What would you tell a prospective customer when he tells you they are looking for the cheapest rate freelancer to develop a relatively complex web application? On top of that, the prospective customer also asks you to recommend a Community Manager to post once or twice a day on the social media accounts of the so-called company (which happens to not even exist yet).
Taken at face value, you might get discouraged to work with this person, but have you ever thought why? Have you thought deeply about what is enraging of this example situation? Let’s discuss a bit more about this topic.
Deep within, you already know it’s a trainwreck
Your gut knows what this prospective customer is looking for. They seem to be the kind of people that extract the last drop of blood and sweat out of your deliverables, and that’s going to cost you emotional effort and a good amount of energy to negotiate win-win terms. Sometimes you feel they are taking a win-lose approach, where you’re on the losing end of it.
It not only costs you energy, but it also costs you time, and time debt is one of the strongest chokeholds you can have. If you misuse time, time will misuse you. The key to time management is not managing your time, but rather it is about how you spend your time. So it’s also an issue of self-management as a provider.
Time debt is the concept of operating in a way that costs you more time in the future. So, you intuitively know that a customer like this is going to be extractive in their relationship with you. Examples of the losses implied are, but are not limited to:
- Relative to scope creep
- Nitpicking on some details that were not originally in scope, some are seemingly small and have ample implications on time costs
- Regressions: Going back to a known state, after the customer agreed to change it
- Relative to financial costs
- Not paying on time, disordering your finances
- Not paying the agreed amount and playing dumb, especially without a contract in place
- Paying over an expired quote and playing dumb again
- Requesting unreasonable discounts every time you have to deal with them
The pitfall with time debts is that your customer may not have a grasp of this concept, or even if they seem to understand it superficially, it’s not the way their actions expose the way they really think. It’s not their adopted paradigm.
The problem with customers like this is mostly the way they manage themselves or the company they work for. Most of the time, it’s well ingrained in the values of the companies to work like this. And it’s a problem of vision, or rather, a problem of vision assertion.
Your prospective customer could have their vision very well defined, and think they are realizing it. Nonetheless, it could be an illusion, if the vision is inconsistent with their actions they’ll likely miss the target. Strong visionaries not only have a clear vision, but they also check every once in a while if the path they are going towards matches the one they discovered for their company.
A company that operates like this will not see its vision come to reality if they happen to have one. Why? Because a company that relies only on the financial aspect of their execution is leaving unattended other aspects of the business. Treating economic symptoms on palliatives such as massive cost-cutting will remain in financial trouble for a long time, if not bankrupted before.
They want strong results, with weak investment.
At the risk of being misunderstood, cost-cutting is an effective strategy to buy you a financial runway for your company, but it’s not the only Messiah that will save your customer’s company. It will if it’s the only problem they have, but most of the time it’s not ever that simple.
There are many reasons I could provide why a company operates on such a strategy, but some examples are:
- Is the market where the company participates slowing down? (Market profitability study needed)
- Is the company’s offer not really a need or desire for the current market anymore? Or ever was it? (Market validation needed)
- Are there too many participants in the market? So every other participant gets the profits competed away. (Market profitability study needed)
- Is the reason for the financial strain insider corruption? (Insider incentives analysis needed)
- Do the founders or the board of the company seem to be too materialistic as human beings? (Incompatible values with you, and almost no agreement is possible if this is the case unless one of your values is to not care about your customer’s set of values, and this is likely to cost you more than you imagine)
- Do the founders operate on a whim and ignore rising market opportunities where a timely pivot may (or may not) bring future financial growth? Provided the company is ready to take on it
- Does the company focus more on the technology rather than if there’s a market request for the offering they are proposing? (Market validation needed)
The problem is usually deeper than that of operating costs. It’s missing the point that time has greater value than money in our lives. Companies are not faceless, are operated by people, and the people reflect their values on the company they are working for.
Recently I saw in a public forum, a prospective customer requesting a clone script looking to compete with a very successful food delivery site. Even if your customer had the technology (let’s say it’s as simple as your typical React + Node.js application), would their initiative have the market potential to “lift” that much customer demand? Given established competitors. This very same customer had a budget offered lower than USD 1000 for the job. Intuitively, you know it’s doomed to fail. It’s going to run out of money even before deploying a semi-decent MVP.
This is not to discourage your customers from having entrepreneurial initiatives themselves, but oftentimes they don’t have a value differentiator. It’s not about coming first to market (First Mover Advantage), but it’s about having such a strategic value proposition that it feels it must exist, analyzing why it doesn’t right now if there’s a strong market need, what’s going to be required to challenge the status quo and know deep within yourself if this is going to give you an unfair advantage over your competitors. Otherwise, don’t. Your customer’s approach will be flawed at best. A train-wreck waiting to happen.
After this exposure of the problem, what is the solution then?
Advice your customers on the best route to take when you find they are having a flawed foundation for a project. It’s true that at the start of many of these projects, resources are not abundant, but then the actions taken should go towards making decisions that don’t increase time debts and secondary to that, saving money.
Time debt will always exist, in many sorts of ways, but you should never add more to it unnecessarily. One example of organic time debt is when you acquire more knowledge and experience, and then realize your previous work could be improved, and this is beneficial to your continuous improvement program.
On the other hand, nocive time debt is when we quickly do something (oftentimes a quick patch) and then we have to deal with it later more thoroughly, instead of giving the ultimate solution that’ll cost less overall. Time invested upfront on a solution that’ll relieve you from work in the future is better than time invested now on a scrappy path which results in a commitment for later.
If your customer doesn’t compromise on the financial argument, you should never compromise on quality either. Have deliverables with well-defined specifications at specific price tiers. If you must have a customer like this, navigate ways to make it painless for you, but don’t forget to analyze how you came to be in a situation like this.
Probably your customer can make the time investment and effort to determine if something is going to truly have a chance in the market. One must always check if the “common sense” our customers use actually makes any sense at all.
Do the time-math, focus on what is really valuable. Until next time.blog comments powered by Disqus