Episode 12 with Dane Sanders
The Difference Between Freelancers And Entrepreneurs

Dane Sanders is the Founder of Fastermind.co and host of Converge: The Business of Creativity podcast. He is a coach, consultant and keynote speaker. After growing his photography business to over 6 figures, he founded Fastermind.co to help other freelancers. Today he serves on the board of Alpha and has published multiple books.

The Difference Between Freelancers And Entrepreneurs

Dane Sanders is the Founder of Fastermind.co and host of Converge: The Business of Creativity podcast. He is a coach, consultant and keynote speaker. After growing his photography business to over 6 figures, he founded Fastermind.co to help other freelancers. Today he serves on the board of Alpha and has published multiple books.

In this episode, Dane speaks to us about:

  • Why it is important to know whether you’re a freelancer or an entrepreneur:

    You have to decide whether you are trading your time for money or creating a business that’s built for scale, because your tactics for growth will be very different based on this.

  • How to be successful in either career:

    As a freelancer the only way to make more money if you can’t add more time is to raise your prices; you can do so by really customizing and differentiating your services from other freelancers, and ensuring customers are willing to pay a premium to have access to you.

  • Why referrals and community matter:

    How being connected to other freelancers in your space or a similar situation can help you leapfrog and grow.

Full transcript

Juan

You're listening to the Six-Figure Freelancer audio course, brought to you by And Co from Fiverr. We interviewed top professionals who share their exact formulas for success in starting, growing, and maintaining a six-figure freelance career. And I'm your host, Juan Felipe Campos.

Juan

Okay, freelance masterminds, remember: on every episode of the Audio Course, there's a giveaway of digital goods or resources from our partners that other people don't have access to. To get your audio course resources, subscribe to the audio course on iTunes and then visit and.co/resources. Again, that's a n, d dot c o slash resources to access your digital goods.

Juan

Dane Sanders is a coach, consultant, and keynote speaker. After growing his own photography business to more than six figures, he founded Fastermind.co, a community of freelancers looking to scale beyond themselves. Today he serves on the executive team of Alphausa.org and is the author of two best selling business books for creatives through America's largest publisher of its kind Penguin Random House. Let's hear more from him on this episode of the six figure freelancer audio course.

Juan

Dane, thank you so much for coming on the show.

Dane

My pleasure Juan. Thank you for having me.

Juan

Dane, you certainly know something about starting, growing and maintaining a six figure income as a freelancer that most of us don't. Can you walk us a little bit through how you think about being a freelancer and the difference between being a freelancer and maybe some other career options?

Dane

Yeah. Well, the first thing I'd say - this one's pretty easy - a huge influence on my life, especially in the last decade, and on several people, several million people actually, is Seth Godin. And one thing that Seth taught me early was to make the right decision on the frontend of my relationship with business. So what I mean by that is there's kind of two categories. If you really want to break down people who are in business and you're trying to make money at it, you're probably either a freelancer or you're an entrepreneur. And what I take that to mean is, a freelancer is a high calling, it's a cool job. And you're basically trading your time and talent in for money, that's the model and there's some implications to that model, which I'll talk about in a second.

Dane

The other option is, your an entrepreneur, and in that case, you're building a business that's bigger than you. You're building for scale. So freelancer is non-scale. Entrepreneur is scale. At this point, most people are at home thinking like, okay, well scale is the right answer. I guess I have to be an entrepreneur if I really want to be legit. And that's not true. You can be a freelancer and you can make six figures and you can, you can crush it if you follow the rules of freelancing. If you follow the rules of entrepreneurship when you're actually a freelancer, you'll really hurt yourself. It can be really painful. On the flip side, you can certainly make six figures as an entrepreneur if you play by the entrepreneur rules where you're building to scale. And if you do that, you could do well. It's higher risk, higher return, but it's a different kind of game.

Dane

And the way I think about it, and, and at this point I'm varying away to my ideas, not just Seth, so anything I say that's dumb, cite me if it's smart, cite Seth. But the way I think about it in my experience as a freelancer - so I was a photographer for 12 years and was really fortunate and was really grateful that I knew that's what I was doing. I was trading my time and telling them for money and it turns out the only way to make more money when you can't scale beyond yourself is to charge more per hour. That's really all you can do. So if that's the case, especially in the market that we're in, that's super saturated and there's always competition around you. You have to differentiate. So the way I think about it as your rules of thumb as a freelancer are to customize and charge like crazy. Customize, differentiate, do whatever you can to make a unique value proposition offer as a talent and where you're standing out from the crowd, that's your whole job.

Dane

And in that standing out, you need to have your price match that value, and now people get really stuck here. It's really tough as a freelancer and we can have a whole conversation just around pricing. But people get really stuck when they go, okay, what if I'm a overcharging? Or what will my colleagues think? Or you know, maybe I'm not quite there yet - like, I've looked at these other people who are charging more, but I have such admiration for them. All those conversations are not resourceful. You should be asking the question, what will the people that I'm creating value for value this thing at? And charge less than that value. And as long as they know they're getting a bargain, even if you're charging a premium price, they'll pay for it. So that's a quick rule of thumb on the freelancer. Your job is to customize and to charge.

Dane

On the entrepreneur side, if you're building a scaling business, in that context, you actually want to standardize and scale. And what I mean by that is you want to create a very consistent experience. Whether you're selling a service or a product, you want people to go, oh, this is really cool. I've been surprised, I'm delighting in this thing and it's so cool, they've even built into the product or service and easy way for me to tell my friends about it. And when that happens, it scales. So as long as you have a consistent, extraordinary experience with whatever you're selling and they can easily share it with others when you're not around, then you've cracked the code for what it takes to scale a business. Now I'm speaking philosophically in all these ideas, but these are really important because if you get caught in the reverse position where you're trying to scale something, when there's no chance of it ever scaling, you're going to have a real hard time and you're trying to standardize and you're trying to make it really easy for people to share all the time.

Dane

But if you have a unique value that people want, you want people to charge a lot of money for, you actually need the position in the marketplace so that you're not going to be quite so easily handed around. And then people will pay a premium to have access to you. It's a status issue, uh, but on the other side of it, when you're relating with a scale business, you want to make it really simple for people to get access to it and really consistent in the deliverable and that's what will make something a shareable and scalable quickly.

Juan

And to make sure that I really understand the difference between freelancer and entrepreneur, the way you're distinguishing this- which by the way I think is genius and something that we're not honest enough with ourselves early on in our freelance careers, a lot of freelancers- I understand that consistent, extraordinary experience with a way for your customers to refer your services when you're not there for entrepreneurs. But I think that's probably also very relevant for freelancers. Right? So how do we even further distinguish the entrepreneur bucket from the freelance bucket? Is it processes? Is it the fact that you can hire more people? What exactly makes one thing, one thing and the other one, the other.

Dane

It's probably the talent. So if you're the primary talent and an entrepreneurial venture, you're in trouble. If you're the owner and you're the talent, you're probably more freelancer than you think because you're creating a bottleneck for yourself. In contrast, if you're like - this is where I'm really struck by folks who are really talented and are actually making it an amazing per hour rate, but they're somehow dissatisfied because they see other people who are in scaling businesses working less hard but getting a bigger return. Well, that's because they're not around when the transaction is happening. They built a business that will work when they're not there. But if you're the talent and, and you're charging a lot per hour, it's, you kinda have to be there. And now there are people who create little hacks to, to kind of give the impression of being there or a create levels so that you're getting slight touches but still kind of an experience of, uh, you know, access.

Dane

And that's fine. There's kind of maybe a partial scaling that might go on for a freelancer in that regard. But there are limits and every freelancer who's kind of made it that I know, comes up against the scaling problem, which is why they do things like sell books, because that scales, create courses online, because that scales, do coaching and those kinds of things with scale. But if you're a public speaker and you're a fantastic public speaker, you're still, you have to be on that stage to deliver, so you want to position yourself in the marketplace to charge a big rate because that's how you get paid. It's the only way to to have an increase.

Juan

So let's focus on the freelancing part of this conversation, seeing as most of our audience are either designers, marketers, developers - we see people typically gravitate to like one of those three buckets. How do we make sure that we can increase our prices as freelancers? And this question isn't just coming from a practical, um, or like this question is coming from a practical dividing up of the time. So if you were an early, early, early stage freelancer that's about to get started with their freelance career and they're wondering how do I divide my time to make sure that I'm on track to eventually hit six figures as a freelancer? What kind of advice would you have for them?

Dane

Yeah, so this is a great place where I think a lot of freelancers that I talk with, if they don't, if they have - think about how many transactions you need to have in a year as a freelancer to be successful. So let's say your rate is for, for napkin math, like a thousand dollars a customer in a year and you want to make $100,000 in a year. Well now it's not complicated, you need 100 customers. And then you go, okay, if I need 100 customers and my close rate is say one in - again, easy math - we'll say one in five. So if I want a thousand customers, and I have had five conversations to get one customer that'll hit well then I need. Sorry I'm getting my math wrong already. This is how bad my napkin math is. How do I, what do I need? $1,000, 100 people, if I get, if I close one in five, then I need 500 leads to get 100 customers to make 100 grand.

Dane

Does that math make sense? Yeah. Yeah. Okay. So that means I only have to have 500 serious conversations in a year. That's not very many conversations and some people think, oh man, I got to get all these tools and devices and systems and they're paying more per month, all over the place to have all these kind of scalable tools to work. When in truth, you can make two calls a day. Uh, you know, you can have two conversations. It's not, it's just a commitment and I think that until you have - I learned this from Jeff Goins - until you have like a thousand people or more that you have to deal with in a year, you don't really have much need to do much outside of, as close to in person conversation and connection as you possibly can do. And that might sound like a big number for folks. But where you want to locate yourself in the early days is as close to the customer and as regularly as possible, where they're experiencing your value in person. And then once you get beyond those bigger numbers, then you have some other things you have to deal with. But those are wonderful problems to have,

Juan

Right. Yeah, they'll be welcomed when you have them. But I love that at the beginning it is more about building that intimacy, that network, that relationship, and we distance ourselves from the ability to do that. And we use the internet to allow us to be less human.

Dane

To hide! And this is actually the first point I think is so important is because if you think you're trying to build, if you're not clear or am I an entrepreneur and a freelancer, am I scaling or not scaling? You get caught in the middle and all of a sudden you're like, you don't really know. It's not purposeful why you're getting a certain tool or another expense or a piece of gear or whatever. It's like, even before we went on the air, we were talking about podcasting and how, you know, Gosh, what do you really need? Well, you probably need your iPhone if you want to get started. People who will put up with, with with low grade stuff, if the conversation is fascinating and the person is compelling and inspiring and then, and then you get a little mic that you plug into the iPhone and then you'd get a better setup and then you get a studio and it's awesome, but don't get ahead of your skis, man, like work with... If you're trading your time and talent for money, people are paying for your time and your talent. So give them that access and, and the other game, it's a different game. That's when you have to get your talent out of you onto things like other people and manuals and processes and systems and that's where you scale.

Juan

I love that. So it's about being honest and just calling it what it is. If you're going to be a freelancer, then listen to all the podcasts, read all the books and just become an expert at just that one discipline instead of calling it freelancing, but studying entrepreneurship. And then like you're saying, you get caught in this limbo where you're not able to successfully do either of the two.

Dane

Right. Yeah, that middle is um, a lot of people spend a lot of time and money and, in a sense it's almost unavoidable because everyone tries a bunch of stuff, at least in my experience, pointing back to Seth. He's the guy that said there aren't any shortcuts. He's the first guy I ever heard say it and I knew that was true, but I didn't want to believe him. So I just tried a bunch of things and turned out he was right. There actually aren't many shortcuts. It requires - the long cut is the new black, like the long cut gets you there much more efficiently than trying to hack your way to success.

Juan

Amazing. So let's do a recap of this episode because this has been super valuable. Dane was very influenced by Seth Godin, who taught him to make the right decision on the frontend in your relationship with business. So you have to decide whether you're going to be a freelancer or an entrepreneur and they have both their pros and cons. The case of freelancers, you're trading your time and talent for money. In the case of entrepreneurship, you're building a business that's bigger than you. You know, by definition. And as a freelancer, you can't scale, which is one of the cons and as an entrepreneur you can scale, but in both of them, you can crush it and make six figures if you followed the rules of each one of them intentionally. So the only way to make more money as a freelancer when you can't add more hours is to start increasing your prices.

Juan

And that is the rule for being successful as a freelancer and you're able to do that if you customize. If you differentiate so you can stand out from the crowd and you constantly ask yourself, what would the people that I'm bringing value for value my service at, and then you just price yourself below that value. As an entrepreneur, you do things differently. You're focused on scaling, on creating a lot of processes so that you can remove yourself from the relationship and make sure that other people can do the job better than you. And it's about creating a consistent, extraordinary experience with a way for your delighted customers to then be able to refer your services even when you're not around. Really, if you're the owner and you're the talent, you are a freelancer, not an entrepreneur. And that is something that is very important for us to remember. The long cut is the shortcut.

Juan

Okay. Freelance Masterminds. Do not forget to pick up your digital resources from this episode. It's very simple. You just subscribe to the show on iTunes and then once you've done that, visit and.co/resources. Subscribe on iTunes and then visit a n, d dot c dot co slash resources to get your digital goods. See you on the next one.

Juan

I just want to thank you so much, Dane, for coming on the show. As you continue to grow and take your career forward, where is the best place for people to stay in touch with you, learn more about what you're doing and learn more awesome content from you?

Dane

You know, I, I love the question. I love your articulation man. I, we say this all the time because we're friends, but I am so impressed with your capacity to take in a lot of information and make it so succinct. I know your listeners are so grateful for what you create for them. So, amazing job.

Juan

I'm a DaneSanders.com. It's easy to find me. I'm kind of @DaneSanders everywhere, but what I think would be more helpful for your audiences than to come track me down, but more, we have a community of people that take these ideas so seriously and are working together collaboratively to do this and it's called fastermind.co with an f and now m so fastermind.co and if being around a community like this where we're taking these ideas and wanting to go further with it, and practice it under the hood with your business, with accountability and learning and content and real community... and you plus Starbucks plus the laptop is a little overrated. Come hang out with us for a bit. And, I think you might find some new friends.

Dane

Amazing. Dane, thank you so much again for coming on the show and sharing all this with us.

Juan

Thank you Juan.

Juan Felipe Campos
About your host

Juan Felipe Campos

Juan Felipe Campos serves as VP of Technology at Manos Accelerator in partnership with Google Launchpad. As a freelancer, Juan has worked on growth and customer acquisition for VC-funded startups including Ease, Admix, Timeular, and AND CO from Fiverr. He hosts the Six Figure Freelancer audio course/YouTube channel, leads the Freelance Masterminds Facebook Group, and is passionate about helping remote workers make more money and live life on their own terms. His companies have been featured in major publications including Entrepreneur, Huffington Post, Inc. Magazine, and Forbes.