Hoehn’s Musings

“I should probably post this before it loses relevance…“

2009 was a whirlwind year for me.  The number of new experiences, places visited, and lessons learned makes my head hurt when I try to recount all of them. Nevertheless, I’m going to do my best to recall most of the good stuff (and a little of the bad), talk about a few personal milestones from last year, and hopefully cobble together some newfound wisdom I gained along the way.

• Started my first “official” company. Quickly discovered that consulting is not really my wheel house.   As much as I like teaching and offering advice, I prefer DOING — having a greater degree of control and seeing the results from my efforts.  Also found that payment for consulting work is way too sporadic for my liking, unless you’re on retainer.

• My favorite work routine. I did, however, find that I LOVE the work schedule that comes with being on tour.  Although it was exhausting and very demanding, I really enjoyed having to do the same process over and over but in different locations.  It was sort of like playing a sport: same exact routine everyday with the same team, but always a fresh and exciting experience.

• Tons of new experiences. The number of things that I got to experience last year is almost overwhelming when I think about it.  Traveling in a tour bus across the country.  Helping out with the marketing for three best-selling books.  Becoming proficient in Final Cut Pro and learning high-end cameras. Writing my first e-book… Eh, I guess it’s not very overwhelming when I write it out like that.  [To-do for 2010: Work on sounding more impressive].

• Video editing. All the hours I spent editing video… fairly staggering, relative to past experiences.  Hands down, the most footage I’ve edited in one year.  But I still dig it, and am excited to learn the rest of the creative suite.

• Recession-Proof Graduate. The thing I’m most proud of from 2009.  When you combine Ramit’s and my Slideshare accounts, plus the number of people who downloaded the e-book from Ramit’s email list, it quickly adds up to more than 50,000 people having read RPGrad.  That is no small amount, and it still blows my mind.  Even though a lot of people enjoyed it, there were still a few pitfalls.  It kinda sucks being known as the guy who does free work, for instance.  I’ve had some people come to me, asking if I’d be willing to do MONTHS of work at no cost to them.  Sorry guys, it doesn’t work that way — I have to approach you first.

• Learned A LOT about pricing. I can’t see myself ever working hourly rates again (unless it’s for a trial period, or I take on a part-time job for fun).  First off, I HATE keeping track of my time for someone else’s benefit, and I usually forget to do it.  Second, “hours worked” is not necessarily linked to quality or results.  Third (and most important), it doesn’t scale.  The ideal way to price your services is to have a flat rate, plus a scaling rate based on your results.  When you want a potential customer to buy your services, do not offer them just one rate, whether it be hourly or fixed.  Instead, offer them tiered-pricing: basic (low cost), middle, and premium (high cost).  This way, they aren’t deciding between “yes” or “no”; they’re deciding on which offer will be best for them.  They’re happy to have more choice, and you’re more likely to gain a new customer.  Pricing is both a measure of value and a barrier.  Use it to filter out the types of customers you want, and to turn away the ones you don’t.

• Don’t fall in love with imaginary numbers. When you’re dealing with people who don’t have an extensive track record (see: first-time entrepreneurs), they offer percentages pretty frequently.  So it’s easy to think, “Oh dear god… if this thing does well, I’ll be making bank!”  Don’t be fooled.  There’s always a very decent chance it will never go big (or even fail completely), all while you’re being lulled along for countless hours of work by money that isn’t there.  I’ve had “equity” and certain percentages dangled in front of me a number of times now, and taken up several of them.  Some turned out okay, many didn’t pay off at all.  When you take on a project with an offer like this, just be sure you’ll gain something significant from it — skills, marketable experience, anything.  Otherwise, you’ll walk away empty-handed.

• Measuring a person’s toxicity. One of my favorite things I read was on how to decide which of your friends, co-workers, clients, significant others, and even family members are toxic.  When you interact with that person, do they drain your energy, or do they rejuvenate it?  When you THINK of spending time with them, do you start feeling stressed and tired, or do you get excited?  Cut down your time with the people who drain you, and work on becoming a person who rejuvenates others.

• The source > The numbers. Ad impressions mean nothing if the viewers aren’t conditioned and primed to buy.  An influx of traffic is worthless if it comes from a site with ADD readers.  What’s important is the quality of the source.  A thousand impressions on a site where readers have been conditioned to click and buy are far more valuable than a million impressions on a site where readers ignore the ads, even if the latter is much cheaper.  Having a thousand readers visit after an endorsement from Seth Godin is far more valuable than ten thousand visitors coming from Lifehacker.  Different audiences, different expectations.

• I hate all social media experts. Even if you legitimately know what you’re talking about, I still hate you for the title you’ve given yourself.  You have the easiest job in the world, you’re overpaid, you have almost no experience, you get excited over things that are excruciatingly boring and inconsequential, and perhaps your greatest sin of all, you’re okay with feeding your clients garbage and making them think they need you. Shame on you if you’re extracting money from a small mom-and-pop company because you think they should have a “presence” on Twitter.  Get outside of your own heads and start thinking about how you can help clients accomplish their goals, you morons.

• Anyone can mitigate their financial risks. I don’t think it’s smart to have one stream of income.  Even if you’re financially successful and have been with the same company for 25 years, all of it can be instantly taken away from you.  Set up an emergency account and start putting away a small amount of money each week.  Save up for 3-6 months of basic living expenses.  Then think about how you can earn extra income on the side (with your skills, setting up a side business, selling things on ebay, etc.) and start doing it!  You may scoff at this generic advice, but I’ll be damned if it’s not hugely important.  I’ve witnessed friends’ parents lose nearly everything at the brink of retirement, simply because they put all their eggs in one basket.

• Plan ahead for fixed costs. In mid-2009, I was running low on funds and had hit a dry spell for work (i.e. no money coming in).  Then I received all of the following on the exact same day: a car insurance bill that I’d somehow forgotten was coming, an overdraft fee, attorney’s fees for paperwork on setting up an LLC, and a credit card bill.  The one that infuriated me was the car insurance, because I could have easily planned for it if I hadn’t been an idiot.  After that incident, I opened a sub-account and set up automated weekly savings for all the bills I knew were coming.  Problem solved.  So look at your big expenses from 2009.  Which ones can you expect again this year?  Divide by 52, then automatically set aside that amount each week.

• The internet is an echo chamber. I’ve learned this firsthand twice, after Kottke randomly quoted one of my posts, and Seth wrote about RPGrad.  All of the sudden, EVERYONE was parroting versions of what they wrote.  It was extremely humbling, but also somewhat disturbing to see how many people just copy the influencers (and I’m referring to Kottke and Seth, not myself).

• There is no “right” way. In spite of my incessant endorsements for doing free work, that’s just a tactic that’s worked well for me.  And while I think it’s very useful for anyone who’s just starting out, I’m biased: I defend it because it was the path I chose.  There were a lot of trade-offs that came with it, and sometimes it just flat out sucked.  But that kind of honesty doesn’t get anyone excited over an e-book, does it?  The truth is, I worked harder than most people to reach this point.  I made a ton of mistakes along the way, and could have easily taken several different paths that would have been immediately more lucrative but less fulfilling.  There is no right or wrong when it comes to your career; there is only what’s right for you.

• How to succeed as an entrepreneur. I’ve effectively received a 1-year crash course in entrepreneurship, something my schooling didn’t really offer. I’ve done lots of research, had a decent amount of hands-on experience, and raised my standards with a few cool people who were willing to give me more control than I probably should have been allowed.  I’ve learned that becoming a successful entrepreneur is really hard, and I have immense respect for anyone who can pull it off.  But I’ve witnessed and studied the processes that successful entrepreneurs go through so many times that it finally clicked last year, and I know I’m capable of doing it on my own.  And that, I believe, will ultimately give me the freedom that I’ve been pursuing.