Psychotactics Blog

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When you are starting up should you work for free?

The advice about “free vs fee” is clear. Free should be avoided at all costs because you will just be taken advantage of, while others get paid. Yet, this seemingly black and white advice has shades of grey as well.

As a startup, payment isn't the only or even the best option. Find out how and when free can work to your advantage.

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In 2009, I flew to Chicago to speak at an event for free. And I made $20,000.

If you're a professional, there's a good chance someone will ask you to do something for free. Which puts us all into a bit of a pickle. Should we respond with an outright NO? Or should the answer be YES?

And perhaps there is a middle ground that we need to explore. But invariably all of these questions are irrelevant until you ask yourself a single question.

“What's in it for you?”

To explore this topic a bit, let's look at:

1- How to frame the “WIIFM” (What's in it for me?) question (and answer it as correctly as possible).
2- How to makes sure you get paid.
3- The $20,000 story—and how you can negotiate from free to getting paid.

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1- How to frame the “WIIFM” (What's in it for me?) question (and answer it as correctly as possible).

For the past three years, I've done an annual event absolutely free.

I want to call it “free”, but in reality, it costs us money. We have to fly to another country, and there are internal travel and food costs involved. Which means that even though part of the travel and hotel stays are covered, we end up spending money.

The audience we speak to is quite small, often fewer than those that show up on a webinar. And they're not always suitable matches for our business.

Does it sound like a bad deal?

If you look at it from a time and money point of view, it's not ideal. However, one of the reasons why we make this trip is because it gets me out of the office and I meet up with other speakers. There's been minimal economic gain and whatever little we've earned has been cancelled out by the travel costs. Even so, at least until now, it has made perfect sense to speak without charging a cent.

The singular, most important question is: WIIFM (What's in it for me?)

My benchmarks have usually been:

1- A new place to visit
2- People I might have ordinarily not met
3- An economic gain of some kind

Yet, when I started, none of these three benchmarks mattered

I was an average speaker and needed a lot of practice. Which is why I'd willingly seek out every possible free speaking engagement I could find. Usually, they were small clubs, networking meetings and local groups.

They expected little of the speaker, which suited me just fine. I could practice both my speech, pacing, watch where the audience laughed or objected and fix things accordingly.

My goal was to get an incredible amount of live practice

The practise is what you're likely to need as well. While most people (me included) might suggest you don't do anything for free, if you can help it, it's not always practical advice. It helps to think of it as a course, instead. In a course, you do a bunch of assignments, and instead of getting paid, you pay for the course, don't you?

There are times when you need to learn, and unless you get a lot better, it hampers your growth. In such situations, it's best to stop thinking of what the experts tell you, and work for free.

Which is how I got into advertising as well

I was just out of university. I'd done some shoddy, but official advertising course that taught me little or nothing. And I had a degree in commerce and accounting, but not a shred of work experience in copywriting. While my colleagues got jobs in tiny agencies, my WIIFM was to get into a well-known agency.

Which is why I offered my services for free. “How about I work for a month, free of cost, and if you like me and I like you, we can continue,” I said to the creative director. “If it doesn't work out, we can go our separate ways.”

I was lucky she was more open to this strange proposition than most

Most people would have turned me down. Even offering your services free is no guarantee of any benefit to most people, because let's face it, you're a beginner. You're more likely to get in the way, goof up and end up embarrassing the person that took you on.

At this point it seems like people are doing you a favour when you offer your services free of cost

I think that's just the way to look at any opportunity that is something that appeals to you. When you're starting in any field, people are taking a chance on you. And from your point of view, you need to look at WIIFM? In my case, every time I worked for no cost, I did so willingly, and there was a definite benefit, and not all of them were economically gainful.

Ask yourself: WIIFM? If you have enough of a reason—and especially if you're learning the ropes—then go ahead and treat it as a course. It's an assignment that you have to learn from, and they're not charging you for it.

Even so, as is evident, offering yourself for free can only go so far. When do you cut the cord and start charging? In other words, when is “free” unacceptable?

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2- How to make sure you get paid

Let's say you've been invited to speak on 15 popular podcasts. What's your reaction?

It's more than likely that you'd be quite excited, even if the podcasts were each an hour long.

And you realise where this train of thought is going. Not one of those podcasts is likely to pay you for your time. You expect that the podcast episodes will be broadcast. You extrapolate the number of listeners who are likely to buy into your products or services. And yet, it's all a thought process built on conjecture.

Yet if someone asked you to put in 15 hours of work with no return, you'd think they're crazy.

Which kind of brings up the question: What makes one kind of situation suitable for payment, whereas the second one can remain unpaid? And what is it that makes us resent one assignment and wholly embrace the other?

I tend to boil the answer down to two factors

1: Money
2: Time

While working for free is perfectly okay when you're getting your act together, the biggest reason why you're in business is because you want “more control over your life”. Without money and time, even the finest business plan goes veering off into the ditch, which is why you need to be paid for your effort.

Let's take an example of giving a presentation

If you've ever been contacted by someone to give a presentation, you've probably been asked to do it for a pittance, or free. Maybe, they'll throw in some travel fee and put you up in a hotel.

Yet, as you look around you, you'll notice that other speakers—possibly at your level—are being paid. Why would such a double standard occur, you may think to yourself?

The answer often lies in the way you're presenting yourself

When I was starting in business, I too got a dime a dozen speaking engagements—all unpaid. However, during that same period, I was also getting paid a small sum of $1500 to speak at events. How is it possible that you can be paid and be expected to speak free of charge at the same time?

The answer lies on almost any big-name author website, for example. If you want David Epstein to be a speaker at your event, you have to get in touch with Holly Goulet. Who's Holly Goulet? She's the Senior Vice President of APB Speakers.

Once again, you realise where this is going, right? If you end up on APBSpeakers.com you are going to be faced with a form, then asked for your budget that starts at $7,500 and ends up at $100,000.

If you want to be paid as a speaker—and I did—you need to go where people look for paid speakers

It seems pretty obvious when you think about it, but anyone directly contacting you is very likely to be expecting you to do a favour of sorts. At Psychotactics, we have cartoons all over our site.

You'd think it would be rude or even unacceptable for someone to write in and ask if they could use our cartoons free of charge. It rarely crosses their mind, and mostly they're not trying to be rude. They fully expect to give you credit, but credit does not pay any bills.

To get paid for speaking, I got in touch with a speaking agency.

To get paid for my cartoons, I did something similar—I signed up with an illustration agency. I didn't get paid superstar sums as I was still very much an unknown quantity, but I got paid well enough to keep the home fires burning.

There might be many situations, however, where signing up to an agency would be slightly bizarre

Maybe you're a graphic designer or a web designer. Or you offer services of some kind. In every situation, you want to fend off the “will you do this for free”? By having a charge next to the products and services you provide.

While many of us aren't sure about how much we will charge, there might be smaller tasks where you can estimate a rough cost, and you quote that price accordingly.

For instance, we had to deal with some developers recently as we installed a new forum on the membership site at 5000bc. Their price per hour? $150. If we wanted to make some changes, the billing would be based on how much more time they had to spend on the project.

In short, if you want to get paid, you can't rant and rail about why people are not paying you

You have to position yourself in the right places in the first place. You might believe that you're just starting and no one will hire you. Maybe a top-notch agency will turn you down, but many smaller agencies will put you on their roster.

As clients go to your website, they will see they have to contact an agency. That alone will give you a bit of a boost in their eyes because now you're more of a hotshot than they expected. And yes, there's a chance they may simply go elsewhere.

Your job is to get paid for your time

Make sure you present yourself as a professional. If you don't, you will continue to get requests from the outside world asking you to do things for free. And sometimes, you might want to go on those podcasts or do something absolutely free, but that is entirely your call.

Yet, there are times where you aren't likely to get paid, and you can't justify doing things for free, either. That's when you need to pull out your negotiation handbook because you're going to have to bend the rules a bit. Let's find out how you can handle non-paid situations and still get paid.

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3. The $20,000 story—and how you can negotiate from free to getting paid.

I was voted the best speaker at an event three times in a row. The fourth time, I didn't get invited back.

Back in 2009, I knew I had to make a very long trip yet again, to a far off land. Yes, America. The workshop was closer to the East Coast, which meant I had to fly 12 hours to San Francisco, stopover and then a further 3-4 hours of travel. It was my third trip to this event, and I was excited to get to my destination. The event was very well marketed and had between 200-250 attendees.

However, there were downsides as well

The airfare was not being covered, and neither was the hotel stay or the food. While the organiser allowed us to sell product or services from the stage itself, he also took 50% of the sales as a commission. In short, it was heavily tipped in his direction, and we had to hope that somehow we'd recover our costs and make a decent profit as well.

This event wasn't the first one with such conditions, either

I'd spoken once in Australia (where I barely made back the money we spent). I'd also spoken in the US before at different events. And yet, here I was again, for the third time in a row. However, until that point, I did believe to some extent that I was in training, and that it was money well spent. Yet, in that third year, I decided to do a deal.

When you're starting, it's hard to decide between free and fee, but there's an in-between mode too.

It's called a deal—as you'd expect. And there's no prescribed formula as every situation is different. However, if you're dealing with someone that is not going to pay at any cost, an in-between bargain is what you need to strike.

In the case of the speaking engagement, I decided to ask the organiser to pick up the travel costs of Renuka and me—or if he weren't agreeable to that condition, I would get to keep 100% of my sales.

At first he agreed to pick up all the travel costs, which would have amounted to about $3500

However, later, he decided he wasn't going to pick up the bill and agreed to our terms. Which turned out to be a slight misjudgment as we sold approximately $20,000 worth of products and services from the stage.

Which, seems like a lot—and is a good payday no matter how you look at it—but we'd done our groundwork. We'd spoken at many events, bombed badly, learned the ropes of speaking, selling and yes, negotiating.

There's always room for negotiation

At speaking engagements, you could ask to sell something or to have an extra table where you demonstrate your products. You could work out a pre-call or pre-webinar where clients tune in to listen/watch you, thus warming you up to them before the event. If you're not into speaking, there are likely to be things that you could ask for, as a barter.

When I first started, I'd draw cartoons free of charge, but I'd get costly books from the publisher or marketers online. Expecting to get paid in cash and having costs paid is not as crazy as it sounds, but saying no is not always the best solution. You need to weigh up your options and see what you have to lose, and potentially what you can gain.

The organisers are no dummies

They know people have to eat, get clients etc. And yet, there may be times when you can't think of what to ask for. In such a condition, simply state put the decision making in the organiser's camp. Tell the organiser that since we're all professionals, there has to be some value in it for everyone.

Ask what they could do for you. Don't ramble when you ask this question. Just keep it down to a single line: What could you do for me to make it a fair deal? It might be that they're unreasonable, in which case you can sit on your high horse too.

However, in many cases, they're likely to come halfway. At which point, the negotiation doesn't need to die. You can still push for a little more if needed.

But shouldn't they pay you anyway?

They do pay for everything else. Electricity, petrol, rent, airfares. There's no bargain there, is there? You'll be surprised. Even in those situations, there could be a bargain. Airlines may barter for your services, offering fares in exchange for work or publicity.

Petrol, or electricity, I'm not for sure of, but people are doing deals everywhere that may not necessarily be dollars and cents, and yet still count as money. There is a point, however, where you may decide that only hard cash will do.

At Psychotactics, we did many deals when we were growing up

We don't do that now. If I do something free, it's because I'm doing a favour for a friend. Even so, I will still ask them to pick up the costs—if any. However, I think it's important to not simply think of the payment issue in black and white alone.

A big shot might tell you that you have to be paid as a professional. That's true, but it's also black and white. Look at the greys too. There's a lot to gain in-between as well, and those greys may well pay the bills after all. 🙂