I grew my first SaaS company Heyo to 40 full time employees and $98,000 per month in headcount expenses.
Outside of the development team, I had full time employees for tasks like design, content creation, and SEO.
It took weeks, if not months, of my time to find the right candidates, get them an employee contract, pay for their desk setup, health insurance, and more.
Big pain in the butt.
Enter the “Starbucks Test”.
When I sold Heyo in 2015, I told myself I would never hire another full time employee unless there was a very clear need that I would need help with for many years.
In the past 6 months, I’ve paid over 15 freelancers as little as $3 to as much as $9000.
This article is my stab at articulating how I find, motivate, and develop freelance talent where I pay based on one metric:
# of times a specific task is completed.
Examples include:
- Podcast audio file edited and scheduled in libsyn: $3
- Monthly magazine design/layout: $1,500
- 1000 word blog post: $200
- 15 new backlinks to GetLatka: $1,800
- Zapier codes connecting Airtable to external data sources: $2
- Video record a keynote I’m giving in Slovenia: $200
My book hit the WSJ bestseller list partly because of the popularity of pages 35-45 where I go into deep detail on my podcast process and how I go from recording to live episode for under $5 an episode. The book just passed 25,000 copies.
In this article, I’m going to walk through how I use freelance sites to do something many of you do: Create blog content as cheaply, as quickly, and as high quality as possible.
Step 1: Only hire a freelancer when this happens
After you’ve done the task and clearly defined the steps to complete. Document the process in a google doc and record a loom video of you executing the Google Doc process step by step.
Step 2: Print off the process and take it to Starbucks
Go into a Starbucks and buy 5 giftcards for $5 each. Walk up to strangers working on their computer and make them a bet:
“I have a challenge for you. Its really tough. If you complete it, I’ll give you this $5 giftcard. You game?”
If they say yes, give them a one page print off of the process you documented that you want to hire a freelancer for.
Tell your new starbucks friend:
“Act like I’m not here and try to follow the steps on this page. If you get stuck, talk out loud and share what you’re thinking.”
Don’t’ say a word and see if they can get through your process doc.
Keep repeating this process until a random stranger can execute your process with relatively little training.
Step 3: You’re ready for Fiverr
In my example, I’m going to use Fiverrr. Depending on what task you’re trying to get a freelancer for, you might use Toptal (for developers), or Verblio (for writers). There are lots of niche players.
Go to Fiverrr.com and search for the task you’re trying to hire for.
“Technical Writer”
Fiverrr returns over 1300 results ragning in price from $10 to $100.
Do not try and message freelancers and negotiate price (yet).
Pick 2-6 of the freelancers and hire them.
I hired:
UKwriter 23 for $210 bucks and Prijat for $57.75
Step 4: Give the same process doc to multiple freelancers
Take your “Starbucks Process” and in the job description detail, paste in the process doc.
You’re going to give all the freelancers the exact same directions and then judge the quality of the work they give back to you.
You can see here, I’m using the podcast interview to help the writers get more content to write about:
The end result?
Here you go: https://blog.getlatka.com/wasabi-cloud-storage-customers-revenue-aws/
Not bad at all!
Step 5: Negotiate price with 1 freelancer
Consider what you paid the freelancer for the quality you got back and pick a single freelancer you want to work with more.
Ideally, this task you’re hiring for is one that your business needs done over and over again.
This is when you negotiate price.
“UKwriter23, I need 10 blog posts written every month. If I commit to hiring you for all of them, can you do them for $110 per article instead of $210?”
“This means I’d pay you $1,100 per month and I’m happy to commit to many months as long as you keep quality high.”
This volume play is what enables you to build highly profitable, repeatable, systems that your business easily sits on top of.
Step 6: Set it and forget it (Like a Crock-Pot)
Pay the freelancer 50% at the start of the month and 50% when the month ends. Keep doing this as long as the freelancer provides high quality deliverables.
Start to think about what you do right before this task, and what you do right after it and consider consolidating all those tasks under this same freelancer to free up more of your time.
For example, my podcast editor also handles scheduling the episodes for release in my podcast host, Libsyn.
My writers also handle adding the writing to WordPress in a way that’s formatted for easy reading and SEO.
Following these 6 steps will allow you to get your hardest work done, while paying the cheapest price.
How do you motivate a freelancer?
Freelancers don’t care about equity. They don’t care that you’re changing the world. They only care about what you’re paying them for a task. I personally love this. When you know how someone is motivated, its easy to motivate them. Motivating with money is easier then trying to motivate a team dreaming about the value of their equity 10 years from now.
Side benefit: I know many founders who hire way too fast or too early. They build up fixed headcount expenses and then don’t have the guts to fire their friends when they know they should. Freelancers don’t really have feeelkngs. Sounds mean, but its true. There is no bonding allegiance outside of cash payments for tasks completed. This allows you to scale up and scale back the business as needed, saving money and driving profits in the process.
How do you pick the right freelancer?
After you pick your first freelancer to work with, consider this: They may go on vacation. Or get sick. Or get tired of doing your task over and over.
Like a well designed bridge, you need redundancy. No single point of failure. You should always have a “freelancer in training” to replace the one you currently rely on. This enables you to have maximum flexibility and ensures your layer cake of business systems continues to run no matter the freelancers circumstances.
Where should you look for freelancers?
I have a list of sites I frequently visit to spin up new freelancers.
- Fiverrr for any tasks don’t require extreme specialization.
- Toptal for hiring developers (you’ll pay on avg $60/hour)
- Thumbtack for hiring videographers when I’m on the road to cover my keynotes (cheaper than flying my own video person out)
It’s Ok, Freelancers Are In It For The Money Too!
20 years ago, you had one option if you needed more work done: hire full time employees and enjoy the fixed expenses that comes along with them.
Today, in a global, hyper connected world, you’re missing out if you only look across the street for talent to hire.
It’s very likely there are more talented people, at much lower rates, somewhere else in the world waiting for your work.
They’re happy to work for you for a cash payment and don’t care about “your vision”, your “management style”, or “if you went through YC or not”.
Get yourself some of that and start training yourself to document processes, hire freelancers, and scale with the ones you like.
I bet sometime in the next 10 years a company goes public with no full time employees because of these new resources at our fingertips.
Remember, its not your job to create jobs. It’s your job to deliver a higher quality product at a competitive price.
When you realize the power of freelancer talent, at scale, you’ll never look at paying rent on 100 sq ft for every new employee you hire the same way again.