Seth Godin’s The Dip explains why pushing through difficult phases in any pursuit leads to great success—while knowing when to quit is just as important. The “dip” is the tough, discouraging period between beginner’s luck and mastery, where most people give up. But sticking with the right dip makes us rare and valuable. On the other hand, dead-end efforts (“cul-de-sacs”) and unsustainable paths (“cliffs”) should be abandoned quickly.

Let’s explore how to recognize and navigate dips.

Being the best in the world

Being the best. The rewards for being the best at something are much larger than those for being a little further down the line. Since being at the top is rare, scarcity commands higher prices for those at the top.

The world. “Best in the world” is subjective: the consumer decides what’s best, and the world is the micro-market they’re in when they’re looking for a specific service. Career-wise, it’s also easier to be the best at one niche market. It’s helpful to write down things we enjoy, and set time constraints to try them; then pick the one that really resonates with us and go full on that.

The curves

We can draw a plot of how well any activity is going over time since we start it. Almost all activities we can take up fall under one of these categories.

• The dip: almost everything in life worth doing is controlled by the dip. It’s fun and interesting at the beginning because we’re improving fast; then we get to the slog between the start (beginner’s luck) and real mastery. We should stick with the dips that are likely to pan out, and quit the others.

  

• The cul-de-sac: a dead end where we put in the work and nothing changes, for the better or for the worst, leading to failure. We can tell cul-de-sacs from dips because in cul-de-sacs, we know things aren’t going to get better on the other side, and we just keep going because no one has the guts to quit. We need to get off cul-de-sacs fast as soon as we recognize them, which allows us to focus our resources on the dips that are worth it.

  

• The cliff: it keeps getting better for a long time, until it gets worse very quickly because it’s not sustainable. Smoking is an example of a cliff, although it’s much rarer than the other two categories. Needless to say, we need to quit cliffs as soon as possible.

  

The Dip

Sticking to something hard drives off the competition and makes us hard to replace. The dip weeds out the people that don’t want the result bad enough to do the work, so it creates the scarcity that benefits the ones who make it. This means that we need to feel a deep internal calling for something to get through the dip—external motivators aren’t going to cut it.

The dip is the audition that prepares us and ensures we have everything it takes to sustain our endeavor long term. It is actually the shortcut to getting the result we want: there are no other secret tricks, it just takes a lot of time to get good at something.

The most common response to the dip is playing it safe and becoming mediocre. To become number one, we can’t just survive or cope with the dip, but we must lean into it and use it as an opportunity to create something extraordinary. If we catch ourselves being average because we feel like quitting, realize our two only good choices are quitting and being exceptional. If we can’t get through the dip in an exceptional way, we should quit now.

When faced with the dip, many people tend to diversify by trying out new things; but those who really win are the ones who stay focused and embrace the dip.

Preparing for the dip gives us the best chances of getting to the other side.

• Small improvements that only we can notice are all that matters, so celebrate every small win.

• We should lean into the fact that we’re doing it while everyone else is quitting.

• It helps to surround ourselves with other people in a similar situation.

• We need to remember that nobody can take our skills away from us.

Types of dips:

1. Manufacturing Dip – Scaling production from a small, fun project to large-scale manufacturing requires significant investment and effort, creating a barrier to entry. Example: A craft artist selling at a local fair struggles to grow because they haven’t invested in mass production methods like injection molding or large-scale printing.

2. Sales Dip – Selling an idea ourselves is one thing, but scaling up with a professional sales force is a major challenge. Example: A startup founder who personally sells their product must eventually build a strong sales team to compete with larger companies that have aggressive distribution strategies.

3. Education Dip – Learning new skills or reinventing ourselves requires short-term sacrifice for long-term gain. Example: A doctor specializing in a field invests an extra year in training but enjoys decades of career benefits.

4. Risk Dip – Growing a business often requires financial risk, but smart entrepreneurs know the difference between necessary investment and reckless gambling. Example: Expanding to a larger store can be a wise move, while betting everything on an untested product can be a mistake.

5. Relationship Dip – Building strong relationships when it’s difficult but not urgent can pay off later. Example: An intern who goes the extra mile may later become a CEO, while those who only seek favors struggle to advance.

6. Conceptual Dip – Progress sometimes requires abandoning old assumptions and embracing new ideas. Example: Visionaries like Martin Luther King Jr. and Richard Branson changed industries and society by challenging conventional thinking.

7. Ego Dip – Letting go of personal control can unlock greater success through teamwork and delegation. Example: A founder who empowers their team instead of micromanaging can scale their business more effectively.

8. Distribution Dip – Access to exclusive distribution channels can be difficult but highly rewarding. Example: Selling in Walmart is more challenging than listing a product online, but the potential for massive sales is much greater.

Quitting

Strategic quitting is the secret to winning; reactive quitting and serial quitting make us lose, because quitting too often wastes the time and effort we put into starting projects.

Quitting is hard because it requires us to admit that we’re not going to be the best in the world, at least in that given field, so it’s easier to settle for mediocrity. When faced with a cul-de-sac, a common reason we can’t quit is pride: if there’s no dip and just our pride, we should take the hit now and we’ll feel much better later.

We often quit during the dip because of short-term pain, but we need to remind ourselves of the long-term benefits to keep going. On the other hand, if a dip is too big for us to go through with our current resources, we’re much better off quitting than wasting our resources in a doomed effort. If we know we can’t make it through the dip, we shouldn’t even start. And we should quit everything that is diverting our energies from making it through the dip that we believe can be worth it.

We can quit a tactic or product if it isn’t working, but not a strategy or an overall market once we’ve decided we’re in it. In a career, quitting a job isn’t giving up on the goal of earning a living, making an impact, etc.—it's just quitting a tactic that isn’t worth it anymore; so we should be prepared to quit just before things get comfortable, and reinvent ourselves.

Questions to ask ourselves before quitting:

1. Am I panicking? We need to wait until the panic has passed to make a rational decision about whether to quit.

2. Who am I trying to influence? If we’re trying to convince just one person we’re the best, and it’s not working, it might be time to quit because they only have a limited capacity and a fixed worldview; but if we are trying to convince a market, we shouldn't quit just because some people have rejected us: different people in the market need different things

3. What sort of progress am I making? If we’re making some measurable progress, however subtle, it might not be time to quit. But if we’re not moving forward in any way, we should quit.

Before getting into something, it’s helpful to write down a list of the challenges we’ll likely face, and define our boundaries and the conditions under which we will quit. We should clarify our quitting strategy so that we won’t have to make (bad) decisions in the moment.

Recap: helpful questions

• Is this a dip, a cliff, or a cul-de-sac?

• If it’s a cul-de-sac, how can I change it into a dip?

• Is my persistence going to pay off in the long run?

• Is this something I feel deeply called to (something I know I’m meant to do or keeps popping up in my life)?

• Does it scare me? If yes, it might be a good thing to try.

• Do I enjoy the process of doing it (not taking the results into account)?

• Is it hard in a good or a bad way?

• Will quitting free up time for a better opportunity? What is the opportunity cost of not quitting?

• Am I not quitting just because of the sunk cost fallacy?

• Am I engaged with just one person (or organization), or do my actions in this situation spill over into the entire marketplace?

• When should I quit? I need to decide now, not when I’m in the middle of it, and not when part of me is begging to quit.

• If I quit this task, will it increase my ability to get through the dip on something more important?

• If I’m going to quit anyway, is there something dramatic I can do instead that might change the game?

• Should I really be shooting for the highest possible goal?

• What chance does this project have to be the best in the world?

• Who decides what best is?

• Can we make the world smaller?

• Does it make sense to submit a résumé to every single ad on Craigslist, just to see what happens?

• If I like my job, is it time to quit? Is doing nothing better than planning on quitting and then doing something great?

• Am I avoiding the remarkable as a way of quitting without quitting?

Sources

• The Dip: A Little Book That Teaches You When to Quit by Seth Godin (book)

• I didn’t quit Youtube because of this book. (now I have 100K subscribers) by Deya (video summary)

Part Five of The Freelancer’s Bible by Sara Horowitz is about how to building a great life as a freelancer by managing your work-life balance and your safety nets.

You might want to read Part One (Getting started), Part Two (Getting work), Part Three (Growing your business) and Part Four (Managing your business) first.

Let’s dive into a chapter-by-chapter summary!

Working, playing, and staying on top of your game

Managing your work-life balance as a freelancer has its challenges.

One of the most common pitfalls is ending up working all the time and thus overworking. Here are some tips to avoid this.

• Understand what makes you most productive and double down on that; don’t work at times you know you wouldn’t achieve much.

• Set a clear availability policy, both for your and your clients’ sake.

• Understand it’s ok to make clients wait—it adds a scarcity element that can make you more in demand.

• When you decide to take some free time, switch off completely from work.

• Schedule free time blocks.

• Build a financial cushion, but don’t try too hard to save money on things that will help you work more efficiently.

• Subcontract the work that you don’t need to do yourself.

You can greatly benefit from setting up a daily routine that works for you. To build that routine, you can start by defining what a good, medium and bad work day look like to you. Then, identify specific events or behaviors that can turn a good day into a medium or bad day; you can now try to change one thing at a time in your current routine to prevent this and make a noticeable improvement.

You can manage sick days by budgeting to afford them or subcontracting. Then, make sure you are taking your time to get better.

Every freelancer has a vacation style that suits them: you might do better working a lot, a little or not at all; but make sure to inform your clients and holiday mates first. Planning vacation days in advance helps you avoid promising something you can’t deliver and maybe get better deals as well. It’s also helpful to set a vacation policy for yourself and to budget accordingly. And try your best not to succumb to the “when I leave, the big call will come” superstition: if you’ve been networking and marketing, work will come because you’ve put the odds on your side.

Understanding your work-life balance needs can be difficult for non-freelancers. Here are five rules that can help you navigate this.

• Explain to your friends and family that work is not a choice—you have to work, even if you’d rather help them instead.

• Earning less than your mate doesn’t have to mean you get stuck with all the grunt work.

• Take advantage of the fact that you can blend work and life boundaries: for example, you can work while waiting in a line, or run errands when all other people are working so it’s less busy.

• Believe in your deepest self that your career is worth taking seriously, and others will take the cue from you.

• Be mindful of how you spend your time, skills and resources

Make sure you are managing your nutrition, exercise, sleep, personal appearance and stress needs. Some things that can help you manage stress are:

• taking more control over your portfolio of freelance clients;

• developing rare and valuable skills to command better and better-paying work;

• seeking financial balance;

• finding your work rhythm and leaning into it;

• building good life habits;

• avoiding isolating yourself.

Your safety nets

Freelancers don’t have the traditional safety nets enjoyed by employees, so proactively managing your finances is crucial. It’s important to make conscious choices that prioritize financial well-being and future security; this involves continuous learning about finances, developing a financial routine, and reassessing goals and strategies periodically.

Health insurance is based on the concept of risk pooling, where a large group shares the cost of medical care. As healthcare costs rise, freelancers often face higher premiums and limited choices compared to those with employer-sponsored plans. If you need health insurance in your country, learn its basic principles and understand what type can fit you.

Because of the challenges brought by irregular income that freelancers experience, it’s very important to develop a system for managing income and savings. It’s often helpful to create a budget, tracking income, fixed and variable expenses, and calculating monthly averages. You can also divide savings into four accounts for expenses, taxes, emergencies, and retirement. You will have to prioritize expenses and taxes to avoid penalties and debt, but you should always strive to regularly add to the emergencies and retirement accounts to build your financial safety. These safety nets provide peace of mind and empower you to make better career choices, such as declining low-paying gigs, negotiating better rates, and avoiding financial stress.

• The recommended goal is to have six to nine months' worth of expenses saved for emergencies.

• Retirement savings are often neglected but are crucial for long-term financial security. Learn about the different options available in your country to make informed decisions.

Sources

• The Freelancer's Bible: Everything You Need to Know to Have the Career of Your Dreams―On Your Terms by Sara Horowitz with Toni Sciarra Poynter (book)

This post is the fifth in a 5-part series summarizing Sara Horowitz’s The Freelancer’s Bible.

Here’s the complete index: Part One | Part Two | Part Three | Part Four | Part Five.

Part Four of The Freelancer’s Bible by Sara Horowitz is about how to manage your freelance business effectively, including organizing your days, workflow, office and taxes.

You might want to read Part One (Getting started), Part Two (Getting work) and Part Three (Growing your business) first.

Let’s dive into a chapter-by-chapter summary!

Managing you

As a freelancer, you can organize your day however you like. So, take some time to think about what your ideal work day looks like vs. what the reality is, and plan how you can bridge the gap.

Here are some time management tips.

• Experiment to understand what work location and work hours make you the most productive. Then align the times and places you’re more focused and the most demanding projects.

• Track how much time you spend on different projects, on administrative tasks and on marketing. This can be very eye-opening and help you pinpoint changes you need to make.

• Periodically review your goals and priorities and make sure you’re devoting the appropriate amount of effort to each activity.

• Create routines that help you stay energized and productive.

• Learn to understand when you hit diminishing returns and when to take breaks.

To stay disciplined and get to all the work you need to do, it can be helpful to divide your tasks into “past”, “present” and “future”. The “present” category corresponds to your current projects and time-sensitive tasks; the “past” category includes administrative stuff you have to do after finishing a project, like invoicing, bookkeeping or filing; the “future” category includes tasks that support your business growth, like networking, marketing and building new ventures. Aim to keep a balance among these categories throughout the day or week, devoting the needed amount of time to each and not neglecting any.

If you tend to procrastinate, here are some tips that might help you combat it.

• Remember you’re human and keep your expectations for yourself realistic.

• Check whether you might be doing the wrong things at the wrong times for your energy levels.

• Set up your schedule so that you have enough time in one chunk to complete a task.

• Break tasks down into more manageable increments.

• Use pacts, consequences or rewards to motivate yourself.

• Listen to your body and adapt accordingly.

• Use willpower for short sprints, not long marathons.

• Remember the bigger purpose of what you’re doing.

• Do something with friends or fellow freelancers and stay accountable to each other.

• Use the time you would procrastinate to connect with other freelancers on social media or to read articles you’re interested in.

Do your best to manage distractions so that you can get your work done. You can try gently refocusing your attention, limiting what you know creates distractions, jotting down ideas or thoughts and immediately getting back to work, setting timers, making use of the hours you’re most productive, rewarding yourself, or keeping your workspace (including your digital one) decluttered.

Managing your office

Keeping organized records makes tax reports, project management, marketing, and tracking progress easier. Doing a little regularly helps keep tasks manageable and allows you to stay up-to-date with how your business is going.

Keep a record of your payments and expenses, as well as a folder of supporting documents, which provide the data for your books and support tax claims. Create a bookkeeping system that works for you and follow it.

Create a clear system to organize your office that reflects your workflow and enhances it. It’s usually helpful to keep frequently used items within easy reach, while gradually moving less frequently used items further away.

Keep multiple backups of everything to protect your work during emergencies.

Taking care of taxes

Learning more about taxes usually helps your peace of mind. You can always hire an accountant if you don’t like getting into the nitty-gritty of taxes.

Common deductible expenses for freelancers include home office, business meals and entertainment, client gifts, office furniture and equipment, technology, phone, child care, advertising, professional services or subscriptions, travel, health insurance, training, loans, subcontractor, and employee expenses.

Sources

• The Freelancer's Bible: Everything You Need to Know to Have the Career of Your Dreams―On Your Terms by Sara Horowitz with Toni Sciarra Poynter (book)

This post is the fourth in a 5-part series summarizing Sara Horowitz’s The Freelancer’s Bible.

Here’s the complete index: Part One | Part Two | Part Three | Part Four | Part Five.

Part Three of The Freelancer’s Bible by Sara Horowitz is about how to grow your freelance business by marketing yourself in person and online, rethinking your business, subcontracting, building teams and joining a community.

You might want to read Part One (Getting started) and Part Two (Getting work) first.

Let’s dive into a chapter-by-chapter summary!

Marketing you

Word of mouth isn’t enough to create a full-blown freelance career; for that, you need to create a strategy to market yourself that fits you.

Here are three tips to create a successful marketing strategy you need.

• Know who you are: clarify what your specialties are, including services offered, business sizes and other soft skills; you should also clarify how often you need to market (e.g. if you don’t have many ongoing clients, you’ll have to market more often).

• Know where they are: figure out what the growing edge of your field is about, what they are talking about, excited about, etc; then find out where they meet and go there; introduce yourself, ask questions.

• Do what works: test different strategies to find out what works in your industries and share them with your network; spend some time every day doing some activity related to marketing yourself, and track your contacts.

To enjoy marketing yourself:

• aim to make friends, not to just pitch you need work all the time;

• be open to serendipitous meetings, even in unrelated communities, and don’t limit yourself by only going after what makes more sense strategically;

• give off a vibe of being up to something interesting or being very passionate, and you’ll be more attractive for prospects; share what inspires you and invite potential clients to play;

• to get someone’s attention, or to maintain good relationships with people you met, think about what you can genuinely offer them without expecting anything in return.

Here are some keys for natural networking.

• Networking in person feels much more personal.

• Make people know what path you’re on—what you’ve done until now and what you want to achieve.

• Prepare different versions of your pitch for different situations.

• Learn about other people’s interests and connect over them.

• Put in place ways people can learn about you (business cards, website, social media…).

• Don’t be afraid to start with just the essentials—you can fill your pipelines without the exclusive memberships and other premium stuff.

• Stay in touch even when you don’t need anything.

Here are a few tips for people who hate networking.

• Choose events with smaller groups.

• Find things you can do that can put you more at ease.

• Keep expectations for yourself low.

• Arrive early so it’s easier to start conversations.

• Volunteer and get to know other people in your group.

• Ask questions about others.

• Give out fun little freebies.

• Partner with an agent or get coaching.

Here are a couple of tips for people who, on the contrary, love to network:

• Be selective: focus on the people that are more likely to advance your career, learning, etc.

• Only go to events about topics you’re really interested in.

• Listen more to others; for example, you can go through the cards you got at the end of the meeting and ask yourself what you learned from each person to test if you’ve listened enough.

Marketing yourself online

Online marketing should amplify, not replace, in-person marketing.

To build a great online presence:

• optimize SEO for your website or other online presence by posting high-quality content containing relevant keywords and links, so that you can rank higher in search engines;

• keep an idea file to store all your content ideas; types of content you can create include opinion pieces, common problems or FAQs, inside views and product reviews;

• track metrics to understand what is working.

Here are some tips for your website.

• Look at websites of fellow freelancers to understand what works, or ask them directly.

• Include content that interests your visitors.

• Make it easy to contact you from any page.

• Answer common questions.

• Show off your work.

• If you do two very different types of work as a freelancer, you probably want to separate them into two websites, especially if one has a better reputation than the other.

Here are some tips for running mailing lists.

• Make sure you have people’s consent before signing them up and always include unsubscribe buttons.

• Offer something for free as a thank-you for joining.

• Be consistent and have a schedule.

• Write relevant, high-quality content and include links for SEO.

• Have a consistent sender line and a title.

• Keep it short.

Here are some tips for blogging.

• Post several blog posts per month at a minimum.

• Ideas of things to blog about: things you would like people to know about your industry, new developments in your field, lists of resources, tips and strategies, updates, what you learned from a resource, interviews with pros, how to go about hiring professionals like you, tutorials.

• End some posts encouraging people to comment and share their thoughts.

• You can start by lurking on other people’s blogs or by guest blogging.

• Find your voice and keep it consistent.

• Keep it short, around 500 words.

• Include media to make it more interesting.

• Use keywords strategically, especially in titles and in the first paragraph.

• Reply to comments.

• Include share buttons.

• Offer freebies.

Here are some tips for social media.

• Choose what fits you the best among professional networking sites (like Linkedin), social networking sites (like Facebook), or microblogging sites (like X). you can look at what other freelancers in the same market are doing to understand what works

• Share, don’t sell; but make it easy for people to commit or buy

• Have a policy for when and what you post

• Regularly set goals, review results, and update goals

• Start with one platform at a time

• Share excellent content

• Asking questions, for help or opinions draws people

• Make and keep a consistent schedule

Moving your freelancing to the next level

When trying to grow your freelance business, you have to strike a balance between planned (or intentional) growth and serendipitous growth. Here are some signs you need to grow and ideas to do it.

• You have too much work most of the time: raise your prices, market yourself to higher-paying clients, be more selective, subcontract work, or develop passive income streams.

• You don’t have enough work to do: develop new services (especially tailored towards the growing edge of your market), get some training, study new markets, or develop multiple income streams.

• You know you could market yourself better: get systematic about online and in-person marketing, get back in touch with past clients, package your services in new combinations, or learn from freelancers who are good at marketing themselves.

• You’re working long hours but you’re barely meeting your needs: track the time you spend on different tasks to ensure your price/time ratio is accurate, raise your rates, learn how higher-tier freelancers market themselves, or revise your marketing strategy.

• You don’t have time to focus on the kinds of projects or marketing you really want to do: subcontract lower-paid work, raise your rates, try marketing to higher-tier clients.

Rebalancing the portfolio of your freelance clients might help you grow; for example, you might want to rebalance if your blue chips are too dominant, you are prospecting mostly on the bidding sites, you are not meeting new people when networking, or you work too little time on the new ventures. Here are some ideas on how to do it:

• rethink your assumptions (e.g. by subcontracting, raising your rates or phasing out a service);

• make contacts at levels you aspire to, not levels you’re at now;

• get more visible in every group you’re in (even those that aren’t work-related);

• take your social media presence one step further;

• take new ventures more seriously;

When working on a new idea, it might be helpful to develop a short, effective pitch you should be able to deliver between two subway stops, or to create a one-page document describing the what, why and how of your idea.

Consider whether it’s time to revisit your legal structure and critically assess your insurance situation.

Having multiple income streams helps you even out the ups and downs of freelance business, making you less dependent on a single project or client. Passive income streams can be particularly useful because they don’t require almost any additional work after the initial time investment. Some income stream ideas (some of which are passive) include workshops, seminars, webinars, articles, reports, books, podcasts, videos, running ads on your website, blog, affiliate marketing, and co-ventures with other freelancers.

The nimble freelancer: subcontracting and building teams

Consider bartering if you would like to swap skills or services with other freelancers. Bartering might be subject to taxes.

If you are offered work that fits your freelance portfolio but you are unable to do it yourself because of other commitments, consider subcontracting. You get to know potential subcontractors mainly via networking. Figure out which parts of the job only you can do, and delegate the rest to subcontractors. Make sure you’ve clarified the skill level you really need before subcontracting, then be clear about the task with the subcontractor; put in place the necessary check-ins to make sure the quality of the work is what you need, but don’t micromanage and don’t assume everyone works the way you do. Put in place a good contract that clarifies terms and protects you and the subcontractor; the same advice for a regular contract applies, but you should also consider adding clauses that prevent the subcontractor to go working for your client directly and clarifying the intellectual property goes to you so that you can fulfill your obligations towards the client. Your client doesn’t need to know you’re subcontracting.

If you build a great relationship with another freelancer, you can partner so that you often work together and cross-promote each other. You can also build flexible teams that assemble and disassemble as projects come up and finish.

If you feel you need more regular help than subcontractors, you might consider hiring a few employees that regularly work for you. While you will have the typical employer obligations towards them, you'll be able to exert the behavioral controls employers do, and all the intellectual property will belong to you, although it’s always best to clarify it in the contract. If a regular employee is too much for you, consider hiring a temporary worker via a temp agency to help with busier times.

Community–where personal and professional meet

Being part of a community where you can share freely can help you a lot as a freelancer, both professionally and personally. Community around shared interests fosters collaboration, which advances success. Communities help freelancers share advice, share work leads, recommend each other, listen to each other, laugh, brainstorm or celebrate together, or warn one another about bad clients. Communities can also help freelancers advocate for their rights and get the kinds of safety nets employees have.

Freelancer communities are most powerful when everyone has a giving mindset, because everyone tends to reciprocate and being kind to others builds great positive branding.

To become part of a community, you can start by making a wish list including the type of people you would like to connect with, the type of community you would like to be in, and ideas of what you can do to find or build the kind of community you’re looking for.

Sources

• The Freelancer's Bible: Everything You Need to Know to Have the Career of Your Dreams―On Your Terms by Sara Horowitz with Toni Sciarra Poynter (book)

This post is the third in a 5-part series summarizing Sara Horowitz’s The Freelancer’s Bible.

Here’s the complete index: Part One | Part Two | Part Three | Part Four | Part Five.

Writing cold pitches is daunting for many freelancers, and many of us don’t do it correctly, Writing cold pitches is daunting for many freelancers, and many of us don't do it correctly, creating a vicious cycle of avoiding it altogether. In this guide, we are going to break this cycle by uncovering the process and ingredients for creating effective cold pitches that get read, get replies, and lead to deals.

Step 1: Identify the right prospects to pitch

If you identify the right prospects to pitch, you can focus your efforts on people most likely to respond positively: this way, you’ll feel better because you’ll face fewer rejections, and you’ll have to write fewer pitches to get the same number of clients.

In most cases, pitching to businesses tends to be more effective than pitching to independent creators or nonprofit organizations, because businesses generally have larger budgets and tend to focus more on ways they can grow.

Businesses roughly fall into these three phases during their lifetime.

1. Startup phase. There isn’t much money around, there are a handful of people doing almost everything themselves, and they might still be deciding on the direction they’re taking.

2. Growth phase. Their business model has been proven and things are starting to pick up. They are starting to really value their time because their to-do list is quickly filling up.

3. Established phase. They likely have established systems and a team they already love working with.

The best phase for a freelancer to pitch to is the growth phase, because businesses in the startup phase probably don’t have enough money to pay you, while standing out to those in the established phase is more challenging. If you’re less experienced, you might do better in the early growth phase, while you might do better pitching to businesses in the early growth phase, while you might be better suited to later growth phase clients if you’re more experienced.

To get an idea of whether or not a business is in the growth phase, you can check if it satisfies at least three of the following criteria:

• they are roughly earning $5,000-6,000 a month;

• they have a couple of thousands to tens of thousands of followers/subscribers/etc.;

• they’re signaling they need help;

• they already have a small team, but the position you want isn’t filled.

Step 2: Do your research

Generic pitches don’t capture the prospect’s attention and make it seem like the freelancer hasn’t made any effort. Before pitching to anyone, thoroughly research the following.

• Who is the person, and what do they do? Write down 2-3 specific things you like or resonate with, such as a piece of content they recently created, to mention in your pitch. This will clearly signal that you’ve done your research and you’re not just copy-pasting.

• Do they seem financially stable and capable of paying you? (See Step 1.) If you’re looking for paid work, there isn’t any point wasting your time and efforts on someone who doesn’t have enough money to pay you what you’re worth.

• Do they actually need your help, and what can you help them with, exactly? For a pitch to be effective, the prospect must have a real need for the services you offer.

Step 3: Get your pitch noticed

Many cold pitches don’t even get read because prospects are busy. So, before you write your pitch, plan how you’ll ensure it stands out.

To get prospects to read your pitches, you have to grab their attention. You aren’t entitled to anyone’s attention, you need to earn it. Here are some ideas.

• Do something surprising or unique: film a short video, send a voice message, use a creative subject line, write something personalized on a whiteboard, make a small personalized sample, or even send a physical letter (to their business address!).

• Give them value first: share knowledge or advice, ideas, opinions (if they asked for feedback), show specific ways they’ve had an impact on you, or pay them a specific compliment.

When pitching via email, the subject line is the first thing a prospect sees, so it should really stand out. Try including something unique, creative or extremely personalized.

If you’re planning to reach out to your prospect on social media, make sure it’s a platform you’re active on and where you’ve built some credibility. Engage with them so that they recognize your name.

Step 4: Write a killer pitch

Here are all the ingredients for crafting an effective cold pitch.

• Make it personal: identify one single recipient to send your message to; this should be someone who has the power to make the decision to hire you. Start the message by addressing them directly.

• Write in the prospect’s voice: match their tone and vibe.

• Build human connection: mention something from your research that you and them can sincerely bond over as human beings. You can also tell them how their work has impacted you, but don’t fangirl.

• Pay them compliments, but make sure they’re genuine and relevant.

• It’s not about you: clearly explain what’s in it for them and how they win from your offer.

• One problem, one solution: identify one specific, relevant problem they have and position one of your services or packages as the solution.

• Make it specific and tailored: don’t make a list of all the services you offer, ask how you can help them, or make vague or unrealistic promises; instead, tailor your proposal to their specific case and goals they likely have, and offer specific, realistic examples of what you can do for them.

• Make it clear: it should be crystal clear exactly what you are offering.

• Signal your experience: mention specific work experience and keywords that show you know what you’re talking about and demonstrate your depth of knowledge. For example, write “I create evergreen nurture sequences for online course creators” instead of “I do email marketing.”

• Establish your authority: although this shouldn’t be the main part of your message, you should nonetheless include a couple of sentences to explain why you can be trusted and why they should choose you. This is especially true if you’re making big claims or asking a lot of them. For example, you can build authority by:

  • attaching testimonials or name-dropping clients you’ve worked with who have strong credibility;

  • including numbers, metrics or stats;

  • attaching a really good portfolio, samples, or case studies.

• Offer free, custom value: while this is by no means required, offering something valuable to them while expecting nothing in return is a great way to make a strong impression. For example, you can send them customized, thoughtful advice on how they could improve their work, or a sample asset (blog post, video script, graphic…) you could create for them. If you do, make sure you’re sending them something of high quality—poor work will have the opposite effect! Also, make sure what you send aligns with their existing vibe and values.

• Provide a no-brainer next step: suggest a very small next step or an offer it’s extremely easy for your prospect to say yes to. It should take them very little time and energy to figure out how it’s going to work, and they should feel ready to move the conversation forward immediately.

• Don’t make assumptions: don’t assume they will say yes, and always show respect for their decision. For example, you can offer them an easy out, like: “it’s totally cool if you don’t need this right now, I just wanted to introduce myself because I love the work you do”.

• Format it so it’s succinct and easy to skim.

• Check your grammar: typos and mistakes can indicate a lack of attention to detail.

If you’re chatting with your prospect on social media, soft pitches can work very well: phrases “if you ever need…” or “if you’re ever interviewing for…” are some examples.

Step 5: Follow up

Prospects are often busy and can forget about pitches. To maximize your chances of hearing back, follow up 2-3 times in the following 2-3 weeks. Remember to stay respectful of their time and don’t come across as pushy.

Sources

• How to Cold Pitch Effectively and Ethically by Copyhackers (video)

• 5 Things Every Cold Pitch Must Have by Location Rebel (video)

• The CORRECT way to write cold pitches by Deya (video)

• 6 *real* cold pitches that have landed *real* clients by Deya (video)

• Gently roasting your cold pitches by Deya (video)

• Why your cold pitches are being ghosted by Deya (video)

• How I find the *right clients* to cold pitch by Deya (video)

• How To Cold Pitch Clients by FreeMamaTV (video)

Part Two of The Freelancer’s Bible by Sara Horowitz is about how to handle different parts of the work cycle as a freelancer, from getting new clients and closing deals, to dealing with clients and troubleshooting problems.

Haven’t read Part One? You can find it here.

Let’s dive into a chapter-by-chapter summary!

Getting clients

Here are the factors you need to get clients.

• Genuine connection, to avoid coming across as desperate or devious.

• Being excellent at what you do.

• The ability to influence people.

  • Reciprocity: be kind to others (refer to gigs, share info, offer a free trial or sample…), and others will reciprocate.

  • Consistency: pitch or touch base with past clients talking about services related to what you did for them in the past.

  • Social validation: display testimonials about your work, build social media connections, post news about a professional award, or tell about other projects you’ve successfully completed or other clients you’ve worked with.

  • Liking: try to get to know clients a little and find a common interest to bond; leverage your friends, family and communities you are a part of to get work or referrals.

  • Authority: display proof of your authority in your résumé, website bio, portfolio, client list, professional titles, certifications, or awards.

  • Scarcity: add a sense of scarcity to your work, either in the form of limited-time offers, discounts for the first X people to buy the service, or exclusive rights to a piece.

Here are some best practices for networking.

• Find a networking style that works for you: if you’re uncomfortable at the typical networking events, find other ways to network that feel less dreadful (like talking to people in groups you’re already a part of), or start with smaller groups. You can start talking about looking for work to your inner circle (closest friends and family), and gradually expand to people you know less well; be genuine and show gratitude to all those people.

• Start by thinking about what you can offer to others—not what you can get from networking—and they will reciprocate. Don’t expect a “get” for every “give”, and don’t ask for more when someone gives you something. Go into it with a win-win mentality.

• Follow-up: right after getting to know new people, add them to you contacts list, including notes about what you talked about and personal details; a couple of days later, call or email one or two of the new contacts to schedule a meeting; don’t be shy about reaching out to people you met a while back—people are often flatter when you remember about them and what you talked about.

• Tips for making contacts not creepy: send an article or link they might be interested in, congratulate them on something, or ask them a pertinent question. Then you can start talking about yourself, and possibly add a suggestion to meet.

• Be sensitive to their time and respect it: ask if they’re available, get to the point, and keep your asks modest

• Show gratitude and thank them.

Prospecting is about getting new connections that might use your services, although it is to be expected that most of them won’t go anywhere. Prospecting has three goals:

• starting a conversation with people who have hiring responsibilities at places that could realistically use your services;

• doing a sort of informational interview where you learn how you could help them; it’s ok if it doesn’t click immediately—they could refer you to someone else, ask for additional information to keep you in mind for future possibilities, etc.;

• being top of the mind when they need someone like you by staying in touch without being creepy, like for networking; for example, you can send samples of recent work you did to clients you haven’t worked with in a while.

Here are ten steps you can follow when prospecting.

1. Look at your list of skills and make a list of businesses, professions, industries and companies that might need what you do. Rank those in terms of relevance for you, and find their contact details on the web by scanning websites they might be on, trade associations they might be part of, etc.

2. Prepare a script that says who you are and what you do, asks if they hire people who do what you do, says what you can do for them if they’re interested, and aims to get the conversation a bit deeper, e.g. by sending further information or setting up a short meeting. It should be a bit personalized to help with the connection part.

3. Practice your pitch, thinking about different scenarios that might occur (the prospect is welcoming, terse, in a hurry…).

4. Warm up with less important prospects to get relaxed about your script. You can start with industries you already worked in.

5. Do what feels right to you and avoid things your gut is really screaming about.

6. Don’t worry if your delivery isn’t perfect: it’s good not to sound too rehearsed. Try to mirror the language they use.

7. Have a plan if they ask about your rates. It can help to give ranges you’re comfortable with, or to ask them some clarification questions first.

8. Have a follow-up plan: you can ask to send them information to file, ask if it’s ok to check in periodically, or ask for referrals or resources; then, thank them.

9. Start spacing your follow-ups further if they don’t respond, and know where to stop.

10. Track your pitches and follow-ups to know where you left off.

Closing the deal

Before closing a deal, you should ensure that your client fits on three levels.

1. Freelance portfolio fit: for a client you potentially want to start a longer-term relationship with (blue chip or growth investment), you might need to be more flexible or they might not want to work with you again.

2. Life fit: check if you can manage the work in your current life situation; for example, it’s ok to want less demanding work if you’re going through rough times in your personal life.

3. Personal fit: be ok with negotiating differently if a gig feels perfect.

Contracts are important to clarify that a deal existed and what the terms were. For very complex or high-money contracts, you might be better off hiring a lawyer. A contract should cover anything that could cost you money, time or skill. Here are the most common contractual issues.

• Statement of work: summary sentence describing in broad strokes what services will be provided.

• Project scope and deliverables: clarify and quantify what you’ll deliver, how they will deliver them, the revisions/approval process, and how additional work will be addressed

• Deadlines (including delivering stages, if applicable).

• Approvals: clarify the criterion for satisfactory completion, the timelines for client approval and what happens if they miss them, and how to handle additional consults or problems after approval.

• Payment structure: specify when payments are due, and what happens if they’re late.

• Expenses: if your work involves expenses, clarify whether they will be reimbursed or if they are included in your pricing.

• Ownership: state who owns the final product, including exclusivity, territory, duration, and royalties (if applicable).

• Warranties: for example, you can guarantee that you’re free to make this agreement (you don’t have conflicting noncompete agreements), or that your service doesn’t damage others or infringe rights; don’t guarantee what you can’t control, and think about what the client should guarantee in return. This can also include confidentiality agreements, what happens in case of negative events and the limits to each party’s liabilities.

• Governing law and jurisdiction: clarify which state’s laws apply in a dispute, and where disputes will be heard.

• Force majeure: clarify what events can be considered force majeure, making a party not liable if an event beyond their control happens.

• Termination: clarify the reasons why a contract can be terminated, and how to handle termination, including fees and notice.

• Disputes: to avoid costly disputes, alternative dispute resolution solutions are available, including mediation, arbitration and negotiation.

As a freelancer, try to retain as many rights to your work as you can, and really avoid giving up all rights for an unlimited period of time or giving up “future” rights that don’t exist yet.

Here are some tips for negotiation.

• Know your industry’s deal norms: demanding terms outside industry norms makes you look clueless.

• Know the client’s needs.

• Know your market value: understand what rates are in line with your experience.

• Learn about your prospect.

• Prepare a list of points you consider must-haves and a list of those you can give up, as well as what you can trade for them.

• Agree on specifics such as the project scope (in detail!), revisions, timelines, and additional work.

• Explain how you’re adding value to the project.

• Don’t rush it and take your time to think things over, but don’t let things (and payments) drag too long.

• Think twice before lowering your price: instead, you can offer smaller trials so that clients don’t feel locked in before they know you, or throw in a one-time extra.

• Ask for the appropriate amount of detail you need before providing price or rate ranges.

Clients 360°

Here are three main ways to keep clients happy.

• Be there: turn in your best work on time, say what you can do instead of what you can’t, be on time for meetings, don’t multitask on calls, be helpful even when it’s not really your job, and stay in touch, not just when you’re paid to be.

• Prepare: let them know if you’ll be in touch later because you’re taking time to do some research, and let them know you did your research.

• Care: be transparent and communicate at your best.

Setting up policies can help you protect yourself and set healthy boundaries. Here are some examples:

• state clearly what you can (will) do and what you can’t (won’t), and for what price;

• if you check email at specific times, say so, and try not to make exceptions at the start;

• explain your work schedule clearly, but you don’t owe any explanations about it;

• clarify how you will check in on one another, and how you’ll structure feedback and approvals.

Communication is key to maintaining good relationships with clients.

• How to do great communication:

  • clarify how you operate;

  • help clients figure out what they want, then tactfully escort them towards decisions;

  • stay in touch and update about your process;

  • provide several options if applicable, but not too many, and only those you can deliver;

  • document key agreements with written emails, or contract amendment for major ones;

  • respond to their messages, even just to say thank you or when you’ll work on the issue;

  • choose a communication method that works for you;

  • choose your words carefully in delicate situations and proofread.

• Communicate really well when delivering bad news, and stay more in touch than usual to let them know how you’re fixing it.

• Tips on getting feedback:

  • educate clients about the process;

  • be a good listener when receiving feedback;

  • if the feedback is negative, try to understand if you can improve communication or if you can set up ways to avoid problems in the future;

  • send confirmation emails outlining the plan to move forward from that; if something is out of scope, point that out immediately.

• Tips on giving feedback

  • make suggestions based on what will make the project better to keep things more objective;

  • be honest and respectful, tactfully communicating that you expect the same;

  • suggest solutions;

  • cite the positives to get a good start.

• Building your reputation allows you to pursue the highest-level work and relations. Deliver your best work, work with integrity, respect your clients’ time, and be responsible about money.

Be on the lookout for misclassification, i.e. when you’re essentially working as an employee, but without the employee benefits. This can happen, for example, if you notice you’re doing the same work as colleagues that are employees, if you’re basically working a full time schedule, or if you’re controlled as if you were an employee.

If you get too much work, refer a fellow freelancer and let them know you referred them. If this starts happening longer-term, start weeding out lower-paying, smaller gigs; then, consider starting to subcontract or hiring a virtual assistant.

Troubleshooting

You have much more leverage in troubleshooting if you have a written contract or agreement.

When in doubt, it’s better to ask questions from the start than having to fix the problem later.

When faced with a problem, acknowledge it and analyze its extent, then come up with solutions to propose to the client which are appropriate and you can manage. Good communication, responsiveness, proactivity and showing that you care are always helpful.

It’s ok to put more effort into clients you value more, and to get paid and move on as soon as possible with less valuable clients.

Problems can happen when clear boundaries aren’t set or when the client doesn’t respect them. Some solutions can be:

• letting it pass for the first time, letting them know the policy has changed (if applicable);

• making it clear you would be happy to do the extra work, but also its cost;

• setting up systems to answer common questions or issues, such as an FAQ, pre-bundled packages, or even a product (ebook, webinar…).

After a crisis ends, get your emotions out, then analyze what went wrong and plan ways to prevent or deal with similar situations in the future.

Here is a list of common situations and how to handle them.

• The client is slow to respond: bring it up as soon as possible, create feedback schedules, set deadlines and obligations for the client in the contract.

• The client is making too many changes: make sure you regularly agree on the project direction and put it in writing, specify revision rounds and extra revisions costs in the contract.

• The client is indecisive or keeps changing their mind: narrow down options, offer opinions, specify the number of concepts in the contract, or set time frames for client responses.

• Doing the work is taking longer than you thought: assess whose responsibility it is, and split the burden accordingly; involve the client in deciding how to handle it; build cushion extensions into the contract.

• You have too much other work: negotiate extensions on less-important projects, get someone to help, find subcontractors or replacements, or figure out a solution with the client.

• You have a serious personal issue: figure out how much you can still do, communicate with the client, find subcontractors or replacements.

• The client cuts the budget: submit revised estimates of what you can do for that price, and be firm about what’s possible.

• The client puts the project on hold due to financial or organizational changes: let them know you’re pausing the work until issues are resolved, put suspension clauses in the contract.

• Your expenses are getting higher than anticipated: be transparent with the client and discuss modifying the project, or build cushions by specifying expense ranges.

• The client wants something more than was originally agreed: keep and show written agreements, and negotiate additional cost and time.

• The client rejects the final, says they never liked it, or claims you didn’t deliver what was promised: keep and show records of approvals or unresponsiveness, tie payments to approval stages; try to work things out for important clients, finish as well as you can and move on from others.

• A mistake or oversight happens: whoever is responsible for it has to fix it and eat the costs; live and learn, or get insurance if needed.

• Something unexpected happens and it’s no one’s fault: make a disaster plan together to control the damage, include force majeure clauses and kill fees in the contract.

You can combat dissatisfied, disgruntled or disrespectful clients by having protections in your contract (e.g. against scope creep, unreasonable demands, late payment…), as well as exit clauses. Differentiate clients in your freelance portfolio, and try asking for a higher rate if you get a bad vibe from a client. Deal with them with kindness but firmness.

To deal with nonpayers:

• send invoices promptly, while everyone is still in love with your work;

• send payment reminders reminders—better sooner than later—stating how late the payment is; get more firm as the payment gets more late, but be careful not to cross harassment boundaries;

• try to get upfront payments or deposits;

• have a clear payment policy;

• write dispute resolution terms in your contract.

Sources

• The Freelancer's Bible: Everything You Need to Know to Have the Career of Your Dreams―On Your Terms by Sara Horowitz with Toni Sciarra Poynter (book)

This post is the second in a 5-part series summarizing Sara Horowitz’s The Freelancer’s Bible.

Here’s the complete index: Part One | Part Two | Part Three | Part Four | Part Five.

Part One of The Freelancer’s Bible by Sara Horowitz is about getting to know the basics to start freelancing, setting up your office, and learning how you should generally manage your client base and hard times.

Let’s dive into a chapter-by-chapter summary!

Seven start-up steps

1. Know why you’re freelancing: clarify what you want to achieve with freelancing, and plan how to get there.

2. Figure out your key strengths.

   1. Start with lower prices to gain experience and momentum.

   2. Invest in training to command higher prices.

   3. Make a list of skills you have and that you’d be happy to use on a day-to-day basis, and a list of skills that you have but don’t enjoy as much; aim at using the first list of skills most of the time, but be ready to tap into the second if times are tough.

   4. Identify your top-rated skills, i.e. the ones you’re really good at; to do so, you can think of a recent achievement and look at how you provided exceptional value.

   5. Measure your success in work to improve how you market yourself.

   6. Figure out how you can specialize (ideally where your skills and passions intersect) to command higher rates; it’s also good to have multiple specialties.

   7. Be flexible during tough times and ask yourself how you can transfer your skills.

   8. Build personal strengths and soft skills such as great communication, problem solving, keeping your cool, etc.

3. Figure out your customer’s needs.

   1. Be empathetic in the analysis of what your client needs.

   2. Match your skills to their needs.

   3. Summarize what you do in a compelling tagline.

4. Know what you’ll charge (more or less).

   1. Your compensation should take into account the time you spent doing the task, your expenses for completing it, the costs associated to “what it takes to keep the lights on”, your profit, and market considerations (for example, prices can be higher if you have low competition or the economy is good at the moment). A rough formula to calculate your hourly rate is:

      

      1. Consider your salary as what you pay to yourself as your own boss, and add a profit on top of it of 10-20%.

      2. To calculate your billable hours, take into account desired vacation time and sick days, as well as time for administrative tasks.

      3. Use this formula as a rough baseline, and adjust it as needed.

   2. Track your time to get concrete insights.

   3. Join a network and compare your rates.

   4. Research industry benchmarks.

   5. Educate clients about your worth.

5. Work out your budget and do any necessary paperwork.

   1. Set money aside for emergencies, retirement, estimated taxes and expenses.

   2. List startup costs for your new freelancing business.

   3. Separate your business and personal accounts.

   4. Set up a suitable legal structure.

6. Gather your brain trust: find a trusted inner circle that can support you on your freelance journey. This can include fellow freelancers, friends and family.

7. Make your game plan for going public.

   1. Surround yourself with people who are practical and positive about freelancing.

   2. Don’t be shy about telling people you know about what you do and that you’re looking for work, but don’t be too pushy; have a compelling one-line pitch to make good impressions.

Your office setup

If you work from home, a portion of your home expenses might be tax-deductible.

Increase protection on your physical and virtual work space (e.g. insurance, anti-malware, encryption).

Make sure you have good ergonomics in your home office, including a good chair and desk, window light at right angles from screens, and diffuse lighting in general. Your monitor should be in front of you, 20-40 inches (50-100 cm) away, with the top at eyebrow height, set so that you don't have to lean forward or squint.

Take regular breaks from sitting and screen time (pro tip: do small house chores during breaks - they’re both physical and keep the house clean).

Your freelance portfolio

Here, a freelance portfolio refers to your collection of income streams and how much time and energy is allocated to them.

A freelance portfolio should meet the following goals.

1. Have enough clients of the right kind: not too few and not more than you can handle, who pay well and/or can advance your career in some way.

2. Bring in enough steady income to reduce cash flow highs and lows.

3. Meet your total income goals.

Here are the types of clients and work you can have in your freelance portfolio.

1. Blue chips: major clients that you maintain and that provide regular income and work. They are your anchors and they allow you to build long-term, trusting relationships, and they might provide referrals. Have more than one to stay safe and don’t neglect growth investments to stay nimble; if you can no longer stand one, get a new one or raise your rates to make it worth the aggravation, and keep healthy boundaries.

2. Growth investments: incubator for blue chips, which generate income by their volume while enriching your client base, and turn over faster than blue chips. You get them mostly from networking: referrals, client testimonials, maintaining your network, cultivating new contacts and prospects. Price yourself high enough to weed out low-paying gigs, but not so high they think they can’t afford you.

3. One-shots and long-shots: opportunistic gigs that fill your time or income gaps, or that provide some experience or testimonials. They can come from online listings (Craigslist, Monster, Freelancers Union, MediaBistro), on-demand work platforms (Elance, oDesk, Guru.com): browse them often enough to pick up good gigs (and maybe blue chips sometimes), but don’t spend too long on these super competitive sites and prioritize networking.

4. New ventures and growth: ventures you’re creating on your own or with others, which you might test for free, but ultimately position you for a more profitable future.

Here are some tips to manage dry times.

• Don’t be shy about promoting yourself, and keep doing it. Try getting back in touch with old contacts, asking your network for new ones, cold-emailing, following up with new contacts, going to networking events, or checking job boards.

• Ask for testimonials from satisfied clients.

• Evaluate and update your freelancing portfolio, strategy and rates.

• Clean up or update your online presence.

• Add new skills by taking courses.

• Investigate market changes that might be occurring and be ready to reinvent yourself if necessary.

• Keep a normal work schedule, but you’re the project you need to work on.

• Get some administrative work done.

• Barter services or do volunteer work. Working for free can be good if it’s for a cause you care about, you need to build experience, referrals or a portfolio of work. But do it with no other expectation than the satisfaction of your contribution.

Sources

• The Freelancer's Bible: Everything You Need to Know to Have the Career of Your Dreams―On Your Terms by Sara Horowitz with Toni Sciarra Poynter (book)

This post is the first in a 5-part series summarizing Sara Horowitz’s The Freelancer’s Bible.

Here’s the complete index: Part One | Part Two | Part Three | Part Four | Part Five.

Part 1: Blue ocean strategy

Creating blue oceans

Red oceans are the industries not in existence today, which exploit existing demand; blue oceans are the industries not in existence today, which create and capture new demand. In red oceans the boundaries and rules are defined, and the competition makes them bloody; supply often exceeds demand. Blue oceans can be created outside existing industry boundaries, or by expanding existing industry boundaries; competition is irrelevant because the rules aren’t yet set.

New industries have continuously emerged through history, and will likely continue to do so; but business strategy has mainly focused on red oceans. However, business launches based on blue oceans tend to generate more profit than those based on red oceans. There is no company that consistently outperforms others over long periods of time, and blue ocean moves can be achieved in any type of industry and any type of company.

Blue ocean strategy is based on value innovation: don’t focus on beating competition, instead focus on making the competition irrelevant. In red oceans, companies either create greater value for customers at higher costs or create reasonable value at lower costs. In blue oceans, companies pursue value and lower cost simultaneously, breaking the value-cost tradeoff; they eliminate unnecessary costs by removing outdated components (factors existing industries are competing on) and add new value (never seen before in industry) customers are willing to pay more for. This involves a new strategy for the company, not e.g. just innovating an industrial process to lower some costs. 

Analytical tools and frameworks

Strategy canvas

The strategy canvas captures the current state of the marketplace. It lists factors products currently compete on on the x-axis, and scores how well different companies do on them on the y-axis; connecting the points creates the value curve. 

If the curves of different companies all look the same, it means they're indistinguishable from the customer’s point of view, so it’s a red ocean.

Competing factors should be stated in terms customers can understand, not in industry jargon.

4 actions framework

To create a new value curve:

• eliminate one or more factors the industry takes for granted (identify outdated factors);

• reduce one or more factors well below the industry standard (identify which factor companies overserve customers on, unnecessarily raising costs);

• raise one or more factors well above the industry standard (eliminate compromises customers have to make);

• create one or more new factors that the industry has never offered (discover new sources of value and shift strategic pricing).

3 characteristics of a good strategy

• Focus: emphasize just a small number of factors.

• Divergence: a value curve that differs from the competition.

• Compelling tagline: a clear message that advertises the offer truthfully, and is strong and authentic.

Part 2: Formulate blue ocean strategy

Reconstruct market boundaries

There are 6 paths to reconstructing market boundaries based on thinking outside 6 fundamental assumptions underlying companies’ strategies.

Path 1: look across alternative industries

Substitutes are products that are different in form but offer the same core utility: for example, CPA’s, financial apps or software, and pen and paper are different ways people can track their personal finances. Alternatives are products and services that have different functions and forms but the same purpose. For example, a restaurant and a cinema are two very different services, but people use them for the same purpose of spending a night out.

To reconstruct market boundaries, look at an alternative to your product or service and ask why customers trade across them; focus on delivering the decisive advantages of both yours and the alternative, and eliminate or reduce all the rest.

Path 2: look across strategic groups within industries

Strategic groups are groups of companies within an industry that pursue the same strategy, ignoring the one of other groups. To reconstruct market boundaries, determine why people trade up or down between strategic groups, build on the decisive advantages of two of them, and eliminate or reduce everything else.

Path 3: look across the chain of buyers

There is a chain of “buyers” that are involved in the purchase of each product: the users are those that use the product, the purchasers are those who pay the money, and the influencers are those that convince them to buy. These groups can value different things, but different industries tend to focus on just one of these three groups.

To reconstruct market boundaries, identify which buyer group your industry typically targets and shift the focus to a different buyer group, unlocking new value by serving their needs.

Path 4: look across complementary product and service offerings

The value of any product or service is influenced by other products or services: for example, a cinema’s value is influenced by the ease of parking or finding a babysitter. 

To reconstruct market boundaries, identify which products or services influence yours by thinking about the context your product or service is used in, as well as what happens before, during and after your product is used. Then eliminate the pain points through complementary products or service offerings.

Path 5: look across functional or emotional appeal to buyers

Most industries compete either in prices and function (rational appeal) or on feelings (emotional appeal), but most products don’t intrinsically appeal in one or the other way. 

To reconstruct market boundaries, emotionally-oriented companies can strip away extras that don’t enhance functionality, thereby reducing costs; functionally-oriented companies can stimulate new demand by adding to their products some elements that make them emotional.

Path 6: look across time

All industries are subject to external trends that affect them over time. Most managers focus on predicting how the trend will evolve, but projecting how the trend will affect customers’ perceived value is more useful for company strategy.

To reconstruct market boundaries, identify trends that have a high probability of impacting your business, that are irreversible, and that have a clear trajectory; then, ask what the market would look like if the trend was taken to its logical conclusion, and identify what to change today to create new customer utility.

Focus on the big picture, not the numbers 

Drawing a strategy canvas helps focus on the overall strategy instead of getting lost in details such as specific numbers or jargon. There is a place for discussing numbers and compiling documents, but these details will fall into place more easily once a clear overall strategy has been identified. Here are the 4 steps to visualizing that strategy.

Step 1: visual awakening

Drawing the strategy canvas gives everyone the opportunity to agree on the state of the situation and drives home the need for change. Also, see if you can come up with a memorable tagline encapsulating the current strategy.

Step 2: visual exploration

Go and see how people actually use your product first hand, and study customers when they’re not the same as users; also look at alternative ways customers might fulfill the same need you fulfill. Then, come up with different strategies for tackling the pain points (ideally one for each of the 6 paths), draw their value curves and come up with compelling taglines.

Step 3: visual strategy fair

Present the strategy canvases to a diverse group, including executives, noncustomers, customers of competitors and the most demanding customers; then, vote and discuss the best, and come up with a single strategy incorporating the best of all worlds and the insights that were gathered.

Step 4: visual communication

Communicate the strategy in a way that is easy to understand to every employee. Each time an idea is proposed, ask how it helps get to the new value curve.

The PMS map

A company’s businesses can be divided into:

• pioneers, which offer unprecedented value and operate in blue oceans; they are the most powerful sources of profitable growth;

• settlers, which have value curves that conform to industry’s standards and operate in red oceans; they don’t offer much potential to the company’s future growth;

• migrators, which extend the industry curve by giving customers more for less and operate at the limit between red and blue oceans.

Plot which businesses in your company fall into each of these categories, and plan how to transition to a situation where there are more migrators and pioneers.

Reach beyond existing demand

To maximize the size of the blue ocean you are creating, look to noncustomers, as well as and at key commonalities that different customers and noncustomers value.

Noncustomers can be divided in 3 tiers.

1. “Soon-to-be” noncustomers: people at the edge of your market, who minimally buy out of necessity but are waiting for an opportunity to stop; however, if they were offered a leap in value, they would stay and buy more. A market becomes stagnant if first-tier noncustomers grow. 

2. “Refusing” noncustomers: people that consciously refuse your market’s offering, either because they can’t afford it or they find it unacceptable.

3. “Unexplored” noncustomers: people in markets different from yours, who have never thought of your market as an option.

To create a blue ocean, look at what difficulties make people not use your product or service: analyze the reasons why first-tier noncustomers want to leave your industry, second-tier noncustomers don’t want to use your product or service, or third-tier noncustomers don’t consider your offer as an option. Focus on the commonalities of their responses and aim to find solutions that intersect all three tiers; if there aren’t enough, focus on the tier that offers the greatest potential pool of customers. Go for the greatest catch your company can seize.

Get the strategic sequence right

To create a commercially viable blue ocean strategy, you need to check for 4 factors in order:

1. Is there exceptional buyer utility in your idea, so that people have a compelling reason to buy it? If not, rethink your idea.

   1. Be careful not to confuse technology innovation with value innovation: they coexist only if the new technology makes buyers’ lives much easier.

   2. Use the strategy canvas and the focused-divergent-compelling framework to create an idea with great buyer utility.

   3. To explore utility opportunities, you can use the buyer utility map: the x-axis contains the 6 stages of the buyer experience cycle (purchase, delivery, use, supplements, maintenance, disposal), while the y-axis contains the 6 utility levers (customer productivity, simplicity, convenience, risk, fun and image, environmental friendliness). There are opportunities to create utility at each combination of a stage and a lever. If your offer falls on the same combinations as competitors, chances are it is not a blue ocean offering.

   4. What are the greatest frictions or blocks to utility across the buyer experience cycle for both customers and noncustomers? Does your offering effectively eliminate them?

2. Is your price easily accessible to the target mass of buyers? If not, rethink your idea or pricing strategy.

   1. Pricing to reach as many people as possible is key because:

      1. nowadays most of the cost lies in development, not manufacturing;

      2. to many people the value of a product is tied to how many people who use it;

      3. it’s relatively easy to imitate good ideas, so your strategic price should also help retain customers when imitations arise, and/or discourage imitations.

   2. Steps to identify the correct strategic price:

      1. Identify the price corridor of the target mass. Compare prices of competitors, but also (and most importantly) of products with different form but the same core utility, or with different form and function but the same objective. Then plot the price and volume of market of these products: the price bandwidth that captures the largest group of target buyers is the price corridor of the target mass (this can be quite wide)

      2. Specify a level within the price corridor. Within the price corridor that was identified, you can price towards the higher end if you have legal protection through patents or copyrights or if the company owns some exclusive asset or core capability that can block imitation. The fewer of these elements are present, the lower the price should be to discourage imitations.

3. Can you produce your offering at a cost that allows you to earn a healthy profit margin when selling at the strategic price? This comes after utility and pricing because you cannot let costs drive prices or scale down utility because of costs. If the answer is no, rethink the idea or innovate your business model to hit the target cost. 

   1. Start from the target price and deduct the profit margin to determine a target cost, not the other way around.

   2. Levers to reduce cost:

      1. replace raw materials with unconventional, less expensive ones;

      2. eliminate, reduce or outsource high-cost, low-value-added activities;

      3. shift the physical location of your product or service to lower-cost locations;

      4. truncate the number of parts or steps used in production;

      5. digitize activities;

      6. partner with other companies to quickly acquire valuable expertise;

      7. change the pricing model taking inspiration from other industries.

4. What are the adoption hurdles in rolling out your idea, such as resistance to the idea by retailers or partners? Are you addressing them upfront?

   1. Address the resistances of employees, business partners and the general public.

   2. Proactively educate them, openly discuss the risks, explain why the transition is necessary, listen to objections and provide solutions.

Part 3: Executing blue ocean strategy

Overcome key organizational hurdles

Tipping point leadership consists of identifying the people, acts and activities that have a disproportionate influence on performance, and focusing on leveraging them.

The cognitive hurdle

Rather than showing sheets of data to employees or superiors, put them face to face with the worst part of the harsh reality and the most dissatisfied customers. This will be much more effective to drive home the need for change.

The resource hurdle

To achieve the desired change with limited resources, you can free up and/or multiply the value of existing resources by

• redistributing resources to hot spots, i.e. activities with low resource inputs but high potential performance gains,

• redirecting resources from cold spots, i.e. activities with high resource input but low performance impact, and

• engaging in horse trading, i.e. trading your unit’s excess resources in one area for another unit’s excess resources to fill remaining resource gaps.

The motivational hurdle

To motivate the mass of employees fast and at low cost:

• identify and motivate kingpins, i.e. natural leaders in the organization, who are well-respected and persuasive, or have an ability to unlock or block access to key resources;

• place kingpins in a fishbowl, i.e. shine a spotlight on their actions in a repeated and visible way, making transparent the progress that everyone is making;

• atomize, by breaking the challenge into bite-sized objectives everyone can relate to

The political hurdle

To overcome organizational politics:

• leverage angels, i.e. those who have the most to gain from the strategic shift, by making sure they’re supporting you;

• silence devils, i.e. those who have the most to lose from the shift, anticipate their points and build counterarguments;

• get a consigliere, i.e. someone who is politically adept but also a highly respected insider who will support you, on their top management team.

Build execution into strategy

To execute the strategic change, you need to create a culture of trust and commitment that motivates everyone to execute the agreed strategy, not to the letter but to the spirit. The process must be transparent and fair, so that people feel they are intellectually and emotionally recognized and are thus inspired to cooperate. This is important both for internal and external stakeholders.

The 3 elements that define a fair process are:

• engagement, i.e. involving individuals in strategic decisions that affect them;

• explanation, i.e. making sure everyone affected understands the final strategic decisions that are made;

• expectation clarity, i.e. managers clarifying the new targets, goals and responsibilities after the strategy is set.

Align value, profit and people propositions

To create a high-performing and sustainable blue ocean strategy, the company must fully develop and align the value proposition, the profit proposition and the people proposition, using a holistic approach. You can start from one of the propositions and build the others around it, with one reinforcing the other.

• Are the three strategy propositions aligned in pursuit of differentiation and low cost?

• Have you identified all the key stakeholders, including external ones on which the effective execution of the strategy will depend?

• Have you developed compelling people propositions for each of these to ensure they are motivated and behind the execution of the idea?

Renew blue oceans

Blue ocean strategies bring with them considerable barriers to imitation from competitors:

• the alignment of the three strategy propositions around low cost and differentiation;

• the cognitive and organizational costs that competitors have to face to reconstruct their models around the new idea, or the fact that the new idea doesn’t make sense to them;

• the blue ocean idea going against the typical branding of many competitors;

• economic and legal barriers created by patents and natural monopoly situations.

Eventually, however, almost every blue ocean will be imitated. Monitor value curves of the competition, and innovate again (only) when they start to converge too much with yours. When the convergence is still at the beginning phase, the company should focus on expanding (e.g. in variations, geographically, etc.) and reaping all the possible profits. 

For companies that have multiple business units, a pioneers-migrators-settlers map is useful to decide which units need to be innovated.

Avoid red ocean traps

• Blue ocean strategies are led by both customers and noncustomers, not by just customers.

• To create a blue ocean you don’t need to venture far away from the company’s core business, although a few exceptions do.

• Blue ocean strategies aren’t about cutting edge technology per se: you need to deliver a value innovation, with or without a new technology.

• You don’t need to be the first to sell a new product or service, you just need to market it linking innovation to the value it can provide.

• Blue ocean strategy is not just about differentiation, but also about cutting down to reduce costs.

• Blue ocean strategy is not just about low pricing, but also about creating new value that can be priced strategically (not necessarily lower); even low-end offerings have considerable innovation and uniqueness.

• Blue ocean strategy is not just about innovation per se, but must also include a leap in value for target customers.

• A successful blue ocean strategy doesn’t just need a compelling value proposition, but has to be supported by profit and people propositions in a holistic approach.

• To create a blue ocean you don’t look for new niches of buyers, but for commonalities across masses of buyers.

• While understanding how to compete in existing markets is useful to improve existing products, excessive competition leads to negative economic consequences for firms in the form of razor-thin margins, price pressure, commoditization of offerings, and slower growth.

• You don’t need to displace or destruct existing products or services, just to create a new proposition that redefines the industry’s problems.

Sources

• Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, by W. Chan Kim and Renée Mauborgne (book)

4-sentence summary

Figuring out what our passion is and finding a job that matches it doesn’t help us create a life we love; instead, this popular advice can lead to unnecessary job hopping and frustration. Qualities of a great job, such as control and impact, are rare and valuable, so we need to have rare and valuable skills to offer in return. We can build these skills and set ourselves apart by focusing on the outputs we produce, continuously stretching beyond our comfort zone and getting feedback. Only after we have enough career capital we can exchange it for more freedom in our job and/or a compelling mission; this mission can be accomplished by taking small steps in what we think could be a good direction and learning from them, and by making sure the projects we choose are remarkable.

Rule #1: Don’t follow your passion

The “passion” of Steve Jobs

Figuring out what we are passionate about, than finding a job that matches it, is very popular career advice.

In a famous speech at Stanford, Steve Jobs told graduating students to follow their passion, although this isn’t the advice he followed himself. He was actually passionate about Western history and spirituality; founding Apple was a lucky break that happened while he was dabbling in electronics just as an opportunity to make money. What happened is that he eventually grew passionate about his job.

Passion is rare

Roadtrip Nation, a series of interviews on how different people end up with fulfilling careers, offers some insights on how to find work we love.

• It’s hard to predict in advance, or just based on abstract considerations, what we are going to love.

• We have to push through a learning curve to eventually become passionate about our job.

• Fulfilling career stories often have very complex origins or journeys, and can’t be reduced to simple advice like “follow your passion”.

Scientific studies have also addressed the issue of finding jobs we love, with the following findings.

• Most of the passions people have aren’t relevant to careers: think of dancing, sports, art, etc.

• Most workers identify their work with either (a) a job, that is a way to pay the bills, (b) a career, that is a path to increasingly better work, or (c) a calling, that is an important part of their life and identity. What people identify their work with doesn’t depend on the type of work they do, but rather on the time they’ve spent doing it: it is more likely that we see our work as a calling the more years we’ve spent doing it.

• To feel motivated, we need to fulfill three psychological needs: (a) autonomy, that is the feeling of control over our day and that our actions are important, (b) competence, that is the feeling of being good at what we do, and (c) relatedness, that is connection to other people. These needs are generic and passion-agnostic: we are equally likely to get them from a job that matches our passion or from one that doesn’t.

Passion is dangerous

The idea that following our passion in our career will make us happy originated in the 1970’s with the publication of the book What color is your parachute?. At that time, the notion of doing what we love was new and liberating for most people.

Since then, the popularity of the “follow your passion” advice has been growing, while the rate of job satisfaction has been declining. This is likely because a magic job calling might not exist for most people, so if they don’t find they end up continuously job hopping, confused and unhappy. Of course, other factors, such as the evolving economic context, also played a role in the job satisfaction decline.

The advice of following our passion works for some, but it’s often a more complex story than just chasing what we love.

Rule #2: Be so good they can’t ignore you

The clarity of the craftsman

On our journey to a fulfilling job, we can adopt either the craftsman mindset or the passion mindset.

• The craftsman mindset involves a dedication to our outputs and a focus on what we can offer the world.

• The passion mindset involves a focus on our passions and what the world can offer us.

The passion mindset is based on the false premised that chasing what we love in our career will make us happy. It also makes us hyperaware of the things we dislike about our job, especially in entry-level positions; this ends up making constantly unhappy. Moreover, questions like “Who am I?” or “What do I really love?” often have complex answers, leading to more confusion and unhappiness.

The craftsman mindset, on the other hand, offers us more clarity, as it shifts the focus to our craft.

One objection that is commonly raised regarding the craftsman mindset is that it is only viable if we have a pre-existing passion. The truth is that most people that end up in fulfilling careers by adopting this mindset were often unsure whether what they are pursuing is the right thing for them. The following section will show that, if we adopt the craftsman mindset, passion will follow.

The power of career capital

Three common factors that make a job great are creativity, impact and control. Because these factors are rare and valuable, basic supply and demand laws dictate that we can only get them if we have something rare and valuable to offer in exchange.

What we offer in a job are our skills, also referred to as career capital; to make them rare and valuable, we have to force ourselves to improve.

Adopting the craftsman mindset will make it easier to develop more skills. The passion mindset, on the contrary, can work against this: if we decide to shift to a field that we are passionate about but have no skills in is dangerous, because we are starting from scratch.

However, there are jobs that can be unsuited to applying the craftsman mindset and providing a good foundation for building work we love. They have one or a combination of the following traits:

• they present few opportunities to distinguish ourselves by developing relevant skills that are rare and valuable;

• they focus on something we think is useless or even net negative for the world;

• they force us to work with people we really dislike.

More specifically, the last two traits make it impossible for us to stick around long enough to build valuable skills. These characteristics are also independent of whether or not we are passionate about the work.

Becoming a craftsman

It is a common belief that we need a critical amount of time (about 10 000 hours) to become a master at something; while this is rooted in truth, the strategies we follow during this critical time also make a very big difference on the abilities we can develop.

To become masters, we need to spend time seriously studying the craft, that is stretching our abilities beyond our comfort zone and getting feedback. Existing “talents” play no role in this equation, except in extreme cases such as the height of a basketball player.

How to deliberately practice something is often not obvious, especially in knowledge work, so most people plateau in their skill level. This means that putting in deliberate practice will make us better than most people, allowing us to stand out. Deliberate practice also requires us to block out time to dedicate to tasks we deem important in this sense.

Here is a step-by-step guide to deliberate practice.

1. Decide whether your career capital market is a winner-take-all market, where only one type of career capital type works, or an auction market, where different types of career capital can work and are useful.

2. Identify your career capital type: this is trivial for winner-takes-all markets, while there is more flexibility in auction markets. In the latter case, take opportunities that are already available to you, because it’s hard to start from scratch in a new field.

3. Define “good”: establish clear goals you want to achieve regarding your skills.

4. Stretch and destroy: push past what feels comfortable to you, then embrace honest feedback, even if it destroys what you did.

5. Be patient: it’s important to be diligent when we pursue deliberate practice, as results will take time. Ignore other pursuits that might pop up to distract you.

Rule #3: Turn down a promotion

The dream-job elixir

Feeling we have more control over what we do leads to increased productivity, as well as happier, more successful and more meaningful lives, as shown by different scientific studies. For example, results-oriented work environments, where employees are given freedom to organize how they achieve the assigned goals, lead to much happier employees.

The first control trap

Given how desirable control is in our work, it’s very much worth to invest career capital in it. But we can only obtain sustainable control after we can provide enough rare and valuable skills in exchange.

The second control trap

When we have enough career capital to invest in more control, we will inevitably face resistance because we’ve become valuable enough. This resistance can come from employers who want to give us more responsibilities, or from friends and families questioning our decisions.

When we have an idea to gain more control in our life and are facing some resistance as a result, we should always ask ourselves if we have enough career capital to back it up. If the answer is no, we shouldn’t ignore the resistance and focus on building the career capital instead. If the answer is yes, we can ignore the resistance, and this will require courage.

Avoiding the control traps

A helpful rule to avoid the control traps above is that we should only pursue a bid for more control if we have concrete evidence that it’s something people are willing to pay us for. Ways of “getting paid” can include employers hiring us or keeping paying us, customers paying us for a product or service, getting approved for a loan, or receiving an outside investment. This rule is based on the fact that money is an indicator of the value we can provide.

Rule #4: Think small, act big

The importance of a mission

A mission is a general, unifying focus for our career. It allows us to maximize our impact, which is an important factor in our happiness.

Missions require capital

We need career capital to exchange for a mission, as choosing a mission before having relevant capital isn’t sustainable.

This is because, to choose a good mission, we first need to reach the cutting edge of our field, where the possibilities for innovation become visible. Reaching the cutting edge is hard and rare, so we need career capital to get to it.

To find a mission we must first think small, pursuing a narrow field and getting career capital until we reach its cutting edge. After that, we need to act big: once we discover a mission among the ideas just beyond the cutting edge, we must go after it with zeal.

Missions require little bets

Having a mission isn’t enough: we also need a strategy to transform it into reality. A good strategy involves working in incremental steps, taking a methodical series of little bets about what might be a good direction. These little bets are small concrete experiments that return a concrete feedback, which allows us to learn from the little failures and wins. Tentativeness works much better than one bold plan and a big bet.

Missions require marketing

Projects that transform our mission into a success must be remarkable in two ways:

• they must inspire people to take notice and spread the word about them;

• they must be released in an avenue that supports them being notices (for example, niche or premium avenues should often be avoided).

Sources

• So Good They Can't Ignore You by Cal Newport (book)