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March 19, 2008 - Freedomain Radio - Stefan Molyneux
01:01:40
1014 Succeeding as an Entrepreneur

Ways to deal with difficult clients in the software world...

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Hello?
Hi, how's it going?
Good.
All right. There was a few other people who wanted to just come in to listen.
I hope that's okay with you. Yep.
Most notably, just a bunch of guys from the FBI. But anyway, sorry, to pick up sort of from where we were, what we were talking about yesterday, this question of project management, which you listened to that podcast, right? Yeah, I did.
I listened to that right after the call got cut off yesterday, and it was kind of disheartening to hear because I realized that I'd made a lot of big mistakes.
I mean, I kind of was glad I heard it because it helped me identify what I did wrong, but it also made me feel bad because, you know, for the past year I've been mismanaging my projects.
Right, right. And it is, of course, the immediate anxiety avoidance of saying to clients, I will do it, to get yourself out of the anxiety of the moment that causes the problems in the long run, right?
Yeah, I always, you know, I have a hard time saying no to a client, and I have a hard time saying yes, but that will charge you, that'll be extra.
Right, right. No, I mean, and clients sense that, right?
Because they look at somebody who's young and enthusiastic and they sense that, right?
And since most people in business are operating from a fairly amoral advantage maximization in the short run, that is something that happens very often in the software field.
I've even had one client just recently be pretty honest about it.
He's like, the reason we're hiring you is because one of our team members said, hire the young guy, he'll work the hardest.
Yeah, and there's nothing wrong with that.
I mean, as a former entrepreneur, I guess I'm still an entrepreneur with Free Domain Radio, but as a former entrepreneur...
There's nothing wrong with that.
And that is really how you differentiate yourself when you come into the business, right?
Because when you come into a business environment as a young guy with little verifiable or no verifiable track record, the question is, how do you differentiate yourself from the more professional and advanced shops?
Well, clearly, you don't have the same track record and clearly you don't have the same client list, you're not referenceable and so on.
So, You have to balance that negative with a positive, and the positive is, I'll do a bunch of crap for free, right?
Yeah, pretty much.
So, what you did is not necessarily the wrong decision as a whole, right?
I mean, it was certainly a way to differentiate myself, but...
And it's necessary, right?
Yeah, yeah. It's necessary.
The... The problem is that for you, it was not so much a business decision as it was anxiety avoidance, right?
And what I mean by that is you may have made the same decisions and you may have said to yourself, okay, I'm going to make a loss for the first year because most businesses do not make a profit in the first year or two or sometimes even three.
So to say I'm going to take a loss in order to build my client base because what you do is you invest in Success.
And then you sell success at a premium, right?
So you invest in and you take a loss on projects so that you can build referenceable accounts.
That is a business strategy that is, I mean, it's called a loss leader, right?
And you'll often see this when, you know, when candy bars are introduced.
The question is, why would you buy a new candy bar when you already have a candy bar you like?
Well, the way that you do it, of course, is you advertise it like crazy and you may cut the price of the candy bar.
So that the reason is that you build the desire up through the advertising and then you create a differentiator which is going to dislodge people from their existing products by creating a price incentive, right?
Right, yeah. I'd been told that all through business school and I just wasn't ready to go a whole year without making money.
I made a decent amount in my first year, but then come this year and I just have no motivation.
I'm losing money.
I just can't seem to dig myself out of this hole.
Right, and this of course is the big problem.
Think of IT projects like a comet, right?
There's a big glowing ball of cash up front, and then as it moves through time there's a long sort of nimbus of a trail of labor that is unpaid for, right?
Yeah, yeah. It's the constant, like you get a call, something needs to be adjusted, something else needs to be adjusted, there's a bug or a problem or a typo or something on the website, right?
So you've already been paid up front, but then there's this trail of work that is unfunded, right?
And this is what, of course, happens to a lot of software companies, is they'll make money up front when they charge up front, but then because of a failure to create an endpoint or a close point for the project, they tend to end up with much lower cash costs, Cash to labor ratios in the second year, right? Yeah, yeah, that's right.
And of course, you get depressed and exhausted.
And instead of looking forward to calls from clients, and I know this, of course, since I was a CTO at a company, normally, you know, a business likes getting calls from clients, right?
Right. But don't you like feel complete dread whenever a client gets in touch with you?
I mean, I haven't even been seeking out new clients because of that, because I'm like, I don't even have time to take on new projects.
I mean, I guess I have time, but I just have no desire to.
I'm like just sitting here looking at what I have on my plate and not wanting to do it because I'm not getting paid for it.
Right, right, right.
And so, Tom, I mean, the important thing is that since you've gone through business school, I'm not going to even remotely insult your intelligence by talking over the business stuff because you understand all of that.
But let's talk about The real issue here, which I think is the emotional side.
Yeah, I think so too. I mean, if I were to tell you it's important to get paid for what you do, that was kind of insulting, right?
You know that, right? Yeah, I know that.
And so you know that you've been running your business into the ditch, right?
Yeah, yeah, I do. Yeah, and I mean, it's understandable and we've all been there and it's, you know, it's a learning process.
But the problem is now is that you have obligations as far as I understand it, whether explicit or implicit.
You have no motivation, you have negative income, and you are lacking the emotional energy to turn it around, right?
Yeah, that's correct. Okay.
And the reason, like, let's look at what could be on the other side of this kind of motivation.
Okay. Which is, you could save your business.
You could save your business, right?
And what I mean by that is you could go out to your clients and you could say, I have done some good things in this business and I have done some bad things in this business.
The good things I've done is I've produced quality work for you.
The bad thing is that I have not charged you enough to sustain what it is that I'm doing.
So, new policy, right?
New policy. I have to, you know, be responsible to my business and, of course, be responsible to you because if I end up tanking in this, which I'm not saying I'm about to, but if I end up tanking in this, you're going to end up with a whole bunch of unsupported things.
I want you to think of it like a car.
If I go to a car dealership and I say, you know, I really want that new Audi.
And they say, great, the new Audi is $25,000 or $30,000.
And then I say, fantastic, right?
And I do all the paperwork, and I say, $30,000, right?
And then I come back the next day before they've delivered the car, and I say, ooh, you know what?
I really want leather seats, right?
What are they going to do? I mean, I guess they would negotiate to get leather seats installed.
Right. And would they charge me?
Yes. Of course they would, right?
They'd say, oh, okay, well, that's our seats are $1,500.
No problem. If I come back the next day and say, I want heated seats and I want a sunroof and I want, you know, whatever fancy-schmancy hubcaps and tail fin, every single time I come back and say that I want more, they're going to say, absolutely, and this is the price, right? Right.
And... A lot of what happens in business, particularly among young entrepreneurs, is they simply don't know how to do it.
They don't know how to ask or how to inform the client of the costs of what they're talking about.
And they feel kind of guilty, right?
So young entrepreneurs will say, man, I should have thought of that.
That wasn't in my original quote.
That wasn't in my initial price.
The fact that it's taking longer than I thought is my fault.
And so I'm just going to eat the cost, right?
Oh yeah, that's certainly the thought that's going through my head all the time.
I'm just like, oh man, I messed up this quote.
I think the client had more expectation from this than I realized and now I should just give them what they need.
Right, and that turns into a slippery slope, right?
Because what happens is, if I buy the Audi and I come back in and say, I want leather seats, and they're like, no problem, that's included.
No problem, I'm not going to charge you for that at all.
What am I going to do the next day?
Yeah, come ask for something else for a premium stereo.
Yeah, jeez, I mean, if all the add-ons are free...
All I have to do is not pay for them up front, but come back or phone in every day with the list of all the crap that you can get stuck on an Audi.
I want a satellite dish.
I want helicopter blades.
I want it to be able to go underwater.
I want it to be able to shoot oil sticks out of the back.
I want rockets. If every single time I come back, I get stuff for free, this becomes a slippery slope.
You are actually encouraging people to come back and to rip you off, so to speak, right?
Right, right. So, that is, I mean, and again, this is nothing that you don't know intellectually.
I mean, obviously, right?
But the question is around the emotionality, right?
So, there's two aspects I'd like to explore with you if it's helpful.
The one is real short and the other one might be a little bit more lengthy.
The real short one is the question, the technical question of how to do it, right?
So, when a client, if I'm a client and I say, you know, geez, dude, I, you know, I want X, Y, and Z, what's your normal response?
Let's say it's out of scope, or if the scope is loosey-goosey, that it feels out of scope, right?
What do you say? Oh yeah, sure.
That'd be fine. We can do that.
I'm pretty fast to agree without even, you know, putting a fight at all.
You know, I mean, I spent the first two years or three years in my IT career doing exactly the same thing, so I totally understand that.
So there is a bit of a technical question, which is, what on earth do you say?
Right? Like, just from a practical standpoint, what do you say when somebody says, I want something free?
And you don't know that, right?
You don't know what to say. Right.
Right? So, try being the client, and I'll give you an example of how it can work.
Okay. We want to add a forum to this.
I think it would be good to add a forum so users can interact with each other.
I think that's fantastic.
I would be more than happy to put a quote together for that.
How urgently do you need the quote?
I thought we could just add it on.
Wouldn't it just be a pretty easy little add-on?
Well, when I do additional work, I'm sure you are the same way, right?
I mean, if I'm a car dealership and you want a sunroof, I have to give you a quote for the sunroof, right?
The size of the job will be determined through the quote until I examine it in detail.
I don't want to just say I'll do it and then end up not being able to do it and waste time and delay the project and so on.
And of course, also, if I end up doing work that's unpaid, it threatens the continuity of the business, which obviously you don't want if I'm building your website.
So I will have to look into it in detail to try and figure out if there are any other implications.
I agree with you. It doesn't sound like a huge...
But if I suggest a forum and it turns out that it doesn't have certain feature sets that you want, then I'll have to go and find another kind of forum.
If the forum software that I suggest integrating into your site turns out to be too expensive or it only runs on an operating system that you don't have on the server, like there's just things that are complicated that I kind of need to figure out.
And I also need to figure out, because what happens is, you know, in a project, and again, I'm sure you're aware of this, Mr.
Client, In a project, if I interrupt a programmer and say, do this task and insert it in the middle, let's say putting the forum in is a three-day job, then we have to figure out a good breakpoint in the project to insert that in.
It may not necessarily be right at the end because there might be other things we need to do to the website with the forum that's in it.
So I need to figure out a good time to break him.
He needs to stop what he's doing, do the forum stuff and then pick up again what he's doing.
So usually it's not just three days, it's three to four days because you have to sort of cycle off the stuff you're doing and then cycle back up and remember what you were doing before.
So I agree with you that in isolation, it's a small thing, right?
But it's sort of like if you're building a house and you say, well, I just want to add, you know, a line of bricks at the bottom.
It's like, well, it's just a couple of bricks, right?
It's like, yes, but to lift the whole house, you know what I mean?
Like it could be more complicated.
And I want to make sure that I'm responsible in giving you a quote.
Well, that sounds fair.
I've never approached a plant that way.
Because basically what happens is, this is my guess, but tell me if this is realistic or not.
Basically what happens is you get pissed off, right?
It's like, don't tell me that my goddamn job is simple.
You don't know anything about it, right?
Oh yeah, yeah. It's irritating, right?
I'm irritated quite often.
Yeah, like you're irritated because if I go up to a brain surgeon and say, just, you know, while you're in there, give me increased memory.
I mean, how difficult can it be, right?
It's like, well, if it were simple, don't downgrade my job because you want something for free.
Don't ask something for free.
In other words, try and rip me off and insult my skill set at the same time, right?
Right. So you feel irritated and you don't know.
And because you feel irritated and for you the choice is to be irritated and piss off the client or to cave in and make the client sort of quote happy, those are your only two options, right?
Yeah, that's what it feels like.
Right. So you don't have a third way which is to be positive and responsible and assertive and appeal to the client's self-interest, right?
Right, right. But the way you put it was perfect.
I'm sure that would certainly disarm them if they were at all agitated.
Sometimes they get to a point where they're agitated.
They seem like, you know, I'm not doing the project fast enough and suddenly they want to add something on and they expect me to get done just as fast.
Well, but you train them that.
You absolutely create the agitation in them because what happens is you cave because you don't know how to be – you just never learned, right?
This is not intuitive. You've not learned how to be assertive in business, so you cave.
And then what happens is you get delayed, you get irritated, you get frustrated, which transfers to them, right?
Plus, they start to get greedy.
You know, like, I mean, if I'm getting a paycheck, that's one thing.
I say, okay, well, I get my paycheck and that's my paycheck.
Right? If a Brinks truck overturns outside, I'm going to go completely mental because I'm just going to want to say I'm amoral.
I want to grab all the dollar bills that I can, right?
Right. So if you're giving stuff away for free, what happens is you make people greedy and irritable, right?
Because they're like, well, maybe I can get more for free, right?
Right. Whereas if you give them reasonable limits, they're like kids, right?
If you give them reasonable limits, they'll be much happier.
I mean, as the client, didn't you feel the kind of relief that I was going to give you a quote and tell you what the boundaries were?
Oh yeah, definitely. I mean, I thought that that was very reasonable and understandable.
And I wasn't impolite and I wasn't hostile and I wasn't like, well, screw you, you thieving bastard, right?
I mean, you know, it's like, nice try, but I'm afraid I'm going to have to, you know.
And in a sense, you can't blame people for trying, right?
Right, right. I mean, I do it myself with my programmer.
Sorry, go ahead. I do it myself with my programmer.
I'm like, oh, it wouldn't be too big of a deal.
I just kind of pass that along from the client.
I'm like, oh, no big deal to install a forum, right?
It's like, we can do that, right?
Oh, yeah, and I mean, I kind of cringed.
You know what happens to Terry in that book, right?
Because he ends up turning into the CEO, right?
Yeah, yeah. Because he is exploited.
He ends up exploiting his programmers, right?
That's one of the themes in the book, that it infects you if you don't fight it, right?
Right, right. And I felt bad when I was reading God of Atheists, thinking, man, this is, I'm turning into this guy.
Right. And this is also, so there is a certain just kind of practicality, right, where when people try and get stuff from you for free, you have to be responsible to their best interest in the long run.
And that's why sort of in that statement, I was saying, look, I mean, if I do work for you for free, you might be happy right now, but you won't be happy in the long run, right?
Right. Right. So, it's reasonable expectations and also saying, well, look, you don't work for free, right?
So, why should I, right?
Right. Like, I mean, I remember having this joke.
I did some work for quite a lot of work delivering a software package for General Mills, right?
or at the food company.
And the guy I was working with tried the same thing, right?
Like he tried, I had like this, I had like this, this, this, and this.
And I said, sure, no problem.
And I said, the wonderful thing is I'm really, really happy about General Mills new business model, right?
And he's like, what are you talking about?
I said, oh, I just sort of, well, I understand from what you're saying to me that you guys are going to start giving away food, right?
So I can go to the grocery store and just pile free food.
And he laughed, right?
Because he kind of understood what I was talking about, right?
Right, right.
You guys charge for everything you sell.
And I'm, you know, I have to have the same business model as you do, right?
So it, you can make people laugh about what it is that they're saying.
Um, But of course, if you become hostile, then you're going to end up...
Because you're not in a position of authority with this client.
So if you get hostile when you're in a subservient position 99.999 times, you're going to just cave.
And we all will, right?
Because you can't get hostile if you're in a subservient position, if that makes sense.
But you can be asserted in a subservient position, and that actually changes the entire nature of the future interaction.
Yeah. Because, of course, if clients get a reasonable bill for the services they require, they will quite often say, well, it's not worth it to me, right?
Right, right. Everything is worth it if it's free, right?
It's like, a free forum?
Sign me up, right? But if the forum then costs $2,000, then they can weigh that and say, what is the cost-benefit, right?
Right. And that is actually to the advantage of the client, right?
Because you could also say something like this.
Say, look, obviously you're going to take the forum if I give it for free, right?
The client will say yes. And I said, but that may be the worst decision you could make with regards to this project.
And they'd say, what do you mean? I'd say, well, you know, based on my experience, let's say That you take a forum, even though it's not going to be that much value for you just because it's free, well, then what happens is a few people will start using this forum, and then you're going to end up having to maintain it, reply to it, and so on, right?
And then maybe you'll have to shut it down, which you'll have to explain that to people, and you'll have to pull it out of the site, and you maybe have to back up the database or whatever, right?
If I give you something for free that's not that valuable to you, the burden of maintaining it and responding to it and working with it passes from me to you forever, right?
So if the forum is just like a total nice-to-have and you don't really care about it, but if it's free, you'll take it, that may not be the best thing in the world.
It's like, free puppies, I'll take 12, right?
But then you've got to spend time feeding the puppies until the end of time, right?
Yeah, yeah. So it's also appealing to their own rational self-interest in terms of helping them understand every complexity you add to the website makes it more expensive to maintain in the future, makes it harder to, you know, may require more technological investment and so on, right? Right.
Right, so this is like, there's a little pebble in the stream which seems like, but it's these ripples that go out and it's helping them understand the implications of the decisions that they're making into the future, right?
Mm-hmm. Does that sort of make any sense?
Sure, sure. It certainly does.
You're trying to help them, right? You're really, really genuinely trying to help these people to make better decisions and not to go overboard, right?
Oh, of course. Like if it's one person, right?
If I go to the dealership, right?
And let's say that I can't resell the car and they say, look, if you buy one car, we'll give you two cars for free.
But I only have one parking spot, right?
I have no need for a second car because I'm one person.
I can't sell the car, right, for whatever.
Maybe that's legal. Maybe I have to pay insurance on the car.
You know, I have to pay for a place to keep it and so on, right?
So that second free car actually turns into a net negative, right?
Right. So it's just helping people to understand that if you don't give them a price for something that you're...
I mean, if they get kind of testy about it, if you don't give them a price, then it's going to be a negative for them.
What happens as well, of course, is that they may have genuinely forgotten that they need a forum, and they may have a budget for the project, right?
Right. And they may say, look, I budgeted 10 grand for this website or 5 grand for this website.
I remember that the boss asked me for a forum, but I completely forgot to include it, right?
And so what happens is because they've made a mistake, they want you to fix that mistake for free, right?
That's actually the more, a scenario that occurs more than anything with me, is that they, oh, I forgot.
We need this in the site.
And without this, the rest of the site is useless.
And it's kind of like, they put this burden on me that says, well, you know, if you can't do this, then we can't do the rest of the site.
Sure, sure. And of course, what you can say is, is it the situation that you're working within a fixed budget?
So you just try and understand, don't make it unconscious, right?
Don't take this pressure.
You've got to pull it up to the surface and say, okay, so let me understand the constraints.
We have a budget of, say, $5,000 and we've budgeted a month's worth of work.
Now, I'm guessing, this is totally off the top of my head, but this is going to be another week of work and it's going to push the budget to $7,000.
Is it my understanding that you cannot go above $5,000, right?
And if they say, yes, my total budget is $5,000, right?
Then you say, okay, well, is the forum more important than whatever, the photo gallery, right?
And they say, no, they're equally important, right?
So you're asking them to prioritize.
It's like, if we have a budget of $5,000 and we have a month to do it, I can absolutely do the forum for you.
What is it that we can drop?
Because I want to keep within your budget here.
And if they then say, well, I only have $5,000, everything is equally important, we still have only a month to do it, right?
And we have to have a forum, right?
Then you say, well, in the constraints that we're talking about, you're giving me an impossible situation, right?
Because you're asking me to do more work for free in the same amount of time, right?
And we do agree that the forum was not part of the original scope, right?
So, you know, we'll find a way to make this work.
I just want us to be on the same page, right?
And let's say that they say, yeah, you know, we're really asking for this big favor and this and that and the other, right?
We're like, okay, well, just out of curiosity, do you have support agreements with these clients?
Some of them I have in the past.
I mean, it's something that works out so much better when I do it, and I don't know why I don't do it for every job.
Yeah, no, of course.
I mean, a good chunk of repeatable revenue for software companies is the support agreements.
So let's say somebody says, I've got five grand, I've got one month, and I've got a forum that I absolutely need, right?
And you say, well, if we have to do more work for free at the moment, and you have a cap of $5,000, Then we'll have to increase the support agreement, which is future budget, right?
To cover the costs, right?
And you can just say, well, with the forum, I got the forum free, but he's bumped up the support costs a little bit because he's going to have to maintain the forum, right?
He can sell that internally, right?
Yeah, yeah. Now, if he says, right, and again, let's go down the path of every possible problem, right?
If he says, I want a forum for free, no increase in the budget, and I will not accept an increase in the support, right?
Yeah, okay, so worst case scenario.
Okay, so what's a possible solution for that?
And there is one, it just, you know, it sounds weird, but there is one.
I don't know. I would, you know, be tempted just to say, well, here's your money back.
Good luck. Well, no, you can't give money back because you've already invested time, right?
I mean, you may give them the remainder of it back and so on, but you don't want to do that necessarily because then you're going to get a negative reference, right?
Yeah, exactly. Right, no reference, negative reference, and, you know, my programmer is going to be pissed that I took his money away from him.
Right, which you can't do because you're the entrepreneur.
He's not, right? Well, it sort of was, but not anymore.
Well, we'll get to that in a second.
But that situation, what I would do is I would say, okay, so, I mean, you're giving me a very challenging situation here, right?
You understand that, because you're saying, give me free work.
I'm not going to increase the amount of time I'm going to give you.
I'm not going to increase the amount of money I'm going to give you.
And I'm also not going to increase the support agreement, right?
Right. That's a challenge.
So you're giving me a very interesting challenge.
Here's my solution, and tell me what you think.
You had originally signed up for a one-year support agreement.
If you will extend that to a three-year support agreement, I can do it for you.
Then there's no increase in the amount of money that you're spending right now.
There's no increase in the support agreement money.
It's just extended for two more years.
Yeah, I mean, that would certainly be a great way of negotiating.
I never even thought of that. No, and of course, I mean, why would you, right?
I mean, this is not something that...
You have to grow up with win-win negotiations to get them into your blood, and I mean, of course, I know based on your history that you didn't, right?
That it was just like, do what you're told or whatever, right?
Oh, yeah. It was...
Yeah. Now, if...
And there may be other solutions to this, but let's just say that we've exhausted all possible solutions, right?
So then, this would be my suggestion, right?
If the guy says, I want free work and no increase in the amount of time and no increase in the money and I'm not going to extend the support agreement, in other words, you're not going to get one thin dime out of me for all this additional work, then I would say, I'm sorry but I can't do business with you.
I just can't. I mean, I can't afford to.
I'd love to. I just can't afford to.
So here's what we're going to do.
We're going to decouple the program.
I'm going to take the money for the work that we've already done.
I'm going to give you all of the source stuff if you want to get someone else to finish it.
I'm really, really sorry.
I mean, I can't.
Out of responsibility to all of my clients and my employees, I simply can't do free work.
I've tried three different ways to help us resolve this in a way that is going to put you in a better position to sell it internally.
I'd be happy to write up a document giving you the cost-benefit analysis and So you can use that to sell it internally.
But the reality is that if you're used to getting work for free without any negotiation, I can't do business with you.
It would be completely irresponsible of me.
And the reality is, just out of that conversation, you really don't want to do business with someone like that.
You just don't.
It may seem fine at the time, but what happens is you end up in the depressed situation of being exploited for year after year after year, right?
Yeah. And I have a client right now that just will not accept no for an answer and gets angry when I do say no.
I just don't know what to do about them because they're in a support agreement and I guess I could try to transfer them to a new developer.
Do you not have a cancel clause in the support agreement?
There was barely any agreement to begin with.
I don't even know if we signed papers on this particular job.
Right, right, right.
That was so early on when I was first getting into it.
I mean, I'd just take checks and do the job and wouldn't even do agreements.
Sure. And look, again, it's risky to do that, but you are saving money in lawyers' fees and so on up front, right?
Because every time anybody touches a contract, you end up in this particular problem.
And I certainly can guarantee you that the first couple of software systems I built and sold had nothing other than vague emails and stuff like that, right?
Right, right. So you have a dollar amount for that client for support?
It's kind of like an hourly agreement, like whenever they need support, I do it, and then they pay me.
But that's not a support agreement. Well, okay, okay, no.
I mean... I mean, that's a time and materials...
But they hardly ever pay...
I mean, it's... Yeah, you're right.
It's not a support agreement. It's just...
No, whether they pay or not, I mean, that's a time and materials maintenance agreement.
That's not a support agreement, as you know, right?
It's like a fixed fee per month or per year.
Right, right. Yeah, yeah, yeah.
I don't think I have that with any of my clients currently.
And so have they not paid you for a particular work you've done in the past?
Yeah, it's because I've agreed to do it.
Oh yeah, that was maybe my fault.
It probably wasn't my fault.
I just pretended like it was for some reason.
I don't know why I would do that.
I look at certain things that they want to add and I'm like, wait, they never said that to begin with.
I don't know why I'm doing this.
Sorry, you don't know why you agreed to do work for free?
Right. Well, of course you do.
Well, okay, yeah, I don't want to get into...
Two confrontations with this client.
You're afraid of them getting angry, right?
Right, right. So, I mean, we first have to identify what the issue is, right?
Yeah, yeah. Can I call you back in just one second?
I'm real sorry to apologize for this, but I've just run out of space on my vid cam.
So let me call you back in a few minutes, okay?
Okay.
Thanks.
Bye.
Hello?
Hi, sorry about that.
No problem. Okay, so now we're dealing with the challenging topic, I guess you could say, of a client that you've had a historically semi-parasitical relationship with who is now kind of fussy and negative and problematic and is completely sapping your will to live, right? Yeah.
Now, I guess the question then arises, is your heart in the business at all?
In other words, is there any scenario under which you could see resurrecting your pleasure and joy in what it is that you're doing?
I have one client that I have a contract with where I paid a base and a commission every month for, you know, just general internet marketing, promoting their website, getting their products sold online, and I enjoy that.
I mean, I enjoy knowing what I need to do.
I mean, I worked for this company when I got out of high school and then I went on to start my own business and then they became my client.
So we just have a really nice understanding of expectations and I feel like I'm getting paid well for the work that I'm doing for them.
And so if I could find more clients like that, I know that I'd enjoy what I'm doing.
Well, I'm going to just correct your language a little bit.
You don't find clients like that, you create clients like that.
I mean, you have the power.
This is the entrepreneurial power.
You have the power to create clients like that.
Going out and finding them is a real needle in a haystack, right?
As you know from your other clients.
Right. So the way that you create clients like that is you manage reasonable and rational and mutually beneficial expectations and negotiations from the very beginning, right?
And that took years to perfect that with this client.
I mean, being an employee of that client, at first it was a pretty subservient relationship and I didn't know how to assert myself.
And just over time I realized what power I had in that company.
And then the tables, I don't know if the tables turned or if it just became more equal and I was able to discuss openly any problems I was having.
Right. And look, there are people in business who will look out for your self-interest.
There really, really are.
People, like, I mean, just for a tiny example, an FDR employee last month was doing outreach that didn't generate the results that we both hoped for, and so I didn't get his bill, the bill for his services, right?
And so I called him up and said, where's the bill?
And he said, well, you know, I just don't feel like I did a really good job.
I don't know if I should really bill you for it.
Because I didn't get the results that I wanted and so on, right?
And so, of course, I said, no, you bill me for it.
I'm the entrepreneur, not you, right?
And we both agreed that this was going to be a viable approach.
The fact that it didn't work is not your issue, but mine, because I'm the one who's the entrepreneur, who's taking the risk, whose sort of face is front and center, right?
So I'm looking out for his self-interest there.
Now, lots of people would say, yeah, you're right, that wasn't a really good campaign, so why don't we just pick up the billing next month, right?
And they'd save that money for themselves, and they would say, well, if this person is willing to work for free, I'm going to take it.
And there are a lot of people in business who are like that.
And there certainly are people in business who will look out for your self-interest and give you the room to negotiate and grow.
But those people are a relative rarity.
And of course, if you give work away for free, it's like just throwing a bloody fish in a pool of hungry sharks, right?
Maybe there's some enlightened shark who will be like, well, I don't want to get into this kind of messy feeding frenzy.
But most sharks will just instinctually go and chew it, right?
Right, right. So you want to have more control.
You don't want to surrender the control for the quality of your interactions to the client's reasonableness, right?
Yeah, yeah. Because that's going to leave you feeling helpless and depressed and at the mercy of other people's whims, which is fundamentally what's ground you down to this point, right?
Right. Depression is another word for a lack of control, a lack of ability to effect change, right?
Right. And that's certainly how it's been lately.
It's like I don't know how to change what's going on in the current setup.
And so I just don't feel like moving at all.
Alright. If you have no contractual agreement with the person you're doing support for, you have one of two choices, in my opinion.
And this is just my opinion, right?
Either you can fire the client, and firing the client is an absolutely essential part of business success.
90% of client support money goes to 10% of clients.
The figures are actually more detailed than that, but that's sort of my rough memory of it.
There are a few clients who tend to be very high maintenance and who do not pay for themselves.
And it is absolutely wrong, I believe, to use The revenue from more reasonable clients to subsidize unreasonable clients, right?
Right, right. It's like taking money from your good wife and giving it to your bitchy mistress, right?
I mean, the virtuous clients should get the savings for being virtuous, right?
For being reasonable, for being willing to pay for work that they ask for you to do.
Those clients should get the savings, right?
And the reasonable prices for reasonable people, right?
Unreasonable prices for unreasonable people, right?
So if you're taking money from reasonable clients and giving it to unreasonable clients in a cross-subsidy, you're kind of punishing good people than rewarding bad people, right?
And I certainly feel bad about that, like my current client that is the good client.
I haven't been as motivated lately to work on his projects.
If your business goes down, the good client gets screwed because you were placating or appeasing the bad client, right?
Right, right. That's not going to make you feel awfully proud, right?
Sorry you were suitable, but you got completely screwed because I was too busy running around placating and appeasing my anxiety with the bad client, right?
Especially since I have an eight-year history with this client and he's offered me all the opportunities I've needed to even start this business.
Without him, I doubt I would have even started my own business.
Right. So this bad client is hoovering your soul dry.
He's vampirically fastened onto your jugular and is sapping your will to live, right?
Yes. And I know it's not just one, but we'll just talk about that, right?
So tell me why you don't fire the client.
Why don't you just call them up and say, I'm sorry, I'm going to have to stop supporting your product.
Because they'll get angry, right?
Angry and, I mean, it's actually she and she keeps dangling carrots in my face like, ooh, I'm going to get you this job over here.
Look it, I know these people and they want a website.
And I keep just like, oh, well, you know, I need more business and But it never comes.
No, I mean, she's gotten me a couple jobs.
In the couple jobs she did get me, it ended up being hell.
I mean, it was just the same kind of clients.
I guarantee you, this is a law of psychology.
This is a law of reality.
This is physics. This is the physics of relationships.
Any client that a difficult client refers to you will be a difficult client.
Because if they were good, reasonable people, they wouldn't be a business contact of this person.
Right. Right? Every woman that a nasty woman introduces you to is going to be a nasty woman because a good woman won't have anything to do with her, right?
Right, right, yeah.
So that's never going to happen, right?
I mean, it's just waking up from the illusions, right?
Because the reason you're getting depressed is because you're feeling powerless.
And the reason you're feeling powerless is you're believing a whole bunch of stuff that's not true, right?
It's not true that you have to – there are no unchosen positive obligations.
You have no contract. You can call them up.
You can just send them an email and say, sorry, I'm going to have to relinquish the support contract because of, you know, whatever, X, Y, and Z. Just make up some stuff, right?
And that's, you know, there are no unchosen positive obligations.
You have no contract. I mean, this is like dating, right?
I mean, if you were in a relationship which makes you miserable, what do you do?
If you've exhausted all options for improving it, Yeah, yeah.
You break up, right? Right.
They'll break up. There's no different principle in business as there is in romance or friendship.
You're not here to serve the greed and narcissism of other people, right?
Right. So you have power in that situation.
Now I know that that's a difficult and unpleasant thing to do and it feels counterintuitive and it's going to bring up all this anxiety.
But that's your issue to manage, right?
You know the right thing to do is to not be exploited because it doesn't help the person who's exploiting you and it sure as hell doesn't help you and it punishes the good people in your life, right?
Right. Right.
Right. Right. Now, on the other hand, if you feel that it's vaguely possible, then what you can do is you can begin to charge for everything you do.
Now, in my opinion, that will change.
It's very, very hard to reconfigure a relationship after the basic principles have been established.
It's really hard to do that, in my opinion.
In my experience.
So you can either say, I'm going to charge you for everything, including this phone call, right?
Then that person will probably...
But they'll make your life hell before it ends, right?
That's sort of my experience, my opinion.
You may just want to say, and here's the source code, and you're welcome to find another shop to maintain the code, and so on.
But unfortunately, I'm too busy with paying jobs, right?
I'm too busy with stuff that makes me money.
Yeah, yeah. I mean, if I'm only going to pay a real estate guy 1%, can I really complain about being at the bottom of his list when there are other people who will pay him 3% or 4%?
No. He's like, I'm too busy with stuff that's making me money.
Sorry, right? Right.
And I actually said that, I actually did that with one client about a year ago.
It just was too much.
I was actually making good money with that client too and the expectations were just impossible and it was horrible.
It was sleepless nights thinking about this and finally I just, you know, I'm done.
I can't do this anymore. I'll help you transition to somebody new.
And it was a pretty amicable parting.
I didn't think it would be, but it, you know, he was fine with that and it worked out and I didn't have to deal with him ever again, so I don't know why I'm having so much trouble again doing that.
Right. Well, because you're scared, right?
Yeah, yeah. I mean, it comes down to just you're scared, right?
I mean, there's nothing, there's no dishonor in that, right?
There's dishonor in marching on as if you're not and getting depressed and ruining your life and losing money.
I mean, that to me would be dishonorable, just sitting there looking in the mirror and saying, for some reason, and it doesn't particularly matter for the business what the reason is, for some reason this person has their hooks in me so deep, you know, I might as well be stuffed on the wall of a seafood restaurant, right?
Right. And it doesn't matter particularly why.
That may be a matter for, you know, another discussion or whatever.
But the fact is, just admitting, this person, you know, I'm wrapped around their finger.
I'm, you know, they're playing me like a marlin and I'm not able to have a productive and positive and respectful and profitable business relationship with this person.
Right. And if you attempt to manage your anxiety by avoiding What you know you have to do, you will simply become more and more depressed.
It's just looking at the cost-benefit, right?
If simply confronting your fear and doing what you know you need to do is not going to give you any real benefit, then why would you do it, right?
Yeah, and then there's a side of me that talks to me and says, well, if you drop this client, like I was doing a year ago with this other client, if you drop this client, your income's going to drop.
You're going to be in trouble. You're already in financial trouble.
You're If you drop this client, you're going to be in more trouble.
Why would you do this?
Well, clearly the reason you would do this is because if you lose all motivation to run your business, what is your financial situation going to look like?
Yeah, and that's what I keep trying to have this discussion with this other voice in my head, and it doesn't even want to listen.
Okay, keep that voice, and I'll try and reason with the voice.
Yeah, yeah. Alright, I mean, we're already...
The company is leaking cash.
It's just bleeding to death.
And you want to drop more clients?
It just... That's a very scary proposition.
Sure, I understand that.
I understand that. But could the argument not be made, Mr.
Bad Business Voice, that the fear of that has actually got us to this situation?
That this situation may not be a cause of your fear but an effect of your fear?
In other words, because we didn't fire clients who were bleeding us dry emotionally and spiritually and financially, we have ended up depressed, unmotivated, in despair and in a poor financial situation.
I'm just saying, could that be the case?
Yeah, but why do we have to let these clients control us that way?
Why can't we take the power back and just...
It's frustrating to watch you say yes to these customers all the time when I, you know...
When we could be doing something.
We could be...
I don't know. I guess I'm afraid to do that too, though.
I just... Well, look, I understand that it's frustrating to watch me cave, you know, like a bad seawall every single time we're talking to these clients.
And it would be great if that wasn't who I was at the moment.
Sure. You know, but it would also be great if I could fly and, you know, shit rainbows, right?
I mean, that would be wonderful. I could make a really good living at Cirque du Soleil.
But the reality is that we have to deal with what is rather than what would be nice if it were.
And the reality is for whatever reason, I can't say no to this client.
And we know there's lots of personal history that goes into that kind of situation.
But the reality is that I can't say no to this client, that I have created and established a relationship wherein exploitation and bullying and false promises, this dangling of the other clients has become the norm in this relationship.
That is the reality that we have to work with.
And going back in time and saying, well, it would be different if and so and so and so on, right?
This relationship has been run off into the ditch.
It has a lot to do with the decisions that I've made to avoid the anxiety.
It has a lot to do with the decisions this client has made to exploit my anxiety.
But the reality is that that is where the relationship is.
And we clearly have to start with the realities, right?
Right. And I guess I'm just, it makes me think, you know, when you say that, I'm still afraid though.
I'm afraid if we drop this client, then we'll have to find new ones.
And you've never been too good at sales.
Clients have just kind of fallen in your lap.
And I just, I'm afraid I don't know what to do from there.
Why are we afraid of sales?
In your opinion.
Whenever we talk to a new client that we don't know, that we don't have an established relationship with her, established relationship through another client with, it makes me nervous to talk to new people in general, not just with clients, but in general with people in but in general with people in public.
And why do we feel nervous when we talk to new clients?
I'm not really sure. I mean, I've felt that way my entire career is, I guess, being rejected by the client.
Yeah, you're afraid of rejection, right?
Right, right. Right.
Because you think that rejection means something about you, right?
Yeah. Okay, let me ask you, Mr.
Bad Business Voice, do you believe that we have something of real value to offer our clients, or are we just kind of ripping them off?
Oh no, I certainly think that we're offering a lot of value to clients so we can directly affect sales with our internet marketing skills.
Will we be offering more value to clients if we get rid of our bad clients?
To new clients, I mean. In other words, if we are depressed and our time and emotional and financial and intellectual energies are being drained by non-paying clients, are we providing a lot of value to new clients?
Oh, we can't provide any value to new clients?
Not really, no, right?
So is it clear at least that the best way to be sure that we're offering value to new clients is to get rid of the underperforming clients?
Yes. Right?
Yeah. Right.
If you want a new relationship, you have to get a divorce first, right?
If your marriage is dead, right?
Right. Because if you're still married and you try and have a new relationship, any woman of integrity is going to want to have nothing to do with you.
She doesn't want to be a mistress, right?
Right. So do you see also that the fear of new clients is heavily involved in the despair and loss of value from the old clients?
Yeah, I do.
So when you're talking about a fear in the future, what you're actually talking about is a wound from the past, right?
Right. Right.
So saying, well, we can't let go of these old clients because we don't feel we have enough value to offer new clients is putting the cart before the horse, right?
The reason that we don't have confidence in what we can offer new clients is because we have all these old clients hanging off our neck, right?
Right. I mean, this doesn't eliminate the fear, but has at least put it in perspective.
Yeah, there's a lot less fear thinking about it that way.
I mean, I feel a lot more motivated, actually.
Right. If you could, like, if we could set up a situation, Mr.
Bad Business Voice, if we could set up a situation where we knew for sure that we were only going to work with reasonable clients who would pay us for what we did and we would enjoy working with, and the price of that was ditching the deadbeats, Would that be enough motivation to ditch the deadbeats, or do we want to go straight off a cliff into bankruptcy and then have to get some job and work for someone else?
The prospect of getting a job gives me more fear than finding new clients.
Right. So this is just going to have to be between, you know, the train is going off a cliff and we don't want to jump out of the train, but we know what the alternative is if we don't, right?
Right. So, if we don't get rid of the bad clients, we will not have the confidence to build new relationships and we will not be able to turn this around and we will also stay depressed and get more depressed, right?
Right. So, what are you trying to kill us?
I mean, what kind of plan is this that you've got here?
That we just continue doing the same thing that has made us depressed and sad, right?
I mean, sell me on this plan because I'm a little baffled, right?
Yeah, I always thought the planning was up to you.
No, no, no, no. You can't say that because you're raising all these fears about what the solution is, right?
So your plan is obviously doing more of the same, right?
Because if I've got a plan and you get in the way, it's because you've got a better plan, right?
Yeah. So, let's hear your plan.
If you don't want me to go east, then you must think that we should go west or some other direction, right?
So, where is it that you want us to go to solve this problem?
I don't know.
I don't have a plan.
Yeah. So you're Mr.
Like, if we freeze, nobody will see us, right?
Yeah, yeah. Look, and I understand that.
I mean, I know that when we were growing up, whenever we made a decision or tried to implement something, we'd just get attacked, right?
Yes, yes. You're Mr.
Like, okay, if I don't move, the predators won't see me, right?
So anytime any solution is put into place, it raises anxiety for you, right?
Yes. But we're not at home anymore.
We have that choice and we have that option now.
And if we continue to act like we've got 500 laser sniper things on our chest, we're never really going to be free of the past, right?
Right. So while I certainly sympathize with and understand the fear and the caution, it can't be our compass, right?
Right. Right.
It's just, I mean, it just causes so much fear.
I wish I knew a way to not have it cause so much fear.
I mean, I know you can't control your emotions, but it's a scary prospect.
No, you're going to have the fear. You're going to have the fear, which is rational, because you wouldn't be in this situation if you hadn't been afraid, right?
Right. I mean, the situation comes out of fear.
There's no way to snap away the fear, to make it vanish, because the fear is actually healthy.
The fear is healthy.
I bet you, I bet you, the first time that you got exploited by a client, you felt sick to your stomach, right?
Yeah, oh yeah. So the reason this bad business voice guy is screwing up your future is because you didn't listen to him in the past, right?
Wow, yeah, you're right.
That's why he's just getting back, right?
It's like, hey, you don't listen to me, I'll fuck up your future, right?
Because he's got really important stuff to tell you, right?
Right. Which is, I know, he's the guy who knows when you're being exploited, right?
Right. He doesn't have a seat at your table.
You just shout him down. You're like, hey, we need the money.
Forget it, right? Yeah, I guess I'm having trouble differentiating the voices because I always thought he was the one shouting me down, or at least lately he's the one that's been talking a lot and saying, nope, you're staying in this spot.
You're staying right where you are.
You're going to continue on this path, but I guess that's just the revenge he's taken on me.
Yeah, I mean, he's got to have a seat.
I mean, as we talk about in this home ecosystem idea, he's got to have a seat at the table, right?
He's got to have a seat at the table because he's the guy who can smell...
Exploitation like one pot per billion in the water, right?
He's like got a shark's nose for exploitation and you need him in order to be able to figure out he's your blink moment, right?
who figures out who's good for you or bad for you and if you don't listen to him he's just going to screw you up yeah and that doesn't mean that he won't be nervous but you need him to be nervous Because there's lots of people in this world to be nervous of, right?
We want to be nervous of them, right?
We want to know that there are predators in the woods so we don't get eaten up, right?
Right. And we want to be alert for the crack of the stick and the slither of the bushes, right?
But then we need to act on it.
So this is the important thing.
When you feel uneasy around a client or a potential client or whatever, you need to accept and process that as important information, right?
Not just override it and keep plowing on, because as you can see, it just puts you straight off a cliff, right?
And looking back, I just knew right away about these clients.
You did? Absolutely.
I just had that sense that, man, I shouldn't be getting into business with them.
Yeah, that you did not feel good, right?
Right. So, the good news is your antennae is perfect, right?
That's the good news. The good news is you are perfectly capable of figuring out negative business relationships ahead of time, right?
Right. That's fantastic.
What a gift.
What a gift.
And I'm thinking right now there is a client that my first meeting with him was just wonderful.
And he's been pushing to do more business with me.
And I've been a little hesitant just because of everything else that's been going on.
Well, yeah. And I could certainly dive into that more and, you know.
Right. But you have to say to yourself, life is short and my professional time is valuable.
Yeah. Yeah. And if people don't want to pay me, that's totally fine.
They're free to not pay me.
They're free to try to exploit me.
They're totally free to try and get something for nothing.
And I have no obligation to them whatsoever.
None. They're free to do what they want to do, and you're free to do what you want to do.
I guess I have a fear that there's just not too many good guys out there.
Like, in my experience, I've come across people.
This is what you're not listening to.
Right, right. You're still passive saying, well, I'll just go call on a thousand people and hope that there's one nice guy in there, right?
We teach people how to treat us, right?
Right. You have an incredible power and effect on how your business relationships go.
That's the part that you don't see yet, right?
Because you had no effect on your parents and teachers and so you're just passive, right?
I hope I get a good teacher, right?
And that's how it realistically was, right?
It was that way, yes.
But this is different, right?
You can create these clients.
If you go in with the knowledge that you have value and that you don't do stuff for free any more than they do and that there's going to be reasonable expectations on both sides and that you don't have to engage in anything you don't want to, you will change how they treat you.
You will change how they treat you.
Most people just say, what does this person think of themselves?
That's what I think of them. Right?
So you're actually creating...
I mean, I'm not saying that you're responsible for it, but you are creating these exploitive situations in how it is that you approach and deal with these clients.
And if you get that, that it's how you deal...
It doesn't mean that every relationship will go perfectly, and you're still making...
But fundamentally, if you get that, you create the relationships by what you bring to the table, what you bring in the room.
And what that means is you avoid relationships.
If someone's a real exploiter, and you come in confident, and the first time they...
Ask for anything new. You went through what we went through before.
You won't have those people in your life for very long.
Yeah, I can get rid of them early.
Yeah! And once you get really down to it, you won't even get into business with people who give you that vibe.
And you'll be totally right.
Right. You know everything you need to know about somebody in the first 10 seconds.
And once you get used to trusting that and not just downgrading, right?
Because obviously your parents and your teachers didn't want you to go with that information because it wouldn't have been advantageous to them, right?
But once you get that, you know exactly who's going to be great to do business with right away.
Once you get that, you will have power and you will no longer feel depressed and your business will flourish.
Well, that's excellent.
I mean, that makes me really feel good.
And I think I'm ready to take some action and cut out this dead wood and start to work with the clients that I do have positive relationships with.
And from there, I'm sure I can find some more.
Yes, I guarantee you that that will happen.
Well, let's quit then while I'm ahead so I don't keep lecturing when you're ready.
So I hope this was helpful.
I appreciate that. I'll send you a copy of this, of course.
You can let me know what you think, but I think this would be very helpful for other people.
As always, I really appreciate it, Steph.
And just go ahead and release it.
I have no problem with this being released.
Okay. Well, keep us posted, eh?
What's your website? Okay. Website is richandclever.com.
Richandclever.com. Because if this is going out, we might as well give you a plug, right?
All right. Thanks. Okay, man.
Bye. All right.
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