Great read, thanks for sharing. Wondering how long into the businesses existence you adopted this model? Were there any teething pains as you moved away from traditional engagements?
Thanks for framing your process in this way. While I agree with that the traditional agency model and SOW framework stifles product development (and creativity) in the ways you described, I'm curious to learn if it has also discouraged lucrative projects. I'm a freelancer, so it's certainly a bit different, but with most agencies I speak with there is a "cash cow" that is able to fund a lot of the other projects. Would you say your business is like that still? Or with this framework there is a more healthy balance between your clients?
Hi Jono! If you're saying: do we have a project that pays us a lot of money for very little work - the answer is no. I'm of the mindset that is both a) unethical and b) hard build consistent unit economics around. We bill all of our clients the same hourly amount (unless they are a non-profit or qualify for our 10% sustainability rebate).
However, we do have long running projects with loyal clients that generate healthy margins. Those margins are the same level of healthy as shorter timelines, but the key difference is that we aren't spending un-profitable time between client projects, burning cash on salaries & admin work. We prefer to optimize for predictability of income, rather than big bursts of cash, because we can plan for the future (like pulling one of those developers into a 4 day client / 1 day internal product work week, or upskilling and cycling different people into different roles) and still have them turn a profit. It's a marathon not a sprint!
Great read, thanks for sharing. Wondering how long into the businesses existence you adopted this model? Were there any teething pains as you moved away from traditional engagements?
Thanks for framing your process in this way. While I agree with that the traditional agency model and SOW framework stifles product development (and creativity) in the ways you described, I'm curious to learn if it has also discouraged lucrative projects. I'm a freelancer, so it's certainly a bit different, but with most agencies I speak with there is a "cash cow" that is able to fund a lot of the other projects. Would you say your business is like that still? Or with this framework there is a more healthy balance between your clients?
Hi Jono! If you're saying: do we have a project that pays us a lot of money for very little work - the answer is no. I'm of the mindset that is both a) unethical and b) hard build consistent unit economics around. We bill all of our clients the same hourly amount (unless they are a non-profit or qualify for our 10% sustainability rebate).
However, we do have long running projects with loyal clients that generate healthy margins. Those margins are the same level of healthy as shorter timelines, but the key difference is that we aren't spending un-profitable time between client projects, burning cash on salaries & admin work. We prefer to optimize for predictability of income, rather than big bursts of cash, because we can plan for the future (like pulling one of those developers into a 4 day client / 1 day internal product work week, or upskilling and cycling different people into different roles) and still have them turn a profit. It's a marathon not a sprint!
Thanks for the detailed response! Inspiring to see a successful example (aka you all) of more sustainable practices in this industry.
Are your longterm clients coming back to you to develop components / redesigns? Or are your clients coming back to you to develop new product ideas?
All of the above ;)