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Lessons Learned

The 5 Hardest Lessons I Learned Going From Freelancer To Startup Founder

John Rampton went from freelancer to entrepreneur and back again before founding Due. Here's what the experience taught him.

The 5 Hardest Lessons I Learned Going From Freelancer To Startup Founder
[Photo: Flickr user Michael Pollak]

In a way, freelancers and startup founders are pretty similar: They both follow their passions, answer only to themselves, and want to enjoy a flexible lifestyle. But there often comes a point when freelancing isn't enough. It's a great career choice for many people, but before long plenty others begin to wonder how to turn their individual skill sets and their biggest ideas into a full-fledged business.

I sure did, anyway, and it's been a bumpy ride. I’ve been working for myself for the past 10 years, made full transition to startup founder for the first time around six years ago, then sold a company and went back to freelancing. It was about two and a half years ago when I got back into the startup game, and I haven't looked back since.

Here are some of the hardest things that I discovered when making the transition (more than once) from freelancer to startup founder.

1. It Can Be Weird Working With Other People Again

Freelancers generally don’t do a lot of socializing, and that’s not a bad thing at all. Many of us actually prefer being left alone so we can keep churning out work for our clients. Even when you’re assigned a project, you’re usually only dealing with one or two people.

I’ve had clients just shoot me an email with the specifics on a project, like the scope and deadline, and more or less leave it at that. Other times I've had project managers notify me through tools like Basecamp or Podio. In either case, it was pretty much just one-on-one contact. There was very little collaboration required.

It can be tough transitioning from that situation into building a team—and as a startup founder, I suddenly needed one. There was just no way that I could handle all the responsibilities myself. I needed developers, writers, and salespeople. I had to think about accounting, legal, and social media management. I brought in a cofounder, too.

In no time, I was surrounded with people I needed to work with, trust, and rely on intensively. Going from a one-man show to managing a team was a big shock to the system. I was responsible for assigning tasks, not just completing
them. This meant that I had to work on my collaboration, communication, and leadership skills to make sure everyone was on the same page.

2. Now You're On The Clock—And On The Hook

Most freelancers are used to deadlines but know that even those can be flexible. Sometimes a client just needs a task completed by the end of the week or month. And if they do set a specific date, you usually have enough notice in advance that you can still enjoy the freedom to set your own schedule for the project.

As a startup founder, I was now responsible for setting deadlines for far more projects than just my own—it was up to me to establish goals and milestones and figure out how to achieve them. You need that article to be completed by the 10th of the month so it can be published on the 20th—and it's just one piece of a marketing campaign to introduce your brand to new customers. And without customers, you can’t pay your expenses or your team.

I’ll put it another way: If I didn’t feel like working one day as a freelancer, it wasn’t a big deal. I could work more hours another day or just eat the money if I didn’t desperately need it. I lost that luxury as soon as I started assembling my startup team. Now I had a team of people relying on me to make this business a success—and to pay them on time. For their sakes and mine, I could no longer afford to take a day off.

3. You Forego Pay Sometimes

I was fortunate that there were only a few times when I didn’t get paid as a freelancer. It just meant that I never worked for those clients again. Getting paid usually wasn’t much of an issue since the client and I had an agreement drawn up about my compensation and when the invoice would be paid.

As a startup head, it was basically the reverse: You gain and lose clients. Your expenses increase. It takes longer to get your product to market than you'd planned. There was a glitch in your product, and you had to shut down your app or software for a couple of weeks until you fixed the bug.

During these times, the cash isn’t coming in. You just can’t invoice a client and get paid later that day anymore. If you want to keep the lights on and move forward, you still have to find ways to pay your expenses on time—utilities and employee payroll alike. Sometimes that means taking your own paycheck and using it to pay off those expenses until money comes flowing back in.

4. You Have To Network Differently

Both freelancers and startup founders have to network. In both cases, you have to build your brand and show others you're valuable. The difference is that freelancers are networking with clients, whereas startup founders have to rub elbows with industry thought leaders, investors, and their target audience all at the same time.

You may still mingle with the same people at industry events or on social media, but your focus will get drawn more and more toward the people who are actually looking to get something out of your business—not just hire you for a gig. And that's often a harder sell (or, really, "sells" plural). Investors want to make money. Customers want their lives improved. You have to interact and engage with these individuals differently—by producing different forms of content and having multiple elevator pitches on standby.

5. It Was Still Worth The Switch

So why would anyone in their right mind want to start their business?

For starters, you become your own boss, which means you're in control of your future. For me, that was really liberating. As a freelancer, I often had to deal with the loss of a client because either the project's funding dried up or they found someone cheaper. It’s a terrible feeling when a client lets you go. Founders don’t have that fear as long as they've got satisfied, paying customers.

Another perk is that you get to help others. In fact, I started Due because I knew firsthand how challenging it was to get paid on time while freelancing. With an invoicing platform that lets you quickly create and send invoices, as well get paid almost instantly, I wanted to help other freelancers with their cash flow. Building my business has been a rewarding challenge all by itself, but so has helping independent workers resolve this all-too-common problem.

I've also been able to take command of my own finances in ways I found I couldn't as a freelancer. Instead of helping other people make money, I was now growing a business that—hopefully—could help me earn potentially greater rewards. I'm not talking about Bill Gates money here, just more than what I was previously making as a freelancer.

I didn’t start my own business for the money, though. I did it because I was passionate and saw an opportunity to help others, having spent plenty of time in the freelance world. If I'm more comfortable than I was then, it's because I've invested in myself and my idea—and in the team that's helped me pull it all off. I don't regret that decision, even though adjusting to all the consequences of it was pretty hard at first.

John Rampton is an entrepreneur, investor, online marketing guru, and startup enthusiast. He is the founder of Due Payments. Follow John on Twitter at @johnrampton.

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