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Mr. DeSabado, why don’t you work with third-party agencies slash white labelers slash recruitment services that connect Companies, businesses or startups with us as consultants.

Same.

I’ve worked with three startups in the past and I haven’t had like the canonical negative experience of working with a startup, but what I have had is a group of decision makers in a room who don’t know what they’re deciding on because they don’t really have a solid business plan. And so, my aversion to working with startups is more: well, do you have a durable business model? Do you have, like, it might be a new business model, you might be a new company, but is there logic behind it? And I’ve become very gun-shy of working with, like, we’re a brand new company. We’re really looking to get out there. And I’m like, well, have you figured out like all the things that need to happen? It’s sort of like somebody getting married three weeks into a relationship. Like, yes, you can do that. You probably should live together first. I only want to work with people who have some experience, who have some durability to their business.

It’s an established business. There’s such, just a rabbit hole for a second. There’s such. Such coding around the word startup. Like we use startup to mean like Twilio. Startup does IP uh IPO, makes millions of dollars. Well Are they really a startup? IPO’d. Right? But still, like, it gets referred. It’s so weird. But, like, a startup could be like me and two friends in my garage hacking on something. Okay, that’s a startup. You’re in your first year of business in the tech industry. Okay, that’s a startup. You’ve raised your third round of venture capital. I really don’t think we could call it a startup anymore.

Recruitment oh, I love attacking recruitment services. Give me a pitchfork.

Burned from the face of the earth. They serve no floated on a raft down Lake Michigan. No function, no value add. I’m so angry at recruitment services as a I’ve never seen you. You’re the angry one today. This is good. Very angry about it. I mean, I’ve had so many friends work with recruitment services. I’ve had so many Types of companies try to play recruitment matchmaker for myself or friends. It never adds value to the company. It never adds value to me as a business owner. The whole incentive for a recruitment agency is to Like, paint this horse so it looks good to sell it to this person who’s not good at inspecting horses and then run away with the cash. Oh, you know, Ruby, great. We’ll sell you as a Ruby developer and then flee with the money. Like, I dislike recruiters. I know there’s good ones out there. If you’re a good recruiter, email me. I’d love to have a conversation with you about how to not be a shitty recruiter, but the industry is just evil.

For me, it comes down to something you actually said a while ago, years, years ago, when I was talking to you about why did you roll your own payment system? And you had said something for Yeah, you know where I’m going with this. You want to be as close to the money as possible. You don’t want anybody to control part of that tech stack, and suddenly it goes out of business and you’re like, sorry, I can’t take money from you, dear customer, because. Gumroad went out of business, or this obscure plug-in I use is no longer supported. You’ve spent time to write your own. So There was no interruptions. There were no problems. And even then, like, what was it? Mantro went out of business temporarily or was folded into MailChimp. They turned weird. They turned weird. They got weird. But my dislike of working with third-party agencies, matchmaking services, upwork style job boards, white labelers. I don’t want another business to be between me and the decision maker and me and the client. And the more layers we add there, the harder communication will be. We’re playing a terrible game of telephone that costs hundreds of dollars an hour. And the harder the project will be to ship because I’m doing A, telling it to a person, who tells it to a person, who presents it to a person, they give feedback. And again, it’s the horrible game of telephone. Nothing positive can be accomplished there. I mean, I can’t remember the last time I’ve worked through a third party or white labeled my services. I did for a while. But now, when I do it, I always present it as we’re just going to do the handoff and I’m going to do the thing. And like, we could do the song and dance where I pretend to be your employee if that makes you feel better or makes a client feel better. I work directly with them because I’m the one who’s providing the service. I’m the one who’s going to understand their problem. No games of telephone.

Thank you.

No, I completely agree. I think there’s. I think there’s ways to make it work right as an arrangement. I’m very bullish on referral strategies. Alan Weiss’s Million Dollar Referrals is a book I’d recommend to anybody who’s like Asking the question of how do I get people referring business into me? I’ve been teaching students how to do referral outreach to get connected to decision makers to work with. So There are ways to work with third-party agencies or outside people, but the standard way I think it’s presented is: we’d love to white label your service and have it on our site, and we’ll just pass the people over to you, or we’ll charge a Finder’s fee and connect them with you, and you get the lead after you pay the finder’s fee. It’s broken and doesn’t really work. I’ve seen sort of like the kickback or percentage model work in a couple rare cases, but It’s hard. I’ve had friends who’ve gone down the path of, like, oh, I agree to pay 10% to this third party when they refer leads to me and the leads become a client. And it works great. These get referred in, but then they always run into that discussion of like, well, they signed on for a second project, and our verbal agreement didn’t specify whether the percentage was for the first or everything. And it just goes pear-shaped immediately. Like, It’s a really complicated game to play. I found the best way to win is just to focus on, hey, you could refer people to me. That’s wonderful. And if they turn into a profitable client engagement, I’m going to send you something as a thank you. And, you know, I’ve sent people really nice bottles of scotch, gift baskets, bottles of Oregon wine. I’d much rather do that and have people do that to me in return. Then try to figure out, like, okay, you’re a third-party agency, I’m white labeled, I’m on your site. Well, now, and we haven’t even gotten to the concept of now you as a third-party agency are marketing my services, but are you marketing it the way I intend to market it? Such dissonance can occur.

True, right? True. Yeah. I guess there is that risk in positioning, and I think that’s why. We both advocate with positioning, not to position yourself as like, I’m really good at swinging this one brand of hammer. It’s, I’m really good at building a deck. I’m really good at A-B testing. I’m really good at helping your e-commerce store make more money. We might. Have our marketing focus on a specific tool, I use Optimizely. I focus on Shopify. But that doesn’t, I think that doesn’t. Hamper us in the full way, and it lets us pivot and change. So, if Shopify is bought by Google and becomes evil overnight, he could say, Hey, you know what? Search, find, and replace. I’m Magento now. Great. I help Magento e-commerce stores. I use this framework instead of that framework. So there are ways to do that.

You know, but you made a rare really interesting point about the certifications that changed my way of thinking. I always thought of them as just bullshit. Like this is a money grab on the company’s part that preys on The fear a consultant will have that a client won’t hire them. So, hey, I have a certification. They’ll probably trust me more now. I’ve never once heard a client A, ask me if I’m certified at anything. Or B, mention that they hired another consultant because they had certification X, Y and Z. I’m sure it plays well in like enterprise land. Like, oh, you’re a Microsoft certified partner in these six things. Yes, we will hire you as a consultant. But in the fields we play in, I never really saw value in it. But to your point, if you are niching down on a specific tool, getting certified in that tool, I’m Infusionsoft certified, I’m an Infusionsoft partner, I only work with Infusionsoft clients. Can play well, but there is the risk that we mentioned.

I 100% agree. I think any opportunity you have to build a relationship with. The team or the providers behind a tool you use in your practice, and have them endorse you and recommend you separate from a certification. Is incredibly valuable. Like I use the tool quickmail. io for a lot of the outreach campaigns I work on. And I just discovered that they actually have a services page where they list nine or so providers who do outreach marketing. They’re like, these are folks we trust. And I’m like, huh. A, that would be a nice link to have. B, that’s the type of third-party endorsement that is valuable. The provider saying, like, These are the people that we endorse and recommend. Click through, go work with them. Not apply through our site, we’ll pass it off, and a whole convoluted lead system. But these are trusted people.

I’m going to take this in a weird direction, but I think it makes sense.

Excellent. What we’re really talking about here is sort of a top and a bottom of the relationship.

Yeah, and I think there’s a huge mental shift that a consultant or a business owner needs to go through where they’re subservient to a third party, a recruiter, a white labeler, whatever it be. Or they’re acting as an equal, or they’re acting as the dominant one and saying, Sure, I’m happy if you refer people to me. End of sentence. I’ll send you a bottle of wine. Thank you so much. And it’s a mental shift to value yourself as a scarce resource and realize that there is an abundance. Abundant array of opportunities out there, and that you don’t need to go chasing after a certification, or work with a recruiter, or work with an agency, or white label your services to get those leads. Those might be good tactics to use in the short term. When I switched over and started consulting full-time, I was on a job board, Elto. com, before they got acquired by GoDaddy. I white-labeled some of my services and got some clients through there. I worked with a couple of recruitment services to see if they could generate leads for me. All of those did provide leads and that put cash in my pocket, but they were bad client relationships. They were not the ideal relationship. And I sort of went through the fire by experiencing it and seeing, oh, the quality of the client that goes through this type of agency or gets referred to me. Not that good, not that good of a relationship, not that happy. And it made me more aware of how I want to value myself as a business owner to not get sucked into those opportunities. Again, I’m approached every month by somebody who’s like, We have a job board. It’s very exclusive. We’d love to feature you there. And with the exception of my friend Robert Williams, who runs Workshop, I am very, very, very anti-job board and very anti-that as a means for us to market ourselves as consultants. And so, eh, yeah, mixed feelings.

It could work in a rare, rare, rare situation. You’re starting out, you need a quick infusion of cash. You are, I mean, Here’s the problem.

I’d say, like. I could imagine a consultant jumping onto a job board as a means to generate leads if they just want to focus on their discipline, if they’re traveling a lot, don’t have a lot of energy to spend on lead generation, and they’re willing to put up with the sacrifice and quality that you experience by working on a job board. I have a lot of people who’ve hit six figures annually with clients they’ve gotten exclusively through job boards, but that seems like you’re hampering yourself. You would have Done better by establishing your own brand. What happens when the job board starts charging more money as we just saw with Upwork? Like there’s so many contingencies. And again, you’re putting an intermediary between you and the client, even when it’s just payment. it’s going to cause a bad time. It’s not going to be as enjoyable a relationship as it could have been had it been a direct relationship between you and that client.

So, Kai, how do you get leads? I’d say, I mean, working in the W Freelancing Academy, we’ll talk about this more in a future episode, but. I’ve been working with Brendan on this product to help consultants get more leads for their business. And the things we’ve seen work time and time again have strong positioning. So understand who you’re working for, the problem you’re solving, and how you’re helping their business grow. Understand the exact problems that they face as a business owner. Oh, I’m going to work with e-commerce clients. Great. What three problems do e-commerce clients have that fit into your discipline? Now go make an offering for those things. Now, the challenge is getting in front of those people. Where do they congregate online? Where are their groups of these people? What podcasts do they listen to? What articles do they write? How do you get in front of these people through outreach or through inbound marketing channels? But it all comes back to having strong positioning and having a strong, concrete understanding of the problems the people you’re targeting under or experience as business owners. So many times I’ve seen people go from like, hey, my business is scraping by, making like $40,000 to $50,000 a year. It’s okay. At least I’m independent to, I just broke $100,000 a year. Four months into this, all I did was update my positioning and actually start understanding the problems people hire me to solve. Which doesn’t fully get at like how do you get the leads coming in, but Before we start driving traffic into this business machine, we need to have these components in place. You need to know your positioning and you need to know the expensive problems you solve. Without those two, you do not have a functional business.

There are a lot of Trello to AWS migrations going on. So it’s a niche industry. I don’t believe it’s that niche. I love you.

But you get the idea.

Same. Same for my company. I mean, the inflection point between I’m making $50,000, $60,000 a year and I broke $100,000 a year was I’m showing up. And getting in front of audiences and just saying, like, hey, let’s talk about why and what of this thing. We don’t need to get into the how. It’s easy for us to default to the how because it’s what we do. You could talk about how to do A-B testing forever. I could talk about how to do outreach forever. But nobody cares about how we swing the hammer. They care about why we need to replace the deck. What will it mean to replace the deck? And once they agree on that, they don’t care how we replace the deck, how we solve this problem. But it’s through educating on the why and what that people become convinced: like, oh, this is an issue. Oh, this person was able to speak about this issue and explain it to me in a clear way for an hour. Wow, we should work together. I should talk with them more. So, education, yes, it plays a key, key, key part.