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Reading a post on How To Hire Outsourced Developers made me remember I’ve been meaning to write some of my thoughts on freelance developers, since I’ve been on both sides of it (I’ve worked as a freelance web developer and hired freelancers myself).

When I first started I wondered wether anyone would be interested in paying top dollar for my services. After all, I’ve never been that great a developer. I consider myself a jack of all trades but master of none. So I’m good at design, frontend and backend, but great at neither. This actually is what most clients need, and I would soon find that technical expertise is definitely not one of the most important qualities in a freelancer.

On Technical Ability

Let me say this upfront just so I don’t send the wrong message: yes, you need to be know what you’re doing. And yes, you need to be able to perform the job the client needs. So if someone needed, say, an iOS app, I would kindly tell them I’m not the right man for the job and redirect them to someone else. But most projects you’ll be hired to tackle are not very complicated from a technical standpoint. Most will be CRUD or simple apps, really. So it’s actually very easy to know up front wether you have the right skills for the job or not (or you can learn them fast enough). Also, as the client, testing for technical ability is usually kind of easy (assuming you or someone on your team has a technical background). The article I linked in the beginning showcases one good way to do it.

What Does Matter?

What I found, in my experience, that matters most in a freelancer, is everything else. Spoiler alert: there are probably thousands of freelancers out there who are just as good as you at programming, design, writer or whatever it is you do. So how do you differentiate yourself and actually become someone that clients refer to their peers? By focusing on what actually matters to clients (once it’s been proven that you have the minimum necessary skills to successfully complete the job):

1. Be Realiable. Are you going to just disappear mid project without saying a word? Are you going to complete the assignment by the agreed upon deadline? This is absolutely critical, and you’d be shocked at how many freelancers completely fail in this aspect. I had a client once, a good client. They paid handsomely, in a timely manner, their projects were cool (yet simple) and they were good people. They also had a few projects in the pipeline that needed to be done. Needless to say I was very happy working for them. At some point I had to quit working for them for personal reasons. They said they had someone else to continue where I left off, that used to be a full time employee of theirs. We lived nearby so I met with him, explained the current status of the project I was doing for them, resolve all his doubts, etc. He seemed like a nice and capable guy. A few months later I was catching up with the client and they told me that after a couple of weeks, the guy just disappeared never to be heard from again. I know he wasn’t dead, because I still saw him online on GTalk every once in a while, so what would prompt this guy to drop an amazing gig in that totally unprofessional manner, is beyond me. And don’t get me started on the people you hire on oDesk and as soon as they get some money (if you pay weekly), they’re gone.
2. Be Available. Of course, it’s important that you’re actually available to do the job. If you’re the best developer ever but you’re booked up for a whole year, you’re useless to me. But also the amount of time that you’re available is important. Some people are very good, but only freelance on their free time (say, nights and weekends). This will make the project advance more slowly, and I also know from experience how easy it is to overestimate the amount of free time you actually have, or how capable you are to fight the urge to just relax after your daily 9-to-5 job.
3. Be Responsive. When a client sends you an email (or calls you), you reply quickly. Personally, I would even do this on the weekend. I know, I know, work life balance blah, blah, blah. Most people won’t be upset if you don’t reply on a Sunday to their emails (unless it’s critical or they’re douchebags), but if you do, they’ll be pleasantly surprised. Overdeliver, always. I can’t understand why people who are being paid thousands of dollars upfront to do some work (on their schedule and terms) will take a week or two to reply to the simplest of emails. Yes, this has happened to me, on several occasions.
4. Ask Questions & Be Specific. You and the client should always be on the same page as to what is exactly being built. When a client sends you a spec for a project, don’t make assumptions. Ask questions. “By X do you mean this or that?”, “I understand by what you wrote on Y that the projects needs to […], am I correct?”. It may take more time to finish the spec but it will pay in spades later when you don’t build something that isn’t what they want and an argument ensues about the time you wasted, what the client really wanted, etc.
5. Stick To The Specs. Then, once you finish the spec, stick to it! I remember this one time I hired a developer to write an app for me. I attached detailed screenshots of how it should like like and a complete and thorough list of functionalities. When he sent the first prototype, I couldn’t believe it. It didn’t look anything like the screenshots I sent him. “Oh, I thought since iOS 7 is coming out, I wanted it to look more like that”. Well that may have been a valuable insight to offer when we were defining the specs, but now you’re giving me something that I didn’t ask for nor want. Very few times will you be able to pull something like this and have the client be happy that you didn’t follow the specs to the letter. And if they’re not happy, it’s up to you to redo all the work for free. If you have any great idea like that, better ask the client first.
6. Provide Good Value For Money. A few years ago I would’ve told you that this meant “being cheap” or “charging less”. Now I understand it differently. It means, that at the end of the day, the client must be absolutely 100% satisfied for paying your rate. If your rates are high, this will mean turning down clients who can’t afford you. Let me describe for you the only two outcomes that I’ve had when dealing with freelancers: in some cases, I’m very happy with what I’m paying for the job at first. This means that I’m paying either what I had originally set as the budget for the task, or less. I don’t recall a single instance where this ended well for me. Absolutely every time, it ends with the freelancer disappearing mid project or the quality of the work being bad. On the other hand, there are the cases where I had to raise my budget in order to hire the freelancer that I felt most comfortable with. I’m sure you’re thinking “now he’ll say that in this cases where he had to pay more, he always ended up happy with the results”. WRONG! In this cases, about 50% of the times the outcome is just as bad as before (granted, when the quality is bad it’s not AS bad) and only in the remaining half the times I actually have been happy with the results and glad I paid what I did. So to sum it up, what I’ve ended up realizing is that all good freelancers are expensive (unless you find someone who doesn’t properly value her services), but unfortunately not all expensive freelancers are good.
7. Be Honest. It goes without saying, but you need to be honest. This means not lying to your client (about your abilities or anything important), fulfilling your part of any contracts you sign, not promising things you can’t deliver (“Get to #1 on Google!”), being upfront about what is included in the budget and what isn’t, respecting the client’s privacy, IP and trade secrets, etc.
8. Provide Sound Advice. Keep in mind that your clients may not be experts on certain things (the Internet, the App Store or whatever) and could use some guidance. It’s your job to advice them on what is good practice or can potentially get them better results (remember that if they want some software done, it’s to make more money or save costs, they don’t care about anything else). If you think the project won’t give them the desired results at all (and can say this diplomacy), I believe it is your right to tell them so. Of course, once you make your case, it’s up to the client to decide, and you shouldn’t be upset if they insist against your better judgement (“One Flash intro coming right up!”).
9. Have Connections. This isn’t critical, but valuable. Maybe at some point you’ll need to stop working for a client (despite being happy doing so), or maybe your client needs someone else and you don’t fit the bill (p.e. iOS or Android apps while you’re a web developer). For these cases, it’s very valuable to the client if you can put them in touch with other good, reliable freelancers that you can personally vouch for (and you get to help a friend out at the same time).

As you can see there’s a long list of traits you need to have to be a great freelancer, and most people don’t even think about them before they get into it (or while they’re doing it, otherwise they wouldn’t be so many crappy freelancers!). Obviously there are other things you need to be a successful freelancer, like networking or marketing in order to get leads and clients, but that’s outside the scope of this article.

How To Find A Good Freelancer?

Ah, the million dollar question! As I said before, you have to come to terms with the fact that you’re going to pay top dollar. You may get away with less if they live in a cheaper part of the world, but they will still be expensive in contrast to the rest of developers you find in that region. Once you accept this, I actually don’t think there’s a more reliable way than to do what the article I linked to in the beginning describes: select the few that seem good on paper and hire them to do a small test project, and then evaluate how they perform. Yes, it takes time and money, but over time I’ve realized there really isn’t any other way. Even this way isn’t bulletproof, but it’s the best I’ve heard of.

Some other day I’ll also write about what makes a good client. Crappy clients are also abundant and there are many things they could learn in order to have a better relationship with their freelancers, and get better results from them.

When most people decide to partner up for a business, they pick someone they already know. Friends, coworkers & family members. Usually they’ve known them for years, and think they know them well. That, I think, plus just a general lack of understanding of everything that can go wrong (and usually does) in a business relationship, leads people to believe they don’t need to talk much to each other about things like expectations, “what happens if”, etc. before they start working on the business. They probably also don’t think they need to put everything in writing either. “We trust each other”, they say.

This is probably the first advice I give to anyone asking me for it. Look, having a thorough and (sometimes) hard conversation with your soon-to-be partner(s) is absolutely critical. And putting everything you agree on in writing too. And the reason for it isn’t that you can’t trust them or anything, it’s to preserve the business and the friendship. If you just talk and one year down the line you each think the equity split of the business is different, who is right? The answer is you can’t tell for sure, but you’re in deep trouble (trust me, I’ve been there).

Because of some past bad experience with this topic (which I’m still paying for), I decided to build an app that’d guide people over that tough conversation they must have in the beginning, and help them also download and sign a proper agreement with everything they talk about so that there’s no doubt in the future of what was agreed to. Here’s a link to the prototype, if you’re interested. You’ll see it doesn’t really “work”, it’s just a proof of concept, and I’d appreciate some feedback on it.

Here’s a list of everything you should talk about (and agree on) before you move on to work on a business with someone. If you can’t agree on any of these topics before you’ve even created anything or invested any time and money, shake hands and DO NOT move forward with the venture. Because you will have problems down the line.

Who is getting in business together?

It sounds stupid, but it’s still worth mentioning. Maybe one of you thinks that someone else (a friend, a girlfriend, etc) will be joining in too, maybe later. Make sure who is on the founding team, and who is out (everyone else).

Define the business

Again, sounds stupid, but it isn’t. Define properly and in detail what you want to build. Because if you just talked briefly, maybe you have different ideas of what you’re doing and that will lead to disappointments, confusion and arguments later.

What will each of you do?

Define each of your roles in the company. Who’s gonna do, say, sales? Or development? And if both of you are going to work on one area, how will you split the work? It’s always good to have complementary skills (say a technical partner who develops the product and a business partner who sells and markets it). Otherwise, you’ll have to bring in someone else on board to do those things you can’t do. Or do them yourselves, which may not be the best approach if you don’t have any experience with it.

As part of this, and this is one of the many uncomfortable decisions you must make, you should choose a CEO. Yes, there are companies with two co-CEOs, but it’s not the norm, for a reason. Eventually you’ll disagree on something important, and the CEO must have final call on almost everything. Again, if you can’t trust your new partner to be CEO, and he or she can’t trust you, then you have a problem that you better address before you even start.

How much will each of you work?

You should have an honest hard look at your life and your current work load, and decide (realistically) how much time you can invest in the business. If one of you is unemployed and can work 80h a week and the other has a day job and a family and can only work ten, that’s something you need to discuss soon, so everyone knows what to expect. Again, this avoids disappointment and arguments later on.

As part of this you should also talk about whether any of you will be working on other side projects or businesses at the same time. It’s always better to focus on one thing at a time, specially if you can’t work on it full time.

How much money will you each invest and under what terms?

Is any of you putting any money? If so, how much? And how will it be spent? How about other assets like a patent, existing source code, equipment, raw materials, etc. All these are again critical to discuss upfront.

You should also talk about whether someone else is putting in money and how much. And what happens if they end up falling through or you can’t convince them to. Does the business die right there and then? Do you try working on it without that seed capital?

Last but not least, you need to discuss how those investments (assuming there are any) are treated. And this can be very simple or very complicated, technically speaking. What you shouldn’t do under any circumstances is to just put money for free (unless you all put in an equal amount). At the very least, the investment should be returned to whoever put it, plus interest, when the company turns a profit. Other options (which I personally recommend) are that that cash investment buys extra shares in the company. You’ll need to discuss how many. Again, that’s a tough conversation.

And what happens if you run out of money and you need more? Will any of you be able to? Friends and family? Angel investors? VCs? Under what terms (assuming you can dictate them)? Will you bootstrap?

How much will you each be making?

Most companies won’t pay the founders until the business turns a profit or you raise some external capital, but everyone’s situation is different. Maybe one of you has money to invest and the other absolutely needs to take a salary to be able to spend time working on the business. You need to talk about this, and how you’ll treat it. Of course, someone who gets a salary (however small) is already taking a lot less risk than someone who doesn’t (because your business will most likely fail, by the way).

And what happens when you turn a profit? Do you split them among all of you based on your equity? Do you set yourself a salary and reinvest the rest into the company? Do you reinvest it all and take nothing for yourself? Until what point? And who gets to change any of that? The CEO? An unanimous vote? Money is a touchy issue, so much to talk about in this department. Trust me, waiting until you make money to make these decisions is a bad idea. You should agree on something now, and later on if you agree on something else, then you change it. But agree on something before there’s too much at stake and a failure to decide puts the company in jeopardy.

How will shares vest over time?

To most people who aren’t on the “tech startup” circuit, vesting is usually a foreign term. Vesting means, in layman terms, that you don’t own all your shares in the business from day one, but rather, you earn them over time. Standard terms for technology companies (which I recommend you stick to, even for other industries) is 4 years with a 1 year cliff. That means that if you’re two people and each of you has 50% of the business, you need to work on the business for four years in order to fully earn (or vest) your whole 50% of the business. If you leave after 2 years, you’d only own 25% of it. I hope it’s clear. The one year cliff part means that, if you leave before you work on the business for one year, you own nothing. Not even the proportional part of those few first months.

I understand that a lot of people might be skeptic of such term. I was at first. Why would I need to earn my own shares? What if I want to leave? What if I get somehow fired, or we have a fight? That’s exactly why it’s there for. Imagine it the other way around:

Without vesting, if you and a friend split a business 50/50 and make it official, he can literally quit a week later and still own 50% of the business, even if you end up working for years on it and ends up generating millions of dollars. Your friend, who did absolutely nothing, will own as much as you. I’m sure you agree that isn’t fair. And if you do the same? Then it’s also not fair that you own any part of the business. It’s as simple as that.

Now, of course, it can get a lot trickier. Say you’re three cofounders and two of you want to fire the third one after a few months. He’s clearly done some work but there’s clearly a culture problem, or something like that. What do you do? You leave him with nothing? Well at this point is a negotiation, although you can also add terms to it into the agreement. Something you could do if he worked for 9 months and did solid work is for example vest him a full year and let him own 25% of his shares. If the company’s making money there’s also the option of a cash severance. The options can be many, depending on the individual’s and the company’s preference.

One other thing you should consider. What happens if you sell the company after 2 years when everyone’s only vested 50% of their shares? Do they still need to be work at that company for two more years? And what happens if they are fired immediately after the acquisition? That may not be fair. For such scenarios there’s something called acceleration. A standard term is 50% acceleration on single trigger and 100% acceleration on double trigger. This means that in our example above, 50% of your unvested shares would vest if the company is acquired (so it’d be like you worked for 3 years at the company when it was acquired instead of 2), and 100% of your unvested shares would vest if the company is acquired and you are fired (basically, you’ll get all of your shares).

Sometimes companies screw people with these terms. For example let’s say you’re an employee and are on year 2 of your 4-year vesting. The company is going to be acquired and they want to fire you afterwards because, who knows, they may only want the product. In order to give you less money, your company may fire you immediately before the acquisition. That way it counts as a regular termination and you only get your 2 years vested so far. Of course this is a very unethical and fortunately rare practice.

Still, let me end this section clearly saying again: you need to add vesting to your agreement, and I recommend 4 years with a 1 year cliff. Even for founders.

In what situation can a founder be fired?

Yes, even founders can be fired. Happens often. You need to understand that being a shareholder in a company (owning shares) and working on it are two separate things. Some people do just one (investors only own shares, some employees only work on it) and other people do both, like founders in the beginning. But this situation can change over time. Maybe an employee is given equity, or sells their shares. Or maybe a founder is fired.

Either way, you need to decide under what circumstances can a founder be fired. And I’m not talking about the reasons, but about the procedure. Who can make the decision? The CEO? Does a majority of the shareholders need to agree (whoever they may be)? Does the majority of the founders (this of course isn’t possible if there are only two and nobody wants to get fired). My suggestion is that, if there’s no investors and the company’s just the founders (assuming there are more than two), it should be majority of founders who agree. In any other scenario (just two founders, bigger company with investors, etc), it should be the CEO’s call.

If you’re scared that your founders will just fire you for no other reason but to get a bigger share of the pie (not that you’d want to start a business with these people if you’re genuinely concerned), keep in mind that you could always sue for wrongful termination.

How and when will the company be incorporated?

In some countries, incorporating a company isn’t trivial or cheap, so you may not want to do it right from the start. So when will you do it? Depends on your situation or preference. Some people choose to do it when they start generating revenue. Or maybe after a specific amount of time has passed. Maybe you want to wait until you raise venture capital or get accepted into an accelerator. Either was is fine, but talk about it and put it in writing.

What are your goals for the business?

This is important and not many people pay attention to this. One of you may want to raise VC and join the startup circuit, while the other prefers to bootstrap the business while retaining ownership and control. Either view is fine but you should agree on what each of you considers desirable, acceptable or unacceptable.

Do you want to always run it as a side business or at some point will you quit your job to work full time on this? When would this happen? Do you want to try and join and accelerator? Would you be interested in approaching advisors to join the company? How about selling the company, is that on the table? Or maybe, if you’re one in a million, taking the company public? Is either one of you interested in working only for a couple of years and then moving on to the next thing?

Extra terms

There are a bunch of extra terms you should talk about and add to your agreement. Some of the ones I recommend are:

• Non compete: you should agree that, whatever happens (one of you quits, is fired, etc), you won’t create or work for a competing business for at least 2 years after your relationship with the company ends.
• Confidentiality: none of you is allowed to share confidential information about the company with any third party without the consent of the CEO or the rest of the founders.
• Intellectual Property Forfeit: this means you all forfeit all IP rights to the work you do to the company. This includes whatever you contribute from the start, maybe some source code that predates the creation of the company, or a patent.

How are you going to split the business?

Last but not least, probably the most important thing to talk about and usually the one that causes the most arguments. I like to discuss this at the end because I think it’s important to talk about everything else first.

Before you decide how much of the business each of you belongs, you need to know how time you will all work on it, how much money you’ll invest, how big a salary you’ll take, etc.

As a rule of thumb , you will rarely end up with an equal split. If you do, may be putting yourself up for resentment later on. You don’t want to be thinking “Why do we own the same percentage of the company if I do twice as much work as him?”. It really is a hard place to be at, but at the very least, if you go through all the items on this list and end up knowingly accepting an equal equity split and an unequal time dedication split, then it’s on you. Also keep in mind that if there are two of you and you have an equal 50/50 split, you may end up not being able to make certain decisions. And lack of action often kills companies.

So how should you split the business? There isn’t a specific way of doing it, and eventually it’s up to you, but here are all the factors that should absolutely be part of your decision making:

• How much time is each of you going to dedicate to the business? Working full time is worth a lot more than working “nights and weekends”.
• How much money is each of you investing?
• How much experience do you each have at your role? If for example a very experienced and a very inexperienced are forming a business together, all things being equal, the former will have a bigger share of the company.
• How much market knowledge do you each have? Maybe you’re not a very experienced coder but you have years of inside knowledge at the industry your new company will be part of (say, real estate). This also counts.
• How much time and money have they invested so far? Maybe one of the founders have been working on it for a year and the other is just joining now.
• Who is CEO? Usually they have extra equity for the sole fact of being in charge of the company.
• Who came up with the idea? Usually they have extra equity too.
• Do any of you have other companies under your belt? An entrepreneur with a proven track record is a lot more valuable (and should have extra shares) than a first time entrepreneur, if they join forces.
• Other things each of you may bring to the table: good connections in the industry or VCs, a patent, certain technology…

Now some things that shouldn’t have any importance when considering your equity split:

• How good friends are you?
• Will they get hurt or feel unappreciated if they, for a good reason, have less than an equal share of the business?

Closing notes

Well at this point if you’ve talked about and agreed on all those terms, you’re more than ready to actually start a business together, knowing that your foundations are solid. Good luck!

A thread on HackerNews prompted me to write a comment on my personal experience growing, living off, and eventually selling JuegosIndie.net, a blog in Spanish about casual/indie games. I’m not sure if you’ll get learn much from it (a lot of it was dumb luck) but hopefully you’ll find the story amusing.

The Beginning

In 2007 I had just joined Softonic as a web developer, after pretty much giving up on making a living making indie games (I’ll write about this another day). There I met Albert García, currently CTO at Verticomm. A few years back he had started Obolog (a free blogging platform in Spanish) as a side project and created NexoBlogs (a more commercial and professional network of blogs) as a byproduct. All the blogs in the network were basically run by some of Albert’s friends and relatives. Some were actually run by other colleagues of mine at the time at Softonic.

At some point I gave him the idea of creating a blog about indie/casual games since it was a niche I thought was powerful and underserved (specially in Spanish), and even gave him the name of a friend of mine as someone who could run it (he was already blogging for a more mainstream videogame blog and knew a lot about the scene). He proposed I write instead, something I hadn’t really considered. After some pondering I said ‘what the heck, why not?’ and started writing right away, before we even got a nicer design for it. After I wrote around 10-15 posts, he officially added it to the NexoBlogs network and uploaded the official design. I was so proud of being part of it.

I have to say that I never started it with the goal of making money off it. Mostly, because some of the other blogs had been running for a couple of years now, and if I remember correctly none of them were making even $100 a month (from AdWords) by then. I saw it purely as doing something fun and being part of something bigger than myself.

I started writing about some games that I loved and it was fun for a while. But at some point I realized I kind of had run out of games that I played and loved or that were so well known they deserved their own posts (even if I wasn’t a big fan of them). I had reached the crossroads that every blogger gets to (most sooner rather than later): should I keep writing even if it’s not fun or it doesn’t come easy anymore? Most bloggers get to this point by week two. At least I had lasted a few months!

A Change In The Fun

Luckily, I realized something. 90% of the traffic to the blog (which was rising nicely but was still way behind other blogs in the network) was coming from a handful of posts in related topics. Hidden Object & Time Management games, which are definitely not my favorites, were driving most of the traffic. So then I started writing not for the fun of it but to see if I could increase the traffic to the site. It became a competition, against myself and the rest of the blogs in the network.

By studying popular keywords in my niche (Google Keyword Research Tool was helpful), what games were driving the most traffic and also what games were topping the charts at popular game portals, I managed to increase traffic to the blog a log, and eventually be among the top 2-3 in the network.

Money Enters The Picture

As I said before, making more than beer money was never in my mind. By now I was probably still making less than $100 a month. But then something happened that made me realize there could actually be money here. One of the other blogs in the network got lucky with a very, very popular (but unfortunately, very seasonal too) keyword and got insane traffic and AdWords revenue. In a few short months the guy who ran it got over $1,000 and used it to pay for a great holiday. That was eye opening.

I started looking for ways to make more money. Other than obviously keep working furiously to add more content and drive organic traffic, I realized affiliate programs could be another source of income.

They way these programs work is, you sign up, send them traffic (via links on your site) appending your affiliate code to the URL (say http://www.gameportal.com/?affiliate=juegosindie) and then if anyone you send their way buys a game, you get a cut.

I started using Reflexive’s affiliate program because it offered a 40% share as opposed to Big Fish Games‘, which was only 25% at the time (now it¡s 70%, although game prices have gone down). I went and changed all the links in my posts so far (over 100) to lead to Reflexive with my affiliate code instead of the developer’s site. I quickly started seeing the metrics. There were a good number of downloads, but few sales. Turns out, Reflexive charged you for bandwidth for the downloads you caused, so a lot of the revenue I should be making was being offset by the low conversion rates of my visitors, eating my profits. Some months I even remember having negative profits! I needed a new plan.

That’s when I looked at Big Fish Games’ program. They didn’t charge me for traffic so even if my commission was gonna be lower, I’d still come ahead. So I signed up and changed again all my posts’ links over to the new master. That was tedious.

Immediately I saw I big improvement. Month after month. Turns out BFG had other advantages over Reflexive that I had overlooked, and it was a big one. First, they converted better. That means I had a higher percentage of people buying the games they downloaded. Maybe that had to do with Big Fish’s design, their purchase process or the fact that they ran sales on certain games. But whatever they were doing, it worked. No wonder they became they #1 Casual / Downloadable game shop in a short few years. Also, while Reflexive only gave you commissions for the sales produced from the downloads originated from your immediate referral, Big Fish store an affiliate cookie on the user’s computer and gave you credit for all their purchases for a whole year (!!). This seems very simple but it’s huge. It means that someone could find my blog on Google, follow a link to Big Fish, and then if they bought, say, 10 games over the next year, I got my 25% share even if they didn’t come back to my blog. Unless of course they affiliate cookie was overridden by another of their affiliates. But still, it was easy extra money.

Soon, affiliate commissions were in the hundreds a month and doubling and tripling AdWords revenue. I absolutely loved it.

Around this point, the worldwide advertising crisis started affecting AdWords’ pay-per-click rates and even though traffic and affiliate revenue kept going up, AdWords revenue went down. That sucked.

Getting Cocky

At this point maybe I was writing three times a week. Which became twice. Then once. Then I didn’t write for almost a year. It didn’t matter, traffic and revenue kept increasing and I was confident it was going to continue this way. At some point, though, Google caught up with it and realized we didn’t have “fresh” content anymore, and we started going down on the search results, affecting traffic.

I started panicking, and since I was used by now to the easy life and didn’t want to write anymore, I hired someone from South America on oDesk to write 5 times a week at a rate of 5€ per post. I started paying attention to keywords, telling him what to write about, etc.

It took a few months but traffic started recovering, although it never got to the peak it once had. Instead of the usual 500,000 visits a month, it hovered around 350,000. Still, revenue was better than ever.

Quitting My Job

At one point I was making around €1,000 per month in profit off the blog. A friend and I had just launched another website that hoped would turned into a big business in a year or two, so I decided to quit my job and work full time on that project. Unfortunately, €1,000 wouldn’t gonna cover the standard of living I had in Barcelona, so I decided to move to South East Asia where life is good and cheap.

For a year, life was good and thought the cash cow that was JuegosIndie was never going to end.

Revenue Crash

Then at the beginning of 2011 something scary happened. Affiliate program revenue dropped 50% from one month to the next, and it didn’t seem like it was coming back. Traffic was normal. What had happened? A year before this, Big Fish revamped his Affiliate Program,  giving ALL active affiliate cookies a life of 1 year from that point on. That was good, because it meant that for cookies that were gonna die, say in 6 months, now I had an extra 6 months of commissions (assuming I didn’t redirect them to the site again).

So basically what had happened is that in one month, all the cookies that should’ve died along the last year (and stopped making me money), all died at once. I made more money this way, but it was also sudden and unexpected, and I didn’t know what to do. Remember I was living off that money, and 50% of it wasn’t going to pay my bills (I was already being as frugal as possible).

So I did the only thing that made sense.

The Sale

Usually, I wouldn’t have been able to just sell the blog to someone else that’d take it off NexoBlogs, but fortunately, a couple of months before, Albert told us all that he was very busy running his new company and didn’t have the time to do all the management that he usually did (for which he took a cut of each blog’s revenue), so he was letting everyone do as they wanted: move it over to WordPress, keep it as it was, sell it, whatever. So I decided to sell it.

After asking some people I knew that might be interested in buying the site (all of whom declined), I turned to Flippa. Flippa is a marketplace where people buy and sell websites. A lot of them are shit, but others are legitimate businesses that sell for real money. You can state a “buy now” price, but it works similarly to eBay. People can place bids and there’s a deadline, at which point the highest bid wins (assuming you didn’t specify a minimum price, for which you pay extra).

After realizing that the last year the site made around $20,000 and that, while now revenue was substantially lower, a motivated buyer could turn it around, I decided to state a Buy Now price of $20,000.  You can check the Flippa listing here. As you can see, I was very thorough. I don’t think there’s any other way to do a Flippa auction. Tell the full story and add all the metrics.

During the first 2-3 days, some comments were posted requiring verified Google Analytics reports (didn’t even know you could do that, so I went and added that). Then they asked for Escrow payment, and added that too. Then a bid arrived. $5,000! I couldn’t believe someone was willing to give me $5,000 for a business I created. 12 hours later, the same dude upped the bid to $12,000. That was the most money I had seen together in my life.

The guy asked me privately how much I wanted to close the auction right now. Since it had just started I said I wanted $20K or wait it out to see what happened. A few days later he offered $15,000 to close it immediately. I said there were other people interested and wanted to see if I could get the full $20K. I was lying, he was the only one interested. A few days later he offered to pay the full $20k. Yay! Success!

The next two weeks were a combination of exporting data, sending HTML templates, passwords for a bunch of services, etc. All in all quite painless. When I saw the money in my account I couldn’t believe it.

This was the end of a very fun 4 year journey that netted me around $40K working in my spare time (I’d say less than half an hour a day on average).

As you can see, a lot of what happened wasn’t because of some master marketing plan or my genius. I’d like to think I did some things right, but I also lucked out and found a good niche by accident. Still, if you have any questions feel free to ask in the comments.

Sometimes I’ve found myself in the situation of having to do something that I knew I had to, but that I was dragging for too long because I was afraid of what could happen. Often, this meant asking someone something (a business proposition, a favor, etc). Other times, just telling someone something.

I’m the kind of person who wonders for weeks what will the other person say. “If they say yes it would be awesome! Life would be so easy. If they say no, then that would suck and I’ll need to find a plan B.”.

I don’t immediately do it because a) it’s usually an uncomfortable situation to be in, like asking someone for a favor, or maybe quitting a job and b) because, in case I’m asking something, that would mean facing the situation of having them say ‘No’.

But I’ve come to realize waiting to do those things doesn’t make any sense, for a few reasons. First, all that time I wonder what can happen, it’s just a waste of time and energy. I’m never gonna *know* what they’ll say until I ask, so trying to fantasize about each answer they can give is pointless. Of course you should plan the interaction, but don’t overthink it. A lot of times I’ve tried thinking about all the possible angles a conversation could go to, and then when I actually have it it’s completely different and unexpected.

Another important point is the realization that that interaction you’re dreading and postponing HAS to happen, and ask yourself: would you rather have a YES or a NO to something important to you NOW, or would you rather wait for a month, getting all concerned about what will happen if… If you’re gonna get a NO, you might need to think about a plan B, and if you’re gonna get a YES, you’re most probably going to have to do something with that answer (like move forward on a business transaction). Whatever it is, it’s always better to know sooner rather than later.

So leave the fear of asking aside and just do it now.

This week, the thing I chose to get my out of my comfort zone was to attend First Tuesday Barcelona, a networking event for entrepreneurs.

I’ve always had mixed feelings when it comes to this kind of events. First off, they sound very promising. Lots of people working on interesting stuff, or at least wanting to, seems like the kind of crowd I’d like to meet. I could go there and end up with a bunch of really interesting connections, or even new friends. Then, the worst-case-scenario part of my brain kicks in. What if most are just there to watch, or are the kind of people who are always about to start something (but never do)? What if the talk (there’s usually a talk by some successful entrepreneur) is boring? And so the self convincing begins, and ultimately ends up making up enough arguments to make me stay home. Those are all rational questions, but at the end of the day, the main force driving me to out of those events is the fact that I’d be uncomfortable around lots of strangers, probably more successful than me, and in an environment where you’re expected to “sell yourself”, something I’m horrible at. Another comfort issue.

When I took on the challenge, I knew one of those things I had to tackle was entrepreneur events, and the first one happening in my area was First Tuesday. This time the talk was from TopRural‘s CEO François Derbaix. He gave general advice about starting up an Internet company, and was great. I’ve read lots of books and listened to lots of talks, and it still felt like fresh advice most of the time. Also, while not a ridiculously good speaker, François was very casual and honest about everything he said, which pleasantly reminded me of last year’s Bussiness of Software talk by Balsamiq’s Peldi Guillizzoni. A must watch.

So the talk was good, what about the people? Luckily I ran into a friend there -who was with two other friends-, and I was meeting another friend as well, so I ended up spending most of my time speaking to them. It was great, but it didn’t get me much out of my comfort zone, though. It was plenty of fun, so I can’t complain. At least I got myself to ask a question to the speaker in the Q&A round, though 🙂

All in all it was a great experience which I intend to repeat. Next time, though, I’ll try and network more with random people, see if I enjoy it or get something useful out of it.