By Adewale Adedamola
Hey wassup
[First of all, the context and content of these post preaches the “what works for you” thingy, and I am not fighting with you if you don’t agree]
[Secondly, this is an observation that breed a discussion of test of economics]
SO,
I made a very controversial tweet since yesterday, about earning high as designers.
I wanted to see how economics of numbers works.
https://twitter.com/moski____/status/1285568724771262464?s=20
Fortunately for me, My trainer always rant about How high i need to charge when i started learning design, So i literally grew up in a business oriented environment (I actually charge higher than you think) but I notice at some point, he would end up working for the small fees no matter how much he ranted (no, it doesn't have to be that he was desperate for money), It was all about portfolio then. Buh thats not the point, I learn from watching people a lot. Like, working among crypto folks and closely among business owners.
Lets just drive straight into what i think [my perspective]
I believe in numbers. I’m driven by affecting so many users using what i did and having a taste of my product. So this is one of those things that could differ us. I love a selling products that makes everyone happy, don’t forget i say everyone cause thats the focus. Apart from personal drives and all, its important that we think like business men.
We see successful businessmen or products like the Jeff, Mark, Google and the likes, sell products or services for less or almost free [maybe to acquire numbers for the first 10years].
Till now, nobody knows how Whatsapp generate income, [until they introduced whatsapp business (that charges businesses for slow replies)], whatsapp model is like this: “If we, the users are not paying for the Product or the Service; We are the Product”.
Lets go slowly, since the global pandemic, my eyes open up to some many things; like, drop in dollar value, inflation, companies laying off their workers, Dangote loosing so much money in a day, Zoom making so much of about $328 million in revenue during its February–April quarter.
I realised, whilst everybody went hungry, so many small scalers went big; lets mention the face mask industries and tissue paper for example. I can assume banks recorded more revenue when the went from N52 charge for online transfer to N10 charge per transfer for as low as NGN 5,000.
While all these where happening, I started seeing customers/clients more of products than targets. Something to nurture.
If you understand how Business works, Value is a core part of it. There is nothing like “value vs volume”, Value is an independent characteristics of a successful business itself. Volume is another. Volumes bring longevity and limitless opportunities. If i have a million followers for a particular product, I can sell 5 more products to the same people.
When Whatsapp was sold to Mark, it was sold at $11billion ($73 billion as of now without even monetising it), a total worth of Lamborghini as of today.
Yesterday, Elon Musk became the 5th richest man on earth, when he was asked how he felt, he said: “…what really matters is making great products that people love.”
When i started to act as a professional designer, I counted the amount of “Wack” logos i did in a year, and it was around 100 (I remember celebrating it). I had so many referrals, I was stretched, this is why I say, clients contribute to your growth and self development.
I can categorically say that, You can’t be good in some kinda niche or even exposed to any until a client comes to give you a Job on it. Like Blockchain for example, I knew how Crypto Wallet works, i designed pitch (far ahead of what designers are exposed to), paperworks, finding funds, investors, negotiations and so many other making-a-product-work ish.
Apparently, especially as designers, a good service worth a lot already, you cant overly emphasise this. We are meant to carry this energy of ranting about how low clients pay us to delivering quality services/product. Clients will offer to pay less if the impact of design produce doesn't have its own voice in our community.
When i launched motivv.co, I heard someone talk about the rating some designers got, and how he wasn’t satisfied with it. Of course, rating designers was the combination of even the display name, job headline, then portfolio. You can be that good, but your approach is not professional. As usual, clients complain about these core things among Nigerian Designers/Developers with the way we handle project badly vs how much we charge.
Furthermore, when it was time to include how much designer charge vs the portfolio they submit, a measure of creativity and skill, it wasn't balanced. You are not very great, but you charge highly because that what people say it should be.
Excuses Designers give as a excuse of low quality output includes:
- More Money will solve Burn Out.
- More Money means less reviews.
- Charging High shows its actually a serious deal.
- Clients that pays less stress more.
and then, we completely ignore a fact that every clients deserves good service, whether it was voluntary, free, low paying, high paying, whosoever. Money shouldn’t be the first element/drive for creativity to work.
100 clients, paying 10k vs 10 clients paying 100k.
Apparently, I already engaged with conversations on this with some many minds, this has been my defence/opinion:
- People are your net-worth
Its not new that they say, the more people you know, the more access you have, whether its now or later.
2. Complexity
If I work for 1 client per day, and I earn N10k everyday, in the space of 100 days in less than 2hours due to less complexity in work. There’ll be time, there is space to do more in a single day (I just eradicated the burn out excuse).
However, we can agree that, a design worth of 100k, is more complex, whilst, taking 3days or more to conclude.
3. Survival
In the context of “people who charge less are desperate and broke” I will consider myself broke, if i earn 100k today (which i usually do speaking for myself in this context) and burn out the money within a week (which its very true). I wont say I am broke, if I earn 10k daily in the next 10days — your definition of being broke can be different.
Charging 10k doesn't mean you are broke at all, sometimes, it can be strategic, or relates to a particular season. Like the cases of flash sales/promo.
4. Short Term vs Long Term
Kevin Systrom and Mike Krieger sold instagram to Mark Zuckerberg at — $1bn.
Instagram now worth $100 billion.
5. Wider Reach
There is a mentality that needs to be corrected about how referral works.
Good design does the work for you, far much more than a client. It is true that category of clients can bring their same type, more or even less.
6. People buy influence
7. Passive income
I remember when one of my bosses, convince me to sell my course for $25, an initially worth of $100, [like i said, I could charge way more, you can ask around, this context is for you, if you are struggling in the first 6months — 1year of your career]. When will launched and rolled out the course, more than 100 people bought it, in a very small space of time. The same course I have struggled to sell at $100 on my own.
This little income, solves 90% of my daily live problem. When i earn 500k, I tend to finish it on a high budget, like gadgets. I might not even be able to eat in one day, completed N0, I’m sure some of us can relate.
Passive income gave me comfort during hard times, and when its time for my monthly statements, i see how this small small monies pill up to big time 6 digits.
You’ll never know how much food, data and transport cost if you dont think this way.
8. Scaling
Speaking from experience, you can scale from 5digits, to 6, then to 7 within 4months if you have the right numbers. Seconding, 10k clients doesn't mean they are broke, it doesn't mean they cant afford 100k, you don’t belittle the power of value and trust.
I can charge 10k now, and charge 100k for another product during the business talk. What i normally ask my students to do when considering their pricing formula is to be affordable for everyone.
Call it “Basic Plan” “Pro plan” and “Premium”
Or “Bronze” “Silver” and “Gold”
That works.
If you go all Pro, You have a chance of loosing clients faster, conversation becomes slimmer and that ain’t the way Business Men think.
As a good business man, every deal (that is fair) needs to click. Every call needs to convert.
9. Expansion
Another excuse of designer are burn out and not having time for themselves. Well, I am an example of a person that get a call everyday on design jobs, and i can tell you, its exhausting true, but it has made me innovative.
During my first year in design business, I told you, I had so many contacts, I branded almost 300people, logos, fliers, branding, you name it.
When I was getting worn out, I bred the idea of Aorthar, a design agency. Now it has more than 10 staffs, designers, developers, contents writers, motion designers. When it was time to rest and take breaks, I can pull that off while my firm runs auto pilot.
When the crowd increases, that is the time to expand. You’ll learn whatever you want to learn, increase in speed, and creativity from this.
10. Deflation
When the COVID — 19 pandemic started, guess who was still asking for my services? 10 clients or 100 clients [lets assume you have this two set of clients at hand] Some of the businesses might still be able to keep up with the current price you charge, some will have to beg for discount.
Just like the way Access Bank laid off their 75% staffs during the pandemic, I realise you loose more when you earn more.
11. Economics of scale
What Are Economies of Scale? (Since I am an Agriculture economics grad)
Economies of scale are cost advantages reaped by companies when production becomes efficient. Companies can achieve economies of scale by increasing production and lowering costs.
What this means is, you are actually a Big firm if you cover more grounds.
According to the SBA, some manufacturing companies can have up to 1,500 employees and still be determined to be small businesses. In mining, large businesses are those that have 500 or more employees. Employees aren’t products by the way, they are results of user counts.
In Agriculture, Small scale farmers are the reason behind the low revenue turn over in a nation’s Gross Domestic Product (GDP) due to bad accessibility to good roads and other infrastructure.
12. Law of demand and supply
The law of demand focuses on those unlimited wants. Naturally, people prioritise more urgent wants (lets say Graphic Design is a good example of it) and needs over less urgent ones (like Software Dev or UI/UX) in their economic behavior, and this carries over into how people choose among the limited means available to them.
What this means if, if you charge high, people can choose to walk away if they have no option because of the limited means available to them.
This doesn't mean that, you have to say YES every bad pay to your table, it means, if you are the other end of desperation, hunger will make you loose more when it is time to compromise (law of supply).
13. Competitive advantages
Those opinions are just more controversial, when it comes to numbers. Like a colleague and a teacher said, Quantity vs Quality, do what works for you.
However, I’d love to encourage you that, as much as money is important, treat your skill as a problem solver. Do not overrate short term big money and underrate long term players.
Charge well of course, be very flexible and strategic too.
Don’t forget , Money doesn’t always buy everything.
Gracias.
