Learn how to utilize machine learning and the power of the cloud with tools like Google’s AutoML ( https://cloud.google.com/automl/ ). This type of work is going to be in increasingly high demand going forward. People who can work with big data and AI are increasingly in demand, and that’s likely to continue exponentially going forward. You can charge a LOT if you know how to build apps that utilize computer vision, voice recognition, or learning.
One of the smartest things you can do right now is to look for ways to make your own job obsolete. Beat them to it!
Your job as a service provider is to keep learning and growing, to anticipate and adapt to a changing marketplace. While some of the changes that are coming our way pose big risks, they also offer huge advantages. Work smart and you can thrive.
Returning to Traditional Employment
There is one other “exit strategy” that you might at some point be forced to contend with: heading back to the world of being an employee after a hiatus. This is something that can pose a challenge, as you will now have an apparent gap in your résumé from a traditional employment standpoint, and will potentially come across as someone who is ultimately looking for a way out. My generation (millennials) has a bit of a bad reputation in that regard!
Fortunately, employers have become a lot more sympathetic to our plight on the whole. These days, it is increasingly common for people to take time out of their careers for a whole host of different reasons: including travel, mental health, and more. The key is to look for forward-thinking employers that view this as a form of self-development, and to know how to frame it in that way.
Find a good reason to explain why you took the time out, and emphasize the positives that came from it. Working for yourself teaches a lot of things that employers are looking for, from discipline and self-motivation, to the ability to work toward deadlines and targets. Try to anticipate the concerns that they will have (you are going to leave the position as soon as another self-employment opportunity comes up) and explain them away (it was an idea you just needed to explore, but it wasn’t for you).
Another tip is to keep this possibility in mind as you’re taking on work and accepting it. We’ve talked at length about the importance of building your personal brand and how this is something that the traditionally employed equally need to consider. Well here is the proof: the very same portfolio-building efforts that will help you to ultimately charge more and more as a freelancer will likewise help you to get work in traditional employment.
Use of collaboration tools and project management software, such as Asana, Slack, and Basecamp
Overseeing the creation of top-selling online course
Working with a team of other programmers on a large app project
Being published on prominent online media outlets, including [INSERT WEBSITE TITLES HERE]
Building a personal blog with over 1,000 daily hits
Managing relationships with over 500 clients
Hiring and working with freelancers, employees, and agencies to complete large projects within deadline
Make it clear that you weren’t just sitting on your hands during this time, but actually running a business and gaining invaluable expertise and skills along the way.
If you’re struggling looking for work, then you can also consider the opportunities that your gigging has created. Maybe you could discuss working full-time for one of your current clients. Maybe you could look at a compromise situation, where you work as an independent contractor, for example. Maybe you could transition to a part-time contract with one client, and then look for a part-time job on the side.
Maybe you don’t need to think of this as an either-or scenario at all, but rather as a fluid spectrum that you can transition in and out of at any time you choose. At any point in your career, you can be employed, self-employed, both, or anything in-between!
Chapter Summary
This chapter has been all about looking ahead and deciding what the next step is. That means not only looking at ways you can grow your business and increase your earnings as a result, but also ways that you can eventually divorce yourself from it so that you can retire to that tropical island.
Failing that, we’ve looked at some of the possible futures that are coming our way, and at how freelancers can prepare themselves for that.
In the next chapter we’re going to rewind a bit. You have the theory now and you have your entire trajectory mapped out. All that is left is lift-off: launching yourself into the gig economy and exploring those new possibilities!
No more theory, it’s time to take action.