How to Get Clients for Your Software Company | Multithreaded Income Episode 11
How do you actually get paid for a new venture you're starting? There are ways to provide value for free to prospects that could lead to paid gigs. Listen to our examples of getting new clients and the strategies you can use to start earning extra money from your skills.
Join our upcoming challenge at https://multithreadedincome.com/
How do you actually get paid for a new venture you're starting? There are ways to provide value for free to prospects that could lead to paid gigs. Listen to our examples of getting new clients and the strategies you can use to start earning extra money from your skills.
Join our upcoming challenge at https://multithreadedincome.com/
Creators & Guests
Host
Guest
Guest
Sean Merron
What is Multithreaded Income Podcast?
In the "Multithreaded Income Podcast," host Kevin Griffin navigates the nuanced landscape of generating multiple income streams as a technologist. Aimed at professionals who wish to diversify their revenue while maintaining a focus on technology, this podcast dives deep into unconventional strategies, untapped opportunities, and actionable advice.
Kevin Griffin: Welcome back to the show.
Everyone is commentary time and
I'm joined with my good friends,
Sean Merritt and Chad Carter.
I hope you guys are doing well today.
We're going to jump
right in and discuss Mr.
David Neal.
And I know you guys had the opportunity
to listen to the last episode.
I had the opportunity to sit down
and talk to David for A long time
about a lot of different things.
Many of them didn't even make it
into the episode and there were
conversations that we had afterwards.
It's amazing when you hit stop on a
recording, how many good conversations
happen after the recording that you
wish you had gotten into the recording.
But that's not what we're
going to talk about today.
Now, David had an interesting set of
circumstances coming in compared to
some of our previous guests and David's
secondary form of income is drawing and
anyone who's listening here, I pretty
sure you have seen a David Neal avatar.
On the internet, if you're active
on Twitter or X or on Instagram,
you've probably have seen a David
Neal avatar because he has a very
distinctive style and how he draws.
And I have, I know I've collected
a handful of his avatars myself.
He does an amazing job.
And from a standpoint of someone
like me, I've been able to watch
him progress as professional
drawer over the past several years.
It's been so much fun to see him be
somewhat successful with that because
I don't think of drawing as as a skill.
I would ever have.
And David has really showed that it's
something that you can develop and.
You can monetize and I think the
first thing that we might really
want to talk about one of the big
ideas and I'm interested in hearing
your guys's feedback on this is that
David basically started for free.
He knew his skills weren't quite
at the par of being able to go off
and do all this commissioned work.
He just wanted to put
some stuff out there.
people responded.
And I believe from the interview,
he started with a drawing of Mr.
Ray bingo, who is.
Fairly large personality in the developer
community and Ray, Ray didn't like it.
That was the funny part for me.
He said, I I'd rather have a, a
different photo kind of copied
and given the David Neal flavor.
So David went and did it and
Ray shared it to his audiences.
And other folks came looking for
some of that David Neal magic.
I'm going to.
Kick this over to Sean first.
Sean, what are some thoughts you have
on the do it for free to get started?
Sean Merron: Thanks, Kevin.
Well, I would say, first of all, it
was kind of great to find how David
was finally able to get his one of
his passions back from earlier in
his life and actually find a way to.
Use that to make an
additional thread of income.
And it was sad at first, because I
think he said, what, 20, 30 years.
He, it was, it was pretty high.
I was shocked at the number of years
that he hadn't done any, any drawing
or doodling from when he remembered it
and he had this like hidden skillset
that he hadn't used in a long time
and then from there, just did some
stuff for free, which led to some
paid additional income coming in.
And so the way he was able
to, I guess, validate.
No skills and that it was something,
something he could get paid for.
He did on social media.
Right.
And he started that by, I think his first
example, um, I forget who the person
was, but he created an avatar of, of
someone in the industry and just for free.
And the person, um,
actually I can't remember.
Do you all recall, was it.
Was it the, uh, the person from Microsoft?
Was that his first client or
was that later on the hero
Kevin Griffin: was Ray Bango.
Yeah,
Sean Merron: that was
the first person, right?
Kevin Griffin: that was the first person.
Sean Merron: Ah, perfect.
So it was pretty funny.
So his initial response,
he didn't like it.
Right.
And then, but he went back, made
some changes in the second response.
He got from what he, he loved it.
Right.
And he even changed.
His avatar on social media to the
one that David had written for him.
So used his network, used the people
around him to get some validation
as far as his skill sets and that
it could be used for free at first.
And then he started just drawing some
other ones of people, putting a few other
drawings out there on the web for free.
Others were starting to notice that
and then randomly got a message for
someone that wanted to want to buy
and pay him for those skill sets.
So we see this a lot, actually, I think.
Maybe just in the, the
vast web now, right.
With all these products that are out
there, all the marketing that's going on.
It's very hard to stand out anymore.
Right.
And just do something that
others are going to notice.
So.
Unfortunately, maybe fortunately, I think,
uh, the way we have to do that nowadays
is by offering a free product, right.
To get people in the door, build that
trust, build that validation, show that
you have value to bring to someone and
then start to learn from there what the
actual monetary value might be for that.
And it actually reminded
me of another example.
Coming up in my career, I think
one, maybe we don't really think of
too often is an unpaid internship.
I mean, think about it.
Like you're offering some
free services, right?
You're learning something.
You're getting kind of feedback on your
skillsets and things that, you know,
you might want to do in your career,
but at the same time, you're offering
services for free and then validating
that you could do the job and maybe
even get an offer from that company.
Or you at least can put that
on your resume later on for
someone to actually hire you.
I had a story of someone who interviewed
at the company I'm currently at, so one of
the products that we do involves a website
crawler and during his interview process.
Uh, or before his interview process,
actually, he built a website crawler
and sent it to the interview person just
to show like, Hey, I can do this skill.
I went ahead and took the time
to do something for free, right.
For your company, just something
you were interested in maybe doing.
You may, you may not use it, but I was
able to show my skills off, validate it.
And he ended up getting
the job as part of it.
Now I know it's a little
different process.
It's more of the employee employee model,
but a few other places you see this are.
You know, software as a service products.
What do you notice about those nowadays?
Even apps nowadays is always
typically a free trial, right?
Uh, upfront and getting people in
the door, using the product, feeling
the value of it, and then trying to
convert them into buying it later on.
One other way in the consulting
space, I actually did this recently
is the discovery part where
you're actually learning about.
Uh, the problems that you're trying
to solve for someone, I was just been
networking with people locally here where
I'm at in the local chamber of commerce
and through that, just, um, hearing some
of the problems people need help with
in the tech industry and offered some of
my services to say, Hey, I can help you.
I can at least come talk to you
and maybe try and find someone
if I can't help you and such.
And I know that can lead to in the future.
If you have a lot of clients, um,
you can actually start charging
for that discovery process.
And maybe Chad or Kevin can speak
to that here in a minute, but just
me offering some, some free kind of,
uh, discovery questions up front.
I was able to build some trust.
They wanted someone locally that
they could talk to about this as
well, validate that they could
get the services they needed.
And then I ended up getting
that, that, that job as well.
So now I have another
threat of income coming.
Coming in for, for consulting that
just came from wanting to help
someone out with a problem they have.
So the discovery process, you know,
if you're new early on, you could
offer maybe some of that discovery,
just learning about the problem
and helping someone for free rather
than charging for that upfront.
Kevin Griffin: It's funny, a future guest
we're going to have on the show is Mr.
Michael Buckbee.
And one of the, his favorite
things to talk about is the
idea of programming marketing.
So building a tool to support the thing
that you're actually trying to sell.
And Sean, you just reminded me of the
very many things that he's talked about.
A good example might be if I'm building.
A service that manages your SSL
certificates and you can buy
SSL certificates through me.
I can manage them for you.
I can do all the work.
A free tool on my build to promote that
service is an SSL certificate checker.
And.
My checker can look at when
your certificate expires.
Do you meet all the certain
criteria for, for a certificate?
And if for some reason you lapse in
one of the different areas, I can
recommend my service as a way to
come in and help you fix the problem.
And there are.
Probably dozens and dozens of
different opportunities like that.
And I just recently thought about that,
Sean, when you were talking and what David
was doing is the, you know, the drawing
version of, of all that, give the goods
away, Chad, any thoughts from your side?
Chad Carter: Originally, when I was
thinking about this aspect of Helm,
uh, giving the services away for free,
my initial thinking was, oh, this
is a great way to provide services
and not so much around products.
But yet, just hearing you,
Kevin, uh, products is actually
a fantastic way as well.
You can do free trials and all
kinds of other things as well.
So, this whole notion of providing
as much value as you can, up front,
for free or pretty close to free,
is a great way to get started.
It's actually a great way, ongoing, if
you can continue to provide value up
front and show that, hey, my service,
my product, whatever it is that I'm
selling, is actually worth this, uh, that
can go a long way, because if somebody
looks at what you just gave them for
free, and they're like, wow, I got this
for free, what if I paid this person,
what would I get at that point, right?
And so when he started out, um, He
started out, uh, free because he,
he wanted to create, uh, something
for somebody that he admired, right?
So that was, that was an interesting
thing as well, that he made that
contact, uh, with Persona if he had
much contact with Ray beforehand, but he
provided value to that person, period.
Now, Ray didn't actually like
his initial thing, but...
Ray then turned around and actually had
a conversation with him and said, Hey,
would you mind doing this photo instead?
Right.
And then that began a
relationship is my assumption.
I don't know the exact details,
but the fact that he was kind of
looking up, uh, to, to this Ray and
submitted that, that's my Assumption.
And so it's just another
piece of advice here.
If you want to get the attention
of somebody, somebody you admire,
um, a potential mentor, something
of that nature, figure out how
you can provide that person value.
That, that's the key.
Figure out how you can provide
them value and provide that value.
Don't ask for anything.
It's all about building the well
before you're thirsty, right?
You can't wait until I need something
to drink to go and then build
your, your well to get something to
drink, you'll, you'll, you'll die.
You won't get any water in time.
But, if you are thinking about
it up front, of what can I
do to build a relationship,
to provide value to somebody?
And then later on, if I need
something, I can actually ask.
And I'm now dipping out of a
bank account, if you will, that
I've deposited goodwill into.
To get something back out of it.
And again, the motive doesn't
actually have to be for that reason.
But if that's what you have to do
to tell yourself, Hey, I'm worth X
amount, I should charge what I'm worth
and you should charge what you're
worth at a certain point in time.
But until you get to that point
in time, provide value for free.
I've heard this and I
think is really good.
And I'll wrap up my thoughts with this.
Thank you.
When you're first starting out, especially
in a service based type business, is
you determine how many people you can
service, uh, over a period of time.
So whether, you know, if we're talking
about David here, so many avatars that
he can create in a week, um, or so
many clients you can handle in a month,
whatever the case is, you determine what
that number is, 2, 5, 10, whatever it
is, and you put it out to the world, to
your contacts, through social media and
everything else, organically, say, Hey!
I am starting this adventure.
I'm doing this thing.
I am actually accepting whatever
your max is, 2, 5, 10, whatever it
is in this time frame, for free.
I will do this work for free.
The only thing I expect in return
is a review, if you found it
beneficial, or honest feedback
to me of how I can improve.
Right?
You do that for the first segment,
and then, or the first time frame.
Once you're done with that...
You do it again, but this time
you do it at 80 percent off what
you're planning on charging.
Right?
Because a lot of times you don't
know exactly what you should charge.
And so whatever you have in your
mind, you just do 80 percent less.
So you're only charging 20 percent
for the next 5 people, let's say.
You get those done over that month,
and then you charge 60 percent of
what you would or 60 percent off
of what you would actually charge.
All the way up until you're
finally charging what you
think you should be charging.
And if you're still getting those five
people a month or whatever it is, well,
the next month you do 20 percent more and
then 20 percent more for that until you're
no longer filling your bucket of time.
I can't, I can handle five people.
I only got four people at this.
So here's my price.
My price is 40 percent more than
I thought it should have been.
Or maybe it's 20 percent less than
what I thought it should have been
because like nobody's going up to
my full price at that point, right?
That's how you can, that's a way to
figure out some pricing, uh, strategy, but
Kevin Griffin: With consulting, a common
tip is you should raise your rate for
every new client that you bring on.
So if you're starting with your first
client, it may be 75 an hour at the
next client that comes on, raise
them up to 85 an hour, and then move
up to 95 an hour and so on and so
on, and eventually you'll build up.
A portfolio of work that you've done,
and now you have something to justify
the three digit hourly rate or more
that you might be charging yourself.
So I really, I like that, that idea of
just take on a little bit more, charge
a little bit more, take on a little
bit more, charge a little bit more.
Chad Carter: yeah.
And something around that, um, Sean,
you just mentioned discovery and
that's something that early on when
I was doing a lot of stuff with the
clients, I was doing discovery for free.
And I found myself spending, um, hours
and hours, weeks even learning about
their business, what they needed,
providing tons of value for free.
And then, you know, getting the
deal and doing that, or sometimes
not getting the deal, right?
And if you don't get the deal,
it's like, wow, they got a ton
of my time and I got zero for it.
But, and that's okay, because you
learn stuff through the process.
But as you build up that
expertise of doing the discovery,
knowing which questions to ask.
And in an effective way, so it
doesn't take you, you know, uh,
a long, long time to figure out
what a client actually needs.
You can actually charge for discovery.
And right now, I'm actually at
the point where I charge about
7, 000 for discovery work.
So if a client wants to talk to me
and try to figure out what it is,
I'll have a couple introductory calls.
And then, it'll actually be 7, 000.
And it's over a course of a few weeks.
To actually determine exactly what
their needs are and then from there
They'll determine if they actually
want to move forward with the project
with me or at the end of that discovery
They'll actually have a project plan.
They can go and send off to another
development agency if they desire to
or whatever But there's another tidbit
here when you have multiple touch
points with a client You build up that
trust so even though you're charging
for that you're still providing again.
The key here is value so the 7, 000
For me, personally, your number could
be totally different, but for me the
7, 000 is critical because it shows
that based off the budget of these
typical projects I'm involved in, these
custom software development projects,
that they're serious about it and
they're willing to spend some money.
Because sometimes you can get
something, oh I want this new, brand
new system nobody's ever created
before and I got 100 to spend.
It's like, well, it just, it doesn't
compute, you can't do that, right?
On the flip side, that 7, 000
provides as much value as you can.
So it's actually worth 15,
000, 20, 000, 30, 000 for them.
Because now instead of having to
spend somebody a million dollars on
something, they can do 100, 000 or less.
Right, because of all this focus you had
put them through to figure out exactly
what it is they want instead of all
these change requests that happen by
the time you're done with the project.
Kevin Griffin: Well, let's switch gears
a little bit and let's get away from
the freebies that David was doing.
And let's talk about his
first couple paid engagements.
And one of the things we noticed listening
to This episode is that David didn't
do what we obviously think he should
have done in that is go out, set up an
e commerce site he needed to go get.
And LLC, he needed to
set up his bank account.
He needed to go get stickers.
He needed a logo.
He needed the business cards.
He didn't do any of that.
And we all know that's the obvious
first step to any new business venture.
No, David just went out there and said,
I will take your requests via a Twitter
direct message or an email and pay me.
PayPal, which seems like it's the
simplest possible thing you could
do to just start collecting money.
Sean, let's jump back over to you and
get some of your thoughts on that.
Starting with the simplest thing first.
Sean Merron: Sure.
Well, I love what you hit on there first,
as far as all the things everybody thinks
they have to do to start a business.
Right.
Uh, when we did two frugal dues, I
think we even did this as well, where.
We say, we're not going to incorporate
until we make our first dollar.
Uh, and our accountant told us that we
could backtrack all the expenses that
we do actually pay for all the other
business things we might buy ahead of
time before we actually incorporate
and want to start tracking all that
expanse against some income that we.
Otherwise it might not really make sense
to even go through the process of, you
know, getting attorney and accountant,
setting up the LLC, all that stuff.
I know people that like think that they
have to go trademark their brand before
it even has any value or anything like
someone else is going to steal this.
And I think I also learned that.
Even in the patent space, and we, you
probably want to fact check, excuse me.
You probably want to fact check
this listeners, but I believe I was
told I was told this actually, and
I don't know if it's actually true.
We need to find out.
But if you actually end up selling
anything, then you own some type
of rights to that patent later
in, in, in time down the road.
So even if someone else tried to go get a
patent, or if you, when you do eventually
try to get the patent, as long as you
can prove that first sale of the product
from some previous time through some
kind of receipt or transaction, then
you actually own the initial rights.
The patent to that.
Now, all of these, I just said
about waiting to incorporate
the patent laws and everything.
I'm not an attorney, so you should
always consult with someone first.
I mean, there are, there are some
liability protections and other reasons
to get incorporated depending on the line
of work you're doing and how much risk
you really want to take individually and
when you're going out to do some type of
consulting work or individual products.
So that risk appetite is ultimately
your decision in my case.
And in the case that I know
sometimes with Chad and Kevin
here as well, uh, we choose.
In many cases, could we do it?
We've been involved in
many startup companies.
So maybe not go all the way gung ho
right away and spend all this money
to just try and get the entity set up
without making that first dollar, or
at least having a path to it where we
know that first dollar is coming in.
I have actually done that as well on.
Uh, consulting gigs where I will go
and actually get the check to, to the
company that, uh, um, uh, I'm coming to
the client as once I have the check, I'll
incorporate deposit the check as well.
Um, because it might actually
not actually come to fruition.
I don't do a whole lot of
consulting gigs personally.
I'll do them every once a while,
because the fact kind of what Chad
was talking about there earlier.
Where it's just based on how much
time I have and how many jobs I
really want to take on currently.
So luckily when I do actually
have a project I want to do, I do,
I, or I can charge a high enough
rate to actually get that done.
But, um, as far as like scaling, I
love what you've said in the past,
Kevin, I think you've said it many
times to me personally, and you've
heard this advice from others where
you don't, don't do the things that.
Uh, or sorry, you do the things
that don't scale initially, right?
Start with the things that don't
scale, gain the traction that way.
Do the hard stuff that, you know,
you're worried about later on that
you'll have to set up this awesome
system to be able to do all this work.
It's the whole analysis paralysis stuff.
We get stuck in a software developers.
Actually, my favorite, my favorite
software development principle is YAGNI.
You ain't going to need it.
I haven't, because so many times have
I thought that, Hey, if I build this,
you know, I solve for every problem
that could happen, or, you know, the
customer might need this, I go and build
something that's not actually needed yet
in production or that the client doesn't
really need yet, just to kind of save me
of something I think I might need later
when I'm, when I'm trying to scale this
business or make it generic for multiple
types of clients and different industries
and such, the truth is when that actual
use case comes around and someone wants
that need that I thought they needed,
it's completely different than I thought.
Upfront and I have to change
something anyway, so I do actually
end up having to go around and
doing some rework later on as well.
Um, so yeah, I would just, uh, you know,
the use case or the client you have
in front of you, think about what do I
really need to scale and what do I not?
What can I do manually today?
What can I do simple through PayPal or
Venmo or even talk to my accountant, like
I said earlier, and see if I can just keep
track of some expenses on a spreadsheet.
And just send that later to my accountant,
um, down the road when it's time to
do taxes versus going out and getting,
you know, all the subscriptions for
QuickBooks and, and all the others,
you know, staff SAS products you may
think you need, um, to run your company.
Kevin Griffin: I started my
consulting in the worst way, right?
I.
Went and set up the bank account.
I said, the business, I did all that
work before my first check came in.
And in hindsight, I probably
didn't need to do that.
Even for a lot of folks out there,
if you're consulting, you could
technically take the money and put it
under your, your personal accounts.
And.
You'll file that as basically you're
a 1099 under your personal, um,
social security number if you're
in the U S if you're international.
Yeah, we're not even going to
talk about that because that's
a whole different set of rules.
But then what happens is a text
time you say, all right, I made.
Several hundred or 1, 000 worth
of additional income that wasn't
taxed and your account, you know,
whoever you do, your taxes through,
we'll figure out how much you owe.
We don't recommend that because you end
up paying substantially more in taxes
on that money than you would if you were
going through some sort of legal entity.
But that's, yeah, some really good
advice is the things that don't scale
and eventually you can start to automate
and you can set up the systems for
the stuff that you're doing by hand.
Chad, what are your thoughts on
doing the simplest thing first?
Chad Carter: Yeah, I believe that those
that take action are the ones that win.
I've spent way, way too much time
over my life not taking action.
Being in analysis paralysis, figuring
out what the best thing to do is.
I heard someone recently say,
You can get almost anything done.
That you want to get done
something to learn in 20 hours.
I thought that seems really short But
they said this the problem is it takes the
person 20 years sometimes to do that first
hour Because they're not taking action.
They're thinking about stuff.
They're reading things, but they're not
they're not really They're not learning
as they're doing so a lot of times
the software guys It's very common to,
some new tech comes out, you kind of
go learn the tech, so that's kind of
cool, but you don't use it, you didn't
really, you didn't really learn it,
you know, until you actually get in
there and you start working with it.
You start working with it, then
it becomes real to you, but it's
that taking the action of actually
creating some project with it, not
just watching some video, reading a
book, and not taking action on it.
So take an action.
is the most important thing.
So the fact that he did PayPal to
begin with, that was him taking action.
I just need to accept some money
and I'll set up a PayPal account,
like super easy to do now.
I've had, I've talked to folks.
Who have only just accepted a credit
card over the phone and then they've gone
through and actually pretty much typed
that into PayPal themselves or whatever.
So the user didn't have to go set up,
you know, this is kind of earlier on,
but the whole key here is start simple,
start with stuff that doesn't scale.
On the whole aspect of business
entities that you're talking about.
Obviously, none, none of the
three of us are accountants, none
of the three of us are lawyers.
So you do need to talk to an accountant.
You do need to talk to a lawyer
when you're trying to determine
ultimately what you want to
create from your business entity.
From my perspective, when you,
again, my perspective, not being an
accountant, not being a lawyer, my
perspective is you can start out as a
sole proprietor, which is just default.
That's what it is.
You're just accepting money and
it's just extra income under
your social security number.
You can start there.
If you think you're going to get to
the point where you are bringing in
hundreds of thousands of dollars a year,
then it could make sense to actually
either start an S corp or you start an
LLC that you can be taxed as an S corp.
That could be beneficial.
But again, you have the whole point from
a legal perspective, why you want to
ultimately get an LLC, but not start here.
is for protection.
So if somebody does seal you, then
they'll sue the company, the LLC
and not get your personal assets.
Right?
So from a legal perspective,
that's why you want that.
But if you know who you're actually
doing this business with up front and
you don't believe you'll get sued, you
don't need to take that action right away.
At the same time, if you are just starting
out and you are concerned about who
you're going to do business with and
they may actually come after you, it
could be worth a couple hundred dollars.
Yes.
To incorporate LLC, because at least
with the LLC, once you have that, you can
then tax it however you want to later.
So take action, uh, but don't leave
yourself overly exposed either, would
be my suggestion, but definitely
talk to an accountant and a lawyer.
But
Sean Merron: It's kind
of sad nowadays, right?
How we have to worry about all these
written contracts and legalities and.
Talking to an, uh, you know, a
lawyer about so many things and the
days of the old handshake, right?
It seemed like they're getting,
they're going further and further away.
Um, but if you do have a relationship,
someone you can trust, hopefully
you can do some of the things
without that and save yourself some
money, save them some money, right?
You don't have to put that fee
on top for some of those expenses
that you're having to incur by
going through all this legal work.
But unfortunately, that's the
world we live in nowadays, right?
Where people are so happy or if they're...
You know, really it just comes down
to, um, not being trustworthy and doing
some of the things people promise.
Chad Carter: yeah, in which case my
suggestion would be probably just don't
do the deal, especially if you're starting
out, just don't even do that deal.
If, if you don't get in a good
vibe for that client, okay.
Even if you need the money, figure
out some other way to get the money,
don't do the deal with that person.
It'll just save you a whole
lot of pain in the long run.
So that would actually be the real,
real suggestion there is if you feel
like, oh, I really need to set myself
protection and LLC like on this deal,
you probably shouldn't even do that.
Kevin Griffin: It's all great advice and
it's amazing how we can take literally
three minutes of a David Neal interview
and talk about it for half an hour.
But we're going to go
ahead and wrap it up there.
Sean, Chad, thanks for hanging
out with me and talking about
David Neal a little bit more.
And I'll be back with you next
week with our next great episode of
the multi threaded income podcast.
Thanks everyone for listening.