Freelancers and solopreneurs

Autonomos et solopreneursWhen I came to Spain 5 years ago, I searched for a meeting place for French expatriates, but I did not find much. We frenchies are pretty “stay at home” – in any case I am rather homebody – and yes I know, this is quite inconsistent with the fact of going to live in another country. But it is certain that the French expatriates are not the kings of the foreign scene in Madrid.

Finally, as it is now two years since I am working as an ‘autonomo’ (an independent consultant or freelancer in Spanish), I thought it would be a good idea to intend it again and meet and talk with some of my peers. So I registered in a few Meetup Madrid groups, devoted to those interested in entrepreneurship, candidates to launch a startup, freelancers and small business, followers of Lean Strategy, Business Networking and Venture Capital.

And finally last week, I participated for the first time to a ‘Geek Lunch’, an informal lunch for members more oriented toward technologies – although this is not a pre-requisite – or at least willing to discuss these issues.

I was totally delighted with the experience. We were eight around the table, and I was not able to chat with everyone, especially that the lunch took place in the backroom of a small typical Madrid restaurant, quickly filled by regulars of the place so, nice but a bit noisy. I will not pretend to generalize from a few conversations, but I learned some things:

  • I did not ask for their identity cards to the participants but I would say that most were between 27 and 35 years. I was clearly the oldest at the table (at least +15 years). Currently, I see a lot of young spanish people emigrate because they can not find work in Spain, I find it encouraging that some decide to create their own business. Except that …
  • … Spanish were the minority, I think we were more than half of the people around the table from foreign origin, and from all sorts of different countries. Most of the conversations took place in English, even if everyone spoke perfect Spanish (and often also a third language). Some also divided their time between Madrid and other European cities, for a cosmopolitan activity and not focused solely on Spain.
  • The majority of us had a freelance business, which seemed to work well, and a project or an idea of a startup. For some it was a first attempt, but the people with whom I chatted most already had experience of creating their own activity, mostly around a concept of a website, B2B or B2C. At least one person had her website operational, and with customers, and was seeking an investor that can support their growth.

Half of us soon a freelancer

These characteristics are similar to those I find regularly in a number of articles on freelance work, including this recent one: Half Of Us May Soon Be Freelancers: 6 Compelling Reasons Why.

When my last job did (abruptly) end, I knew I was going to start a freelance business for a simple reason: I am convinced that the vast majority of us will have to create their own jobs. In France currently, 25% of young people under 25 are unemployed and 30% of long-term unemployed (without work for more than one year) are over 50 years. The same figure in Spain are respectively more than 50% for young people and 70% for senior citizens.

So at least one third (in France) or half (in Spain) of us won’t have the number of years of contributions necessary to be able to retire from active life and will have to create their own jobs and build their own retirement.

Of the 25 000 new jobs registered in Spain in June, half of them was the fact of ‘autonomos’ who then created their own jobs. The statistics in the United States are 1 in 3. This phenomenon is growing over the years, and not only because of the current economic crisis.

The above article also lists some of the findings that I have done about the freelance activity:

  • “Work is where your computer is located”. If you work with a computer, then you can work in remote mode and become an ‘autonomo’. Most freelancers around the table of our Geek lunch had one of the activities in the top of the curve in the graph ‘oDesk Visualization Skills’ in the article cited above, and were therefore fully representative of these statistics.
  • “The Facebook generation is comfortable with the Internet”. I do not necessarily agree with this point (my mother has a Facebook account), but I’ll take it on another form: in my time, developers worked on client-server banking applications while today they develop Android applications. 20 years ago, technology and projects did not allow to work remotely, unlike current technologies and projects (iPhone apps, Web development, Cloud, etc.). Well, in fact there was no Internet in my time.
  • The system is economically beneficial for both parties. Through my blog, I regularly received proposals from foreign software vendors. Investing in an office or a subsidiary in Spain means high fixed costs to them, with no guarantee of a return on this high investment in a foreign market and a difficult economic environment. It is interesting for them to convert these fixed costs into variable costs, with an independent consultant on hand to represent them to a client or prospect, or participate when necessary to certain pre-sales tasks or the implementation of a software solution. The customer pays only when he needs someone – no need to pay him during his holidays or during periods of reduced activity, and the independent consultant can work at a daily cost acceptable for both parties.

A freelancer is a startup

OK, a freelance is not a startup, but as stated in the last point of the previous article: a freelancer must think like a startup. And this is where I see at least two problems.

Financing your business

Whether you want to establish yourself as a freelancer, or you project to start your business, you need money. Most people have either a first client, or some savings to get the time to find a first client.
A freelancer with an idea and technical skills does not need much money to start, but a bank is never going to pay 10,000 euros to an independent or someone who wants to run his startup because:

  • Banks are cautious nowadays and lend only to someone who can provide guarantees. Always the same old story: banks lend only to the rich, or rather do not lend to those who need it most.
  • On the other hand, a bank is not interested in lending 10,000 or 20,000 euros because this is not how they will make money. Better lend 200,000 or 300,000 euros to someone who wants to buy a home.
  • So we need to find an investor, a business angel, someone who adheres to your project, which means to learn …

Selling your business

The first thing you learn in a software company is how to pitch the product.
The term ‘pitch’ comes from Hollywood. Say you’re writer and you meet Steven Spielberg in an elevator. You have 5 seconds to convince him of your idea. Some examples of a pitch (I do not give you the titles of the corresponding films, you’ll find right now):

  • A Roman general, betrayed by a corrupt prince, sees his family murdered and becomes a gladiator in Rome in order to take revenge.
  • A third class boxer gets to fight against the world heavyweight champion in a fight for which he must first regain the respect of himself and his family.
  • A long time ago, in a galaxy far, far away, the young Skywalker joins forces with a mercenary pilot and two droids to rescue Princess Leia and save the universe from the evil forces of the Empire.

You may notice that these pitches have a single sentence, usually presenting the hero and the major challenge he must face. There are several forms of pitch, and the one we learn in a software editor is the 30 seconds pitch, to recite perfectly as every sentence counts, and without any hesitation. You will often find that pitch on the presentation page of a startup web site.

During the lunch, we discussed plans and I have not seen anyone do even the beginning of a pitch. In the best case, someone described the product: “I am developing a tool …” or “I am thinking of a website … “. Someone mentioned a CMS tool and I asked what it was, and everyone turned to me with some surprise, and answering ‘Content Management System’.
Okay, I know what a is Content Management System (as I am using one to write this post), but as this is not my main activity, I thought that CMS meant Customer Management Success or that he meant SCM (Software Configuration Management).

I know we were in a Geek Lunch, and not in a meeting with investors, but I think the pitch presentation should be an immediate reflex. And it should not contain acronyms that can disturb someone who is not familiar with your business, which will certainly be the case of a business angel.

Also, one of the questions an investor will quickly ask is “How much do you need?”. I did not look to bring this issue during our lunch, and in any case the projects were not advanced enough for everyone to have a business plan. But again I think that everyone should have the reflex to put it on the table at every opportunity, and be able to justify precisely the reasons and purpose of this investment. We were exchanging ideas and I am surprised nobody said “I believe I will need such money for that and that reasons. What do you think of it? Do I forget something? Could I use this money better?”

I am convinced that most of us will sooner or later become a ‘solopreneur’, and this Geek Lunch was fantastic to share ideas. I came out with a new motivation.
The main obstacle in my opinion is the ability to become ‘business people’ and that is certainly on this important point that we should be exchanging ideas and experience among freelancers.

Well, I have to leave you, I must review the pitch of my blog.
See you soon.

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