A Year Later : My Experience as a Mercenary Coder in Albuquerque
Today I gave a presentation for the 2013 Albuquerque Tech Fiesta. This presentation went well. It would have been good to prepare my introduction a bit more, but overall I've been happy. Here is the blurb promoting my speech, and below is the speech.
Thank you all very much for coming to listen to my talk, “A Year Later: My Experience as a Mercenary Coder in Albuquerque.” My name is Brian Stinar, and a year ago I quit my 9-5 job to open my own software company called “Noventum.” I always like before-and-after pictures. Before I get really started in my talk, I want to show everyone a before and after picture of me.
Before (as an employee)
After (as an independent contractor)
I’ll introduce myself, give you guys a bit of background, go over some definitions, and then quickly summarize what my talk will be about today. Then, I’ll talk about it. After I finish talking about it, I’ll summarize what I talked about, and then have some time for questions. I tend to like predictable structures. No surprises here.
I’m basically as local of a New Mexican as it’s possible for someone to be, if their family hasn't lived here for six generations. We moved to Silver City, New Mexico, about 16 years ago. I went to high school outside of Silver City in Cliff, New Mexico, did my undergrad in computer science in Socorro at New Mexico Tech, and then came to UNM for my master’s, also in computer science.
Before starting my own company, I worked full time for three years after completing my master’s. My first year out was at a small web development company called Leader Technologies. Leader Tech built product registration software. If you've ever bough a Logitech mouse or keyboard, a Kodak printer, an nVidia graphics card or any Adobe software, you’re probably receiving a spam marketing message a system I worked on sent you. After Leader Tech, I went to work for a computational fluid dynamics software company, located in Santa Fe, called “Flow Science.” At Flow Science, I learned a ton about object-oriented software development using a programming language called C++, as well as accomplishing technical objectives in a political environment. I’m grateful for all I learned at both these jobs.
I like to define the terms I use. By “Mercenary coder” I mean freelance, or contract programmer. This means NOT an employee programmer. I try to avoid being treated like an employee, or taking any actions that the IRS would consider grounds for re-classifying me as an employee. Having my customer specify the place (their office) or time (9-5) of completing my work is THE major action that would result in me being treated like an employee. Reclassification sounds like a very painful and possible expensive process. As a programmer, I build software solutions for people using programming languages. I’m getting more and more into content management systems (like Wordpress and Drupal), which are not programming but still very useful.
My contract jobs tend to be hourly, but if my customer is able to provide a well specified project, I like to bid it out as a project. Often times, this is not possible because of unclear specifications though.
For example, a porn site. The porn site was EXTREMELY well specified. The customer had everything photoshopped, and very clearly specified. I ended up turning that job down, but it was VERY well specified.
It’s just me. I sometimes work with other contractors, and when I was extremely busy I looked at hiring an intern. But it’s just me.
What am I going to talk about today are my experiences during this year, and slightly before. I want to first go over the reasons I decided to go out on my own. After that I’d like to describe some of the challenges I’m still facing, like keeping my sales pipeline full and taxes. Then I’ll go over some areas I feel like I’m doing decently well in such as saying no to customers (or potential customers), accounting, and marketing. The last thing I’ll go over will be where I see myself going in the next year, and beyond. We still should have some time left at the end for questions, unless this goes WAY longer than I rehearsed.
Why Did I Go Out On My Own
I became bored at both my full time jobs pretty much as soon as I became very proficient. This increasing productivity did not ever result in getting paid more. I’m convinced that the only jobs that are actually paid according to their productivity as sales jobs. With programming, it’s difficult to measure exactly someone’s productivity, as it’s possible in physical manufacturing jobs, but it’s still possible to get an idea. If someone is cranking out tons and tons of code, and not being compensated accordingly, that person seems like someone that I could convince to give contracting a try. With owning my own company, I am paid EXACTLY how much value I contribute to my customers. Check out this image with salaries I put in for values I think are reasonable. This is my mental model of the career path available in New Mexico.
I did not want to continue to put time into the above graph, to make my income and responsibilities go up marginally.
I like learning. It’s fun for me to work on new technical projects, and solve problems for people in new ways. I wanted to learn all about running a business, and being in business for myself. That’s another major reason I started my own thing. This is the most I have learned in a year since I left college. It’s fun to grow.
Another reason is that I live a broke-ass lifestyle. Seriously, this was a major reason that allowed me to start up my own thing. The extremely inconsistent income from contracting (which I am going to talk about next) does not go well with a number of financial responsibilities. I do not recommend you start your own company if you have family members that depend on you. My family members are my parents, and my adult sister. None of them depend on me financially, so I was not neglecting my duties to try and start this up.
Challenges I’m Facing (work on transition)
The major challenge I face is managing my sales pipeline. This is different than making money, or getting sales. The mistake I’ve made twice has been to stay super focused on sales, then as soon as my leads start turning into sales, I neglect all future sales. Guess what happens after those projects finish? I have no new projects to work on and it takes a month for me to ramp up prospecting and converting leads into sales.
Sales Line. Don't Do This.
Sales Cycle. Do This.
This sales cycle image I grabbed from Google Images shows that sales should be a cycle, not a “start” and “end” with an arrow between. The ‘sales arrow’ instead of the ‘sales cycle’ is a problem I’m trying to avoid.
Sales needs to be a continuous process, not a ‘one-and-done’ thing you worry about when you’re finished with your existing customers. Every day I try and focus on sales for an hour, or more. I have developed relationships with existing customers to make this not as pressing, but a large portion of my projects tend to end when the project is finished, which makes sales completely necessary. These are extremely basic sales lessons, but it’s something I have to focus on and continuously try to improve on. My friends that have actual sales experience laugh at how basic of a principle this is, and I have to agree with them, but it’s still something I have to be mindful about.
The other issue I’m trying to focus on are my taxes. My tax bill this April was a gigantic surprise. This is because I did a poor job of planning my tax liabilities. Taxes are 100% predictable. My problems with taxes were caused getting my accountant all of my information not early at all, not paying any anticipated withholdings (which only resulted in a < $100 fine) and in using my accountant as someone to help me find creative, legal, tax deductions instead of as a tax and financial planner. My accountant used to be an IRS auditor, so he always has cool suggestions on legally avoiding taxes. If I had a gigantic pile of cash I earned, a ‘surprise’ bill like this wouldn’t be an issue. However, planning on being so profitable that certain segments of running a business can be completely neglected doesn't sound like a good idea to me. Moving forward, I am trying to proactively plan my tax liability so surprise tax bills are a thing of the past.
Things I’m Doing All Right In
By this point in the talk, I hope it is clear I am not an expert businessman. However, there are a few things I feel like I have focused on a lot, and am not doing horribly wrong.
One thing I feel like I’ve been well prepared by New Mexican universities, and my jobs, to do well is to solve my customer’s problems. That has to be the first thing in any business - customers giving you money are getting more value for what they get in return. I feel like with the vast majority of my customers, this has been true.
Saying “no” to customers is another thing I’ve had to become good at. Most customers I've dealt with have been extremely awesome to work with. Sometimes though, a customer isn't the best fit in the world, or they really aren’t that great to work with. A bit of my business comes from online contracting sites like oDesk, Fiverr or Freelancer (check my out on there, if you’d like.) Sometimes customers on those sites want me to do immoral/illegal things, or more commonly things that would be impossible or not feasible with the resource constraints they've given me to work under. Saying “no” online is much easier than saying “no” in person, but I've had to do both.
Accounting is something that I think is EXTREMELY fun. It’s basically like debugging a computer program, with money. If your books don’t match your bank account, you keep studying your books until you find the error. Being aware of where every penny goes to is extremely helpful for me. I use Quickbooks Pro, and had an ex-girlfriend that helped me a bit getting it setup. Plus, I had ONE accounting class a few years ago which helped me understand what I was trying to do.
I’m progressing with marketing in a meaningful way. Marketing is defined as promoting and selling, which is helpful in keeping my sales pipeline full and balanced. The UNM business library has a lot of great books on marketing, and I’ve been learning from one of my customers that has more sales experience than I do. This is the one I still need to work on the most, but I feel like I am moving forward. My speech today basically grew out of my (rough) marketing plan. My friend Travis (from POS Lavu, name dropping) and I thought giving an interesting speech about my experiences would help me find new customers.
Where Do I Want To Go
Ultimately, I’d like to have a product. Right now my product is my time which I can sell because of my skill at software development. That will not scale very well past about 50 hours / week. When I become extremely busy, I have my friends or other contractors, help me out. Still, that doesn’t scale well. My goal is to have a product that scales.
To build a product, I’d like to build a team. I’m good at programming, and not-horrible at business. As a programmer, if I’ve been able to hold your attention this long and not completely alienate you, that is pretty amazing too. However, I don’t have all the skills needed for developing, marketing, supporting, and growing a product. I’m very happy to have had this past year to develop skills that will help me with a product.