Episode 78:Whale Clients
In this episode, Nick and Kai discuss how to manage your business when you have a whale client. What should you do? How do you future proof your business?
Summary
Nick and Kai cover whale clients, consultants who end up with one client consuming the majority of their time and income. They work through the dependency trap, the boiling frog problem of slow over-reliance, and the practical steps to stay solvent and visible if that client walks.
Highlights
- Kai has reversed his earlier position that taking a day job after a whale client ends is giving up. He now frames it as one chapter in a 10–20 year business story, not a failure state.
- Kai lost three-quarters of his client roster when an early startup whale ended, that relationship had consumed 75% of his time and he hadn’t built the rest of the pipeline.
- Nick currently has a whale client situation and manages the risk by treating that income as gravy, keeping a 6–7 month runway separate from it. His rule: if that person fires him tomorrow, he is still okay.
- Nick recommends a 5-minute quarterly journal check: list every client and what share of your time each takes. Seven clients at one-seventh each is the stated goal.
- Nick’s standing monthly minimum is three podcast appearances, one guest blog post, and one new small offering. The point is staying visible even when a whale has most of your working headspace.
- Kai recommends blocking 4–8 hours a week for business activities during a whale engagement, publishing small things, guesting on podcasts, doing webinars, citing Robin Sloan’s ‘stock and flow’ essay as the model.
- Kai argues the financial stability of a whale client is good cover for risky moves like repositioning. You are not desperate for new sales, so you can test a new angle and see if it catches.
Read the transcript
Kai, what are we talking about today?
I have no clue.
You know, I just spent 20 minutes fixing the microphone, and now, and now here we are. What?
This is really good tea. It’s disgusting. Do you have thoughts on the history of tea?
We already did that episode. I think it alienated all of our listeners.
I had people right in saying they appreciated the episode.
They appreciated the episode. A couple people emailed me. Me about coffee, and like they had more detailed questions about coffee. And I was just like, game recognize, game, man. It was very satisfying. It’s very satisfying.
Kelly didn’t delete those emails.
Um well, I think she forwarded them to me. Ah, she broke protocol.
We tell uh, I mean, if you have any questions, any opinions, any thoughts whatsoever about the show Email office at draft. nu and Kelly. Nix Assistant will promptly delete your message. We’ve had zero complaints about this so far. The system works perfectly. She burke protocol.
I think Even if there were complaints, she would just delete the complaints, wouldn’t she? Exactly. Right. Yes. Yeah. Okay, great. That’s, yeah, that’s the joke. Well, okay, so here’s a topic that I was thinking about recently. Like, what are all, we’ve talked a lot about product ladders. We’ve talked a lot about positioning. What are all the Things that are in the back of our heads that we haven’t been talking about lately. Right? My big one, and we talked about this for like 15 Minutes wants is whale clients. Like, we never did a whole episode on whale clients.
That’s a good topic. That’s a good topic. It’s a risk, I mean, it’s risky for Consultants that go for a whale client. This dovetails nicely with a. Let me share this as an aside first and let’s go deep on whale clients. Deep on whale clients. Okay. I’ve talked with a number of consultants and freelancers lately who have shared a situation of my business isn’t doing as well as I thought it would. I had a whale client, the whale client let me go. Financially, I have a small, I have a decent runway, but It feels easier to get a job and work a jobby job for a year. And I’m not sure I feel like that’s giving up. I did a lot of thinking around this, and I actually have reversed one of my earlier beliefs. And I say, there’s really no major difference between. Having a client say, like, I value your time so much, I want to buy up all of it for the next six months. I want to, I need you mono for my consulting, whale client style. And getting a day job. And if you, as a consultant, are in the position where, hey, you know, I lost my whale client, I lost a $10,000, $20,000, $100,000 I expected. Shit, I have to pay the mortgage. There’s no problem with like the 10-year story of you as a consultant involving. And for a year, I got the job and learned more skills and networked and built it up on the side. So, as an aside, as we get into whale clients. I just wanted to say for listeners in the audience that ever are facing that choice of do I get the day job, do I not? It feels like giving up, don’t think about it in terms of giving up. Think about it as I’m telling a 10, a 20 year story of being a business owner and working in a field here. Maybe this is the point in the story where then I got the day job and loved it. And in four years, I was a partner at the company. And we don’t know where that story is going to go. So. Embrace it and accept it, and there’s nothing wrong with it.
Yeah, I mean, a whale client is ultimately a sign that somebody likes your work enough that they want to buy you out, which is like not a bad thing at all like it’s actually tremendously powerful thing to be having so like that’s something that That I think people ignore. Another thing, like I live in Chicago, and we have a lot of ad agencies here, and they’re like big-deal ad agencies like Ogilvy. Burnett and Hervidor Vederf. They all operate with freelancers on a full-time basis. There’s no such thing as doing anything but buying you out from 9 a. m. to 5 p. m. And so I know a lot of people that have been freelance for a really long period of time who probably have listened to Make Money Online shaking their head in dismay at me. at the fact that they’ve been effectively freelance, and the only difference is that they’re paying for their own health insurance and they’re paying for their own 401k. and they have to negotiate a rate that’s effective. But other than that, they’re operating at 100% utilization. They never have to do content marketing because they’re in a relationships-based city, and so the reputation is the only thing that matters. And that is honestly kind of enviably comfortable.
It is. It’s a comfortable position. I mean, having a wheel client or having a day job, there are benefits to it. And there are upsides to it. It removes a lot of the feast, fam, and roller cycle. If you have that whale client who’s bought you out for six months, or if you have a day job, well. The famine cycle is, oh, we’re letting you go. It’s not, oh shit, I didn’t book enough work or somebody canceled. Like, there are downsides, but it’s not a problem.
The famine cycle is your industry collapsing. Fair. Right? It’s like if you did only HTML development in 2010 and all of a sudden SquareP has. Squarespace occurred. And so then you, you know, everybody is just making crappy standard Squarespace template sites and you’re out of a job. Like, or you did Flash in 2007. Okay, well, now you have to learn a new line of work and establish a different business positioning.
We’re iOS in 2017.
Oh, God, where to begin?
But no, so will clients. There’s something that has happened to me. I mean, at multiple times, I’ve had a wheel client who’s either 100% of my time or a very much a primary, a supermajority, 70% plus of my time. When I started consulting, I connected with a startup who essentially bought out three-quarters of my time because they needed somebody who could speak both marketing and tech. And it was a great long-term relationship. And it helped me get my feet under me as a consultant and have sort of a safer long-term relationship. Downside was, when that relationship ended, I lost three-quarters of my client roster.
Right. Yeah, and I’m in a situation right now where I have technically two different draft revised clients, but they’re run by the same guy, right? So effectively, I have a whale client. And I’ve gone ranting about whale clients in the past and how they’re a bad idea and etc. , etc. , etc. I feel pretty okay with this.
I think it’s a bad idea if you don’t go into it intentionally or with a strategy.
Right. And I’m going into it also. I treat all of this person’s income as gravy income on the business. The problem is not having a client where it’s a third of your business or more. The problem is having a client that you come to rely on. And not being able to establish an effective runway that allows you to gain true independence. So if this person fires me tomorrow, God forbid I love you, please don’t do that. I’m still okay. I have a good six or seven month runway because I see so many agencies die because they lost their biggest client. I’ve been in situations where I’ve gotten laid off. Because they lost their biggest client, and that was the thing that I was working on, and it was the thing that got my bread and butter.
I had the exact same thing happen with a friend. Opened at agency, landed a client. Clyde essentially bought up his entire team’s time for forever. And then the client went out of business, and Buddy was unfortunately living sort of hand-to-agency mouth. They did not have a runway and Well, we don’t have time to sort of acquire new clients, so I guess we’re shutting down. And it sucks. Yeah. Yeah.
Or they choose not to, right? Like, there’s giving up takes a lot of forms. Right? You could just be like, you know what, I’m exhausted and I don’t want to do this anymore And then you close up shop and fifty people are out of a gig. That happened in my career like and it was not me doing it, it was somebody else horrible doing it and they moved to South Carolina and I’ve never seen them since because they’re in South Carolina, the Indiana of the South.
Truly one of the two best Carolinas. Yeah, as well.
So, you know, there’s, I think the takeaway for all of this, or one of the key ones, is. Recognize what you’re getting yourself into, and also recognize that there’s kind of a boiling frog problem. And also, recognize that what looks on the face of it like somebody loving you and your work can potentially backfire against you in the future. And nobody has any reason or right to give a shit about it.
I’d say when it comes to whale clients, one thing to keep in mind is that you as the consultant Are the person who is, at the end of the day, saying yes or no to somebody wanting to pay you more money for your time? If you have a client and they come to you and they say, We love working with you, we want to work with you more, we want to give you more money, we want more of your time. You were able to say no. You’re able to say no, just flat out no, or no, because I don’t want to have too large of a client with you, or no, I don’t have time, or no, I have other projects. What happens if you’re legitimately booked and somebody wants more time?
Right? Yeah. I mean, I’m booked solid right now. If this one whale client wants more of my time, he actually cannot have it. You know, there’s no way for that to happen other than me firing my other clients that I have a great relationship with. Don’t do that. Don’t become this place incorporated. Right? Like, that’s not healthy or reasonable.
Or you overwork yourself, in which case, we’ve talked about that before, it goes against the principle of self-care.
Right, right. I mean, then you run into a situation where you’re going to burn yourself out, and I’m not here to help you burn out, man. That is not the goal of this podcast. So yeah, there’s one thing that I recommend that’s another tactical thing you should be taking stock of. Every three months, vet how much of your time each of your clients is taking up. And this is five minutes in a journal. Take the moment to focus on that and say, okay, I have seven clients right now, and each one of them is taking up one-seventh of my time. That is amazing. You succeeded at this podcast. Congratulations. Close this tab and salt the earth.
And if you’re a listener who has other revenue streams like coaching or products or anything. Yeah, count those as you like, either one stream or multiple streams. I’m getting to the point where I count each of my books or products as a separate revenue stream. Early on, I rolled it all up into one non-consulting, non-coaching revenue column. Definitely adapt this to the structure of your own business, how you are earning income.
So, one thing that I do that I recommend to everybody: I have two different solver files, and you can use whatever Kalka does this. You can make a spreadsheet, do whatever you need. And one of them is all of the expenses that I have on a monthly basis. And by that, I mean I take all of my annual expenses and divide by 12. I take all of my, you know, and this goes even as far as me renewing my passport every ten years. I have the cost of that divided by 120 months. I do all of this. And so when draft I say draft is in the black, that means it is higher than the sum total of all of the expenses that I can possibly think of. that are not one off expenses like buying a house or adopting a dog.
We’re drifting a bit to like best practices for financial management, which I think would make it a perfect episode. But circling back to whale clients and how they impact on a business, What strategies do you use, still still staying on the financial management thread, what strategies do you recommend or do you personally use to Soften the blow if you take on a whale client and then the whale client leaves and you haven’t necessarily been marketing. What would you advise?
Well, the goal is to Build a system where you are constantly marketing. I have a saying in draft where I replace me with Kelly and Kelly with a robot. The goal is that, you know.
The robot deletes the messages.
The robot deletes the messages. No, but the robot sends out the drip campaign. The robot automates my presence online. And So hopefully you’ve done a lot of work around this to try and publish as smartly as humanly possible and continue engaging with people, even though it looks like you are It looks like you’re engaging with people, but in reality, you’re working for this whale client because you don’t have the headspace. The real goal is make the headspace. Let no client get 100% and spend the other 20% at least 25% of your time working on your business.
Right. And I’d even say, slightly disagreeing there. If you do take on a whale client, if you do end up with that one client who is consuming a majority of your time, do or all of your time, try to reserve four to eight hours a week. For specific work on business activities. So publishing things, launching tiny things, just small, there’s that wonderful essay by Robin Sloan on stock and flow. Publishing small fixes, small things that build up your reputation in the community. Doing webinars, guesting on podcasts, things that get your name out there. So If and when that whale client project does end, you haven’t sort of disappeared into the back cave for four, eight, twelve months. You’ve been active out there, and now it’s, hey, I have a slot opening in a month. Reach out if you want to get in touch. Here are the cool things I’ve been working on.
Yeah, so I have a rule with myself, which is three podcasts, one guest blog post, and one new tiny offering a month into perpetuity. And the latter is new if you’ve been following my work, but it’s something. I write a marketing page. I spin up something that’s like a checklist or toolkit or a set of interviews or something like that, right? Like I’m already I’m reusing my own sawdust, so to speak. And we talked about that in a previous episode. But you’re always trying to do the thing. And even when it is a chore or stupid and you hate it and you want nothing more than to be snuggling your dog instead of doing literally anything, you fucking show up to work. That is the whole point. But yes.
So there’s an importance in having a practice of promoting yourself, promoting your work. Developing your reputation in the industry while you have a whale client. You landed the whale client because you’re probably an expert in authority. You’re just pretty fucking good at your job.
Nobody cares about your whale client, right? Exactly. Like nobody cares whether or not you have one. Nobody cares how much of a time it’s taking up. Nobody cares. what it is that you’re doing that affects your practice. And you have to recognize that. Like you have to get out of your own head about it. And I mean, life gets in the way, things happen, but like automate as much as humanly possible in that sort of eventuality, and then show the fuck up to work the rest of the time.
I’d say there’s two major benefits even of having a whale client. One being, well, you’re earning a lot of money because somebody has brought up a lot of your time and is paying you for the value you’re providing. Sock some of that money away. B, having a whale client is actually a position of safety to make more risky moves like repositioning yourself. Oh, yeah. Because if somebody has bought up your time for six months and you’re like, well, I don’t really have to do sales or Yeah, I don’t have to do sales for the next six months. Do a marketing activity like change your positioning, start spinning up interviews on that, see if it catches, and then do weird stuff.
Yeah, be weird on the internet, please.
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