What do you do when a client keeps wanting free services yet then they brag to you about their new office space, new mfg plant, new employees and such?
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Am I being played for a sucka? I have this client, we met over LinkedIn last October, and my business guy (as a nerd, I am not that business savvy) advised me. They paid for a $1000 letter of intent for a task, which we did and they loved, and then a $1500 letter of intent and we performed the work, and now they are working on writing a grant proposal and my business guy, who I respect because he is a former U.S. Marine, 20+ years experience, used to work on the top floors of the TransAmerica Pyramid etc etc., and I've been friends with him for nine years, has been insisting we do pro bono advisory for them on their grant proposal to "build relationship" and he tells me "there will be oh so much money rolling in if they win it." Me, I am not so sure. As a physicist, I view the future as a complete uncertainty, except for probabilities. There is no 100% guarantee they will win the grant, and as such, I feel it is important to, as a profit-making enterprise, charge money for their use of my Ph.D. education to advise them (it's a grant from the government to work on spacecraft). So we've been doing this for a couple of months now, and my business guy has not been charging me (he's a contractor to my little LLC) and so of course I've not been charging my client, but just last Friday, the CEO gets on the line for our tag up and brags to me about his new office he's opened up in Titusville, FL. And a further while back I heard from their CTO that they are constrained on budget but before that call, the CEO calls me up and tells me that he just won a $300,000 funding round. I also saw a LinkedIn post about how they just opened up a new mfg facility and the CTO had told me about how they have $92M in pre sales. They are even engaging with a vendor who, I presume, they are paying to help them write the grant. So where is the piece of the action for my company? My business guy says, "Provide them free services for now to 'build relationship' and 'make them like you' in hopes they will pay later. My thinking is, "They are going to get an inch and then take a mile." Call me naive, but as a PhD astrophysicist who worshipped Mr. Spock growing up, I am confused. I idolized Mr. Spock because, in my mind, he thought (mostly) that all humans were idiots and emotions were stupid (which I agreed with at 12 years old and my life since then has more or less confirmed). I also thought a bit about logic and thought, Mr. Spock knows what he is talking about. "If p, then q." Makes perfect sense to just think abou
The business world has this idea of the lagniappe[^]. Think of the free pens you can get at a business convention. These are usually small, cheap items that help to remind the customer of your business. In the art world, people always try to get free art by paying in "exposure" for the artist. Serious artists know that the "exposure" is never worth it and they should be paid fairly for their work. As a tech producer, you are in the business world, so giving away something like a pen might be worth it, but a complete product is not. Some people think software engineering is a form of art. If you agree, then you shouldn't ever give any of it away for free. In short, always get paid for your work. If you offer a fair price and a good product/service, then you have built the business relationship by being a trustworthy partner.
Bond Keep all things as simple as possible, but no simpler. -said someone, somewhere
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Am I being played for a sucka? I have this client, we met over LinkedIn last October, and my business guy (as a nerd, I am not that business savvy) advised me. They paid for a $1000 letter of intent for a task, which we did and they loved, and then a $1500 letter of intent and we performed the work, and now they are working on writing a grant proposal and my business guy, who I respect because he is a former U.S. Marine, 20+ years experience, used to work on the top floors of the TransAmerica Pyramid etc etc., and I've been friends with him for nine years, has been insisting we do pro bono advisory for them on their grant proposal to "build relationship" and he tells me "there will be oh so much money rolling in if they win it." Me, I am not so sure. As a physicist, I view the future as a complete uncertainty, except for probabilities. There is no 100% guarantee they will win the grant, and as such, I feel it is important to, as a profit-making enterprise, charge money for their use of my Ph.D. education to advise them (it's a grant from the government to work on spacecraft). So we've been doing this for a couple of months now, and my business guy has not been charging me (he's a contractor to my little LLC) and so of course I've not been charging my client, but just last Friday, the CEO gets on the line for our tag up and brags to me about his new office he's opened up in Titusville, FL. And a further while back I heard from their CTO that they are constrained on budget but before that call, the CEO calls me up and tells me that he just won a $300,000 funding round. I also saw a LinkedIn post about how they just opened up a new mfg facility and the CTO had told me about how they have $92M in pre sales. They are even engaging with a vendor who, I presume, they are paying to help them write the grant. So where is the piece of the action for my company? My business guy says, "Provide them free services for now to 'build relationship' and 'make them like you' in hopes they will pay later. My thinking is, "They are going to get an inch and then take a mile." Call me naive, but as a PhD astrophysicist who worshipped Mr. Spock growing up, I am confused. I idolized Mr. Spock because, in my mind, he thought (mostly) that all humans were idiots and emotions were stupid (which I agreed with at 12 years old and my life since then has more or less confirmed). I also thought a bit about logic and thought, Mr. Spock knows what he is talking about. "If p, then q." Makes perfect sense to just think abou
Your busines / time is only worth what you charge for it. To be very blunt, unless this client values your time to pay you something of value (1. Money, Distant #2 Stock) your time is better off pursuing clients that pay. Exposure is much better done via writing articles, speaking at conferences, etc. than hoping someone with demonstrable weak ethics will help you. If your business guy isn't advising this, have a conversation about strategy. Good luck should never be mistaken for good planning. What is your business guy's definition of success? Goals, metrics, etc.? Don't take this to say never throw a paying client a freebee. But only after you're well in the green. I've been doing this for over 40 years and made almost every mistake possible. Been there done that, what a waste of time. Just think of the time you are giving away as the actual money (that it is) coming out of your wallet. If that money coming out of your wallet isn't a good investment - don't spend it. Time=Money. Don't EVERY get hung up on sunk costs. Telling yourself, "but I already spent this time, a little more might pay off". That logic is what keeps casinos in business. This is all my experience and opinion and yes I am just a random internet person. But I damn sure wish someone smacked this into my head 40 years ago. Good Luck.
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dandy72 wrote:
when's the payoff?
From my calculations, around 2 years. If we can find other customers, that would be great, but I don't have a lot of faith in my sales person. We have team meetings at least every other week and so far, they seem impressed with the rate of progress and the final product.
"Go forth into the source" - Neal Morse "Hope is contagious"
Fair enough. Let me go hypothetical here. Say, a higher-up is not aware of this project and arbitrarily decides this is not an area they want to keep investing in. No amount of pleading makes any difference, the order came from "high up". What then, for you?
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Below is a quote from Warren Buffet. Right now, you are losing money. If your work is of value, then you should be paid for it. If they are not paying for it, they are not a customer they are a thief.
On making money.
"The first rule of an investment is don't lose (money). And the second rule of an investment is don't forget the first rule. And that's all the rules there are."Paul Harrington 2021 wrote:
"The first rule of an investment is don't lose (money). And the second rule of an investment is don't forget the first rule. And that's all the rules there are."
This would've simplified the Ferengi Rules of Acquisition(tm). This a programmer's site. No way this is too obscure a reference for most of us. :-)
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What they are doing with the rest of their funds isn't really relevant to your conversation. I'm not at all saying it isn't aggravating, but building a plant is different than consulting work, and would generally come from a different budget item; certainly capital vs expense. There are grant writers who get paid on a success basis contract, and they can vary wildly in terms. From a consultant point of view, it's a tough call. We've gone as far as building an MVP and successfully getting a contract from it, but my general thinking is the doable concept approach. It's a statement of what we'll do, not a recipe of how we'll do it. Don't give away the store. There's no generic answer and it's easy for us to go one way or another on principle, but only you can tell if you're being taken advantage of. I don't like the 12:01 AM line in the sand idea; it's better to talk it through with an explanation that time is your product, blah blah blah. See where that goes. We recently did a POC for a client that required complex approval from several other players. It worked, but we did not get the approval from other players for reasons having nothing to do with us or our client. As it started to go south, I discussed with the client some reasonable cost recovery and got agreement on it. But again, only you know the feasibility of that. But again, don't let your view be biased by other operations of the company.
MikeCO10 wrote:
What they are doing with the rest of their funds isn't really relevant to your conversation. I'm not at all saying it isn't aggravating, but building a plant is different than consulting work, and would generally come from a different budget item; certainly capital vs expense.
The simpleton in me wants to summarize this as "if you have money for X, then surely you have money for Y" (especially when Y is a tiny fraction of X). But I totally understand the idea of different budgets being allocated to different groups operating within the same company. Or even for companies making money hand over fist, but "not having something in the budget until next quarter" (or next year). I forget whether I had a point to make at all or not...
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But musicians do get exposure this way and for some it works out very well. A physicist doing tasks for a business? Not so much exposure there, unfortunately.
obeobe wrote:
But musicians do get exposure this way and for some it works out very well.
As a former professional musician with lots of professional musician friends and acquaintances here in Nashville and in NY and LA and a constant ear to the business I can tell you with 100% confidence that this "works out" so infrequently as to be statistically zero.
There are no solutions, only trade-offs.
- Thomas SowellA day can really slip by when you're deliberately avoiding what you're supposed to do.
- Calvin (Bill Watterson, Calvin & Hobbes) -
Fair enough. Let me go hypothetical here. Say, a higher-up is not aware of this project and arbitrarily decides this is not an area they want to keep investing in. No amount of pleading makes any difference, the order came from "high up". What then, for you?
dandy72 wrote:
What then, for you?
We presented to the higher-ups a few months ago. They liked it enough to give the go-ahead for the same project (mostly) at a 'sister facility' in the same state. That said, they will be on a monthly subscription starting in two months so technically, they can cancel at anytime if the software fails to deliver. If that happens, I'll be left with a highly customizable ordering/shipping/invoicing web application which their competitors may be interested in. :laugh:
"Go forth into the source" - Neal Morse "Hope is contagious"
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Am I being played for a sucka? I have this client, we met over LinkedIn last October, and my business guy (as a nerd, I am not that business savvy) advised me. They paid for a $1000 letter of intent for a task, which we did and they loved, and then a $1500 letter of intent and we performed the work, and now they are working on writing a grant proposal and my business guy, who I respect because he is a former U.S. Marine, 20+ years experience, used to work on the top floors of the TransAmerica Pyramid etc etc., and I've been friends with him for nine years, has been insisting we do pro bono advisory for them on their grant proposal to "build relationship" and he tells me "there will be oh so much money rolling in if they win it." Me, I am not so sure. As a physicist, I view the future as a complete uncertainty, except for probabilities. There is no 100% guarantee they will win the grant, and as such, I feel it is important to, as a profit-making enterprise, charge money for their use of my Ph.D. education to advise them (it's a grant from the government to work on spacecraft). So we've been doing this for a couple of months now, and my business guy has not been charging me (he's a contractor to my little LLC) and so of course I've not been charging my client, but just last Friday, the CEO gets on the line for our tag up and brags to me about his new office he's opened up in Titusville, FL. And a further while back I heard from their CTO that they are constrained on budget but before that call, the CEO calls me up and tells me that he just won a $300,000 funding round. I also saw a LinkedIn post about how they just opened up a new mfg facility and the CTO had told me about how they have $92M in pre sales. They are even engaging with a vendor who, I presume, they are paying to help them write the grant. So where is the piece of the action for my company? My business guy says, "Provide them free services for now to 'build relationship' and 'make them like you' in hopes they will pay later. My thinking is, "They are going to get an inch and then take a mile." Call me naive, but as a PhD astrophysicist who worshipped Mr. Spock growing up, I am confused. I idolized Mr. Spock because, in my mind, he thought (mostly) that all humans were idiots and emotions were stupid (which I agreed with at 12 years old and my life since then has more or less confirmed). I also thought a bit about logic and thought, Mr. Spock knows what he is talking about. "If p, then q." Makes perfect sense to just think abou
Very valuable replies here with years of insight My resume is not even close to yours except SP 4 U.S.Army and degree in Pharmacy Here is a little suggestion based on the concept "There is NO FREE Lunch in the world" UNLESS someone steals your Lunch So go to lunch and see who offers to pay Brian C Hart is not a free lunch he just happens to be polite
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dandy72 wrote:
What then, for you?
We presented to the higher-ups a few months ago. They liked it enough to give the go-ahead for the same project (mostly) at a 'sister facility' in the same state. That said, they will be on a monthly subscription starting in two months so technically, they can cancel at anytime if the software fails to deliver. If that happens, I'll be left with a highly customizable ordering/shipping/invoicing web application which their competitors may be interested in. :laugh:
"Go forth into the source" - Neal Morse "Hope is contagious"
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Am I being played for a sucka? I have this client, we met over LinkedIn last October, and my business guy (as a nerd, I am not that business savvy) advised me. They paid for a $1000 letter of intent for a task, which we did and they loved, and then a $1500 letter of intent and we performed the work, and now they are working on writing a grant proposal and my business guy, who I respect because he is a former U.S. Marine, 20+ years experience, used to work on the top floors of the TransAmerica Pyramid etc etc., and I've been friends with him for nine years, has been insisting we do pro bono advisory for them on their grant proposal to "build relationship" and he tells me "there will be oh so much money rolling in if they win it." Me, I am not so sure. As a physicist, I view the future as a complete uncertainty, except for probabilities. There is no 100% guarantee they will win the grant, and as such, I feel it is important to, as a profit-making enterprise, charge money for their use of my Ph.D. education to advise them (it's a grant from the government to work on spacecraft). So we've been doing this for a couple of months now, and my business guy has not been charging me (he's a contractor to my little LLC) and so of course I've not been charging my client, but just last Friday, the CEO gets on the line for our tag up and brags to me about his new office he's opened up in Titusville, FL. And a further while back I heard from their CTO that they are constrained on budget but before that call, the CEO calls me up and tells me that he just won a $300,000 funding round. I also saw a LinkedIn post about how they just opened up a new mfg facility and the CTO had told me about how they have $92M in pre sales. They are even engaging with a vendor who, I presume, they are paying to help them write the grant. So where is the piece of the action for my company? My business guy says, "Provide them free services for now to 'build relationship' and 'make them like you' in hopes they will pay later. My thinking is, "They are going to get an inch and then take a mile." Call me naive, but as a PhD astrophysicist who worshipped Mr. Spock growing up, I am confused. I idolized Mr. Spock because, in my mind, he thought (mostly) that all humans were idiots and emotions were stupid (which I agreed with at 12 years old and my life since then has more or less confirmed). I also thought a bit about logic and thought, Mr. Spock knows what he is talking about. "If p, then q." Makes perfect sense to just think abou
It depends on how replaceable you are. If your advice is generic, if any PhD in your field can give the same advice, then maybe you have to work for free now in order to maybe ride the gravy train later. If your client will have difficulty replacing your knowledge, and needs it to advance his business, then you can be more firm with him about payment. Since you aren't a regular employee working with them on a day-to-day basis, I suspect the situation may be closer to the former. It's clear that your client is already riding the gravy train. There are thousands of small businesses sucking hungrily at the government teat, particularly in the defense and aerospace industries. It's reasonable that you get a taste of this. One thing you can do is provide off-the-cuff, one sentence opinions for free, but suggest that a more careful analysis is called for, and ask him if he has money at this time for a study. There's a lot you can do to shape his response so that it makes you more money. Ask your business friend about how to do this.
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Musicians fight this all the time. "Play in my club! I can't/won't pay you, but the exposure will help you get future gigs!"
There are no solutions, only trade-offs.
- Thomas SowellA day can really slip by when you're deliberately avoiding what you're supposed to do.
- Calvin (Bill Watterson, Calvin & Hobbes)Experienced musicians add "You can die from exposure." I'm a very part-time paid musician -- kind of past that phase -- but I have a couple of regular paying audio recording gigs. Kevin
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Am I being played for a sucka? I have this client, we met over LinkedIn last October, and my business guy (as a nerd, I am not that business savvy) advised me. They paid for a $1000 letter of intent for a task, which we did and they loved, and then a $1500 letter of intent and we performed the work, and now they are working on writing a grant proposal and my business guy, who I respect because he is a former U.S. Marine, 20+ years experience, used to work on the top floors of the TransAmerica Pyramid etc etc., and I've been friends with him for nine years, has been insisting we do pro bono advisory for them on their grant proposal to "build relationship" and he tells me "there will be oh so much money rolling in if they win it." Me, I am not so sure. As a physicist, I view the future as a complete uncertainty, except for probabilities. There is no 100% guarantee they will win the grant, and as such, I feel it is important to, as a profit-making enterprise, charge money for their use of my Ph.D. education to advise them (it's a grant from the government to work on spacecraft). So we've been doing this for a couple of months now, and my business guy has not been charging me (he's a contractor to my little LLC) and so of course I've not been charging my client, but just last Friday, the CEO gets on the line for our tag up and brags to me about his new office he's opened up in Titusville, FL. And a further while back I heard from their CTO that they are constrained on budget but before that call, the CEO calls me up and tells me that he just won a $300,000 funding round. I also saw a LinkedIn post about how they just opened up a new mfg facility and the CTO had told me about how they have $92M in pre sales. They are even engaging with a vendor who, I presume, they are paying to help them write the grant. So where is the piece of the action for my company? My business guy says, "Provide them free services for now to 'build relationship' and 'make them like you' in hopes they will pay later. My thinking is, "They are going to get an inch and then take a mile." Call me naive, but as a PhD astrophysicist who worshipped Mr. Spock growing up, I am confused. I idolized Mr. Spock because, in my mind, he thought (mostly) that all humans were idiots and emotions were stupid (which I agreed with at 12 years old and my life since then has more or less confirmed). I also thought a bit about logic and thought, Mr. Spock knows what he is talking about. "If p, then q." Makes perfect sense to just think abou
what other's have said. I've been consulting for nearly 25 years. The first rule of consulting or in business for that matter is not being afraid to ask for money. I can guarantee you the client had to pay the people who built the new office. Your problem is your co-worker - set up the rules and live by them. Sure, there can be some slack. However, there needs to be a hard line between being flexible and being so flexible you go bankrupt. oh, stay off linkedin. Cesspool. my personal opinion.
Charlie Gilley “They who can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.” BF, 1759 Has never been more appropriate.
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Experienced musicians add "You can die from exposure." I'm a very part-time paid musician -- kind of past that phase -- but I have a couple of regular paying audio recording gigs. Kevin
