Entrepreneurs address buyers’ unmet needs by filling a gap in the market through innovative products or business models.
Example: Airbnb, Facebook, Uber, Stripe, etc.
Freelancers address already satisfied needs by becoming a competitor in the marketplace and differentiating through better quality, speed, customer service, pricing, etc.
Example: logo design, content writing, web development, etc.
Can you freelance AND pursue an entrepreneurial venture at the same time?
Yes, you can under one condition: proper resource management and allocation.
Before I delve into the strategies I used to properly manage and allocate my resources to build and run StartupCircle.co and its startup family Upify.co, EntrePerks.com and Guidz.co while helping startup entrepreneurs build their ventures through my freelance/startup development studio AspireIT, let me start by discussing what I found to be the main reason behind entrepreneurs’ decision to combine freelancing with startup endeavors: revenue.
Although I have come across a few entrepreneurs who run both types of businesses simultaneously for reasons different from fundraising through one for reinvestment in the other, most entrepreneurs who decide to start as freelancers do it to generate revenue that they can use to start and build their startup ventures.
For entrepreneurs, freelancing has thus become a solution to the lack of funding problem whereby leveraging their knowledge and experience to selling services can now serve as a startup funding source.
My entrepreneur friends, if money is one of the main reasons behind your procrastination and hesitation to execute on your ideas, freelancing can help you solve the problem faster than you’d think. Way faster than spending months seeking investors’ money. Especially at the initial stages of your venture.
My freelance friends, if you ever plan to pursue an entrepreneurial venture, the best-case scenario is when you work on introducing products and services that fall under your area of expertise. In other words, if you see a gap that you can fill in the market you are currently serving, that’s what you should do. With this approach, not only will you be able to sell your existing and previous freelance customers into using your introduced product but also, it’s an area you’re familiar with and with the experience you’ve had and knowledge you’ve built freelancing, you’ll be able to move a lot faster.
Often times, freelancing gigs and startups development interfere. It will come a time when you will be doing both at the same time. It’s challenging, time-consuming and distracting to say the least.
Here are a few strategies that will help you manage and do good at both.
Resource Management And Allocation
The truth is, no matter how good you become at managing and allocating your resources to ensure the best results in both, you cannot give your hundred percent to either if you’re freelancing and running a startup at the same time.
The path to building a startup venture is not linear. Unlike freelancing jobs where the process is clear and straightforward that often starts with a contact, then moves to scope, agreement, work, delivery, adjustments and ends with completion, building a startup takes you through a series of unexpected events that consume all your focus and energy.
So the secret to succeeding at both is by having more resources.
Take the example of Ilya Pozin, an entrepreneur with many successful ventures under his belt. He ran (CEO) a multimillion dollar startup development studio for many years until he delegated the management of the company to focus on Open Me which he led to an acquisition. Today he runs Pluto TV while serving as an advisor to the studio. Delegation (more resources) enables multi venturing.
At a smaller scale, in the beginnings of a startup venture, your focus should go entirely to freelancing.
Here you’re learning as much as possible about customer needs while generating revenue. The truth is, if months and years taught you to become an expert in your specific market, there will still be a lot of trial and error until you find a solution (product) that people are willing to pay for.
What this means is that the initial hypothesis validation, MVP and product-market fit stages can and should be done as you are freelancing. In other words, it’s OK if you spend 80% of your time freelancing during this period.
As you approach product-market fit, calculate the minimum amount of money you need for you to focus more on your startup and to have enough resources to take it to the next stage beyond the initial non-scalable one. This could be the money you need to hire a programmer if you’re non-technical, it could be the money you need to not worry about living expenses or other financial responsibilities or needs you will have.
Do some research depending on what you need the money for then target a number, say $1,500/month.
At the beginning and until you reach your target, your focus is going to be entirely on selling services. If your startup product is aligned with your freelancing gigs, you’d be working on the initial phases of your startup as you’re selling services because by selling services that are aligned with your startup purpose, you’re learning about your potential startup product users’ needs and expectations as you’re selling them services.
When you exceed the target amount, start reducing the time you spend selling services and increase the time you spend building your startup. For instance, if you earn double your target from selling services, spend 50% of your time on your startup and 50% selling services.
This section was mainly meant to show you how you can do both at the same time. Delegation was the answer.
So, increase your prices by the amount you’d be paying the person or people who’d be doing the freelance task for you and use the money to pay them for their work. I would say most of the time, you’d still be making a bit less than if you were to do the freelance job yourself, but this is the solution that will help you keep your freelance business running while focusing on building something with bigger potential.
If you haven’t joined the bootstrap a startup program yet, go ahead and listen to the presentations now, you’ll find many strategies and examples that will help you with your endeavors especially if money is one of the biggest constraints you have to build and run a freelance business/startup.