Freelance vs. Business

    Freelance, as a mass phenomenon, appeared recently, I think no more than 10 years ago, along with the global spread and socialization of the Internet, and today this model of business activity is still very little studied, today's freelancers are essentially pioneers who are studying a new way of life directly on myself.

    I went on my solo voyage in the oceans of the world economy about 5 years ago, but safe fishing in the coastal zone quickly got bored, I was always attracted by the open ocean, where huge liners of world corporations and fast startup yachts sailed away.

    For those who, like me, are not satisfied with the simple sale of their time on the free market, I will describe my path, which seems to me the most direct and obvious course for the evolution of a freelancer.

    For the first year or two, you work enthusiastically in a new, freer environment, gradually gaining the skills of a manager who so far has the resources of only one performer — himself, and if everything goes well, then very soon these resources begin to be sorely lacking, stagnation sets in.

    The most obvious solution is to delegate work, you break up large tasks into pieces and entrust them to other specialists, most likely the same freelancers. Things are moving from a dead point, the size of projects and turnovers are growing by an order of magnitude, you practically cease to do your original work and focus all your attention on management.

    If you continue to move in this stream, then the next crisis will come very soon, now your throughput as a manager is already exhausted. A dozen simultaneous projects and several subcontractors generate a stream of managerial issues, which can even be a very capable manager.

    Some time ago, I found myself in just such a situation, my bandwidth, as a manager, was exhausted, but I had to somehow handle an ever-growing stream of orders. At this time, my production process looked like this.
    • some of the customers need to do some work,
    • he contacts me by email formulating the initial requirements,
    • we coordinate with the customer the details of the work and the deadline for its completion,
    • if in this case a piece-rate payment scheme is applied, then a bargaining and coordination of the cost of work occurs,
    • after, and sometimes in the process of agreeing on the parameters of the work, I contact one or several of my subcontractors by email and offer them some part of the work, and I have the exact same process with them as with the customer, but I'm already on the other side
    • after all conditions are agreed with all participants, the work begins,
    • development is the calmest stage, if the ToR is well composed, everyone just works,
    • then the subcontractors begin to hand over their tasks and I check their work,
    • when all the sub-tasks are completed, I submit the work to the customer,
    • then I seek confirmation by the customer of the acceptance of work and write down the amount of debt in the balance of the customer in the general Google Docs table, each of my subcontractors does the same.

    Now imagine how the work at the same time as a dozen customers and several subcontractors looks like, holding all these flows takes a lot of time and effort, but it comes down to constantly repeating processes.

    And of course, I started looking for suitable tools to streamline and automate the whole process, and I saw that control system manufacturers focus exclusively on traditional companies, not freelancers, and yet there is a big difference between these options for doing work.

    Agreement and bidding

    Only in a traditional company can a task be set for a person, and this means that he automatically begins to fulfill it, no one asks him whether he agrees to do it at all, whether he can complete it on time, and if he is satisfied with the proposed payment. This is unacceptable for a freelancer, approval of conditions, bargaining - this is the most important part of the work process, which has to be addressed in e-mail. But this process is standard and always proceeds according to one scenario:
    • one of the partners offers initial conditions for the task,
    • if necessary, the second one corrects them and makes a counter proposal,
    • the task is transferred from one partner to another until the conditions are satisfied by both parties.

    In this case, several simple mechanisms are needed:
    • Compare two versions of TK by visually showing the changes made by the partner,
    • if one of the partners has forgotten that the other is waiting for a decision from him, you need to periodically remind him of this until he either accepts the conditions or refuses,
    • after a period of time, if the contractor has not accepted the task, the customer should be able to withdraw the task and transfer it to another contractor,
    • the task should include a time-based or piece-rate payment scheme.

    Handing over and accepting work

    Handing over and accepting work for a freelancer is no less important process than accepting a task for completion, and the following processes occur:
    • the customer should be able to offer the contractor to hand over the work ahead of schedule in its current state, if circumstances have changed,
    • after the expiration of a certain initially agreed period, if the customer has not made a decision, the work should be taken automatically,
    • the customer should be able to send the task for revision, and the contractor should accept or reject it,
    • after accepting the work, its cost should be automatically recorded in the calculations of partners.


    Delegation of work is the main mechanism for scaling freelance, it is extremely important that it is done easily and conveniently:
    • you need to be able to negotiate terms with subcontractors before accepting a task from the customer,
    • delegated tasks should not interfere with working with current ones while subcontractors work on them,
    • after delivery of work to the customer, it is possible to accept the work of subcontractors automatically.

    Mutual settlements

    In a traditional company, financial relations are completely separated from workers, in very few management systems you can assign a value to a task, and maintain full-fledged partner settlements and in general only in units. While for a freelancer, this area is no less important than task management and similar rules should apply in it:
    • if a partner wants to add an operation unfavorable for that to the calculations with another partner, his consent to make this operation should be requested, the same thing when deleting a profitable operation, in other cases, just a notification is enough,
    • reminder that the partner is awaiting confirmation of the transaction,
    • freelancers often live in different countries, you need transparent accounting in different currencies with real-rate translation so that you cannot play on the exchange rate difference.

    As you can see, the described mechanisms are fundamentally different from what modern management systems for the corporate sector are built on, and without these mechanisms the benefits of such systems for a freelancer do not far exceed the capabilities of email. My colleagues and I tried several systems (dotProject, Basecamp), but eventually returned to GMail and GDocs. But the thought of how convenient and correct everything can be done was haunting, and in the end we sat down and wrote such a system ourselves.

    The system was implemented as a social network in which the participants are not friends, but enter into business agreements, and do not send messages, but set tasks for each other and carry out mutual settlements. Over time, this system has overgrown with many additional features and capabilities, and at the moment it’s hard for me to imagine how you can do without it.

    As a result, my problem of administrative congestion was resolved, using the right automation to conduct many small projects simultaneously is not difficult. For me, the main result of this experiment is the confirmation that freelance has good scalability, not inferior to many other types of business, only it needs to be automated differently than a traditional business.

    We are currently working on the implementation of the project of a full-fledged fully virtual company, I touched on this topic in last year's article Corporate slavery, runaway slaves and a virtual corporation , but this requires refinement of the system, which we are currently working on .

    The management system is called WorkReactor, I will not give a link, those interested will find it. We invite everyone who, like us, believes that freelance is the future of labor relations.

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