Flush the Toilet: Young Entrepreneurs

its all about building relationships and who you know. awesome stuff!

This is great advice. A few examples come to mind…

Shaun Inman developed ShortStat long before he released Mint. People loved ShortStat so much that when they heard Mint would be a better, more accurate version they jumped at the chance to get it for only $30!

Lots of people have become “famous” on the web for developing free applications that people love. WordPress, anyone?

….FireFox? *wink nudge* well, Opera would be another choice too I guess.

Giving free services is definitly a great marketing tool. If you do something for free, no-one will go after you if you make a small mistake, but instead just keep on thanking you. Expectations are also much lower so it’s much easier to exceed them, but once you ask someone to even pay as little as $20, they will hold that $20 over your head and drive you crazy.

Speaking fro experience, I offered to give free marketing consulting services to a friend’s business, and he then referred me to some of his friends. Now, that’s good, right?! Well, I decided not to take the jobs though, because I felt too much pressure to preform well, because they are paying me. I think for now I’d rather offer services for free until my skills build up. For anyone who wants to build experience, definitly try giving services for free to build your skill, clientele and reputation and then start charging when you think you’re ready.

… alright, time to go back to school to take that French final

Wow, that’s an unbelievable story! It just shows the power of using what you have to market. Everyone thinks that you need money to market, well in your bro’s case his free services were better than thousands of dollars of advertising. It’s a valuable lesson for any cash-strapped entrepreneur…which is most of the ones I know!

Yeah, giving away services is soo… powerful. The more I learn about about entrepreneurism, the more I understand this notion. And, it also just feels really good! Doesn’t it? Thanks for the comments, guys!

It’s definitely true that what some see as “free” is really just an investment. To me, doing free/cheap work is just a cost of doing business. Anyway - check out this short yet inspirational article from the June 2006 issue of Entrepreneur. I liked the concept so much that I’ve had it up on my wall for the past couple months now:

Reid Carr has nothing to sell but time, yet finds that giving it away is sometimes best. Carr’s San Diego company, Red Door Interactive, which had sales of nearly $3 million in 2005, sells web services based on how much time each project requires.

That’s a double-edged sword, says Carr, 29. Because customers often don’t understand the intrinsic value of an employee’s time, they expect too many employee-hours for their projects. On the other hand, when employees are idle, it costs Red Door hundreds of dollars an hour in opportunity costs.

Carr has turned this to his advantage in two ways. First, he regularly prices jobs on a project basis, leaving wiggle room for overruns. Second, he has idle staff work on pro bono projects for local nonprofits. “Pro bono work is free advertising, from a cash perspective,” he says. “People on the boards of nonprofits are influencers, so we said, ‘Let’s show them what we can do.’”

Thanks for catching the article and talking about it, too. Clearly the activity of giving work away for free has not only yielded positive results in the community and in promoting our services to the right kind of people, but it has also produced a fair amount of ink with respect to the Entrepreneur article.

We’ve definitely found the requirement to strike a balance between the paying and the non-paying work as we’ve grown and the best way to do that, really, has been to plan for it.