“Wrong” things … I regularly do

April 15, 2020

It is a regular occurrence that people tell me that I am running my business incorrectly. I find it fascinating and I always welcome the feedback. Indeed, we can only fix the things we know are broken.

So that others might learn from my relentless dedication to doing things wrong, I document my egregious business faux pas right here. I also include my reasoning for doing so many things, so incorrectly. These practices, in isolation, appear strange or even counterproductive. However, my business practices are a well-considered system of differentiation, not a haphazard patchwork of dysfunction.

There is an overarching theme to how I do things. Following the status quo is the fastest route to mediocre, which interests me very little. If you break all the rules, your failures will be spectacular, but your successes will be too. That is very attractive to me, regardless of the outcome.

With this in mind, here are the things I regularly do wrong … and why. Whatever you do, do not follow my example. I have no idea what I am doing. That is the honest truth.

I don’t charge deposits and I refuse to accept them – Deposits destroy trust and give a false sense of security to the receiver. Instead, I leverage trust to facilitate progress. I mitigate risk, or perceived risk, for greater profitability. Learn more about not charging deposits, here.

I don’t use formal contracts / I use “handshake” commitments – The emphasis here is on formal contracts. When two entities discuss an arrangement, write down the details, and both agree – that is “a contract”. By all means, I use these kinds of contracts every day. I do not, however, use formal documents that are structured like we think of as a “contract”. I do not try to trap clients into terms and conditions or restrictive binding agreements. Much like deposits, contracts are a false sense of security and commitment. I prefer to properly and thoroughly qualify my leads. I turn away as much work as I accept and here is why. Related note – I will gladly sign contracts, NDAs, and independent contractor agreements, but I do not initiate them.

I let clients name their price and have them do so at the end of a project – This is 100% true and is not a trick. At the end of a project, the client determines what is fair and that is the price I charge. I have zero guarantees regarding the final price or payment. I complete the project fully aware of and accepting that. Some say this is undue risk and others that I am just lucky. I call it realistic and pragmatic. Happy clients pay top dollar and are happy to do so. Also, the feedback loop is incredibly valuable for me.

I avoid retainers, subscriptions, and traditional recurring revenue models – This is an extension of not using contracts and letting clients name their price. Retainers, subscriptions and traditional recurring revenue models give a false sense of client commitment. Worse yet, they kneecap good pricing policy. Instead, I exchange fair market value for my product-service bundles at the time they are delivered. Learn why retainers are a progress trap, here.

I am not motivated by money – I measure success in happiness, learning, work-life balance, and helping others.

I ignore cash flow and top-line revenue – I focus on days cash on hand and profitability. Doing so applies the adage “mind the pennies and the dollars will take care of themselves”. This is arguably six of one and half a dozen of another, but it is a starkly different approach to business. Having a large number of days cash on hand allows me to pick the projects I like most, but also those that are the most profitable.

I give a lot of work away / I hate to nickel and dime – This is an extension of not being motivated by money but there is a business strategy behind it. I am poverty-stricken, in terms of small-dollar invoices, but I am fabulously wealthy in IOUs and goodwill. In turn, I am spoiled for choice as far as the people I get to work with, and the projects I get to work on. Also, not charging (or accepting payment) for small-dollar projects is a fantastic litmus test for clients. You might be surprised by the range of reactions it garners.

I stand behind my work, regardless of time – This is considered high-risk for a developer because of the rate of change within the industry. However, I am a web developer and that is a bit different. Fundamentally, good code does not change. If something I built breaks it is because I did something wrong. I accept responsibility for my actions and fix my errors.

I don’t have employees and I don’t resell the work of others – I don’t like the idea of making money off of someone else’s efforts. From a business perspective, I stick to my wheelhouse. If I am not confident and capable, I pass on the opportunity. When possible, I recommend someone who is a good fit because I trade in goodwill. More realistically, I can’t imagine anyone wanting to be in my employ. I would be a fantastically terrible employer. I recognize my limits.

I trade time for dollars – I would argue that everyone who works, is at some level, trading time for dollars. The question becomes, at what rate? By charging by the project, my ability to earn per hour is theoretically limitless. I push the limits here via risk mitigation, good pricing policy, process development, and most of all, programming. I write code to do work for me. Why have employees, or tie up cash in investments when my code can make money for me? I think people forget what a powerful jig programming can be. If you have excellent jigs, you trade time for dollars at an exceptional rate.

I don’t believe in scope creep – The scope doesn’t change over time. The product-service provider failed to understand the scope, failed to think creatively about the future and its possibilities, failed to manage the project, or all of the above. In each situation, the error is that of the product-service provider; not the consumer. The client should not pay more when I make mistakes or misunderstand. That is nonsense. Moreover – I think in terms of value creep. Change your perspective and you might find a pot of gold.

I reject “time, cost, quality: pick two” for the nonsense it is – Top three reasons: innovation, automation, and process development. If I cannot do something reasonably well, reasonably quickly, and for a reasonable cost, I am out of my wheelhouse, bad at my job or both. Yikes! I’d rather do the job for free than admit I was so far out on a limb. Pride comes before the fall.

I let things take as long as they need to / I don’t set limits – This applies internally and externally. If I need to scrap something and rebuild it, because I am unhappy with it, I do. Whenever possible, quality comes first. It is not rare that I “miss a deadline” in order to meet my standards. Conversely, I want clients to take as much time as they need. I have seen projects carry on for years and without a penny sent my way. Sometimes they get finished and sometimes not. Shrug. Life’s a journey and I learn a lot from these projects and that has value.

I don’t dictate the process – I operate within a framework and leverage specific concepts/methods but each project is custom, one-off, bespoke, and unlike any other. This means that the client has complete freedom to operate in whatever manner works best for them. What may seem like a lack of process development is quite the opposite. I have worked long and hard to develop processes that work regardless of what the client wants/does/etc. My goal is to eliminate processes that require specific inputs or assumptions. Instead, I aim to develop processes that work regardless of the inputs. I am better at it some days than others, but I get better every day.

I give up on projects and clients – As much as I hate failing, sometimes I throw in the towel. Sometimes it is a disservice to continue a project or with a client. Usually, the decision to part ways is amicable, but occasionally I will “fire” a client. Regardless of the mechanism, I leave projects as professionally as I can. I gladly turn over anything I have completed and do not expect one penny (nor have I charged a deposit). While I may have wasted the client’s time, which I apologize for, I do my best to not leave the client in a poor position. Almost always, it works out for the best for everyone.

I am a jerk – By all means, I value being polite, kind, and considerate. I cherish decorum. However, there is a time and place to raise uncomfortable topics, have hard discussions, and do so in a direct or perhaps blunt manner. I fully admit that I can be rather curt when irritated, but it always comes from a place of wanting better for everyone involved. Or maybe I am just a jerk. It is hard to say.

I depend on repeat customers and I apply a very soft sales approach / I am not “growing” my business – I do not use any outbound sales techniques and I almost exclusively attract new business via word of mouth. Depending on the year, 85-90% of my revenue comes from return-clients. That sounds like all my eggs are in one basket and business is fairly stagnant. The twist: 60-65% of the clients I work with, during a year, are new clients. Weird, right? Well, it is an application of the Pareto Principle (80/20 rule) and leveraging the fact that return-customers pay, on average, 20% more. I do everything in my power to make sure my clients are tickled pink, and in turn, they eagerly come back to spend more.

I don’t backlink to my website – I loathe the fact that web developers and web designers feel compelled to put a “website designed and built by ….” link in the footer of their client’s website. I find it rather distasteful. It makes me think they do not know that “works made for hire” are the client’s property. Looking at this more objectively – backlinking from random websites is poor practice. Carefully curated backlinks can be great for SEO, but having a clear and thoughtful linking policy is required. Not to mention – I get more than enough referrals from happy clients as is.

I don’t have a LinkedIn nor do I leverage any social media – Social media marketing is not a good use of my time. I gave it a genuine go for over 10 years and it resulted in exactly $0 in sales. I find direct, genuine outreach to be much more effective.

Budget is not a primary dictator of project priority – I mix budget, past spend, time as a client, recurrence, ease of doing business, time to pay, wheelhouse variant, project completion percent, urgency, and other factors via a complex formula in order to determine priority. Even if you are paying 10x what another client is, you might have to wait. Sometimes this is because it suits my business needs. Sometimes it is because I want to be fair to those who have smaller budgets, but who pay quickly, return often, and are easy to work with. Most importantly for clients, this means they might get their emergency fix, done immediately and at no cost. When it is your turn to be rushed to the front of the line, it is worth the times you had to be a little patient. I don’t like working with clients who don’t understand this, and they self-select out of working with me.

I value fairness, a balance of equity and equality, over profit or anything else really – If I have two identical widgets to sell, I might sell one for $5 and another for $50. Because I let customers name their price, this is balances equality of opportunity and equality of outcome. Both clients received the product at a price that was reasonable for them. Because I balance priority across a broad range of factors, this is the fairest thing I have come up with. It is a constant work in progress.