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Freelancer Or Entrepreneur?

Freelancer or Entrepreneur?

Quality, Consequences and the Construction Industrial Complex (part 148).

Ah, the things I wish I understood when I was young.

I used to look at my boss and think to myself, what does he do all day? We do the work and he just sits in the office or goes out with clients! I was not clear on his role, was he lazy, an entrepreneur or manager? 

I recently heard a great podcast called Akimbo by Seth Godin (https://www.akimbo.me) about freelancers and the future of work. It really made distinctions that would have cleared the fog of my youthful ignorance. 

Many people think they are entrepreneurs but they are not. Here are Seth’s astute observations on entrepreneurs Vs managers Vs employees Vs freelancers.

Entrepreneur

  • Not a freelancer, entrepreneurs create jobs.
  • Get paid when they sleep.
  • Work on the business, not in it.
  • Build something bigger than themselves.
  • Use other peoples money.
  • Build assets to sell.

IMHO, unusual in property design and construction industry. I think people like working for entrepreneurs as they are exciting and proximity can result in share options and cashing out.

Owner Manager

  • Works in business not on it.
  • Bills some time to clients.
  • Basically an employee with profit share.

IMHO, describes partners or directors of property design and construction firms 

Employee

  • Has opted for short / medium term security in income.
  • Has opted for predictable work load.
  • 100% billable.
  • Competes with others in a wide pool and earns market rate.

IMHO, the current preferred way to deliver goods and services in the property design and construction industry. 

Why do firms exist at all, why not buy all property design and construction goods from the open market? It is cheaper and you only pay for what you need with no down time. Ronald Coase answered this in “Theory of The Firm” (https://en.wikipedia.org/wiki/Theory_of_the_firm). 

The short answer is, the certainty and information we get from hiring employees is worth more than the we have to pay in the market i.e. the cost of risk, discovery and transactions are high. However, the internet changes this. Think of Freelancer.com, Fivver.com etc.

IMHO the future will move to freelancers i.e. the gig economy. So what is a freelancer and how does one survive in this future? 

Freelancer

  • Paid to work.
  • Paid for craft or unique skills.
  • Paid for showing up and solving problems.

Pain comes when freelancers over reach and think they have to grow and act like a firm. They start to hire people who are cheaper and not as talented as them. Then when the crunch comes and the client is important they hire the very best person who works the cheapest, themselves! This is a trap. 

To thrive in the future gig economy I think the following will apply: 

  • If you are a freelancer, own it.
  • Chose to raise to the top, develop a service and reputation that can be summarized in one sentence. This way you earn a premium rate.
  • Never stop investing in tools and skills (soft and hard).
  • Get out of the “pleasing everyone” mind set.
  • Develop a category of 1 with unique, exceptional work.
  • Be comfortable with the word no and advocating for yourself.

There is an infinite market for mediocre freelancers who are cheep. If you want to be cheapest and fastest, do not be surprised if your life sucks. This is a race to the bottom and you might win or even worse, come in second. Being the cheapest and for everyone is a trap, Find the smallest viable, niche market that can sustain you and always fire bad clients who do not value your work or pay late. 

Clarity on who you are and who you want to be matters, so are you an Entrepreneur, Manager, Employee or future Freelancer?

Twitter: @BLDWhisperer

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#107 –  CxM Talent Stack – The 1% ( https://bldwhisperer.com/cxm-talent-stack-the-1/ ) 

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