Employee, Freelancer, Productiser or SaaS Founder

January 19, 2015| Mike Stott

I’ve read a number of different articles online about the advantages and disadvantages of being an employee vs a freelancer which are great for anyone who is considering whether to go it alone.

In this blog post I wanted to take the analysis a couple of steps further and look into a couple of other options and hopefully land at a conclusion of which I would throw my hat into the ring and stand behind. Although I can sometimes be a bit of a fence sitter I think this sort of look into the options available will hopefully give some food for thought.

In a deviation away from the usual post about Theme updates, Plugin updates or general WordPress updates I wanted to spend some time penning my thoughts on the “bigger picture” the reason why you may use WordPress Plugins, or Themes, to better your business, as a route into business or as a hobby that maybe one day could put you in a place with a difficult decision to make.

This is the position I’m in now. As you may already know, Epic Plugins was launched in January 2013 as a way for me to demonstrate my hobby.

Which was writing code, creating websites, and in late 2012 building that hobby into a WordPress Plugin, which then turned into over 20 plugins and more recently into full website templates. Now I sit here with a decision to make… what’s the best way forward.. Employee, Freelancer, Productiser or SaaS founder.

If you’re a freelancer, an employee, a productiser or a SaaS founder or something else, I’d love to hear your views in the comments section below this post.

Employee

Employee-Compensation

This is what most of us are used to and I believe it’s a result of the industrial revolution. You may have been in the thick of this revolution but for any young pups it’s the period where there were factories, workers, and shifts. Machine operators and big workforces produced items (in the UK at least) at scale. For example the spinning industry that produced cotton for trades.

If you weren’t directly in this time period, your parents or grandparents will have been, and it’s through their time in that period that the following “growing up” notion will be familiar to you

  • You’re born
  • You’re financially dependant on your parents
  • You go to School and learn
  • You go to College (High School) and learn more
  • You get a job or go to university and learn more
  • Now you definitely get a job, hopefully related to your studies
  • You work, a 9-5 job, or a shift type job (e.g. bar work)
  • You save into a Pension, so that one day you can “retire” from your job
  • You live off your Pension in retirement

Is that familiar to you? It sure is to me.

So, you’ll see that in the usual lifecycle you’ll become an Employee. A 9-5 Joe Bloggs. Working hard to someone else’s schedule, someone else Direction. You put in the hours, THEY become the ones who become rich.

You may get to a time in the year where you have your usual “performance review” where you discuss how you did over the year, and this determines whether you’d paid a bit more, or get a bonus for not doing terrible…

Being an employee may be the only thing you know how to be.. how can your skills transfer anywhere else. If you don’t become an employee, how will you afford to live? Here’s my key advantages of being an employee

Advantages

  1. It’s relatively secure – you get a known paycheck each month
  2. You get employment benefits – sick pay, holiday pay, pension pay
  3. You’re in an office environment, which can be focussed and productive
  4. You’re in the company of people who have “been there, done that” and you can learn a lot from (mentorship)

Apart from the regular paycheck, the item on the list that I value the most is the mentorship. There’s very talented people in big Companies and if you get close to them you can learn a lot… BUT.. there’s also disavantages, my key ones are below

Disadvantages

  1. You (usually) have to stick to a schedule, be in work, at a desk from 9-5 or more
  2. Office Politics, it’s not what you do it’s how you do it. Make the right noises wins over raw ability
  3. Performance reviews. Have you ever been screwed over by a list of little things which means no pay increase, or no bonus, even though 99% of your work is top notch (and you produce 2x as much as your peers)?
  4. It’s never really 100% secure, since redundancy programmes can always happen to you
  5. You put the hours in, work insanely hard, and you make someone else rich

A bit of a mixed bag for the Employee corner….

Freelancer


This one I have dabbled in with my spare time, I have highly honed skills with WordPress Plugin Development and Theme development and as such I’m perfect for anyone who needs their site modifying, or a plugin tweaking. Anything I do in this area falls under my “freelance” label. So to a minor extent I can list a few pros and cons of freelance.. although I’m sure these same concepts extend wider to people who Freelance as their primary source of income

Advantages

  1. Flexibility, you can work when you want, where you want, no shifts
  2. Full control, you can turn clients down, pick your projects and work on what is interesting to you
  3. You work hard, you put in insane hours, all the benefits go to you

Disadvantegs

  1. Feast or Famine? Is your pipeline more of a drippy tap?
  2. Client demands and scope creep – do you find you’re doing lots of tweaks for no additional payment
  3. Admin work – yes, there’s lots of this to do, from accounting through to general admin

Freelance usually gets the backing from anyone who has been a Freelancer AND an Employee, but it does come with the risks that work could dry up or the market could move and your skillset no longer be of direct use. Of course there’s ways you can act to mitigate against these risks. For example, my good friend and co-author of a number of WordPress plugins runs the everclients service, which through the use of LeadFeed can keep your pipeline bursting with new work leads. The market moving away from your skillset can (and should) be mitigated by you continually developing the skills you have, whether it be learning a new graphics program, or a new coding language.

The other risk is financial risk, do you have the money to be able to take the risk, what if things go wrong? Can you support yourself and your family if the freelance work stops coming. Will you be working on tiny budgets competing with freelancers from cheaper to live in countries who can hugely undercut you on price..  the risks are many, the risks are real. BUT I do think the reward for taking the risks can be great.

Productiser


So, about now is when most of the blog posts I have read recently end. By all means you can read as many of the blog posts on Employee or Freelancer as you like, just search in Google. However I feel that there’s a couple of additional areas that could be an option which potentially help reduce the risks of the Freelance option. There’s actually a few resources dedicated for moving away from Freelancing and into “Product” where product in those terms are what I’ll come onto last. Here, by product, I mean just like our products here at Epic Plugins and Epic Themes, there’s plenty that the non-developer, or casual website owner can do in the “Product” space, some examples would be

  1. Info products – such as training material, how to improve your skills in xyz
  2. Digital products – similar to info products but these can be for specific platforms (WordPress plugins, WordPress themes, Joomla extensions, Bootstrap skins, graphic elements, digital sounds) which people could pay an amount for
  3. Physical products – anything you can think of that you could turn into a micro site
  4. eBooks – there’s whole other markets out there (such as amazon and smashwords)

If you’re a creative, then you could even combine your Freelance and turn the result into a “Product” for the wider audience, that’s how our Epic Hackers theme was created. Someone had seen that Growth Hackers used our WPeddit Theme as their starting point and tried to do the same. However GH had massively altered the design and we were asked to help create a version of WPeddit that was similar to Growth Hackers on a freelance basis with a view to sell the theme afterwards. Which ended up a great success.

What’s the advantages of “Productising” rather than just “Freelancing”?

  1. The product will always be out there available for someone to buy, whereas with Freelance it’s a in and done move on
  2. You can develop as many products as you like, and the growth potential is limited only by your capacity of production

The main disadvantages?

  1. Products take some “sweat equity” going into them, for example our latest theme took close to 100 hours to create without any sales. That’s an expensive product to develop (on a plus point, you get 100 hours *and counting* worth of development product for the cost of a top quality developers single hour)
  2. Products could fall out of flavour and any income stream you’ve developed could completely dry up

So, sounds better than freelancing? If things are automated then you can just sit back, and watch the product income flow in… not quite, all products bring with them a level of support from users. It’s an ongoing commitment to maintain a product portfolio but it can build up to give a good base of income for anything you may wish to do in your non product hours. A typical split of a day for a productising freelancer may be

  • 6am – 7am: rise, eat, prepare for the day
  • 7am – 10am:  Answer support tickets from the previous night (tickets come in on a 24/7 basis)
  • 10am – 1pm:  Product Maintenance (updating and maintaining existing portfolio)
  • 1pm – 2pm: Lunch
  • 2pm – 5pm: New Product Development (3 * 30 gives an approx new product a month)
  • 5pm – 6pm: Answer any support tickets during the day

So that’s a steady packed day, WITHOUT any freelance included, you could of course seek help with the support side and free up 4 hours a day to focus on freelance, or alternatively switch between Freelance and Product development on a day by day basis. This all depends on the cashflow, the new product lifecycle (and launch process) and whether there’s Freelance work currently needing to be worked on.

A good mix I’d say, product development can fill the downtime between Freelance famines, whereas Freelance can help keep the food on the table.

Finally, SaaS Founder


The final area I’d like to touch on is the role of a SaaS founder, a SaaS in my eyes is like a product, but it’s a product which isn’t downloadable, and sits online for you to login to and use. Particular examples that spring to mind are:-

  • Toggl
  • Evernote
  • Basecamp
  • Zendesk

These are all great systems, with a pricing structure, it’s great if you can build up to one of these products and build a premium userbase, but it takes TIME to do so and getting the word out can be tricky. But if you can find an area that’s not been looked at (or even if you can find and improve an existing area) then all the better.

Building a SaaS should follow a number of “rules” as it’s very easy to get carried away and build it before you’re even sure it’s needed. You throw 100s if not 1000s of hours at the project, release it and then find out no one really wants it…

So what are the general rules of creating a SaaS from my experience (I’m not claiming to be an expert here)

  1. Talk about what you’re thinking of building first (for example, I’m thinking of building a SaaS called risk list)
  2. Do some market research, who might use what you’re offering, what need does it fill
  3. How will you price it, freemium? if so what’s free and what’s premium?
  4. How will you maintain it, support it and update it for new feature requests

If you can nail the above, and you get the traction from your target market, then a SaaS can be great. If you price at $19.99 you only need 100 users to pay yourself a pretty good monthly income. The other great thing about a SaaS is that it’s recurring income. Manage your Long Term Customer Value and you’ll be well on your way to great things.

You may feel that a SaaS is outside of your skillset, but you can quite easily use WordPress to help you build a SaaS

The advantages of a SaaS

  1. Recurring revenue – that’s gotta be a good thing
  2. Fix problems and it’s pushed to everyone (no old versions that aren’t updated in use)
  3. One thing to manage, support and update

The disadvantages of a SaaS

  1. Finding a unique idea can be difficult
  2. How do you build such a complex SaaS if little experience
  3. Getting new customers may be difficult

 

I’m keen to hear your views about which of the above you fall into, and which you want to fall into and why. Also any experiences of Employee vs Freelance, Products vs SaaS would be very useful to hear.

Categories: Uncategorized

8 thoughts on “Employee, Freelancer, Productiser or SaaS Founder”

  1. Woody

    Great post Mike, I like that you’ve enumerated what will be a growing pool of options for the fledgling generations who’ve grown up as programmers/digital consumers. Part of the challenge is that these “roles” you’ve described are still seen as new ways of operating, or running your life. In fact these are now totally legitimate & widely followed paths to making it on your own, and far more would benefit from moving from employee to one of the other options than realise it. But I suppose that is further fallout from the empire’s of yesteryear and their ways.

    Still, I’d say that though SaaS is topical, and popular for the reasons you’ve provided, there’s still plenty of cake left in straight digital products. SaaS does take a heavier lift, and for beginners I’d recommend moving down the chain, starting with productising something digitally.

    Certainly that’s what I’ll be advising people @ http://www.everclients.com

    By the way, I love your model of hybridising several roles, this plays well into the 4 hour work week’s suggestion of phasing out of one role into another, (as I presume you know), and is the logical way round the thing. Do you think hybridising comes at a cost to overall focus?

    1. Mike Post author

      Thanks Woody, I don’t think hybridising comes at a cost to overall focus, being able to morph into differing roles is what keeps the options open.

      For example, as I highlighted in the blog post, our Epic Hackers Theme was developed on the back of a freelance request (sure, we took one hell of a bath on the freelance fee) but if we had simply said “no, we’re ONLY focussing on products” then the theme would never have been built.

      It was also, on the back of the Epic Hackers Theme that we were contacted and asked whether it would be easy to group the posts by day, like product hunt, which helped birth our latest and greatest theme (so far) the “Plugin Hunt Theme“.

      Blind focus can hide real gems of opportunity, but selective engagement while keeping focussed chunks of time to product I would definitely say is a good mix.

      1. Woody

        Agree with all you’ve said. I do think it’s important to maintain a discriminating outlook though, if taking on this hybrid approach. It can far too easily slip into doing too many things in a half-arse way.

        It’s integral to have clear will-do-wont-do plans, but then, I think you’re right – it actually trains you for flexibility & lets you practice spotting the diamonds in the rough 😉

        P.S. should link to those themes you talk about here in the comments, would be good for people to see the (epic) product of your outlook!

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