How to Scale from Freelancer to Founder with the Salami Technique
“An entrepreneur is willing to work 80 hours a week to avoid working 40 hours a week.”
I blushed when I read that, but it’s so true. A good 9-to–5 job, with a great wage and stable work environment, is living the American dream in the short term. Long-term, not so much.
We’ve seen major shifts in the way people work in the last few years. Most who dislike corporate culture, or simply dislike being employed, are either freelancers or self-employed now.
When you think about it, freelancing has a lot in common with launching a startup. Both come with a huge amount of responsibility. In both scenarios, this can be thought of as a positive aspect: responsibility should not be given, but taken.
Of course, the learning curve is also much steeper compared to being employed.
This is one of the main reasons I’ve chosen this path, but while still dreaming of the entrepreneurial life, I need to admit that I’m afraid.
Most glamorous entrepreneurs you read about (or meet, if you’re lucky) prefer to “learn flying while jumping off the cliff.”
If you’re like me, though, you probably prefer to take flying courses before you jump off the cliff, and preferably have a well-tested parachute on you.
Sound boring? It’s surprisingly exciting enough to keep you awake at night.
This is the technique I’ve used to scale my freelance services business into a scaleable services startup that helps to bridge the gap from being employed to being your own business owner. If you don’t want to jump into the cold water right away, I have some tips for you, based on my own experiences as a young wannabe entrepreneur.
Try Working 9-to–5
When growing up in Germany, I used to hear the saying “Es ist noch kein Meister vom Himmel gefallen.” It literally means “There’s still no master [that has] fallen from the sky.” I always giggled when I heard it, as the admiration some people received was indeed extraterrestrial. It seemed as if they came out of the blue.
Later on, as a freshman, occasions where I’d hold onto my ideals were getting fewer and farther between. Daily life kept interfering my long-term plans. At the time, I decided to try my luck working part-time as a graphic designer at an established consulting company. It lasted for less than 6 months.
The wage was low, I constantly worked unpaid overtime and my grades at university suffered.
But working in such a closed environment cultivated the rebel spirit in me. It felt weird to have such a busy yet boring schedule, awakening the urge to find alternatives.
Amazingly, job offers and freelance gigs started to come in. While working at my everyday job, I jumped back and forth between various freelance jobs.
Why did that happen? I honestly don’t know, but I suspect that’s how psychology works. Give me one month of vacations and I might procrastinate half of the time. Put me into employment for a month and chances are I could do the same amount of work in the same time, while still working for someone else!
I believe that a 9-to–5 job can teach you a lot about your working behavior and productivity. You’ll crave broader sources of inspiration, which probably wouldn’t be the case if you had all the freedom in the world.
To see the light at the end of the tunnel, you firstly must be in the tunnel.
Listen to your gut. Knowing when to step back and take a leap of faith into self-employment differs from person to person. If you see enough opportunities and gigs coming up to potentially cover double your initial wage, the moment might be just right — your ideal threshold may differ, but this is what worked for me. Also make sure to have some money aside — the first weeks or months might be a bit rough for you financially (this is self-explanatory).
Try to keep at least one steady income remotely. It will give you the needed backbone when times are hard locally (winter is coming!), and a nice boost once the revenue is made. It is essential to put all this under your own brand in order for it to serve as an umbrella for all the services you offer. After all, to create a strong presence (online and offline) you will need to be consistent with your brand.
What I did with every freelance gig I caught was to brand it under my personal creative brand. Branding yourself in a consistent manner will help you create the right network later in the startup process.
Diversify Your Freelance Income
At some point you will have to discuss prices and your hourly rate. If you believed that you can have a fixed rate for every client, I have bad news for you.
Some clients are stressful, some don’t have the budget, while some have serious communication problems, leading to unneeded overtime. You need to take all of these factors into consideration before you decide on a price offer for a specific client.
Headaches? I found this little tool by The nuSchool very helpful when deciding how much to charge for a project. It’s focused on designers, but the logic applies more broadly.
It’s very important to diversify your income. Freelancers often talk about the feast-or-famine cycle. Often you’ll get some well-paid gigs in a short period of time, and if they are one-off jobs you’ll have to start looking for new gigs soon, or you might end up relying on your fallback sources of regular income.
Something that has worked for me and helped me stay flexible is access to remote jobs and gigs.
Freelancers, and some self-employed people, have the privilege of doing a large chunk of their work wherever they want, as long as they have access to their working tools.
This is often compromised if you work for a client who takes up more of your time with meetings and consulting sessions than with actual work. Of course, aside from the fact that you should be charging for these, they make you less independent. You will probably be able to handle some of these, but don’t overdo it, otherwise meetings and calls might clash together in your agenda.
Image Credit: Thomas Litangen
Once the cash is flowing in, you will may tend to forget about the need to grow your startup. Don’t get too obsessed with making money just yet. You cannot reach exponential growth as a freelancer or someone who offers services. Surely, it is a great financial backbone, which feeds your startup with money. But you need to invest a lot of time into the development of your startup, regardless of whether it’s the business model, legal paperwork or the actual services (or product) you want to offer.
As a rule of the thumb: at this stage the cashflow coming in from your startup has a bigger value to you than the cash you bring in as an individual freelancer. Obviously, the network you bring into your startup as an individual is critical, but at some point the startup you’re working on should ideally live on its own, meaning that your startup’s network and testimonials will detach itself from your personal network sooner or later. This is usually a good sign and indicates improved stability.
I have used (and am still using) the same approach with ura, an open-source design startup I founded. As it’s focused on open-source projects, I can’t simply apply the same philosophy as commercial creative agencies. While it’s growing pretty well, I wouldn’t be able to invest all my time into it, so I work on various other projects in the meantime until my startup is self-sustaining. It’s a long but safe process.
Trust & Delegate
Do you always have the urge to do things by yourself in order to ensure that the end result is satisfying? Try to change that.
Surround yourself with people you trust and know well, who could be an essential part of your startup in the long run. I have learned that people you trust and know well are more important in the early stages of a startup. While finding a great developer or designer is a matter of having a network and money, having someone you trust needs time and dedication, because it’s based on a personal relationship.
The keyword here is delegation. The earlier you get used to the fact that you don’t need to take care of every little detail in the founding process, the better. Hence why creating trust on a personal level is so important.
I found this TED Talk by David Marquet very insightful. It explains delegation and decentralization very well (and visually). You might want to check it out:
The Salami Technique
Just imagine you’re Batman: by day you are Bruce Wayne, the guy who has this stable job at Wayne Corporation allowing him to live a good life. At night you’re the Dark Knight, that guy who has a vision and works towards achieving that, no matter what. Bruce Wayne may be a billionaire, but you get my point.
While still being out of most people’s comfort zone, this approach offers a much more manageable learning curve than most others. I call it the salami technique. You cut off little pieces you can work on, one by one.
It’s manageable if you’ve got the work ethic for it. It offers greater financial security. If you’ve been looking for a way to get beyond the hard limits on your earnings as a freelancer, you should give this approach a go.