Scarcity: Fucking With The Minds of Freelancers

Posted: February 26th, 2010

Photo by Mike Zienowicz (Flickr)

Photo by Mike Zienowicz (Flickr)

Scarcity causes you to do dumb things… sober!

Usually when it comes to reasons why some freelancers never become successful, things such as work habits, marketing and efficiency come to mind. In other words, the decision making that affect their businesses.

What doesn’t come to mind so obviously is a concept that freelancers take for granted each and every day. A concept that induces negative attitudes and actions that can, consequently, have negative results on a freelance career. That is, scarcity.

Scarcity is simply a shortage of anything when compared to the high demand for it.

To give an example of the power of scarcity, my favorite was in 1999 with the Y2K scare. Computers all over the world were supposed to crash as soon as the clock struck midnight on New Year’s day in 2000. Chaos was suppose to ensue with disruption of major services, riots starting up and food and supplies flying of the shelves of stores.

The funny part was that in this “holy shit!” scenario that was suppose to occur, overpriced survival kits consisting of one, three and six month supplies of freeze-dried and canned goods began to hit the marketplace costing thousands of (U.S.) dollars.

My landlord, who I lived with at the time, bought the six month variety for a family of three. He figured he would also throw in a few shotguns, in case things really got out of control. Surely, he wasn’t the only one.

Needless to say, no shortages nor riots occurred and boxes of non refundable pork and beans were there to prove it. There is still no word if the newly acquired shotguns were used on him by his wife or son.

If there is a lesson learned, those reactions to scarcity lead to an impulsive decision that may have seemed reasonable, even prudent, at the time. In the end, however, it became a mistake and a costly one too.

Scarcity has the affect of triggering negative emotions, primarily fear, panic and greed. It’s being backed into a corner and being forced to make a decision your life depends on (to varying degrees). When you think about it, though, do rational decisions every really come out of negative emotions?

When it concerns scarcity, the answer is no.

So what does this all have to do with freelancing?

For starters, we deal with scarcity when it comes to employment. The bad economy, layoffs, job shortages are always in the news and on our minds as we deal with our own employment.

It’s reasonable, too, that it should have that affect. After all, everyone has to worry about putting food on the table and keeping a roof over their head for themselves and their families.

These fears, however, can be detrimental to freelance careers in four ways.

1. Fear of not finding work

Whenever you have that belief that there is a scramble to find what little work is out there, then this is where the bad decisions begin. This surely crosses the minds of all freelancers, especially early in their careers, but it can lead to poor decisions on what kind of work you accept.

First, there is a tendency to take any kind of opportunity out there just to get income rolling in. This leads doing projects you would rather not be doing and, most likely, working for less than what you’re worth. It’s what I like to refer to as freelance “prostitution”.

2. Fear of not making ends meet

I know, this is a universal worry of nearly all freelancers early in their careers. Some, however, choose to ignore it and stomp out the worry and others decide to let it eat away at them day in and day out.

Our biggest fears and strongest emotions can come from worrying if we’ll make it to the next month and can lead to a situation, similar to the above, when not able to find work. This is often a breaking point for young freelancers, who may find it more appealing to return to the security of a paid position.

3. No growth or learning

If you work just to survive and pay the bills, and your mentality is set to that alone, then we have a situation where our career transforms into a regular J-O-B. What kind of passion is to be realized if you are constantly worrying about the rent at the end of the month? None at all.

Career fulfillment is a by-product of freelancing. You have the liberty to make your own decisions and grow in your career but, if you are stuck doing work you hate at a wage not ideal but gets you by, then you are really only treading water.

4. A too-competitive attitude

Sure, we need to compete for work amongst other freelancers, but viewing your fellow freelancers as the competition does no good in your business nor for your business ethics. In having the too-competitive attitude, some freelancers resort to undercutting or taking advantage of other freelancers to get their own work.

Not only can this be bad for your reputation but it hurts freelancers as a whole reducing the value of work in your industry. Plus you won’t make too many friends amongst your peers this way.

What eliminates scarcity from the freelancer’s vocabulary?

This one is easy. Change your attitude, which is best summed up through a passage from a post by Lite Cue 23:

What I have found myself doing lately is shifting my perspective from a debt oriented view to a wealth oriented view. In short, a shift from a scarcity mentality to an abundance mentality. The economy may be way down, we know this, but people are still hiring. Companies are still producing and lights still need to be designed.

There may be bad news happening in the employment world but there is still an economy and people out there working in it. Well, at least the last time I checked.

Another thing to do is to get involved in the community of your freelancing peers.

Anybody who has been on Twitter long enough, and follows other freelancers, knows that the community is very positive. Not only this but they share information about their trades and some even give you insight to how they run their own businesses with success.

You may then come to realize that the real scarcity concerning freelancers is the lack of them in the marketplace.

Are Paid Job Boards Really Worth Their Cost?

Posted: August 18th, 2009

These days, given the high number of job boards, its easy to ask yourself “Why should I pay to use a job board?” when there are plenty of free options available. After all, freelancing is a business and you need to minimize expenses. This is especially true if you are a new freelancer and want to cut down on your initial start up costs.

The truth is that there is really no difference in the quality of projects you can find on paid or free job boards. Paying to use a job board doesn’t mean you’ll be able to score projects much easier either. So what gives? Is it a complete waste of money to fork over a small fortune if there is no perceived benefit?

Well, the answer is that paid job boards actually do provide quite a few benefits to freelancers and are worth your while to check out. For instance:

The ability to pre-screen potential employers

It is always reassuring to have a little background knowledge on an employer to all but guarantee a level of trust before you start working for them. When you view available projects, there is usually the ability to view an employer’s business profile, the projects he has offered in the past (and what was paid) plus comments by other freelancers who worked on those projects. This way you aren’t completely in the dark about working with a new employer.

Believe it or not, there are scammers out there who post projects on both free and paid job boards. More often than not, they ask a freelancer to do a project then bail and leave the freelancer hanging when they have the completed work in their hand. Any knowledge you can gain from an employer before you work with him can keep this from happening to you.

Virtually guarantee payments

The biggest advantage of using a paid job board is that they provide an escrow service or some sort of guarantee that a freelancer will get paid for completed work. An escrow service works by requiring the employer to pay the project cost up front to an intermediary (usually the job board itself) and, upon completion, the funds are released to the freelancer. This eliminates the worry that a new employer may stiff you in the end.

They are targeted to specific fields

While free job boards usually lump together project postings, whether it be writing, programming or web development, paid job boards organize their postings by field. Therefore, rather than filtering through hundreds of offers unrelated to what you do, you can view dozens of offers from your field in a single list on all in one place. This ultimately becomes a major time-saver for a freelancer.

Using a paid job board will cost a little dough though. Here is a sample from the three of the biggest out there:

Guru: $29.95 – $99.95 membership fee every three months. 10% project fee. 2% fee for use of escrow service.

Elance: $9.95 monthly membership fee. 8.75% project fee. Free escrow service.

oDesk: No monthly fee. 10% project fee (added to your project estimate upon bidding). Does not provide escrow service but offers guaranteed payment for hours worked.

These fees are, admittedly, pretty steep for a freelancer. Add to this the PayPal fee you would likely use to receive payments and you are left with a small fortune already gone before payments hit the bank account. The simple solution, however, is to simply pass these fees on to the client when you create an estimate. They’ll understand.

A good rule of thumb is that if an expense helps your business perform more efficiently, then spend it. Paid job boards, as expensive as they can run, can really save you some time searching for projects. More importantly, though, it just may save you the hassle of having to chase down a rogue client for leaving you high and dry on a payment.