But when someone needs insights, they often leave the app, export a file or open a BI tool to get answers. This extra step slows down decisions and creates friction.

Embedded analytics removes that friction. It means placing reports, dashboards, charts, KPIs and even AI-powered insights directly inside your existing app.

Instead of switching to another tool, users get answers in the exact moment they are doing their work.

Companies like Tableau, Pyramid, and Sigma have helped popularise this idea by allowing their analytics engines to sit inside other products. But the real value comes not from the vendors but from how deeply analytics becomes part of the workflow.

When embedded analytics is done well, your app becomes more valuable because it helps users think and act in the same place.

In this article, we will learn how embedding analytics directly inside a product increases its usefulness. We will also see how it improves decision-making and creates new revenue opportunities for the product.

What We’ll Cover

• Why Embedded Analytics Matters

• What Embedded Analytics Looks Like Inside an App

• How Embedded Analytics Makes Your App More Valuable

• Practical Ways to Start Using Embedded Analytics

• Design Principles for Effective Embedded Analytics

• Conclusion

Why Embedded Analytics Matters

In any business workflow, insight is always a step behind action.

A support manager who wants to understand why backlogs are rising must check a separate reporting tool.

A sales leader who wants to see pipeline health needs to open a BI dashboard.

A supply chain manager who wants to diagnose delays must export data to Excel.

These breaks in context may seem small, but they pile up. Users lose time. Decisions slow down. Only power users become comfortable with analytics.

Embedded analytics changes this pattern. By placing insights directly where work happens, you remove the hidden cost of switching tools.

A support manager can see backlog trends next to the ticket queue. A sales rep can see win rates while updating deals. A logistics coordinator can see average delay times next to shipment details.

Your app becomes more useful because it no longer just stores data. It helps make sense of it.

What Embedded Analytics Looks Like Inside an App

There are many ways embedded analytics can appear in a product.

At the simplest level, it can be a dashboard embedded through an iframe or a JavaScript snippet. This still gives users a unified experience without opening another product.

More advanced setups weave analytics into the core interface. A CRM might show prediction scores on each lead instead of only having a separate “Reports” tab.

An operations platform powered by Tablaeu might show throughput and error trends beside the workflow screen. A finance app might reveal margin drivers while approving invoices.

The experience should feel native to the product. Fonts match. Colours match. Navigation stays consistent. Users should not feel like they are opening a separate tool. They should feel like the analytics belong exactly where they appear.

How Embedded Analytics Makes Your App More Valuable

Embedded analytics deepens product usefulness by changing how users interact with data.

It moves insight to the front of decisions. Instead of digging for answers elsewhere, users see context exactly when needed.

A procurement manager adjusting an order quantity sees supplier reliability and historical pricing right there. They can make smarter decisions without leaving the screen.

This unlocks new value stories. Customers pay because they get decision-making power built into the product itself. Companies like Pyramid Analytics are often used to deliver enterprise-grade insights inside portals and internal tools, letting companies sell analytics as an added feature.

It also reduces dependency on analysts. Modern embedded analytics platforms enable search-based exploration and drag-and-drop analysis. Business teams no longer need to wait for a data team to create every custom view.

And it strengthens product stickiness. When your app becomes a central hub for both workflows and decisions, users rely on it more. Competing products without analytics feel incomplete.

Practical Ways to Start Using Embedded Analytics

One of the simplest ways to implement embedded analytics is to place a live BI dashboard directly inside your application.

Modern tools such as Tableau allow dashboards to be published with secure embed URLs. These dashboards can then appear as part of your interface instead of forcing users to open a separate reporting system.

Imagine you are building a recruiting platform. Your customers track candidates, interviews, and hiring cycles, but they still leave your product whenever they want an overview.

By embedding analytics, you can surface a pipeline health view directly inside the product’s home screen. Hiring managers would see average time-to-hire, conversion rates, and offer acceptance trends without ever exporting data.

The implementation is surprisingly straightforward. First, you create and publish a dashboard in your BI tool, so it becomes accessible via a URL such as:

https://analytics.yourapp.com/views/hiring_overview

Next, you embed that dashboard inside your product UI using a simple iframe. A page in your web app could include the following:

<div class="dashboard-container">
  <iframe
    src="https://analytics.yourapp.com/views/hiring_overview"
    style="width:100%; height:500px; border:none;"
  ></iframe>
</div>

The iframe source points to your analytics dashboard, and its sizing and border settings ensure the embedded view looks like part of your application rather than an external tool. From a design perspective, the dashboard blends in because it inherits the surrounding layout, spacing, and styling.

What matters most is the experience for the user. Instead of jumping between systems, hiring teams now see insights the moment they open the app.

Recruiters review candidate lists while seeing hiring trends directly above them. Managers check pipeline health during weekly planning sessions without exporting spreadsheets. Executives understand bottlenecks simply by logging in, rather than waiting for emailed reports. The insight lives where the work happens, which is exactly what makes embedded analytics valuable.

This small implementation illustrates how embedding a readymade dashboard can increase usefulness without changing data architecture. By letting users access answers in context, your product shifts from a system that records information to one that helps interpret and act on it.

Design Principles for Effective Embedded Analytics

Great embedded analytics is not about building fancy charts. It is about making the app easier to understand and easier to act on.

Begin with clear questions. Each chart should answer something specific. Instead of a generic graph called Revenue by Region, use a title such as “Which region is growing fastest this quarter?” Clear questions guide the user’s attention.

Show only what matters. Many analytics tools allow complex dashboards, but in a business app, less is more. Three focused metrics are more useful than fifteen distracting charts.

Support deeper exploration. While the first view should be simple, users who need detail should be able to drill down into more granular data, then into tables, then into raw records. This avoids overwhelming beginners while keeping power users happy.

Prioritize performance. Embedded analytics runs inside your product, so slow dashboards feel like a slow app. Pre-aggregate heavy metrics and use caching wherever possible. Leading platforms make speed a core priority because it directly affects user experience.

Match the product’s design. White-label options from companies like GoodData help make embedded dashboards feel native. Consistent colors and typography matter more than many teams expect.

Conclusion

Embedded analytics is not a cosmetic add-on. It’s a strategic way to lift product value. When you plan your roadmap, tie analytics ideas to measurable business outcomes.

Analytics can reduce churn by making users more successful. It can increase the adoption of core workflows by helping people understand what is happening. It can become a revenue driver through premium analytic tiers.

The market also shows how important analytics has become. Companies promote decision intelligence as a core capability for enterprise apps. Many large enterprises use embedded analytics to serve both internal teams and external customers with faster insights.

If your product still pushes users toward Excel exports or sends them to a separate BI portal, you are leaving value behind. When analytics becomes part of the main interface, your product shifts from being a system of record to a system of insight.

That is when the usefulness deepens, user loyalty grows, and your app becomes a place where better decisions happen every day.

Hope you enjoyed this article. Find me on Linkedin or visit my website.

I have seen too many founders who are smart, legit, and ambitious get ghosted by investors simply because they couldn't walk through their unit economics.

It's not personal. It's math.

So here it is: Numbers that will either carry your pitch or quietly kill it, explained by someone who has sat through them time and time again, with examples, and no fluff.

Here’s what we’ll cover:

• 1. Burn Rate: How Fast Are You Lighting Your Cash on Fire?

• 2. Cash Runway: How Long Before You Run Out of Cash?

• 3. CAC (Customer Acquisition Cost): How Much Does it Cost to Convince Someone to Pay You?

• 4. Customer Lifetime Value (LTV): How Much is One Customer Worth Over Time?

• 5. Gross Profit Margin: What Do You Actually Keep After Delivering Your Service or Product?

• 6. Monthly / Annual Recurring Revenue (MRR / ARR)

• 7. Churn Rate: How Fast Are Your Users Leaving

• 8. Payback Period: How Long Before You Recover Your CAC?

• 9. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)

• 10. Valuation: What’s Your Company Worth – and What Supports that Number?

• Real Talk Before You Close That Tab

  • Real Experience

  • Why This Matters

• Conclusion and Final Thoughts

1. Burn Rate: How Fast Are You Lighting Your Cash on Fire?

Burn rate is the speed at which a startup is spending its cash. Basically, how fast are you consuming your venture capital to cover over overhead until you generate positive cash flow from operations? It’s a measure of negative cash flow.

If you’re spending $80K a month to keep the lights on (payroll, AWS, your workspace snacks, and so on), that’s how much cash you’re burning each month. But many startups calculate two different burn rates: gross burn (how much cash you’re spending, ignoring any revenue), and net burn (monthly operating experiences minus any cash you take in each month). Net burn basically measures how fast your cash is shrinking, and it’s often what investors care more about.

Real talk: investors want to know when the plane runs out of fuel before they board. Thats what this metric helps them understand – how fast you’re going through the money you have.

At some point, if a company has a high burn rate, it has to reduce structural costs by cutting expenditures on labor, rent, marketing, and/or capital equipment. The burn rate is an important metric for any company, but it's particularly important for startups that aren't yet generating revenue. It tells managers and investors how fast the company is spending its capital

Watch this video to understand more about Burn Rate.

2. Cash Runway: How Long Before You Run Out of Cash?

Cash runway tells how long a startup can continue to operate at a certain burn rate until they are out of cash. For startups without revenue, you can calculate this by dividing available cash by total monthly expenses. Available cash is defined as the funds that are accessible now or can be accessed at a later time relatively quickly to pay for expenses.

When you’re making this calculation, it’s important to not include any anticipated fundraising and other uncertain sources of capital.

Actively managing cash runway is crucial for startup survival and growth. With a significant percentage of startups failing due to cash shortages, founders need to closely monitor their cash burn rate and runway.

The length of runway needed varies based on factors including the startup’s stage, industry, and milestones. In tighter venture capital markets, startups should plan for longer runways and consider strategies such as increasing revenue, reducing expenses, or raising additional capital. Regularly updating financial models and understanding metrics like the burn multiple can help you make informed decisions to extend your runway and align your growth ambitions with financial stability.

While it’s a simple calculation at face value, a cash runway analysis is nuanced and unique to every startup and can be impacted by a multitude of circumstances.

To calculate this, you just divide your total cash reserves by the amount you’re spending each month. Say you’ve got $250K in the bank and you’re spending $50K/month: 250/50 = 5. So you’ve got 5 months. Not 6. Not “it depends” – 5. That’s your runway.

Investors ask “If we don’t fund you, how long do you survive?” If you don’t know that answer, you're not fundraising – you’re freelancing with hope.

Here is a video that explains cash runway with real world examples and the thought process behind it.

And here’s an article from JP Morgan breaking down cash runway, its importance, and what can you to to maximize it.

Burn Rate vs Runway

So, let’s just make this super clear: burn rate is simply how much you spend each month to run your operation – that is, your negative cash flow. Runway is how many months there are left before your bank balance reaches zero.

So again, why do these numbers matter?

Because burn rate tells you how quickly you need to find more revenue or funding. Runway tells investors whether you are going to still be around by the time they finish their due diligence.

They are not just numbers. They are your survival clock.

Smart founders utilize these metrics to:

• Trim the fat without cutting muscle – know what to focus on and what to let go

• Forecast hiring/fundraising deadlines – know the process and prep for it. Numbers don’t line but they sure can get you ghosted.

• Assure investors you’re not going to come knocking again in 90 days – establishing credibility is key, make an investor realize its not just a hobby, you mean business.

The goal: Extend runway without stalling momentum. Keep the plane in the air, while building a bigger engine.

3. CAC (Customer Acquisition Cost): How Much Does it Cost to Convince Someone to Pay You?

Cost of acquisition refers to the entire cost that a business incurs to obtain a new client or asset. This includes the purchase price, shipping, installation, and marketing costs for the asset acquired. CAC takes into account the total expenditure on all marketing, advertising, and sales for the period, which you then divide by the number of new customers for the period.

In this case, all the upfront costs incurred to purchase a business asset, including equipment or inventory, are part of the cost of acquisition. Cost of acquisition includes:

• Purchase price of the item

• Costs to ship it to its point of use

• Costs to install the item

• Costs to get it up and running (in the case of equipment) or ready for sale (in the case of inventory) condition

• Marketing sales teams salaries

• All sales and consulting marketing expenses geared to get new consumers should all be included

Formula:
CAC = (Total Marketing + Sales Expenses) / Number of New Customers Acquired

Say you spent $10K last month across paid ads, content creation, outbound campaigns, and sales team costs. You onboarded 100 new customers, so your CAC = $100.

But is that good?

It depends on:

• Your pricing model (one-time vs. subscription)

• Your margin (how much of that sale do you actually keep?)

• Your customer retention (how long do they stick around?)

If you’re selling a $20 product once, a $100 CAC is a non-starter. But if that customer brings in $50/month for 12 months, you’ve got a solid return.

Watch for red flags:

• CAC is rising but revenue isn’t

• You’re overly reliant on paid ads (especially if organic/referral is flat)

• You don’t know CAC by channel (averages hide leaks)

A healthy CAC is one that pays itself back quickly and can be improved over time as you optimize funnels and messaging

Here is a video that breaks down CAC for you.

4. Customer Lifetime Value (LTV): How Much is One Customer Worth Over Time?

Customer Lifetime Value is the average monetary value of each customer to your business. LTV takes into account how much a unique customer is expected to spend with your business. It’s an important metric so you know how much new customers are worth to your business over their lifespan as a customer.

Let’s say you charge $25/month. The average customer sticks around 12 months.
LTV = $300.

In this case, if your CAC is $80? You’re in the green. But if it’s $350? You’re basically paying people to hang out (and losing money on them).

Now, let’s connect this to CAC.

Say your CAC is $80. You’re doing fine – your LTV is ~4x CAC. That’s what investors want to see.

Rule of thumb: you want your LTV to be at least 3x your CAC. A 1:1 ratio means you’re barely breaking even, before operational costs and the math stops working at scale. So if you can hit a 3:1 ratio, great – and based off my experience, your business will be much more appealing if it’s closer to 5:1.

And keep in mind that different models can have different thresholds. For example, a SaaS company with low churn can afford higher CACs, while an e-commerce platform might need faster payback. And marketplaces and freemium models may have lower LTV per user, but they can often more easily offset it with volume.

If you don’t know your LTV or can’t defend it with data, it becomes hard to justify spend – and easy for investors to walk.

If you want to know more, this video walks you through the basics.

And here’s a video that beautifully explains the CAC and LTV relationship.

5. Gross Profit Margin: What Do You Actually Keep After Delivering Your Service or Product?

Gross profit margin shows the amount of money a business collects after it pays for all its expenses. It’s usually calculated as a percentage of sales. This specific metric is also referred to as the gross margin ratio.

Companies use gross margin as a measure of how production costs relate to revenue. If a company's gross margin falls because it is making less revenue, it may try to cut labor costs, find cheaper suppliers of materials, or increase prices to increase revenue.

Gross profit margins can also allow a business to measure how efficient a company is, or compare two very differently sized companies that share a common revenue stream or product

If you sell a subscription for $50/month and it costs you $10/month to host, maintain, and support it, your gross margin is 80%.

• Good: SaaS companies often hit 70–90%.

• Bad: If you're below 30%, your "scalable" business will collapse under weight.

Want to know the conceptual math behind this metric and how it differs from Profit Margin? Here is a fantastic video that easily breaks it down.

6. Monthly / Annual Recurring Revenue (MRR / ARR)

Annual recurring revenue (ARR) is revenue a company expects to see from its product and service offerings, calculated over the course of a year. Companies that sell annual subscriptions like using ARR as a sales metric to track what they anticipate making in a year.

ARR tends to be used if companies sell a product or service in the software as a service (SaaS) space, but it can also be useful in terms of streaming services, cell phone bills, and (almost) anything else with a predictable, recurring charge.

ARR is calculated annually, whereas monthly recurring revenue (MRR) is calculated monthly. MRR is useful in that it shows what’s happening on a month-to-month basis. For example, if you change your price in April, you can see the immediate effects of that change in May. MRR also helps track fluctuations in revenue based on outside factors like holiday shopping seasons and economic conditions.

In a nutshell, Monthly / Annual Recurring Revenue = predictable income.

If you’re pulling $20K/month in subscriptions, that’s $240K ARR. Simple.

What investors care about:

• • Is it growing?

    • How fast?

    • And how stable is it?

Here is a founder breaking down the metric and explaining the relationship between MRR/ARR.

7. Churn Rate: How Fast Are Your Users Leaving

The churn rate, also known as attrition rate, represents the rate at which a customer stops doing business with a company. Customer churn is typically expressed as the percentage of service subscribers that discontinue their service subscriptions within a time frame. Churn can also be expressed as the rate at which employees leave their jobs in a given time.

In order for a business to grow its number of clients, its growth rate (which takes into account new customers) must be higher than its churn rate.

The benefit of calculating a churn rate is that it can clarify how well a business is retaining its customers, which is a measure of the quality of service the business is providing and the usefulness of that service.

When a business can see its churn rate increasing from period to period, this suggests that a critical aspect of how it is running the business might be problematic or flawed.

It could be the result of:

• A faulty product(s)

• Bad customer service

• Costs exceed utility to customers

And so on.

The churn rate will indicate to a business that it needs to learn why its customers are leaving, and where it needs to adjust its business. It’s more expensive to attract new customers than it is to retain them, so reducing the churn rate can save a business resources in the future.

Real talk: Say you had 500 users at the start of the month, and you lost 50 by the end of the month. That’s 10% churn – which is high! Annualize that and…ouch. You're not growing. You're replacing.

Make sure you fix this before you fundraise. Or at least explain why churn’s high and what you’re doing to plug the holes.

Here is a video that beautifully explains Churn Rate.

8. Payback Period: How Long Before You Recover Your CAC?

The payback period is a popular tool for determining investment return. People invest money for the purpose of getting it back and generating a positive return on the money they invested. The shorter the payback period, the more beneficial the investment will be.

The payback period does not factor in the time value of money. You can determine it simply by counting the number of years until the principal paid in is returned.

This metric measures how quickly your customer pays you back for the cost of acquiring them. The payback period doesn’t take into account the total profitability of an investment. It’s just concerned with paying the investment back.

There are two common interpretations:

1. Customer-Level Payback: If your CAC is $250 and your customer pays $50/month, it’ll take 5 months to recover the acquisition cost.

2. Investment-Level Payback: You spend $100,000 on a new sales hire, tool stack, or feature. You want to know how long it takes for that investment to generate $100,000 in profit.

Both use the same principle: the shorter the payback period, the less cash you need to float your growth.

If you want a target, aim for 6 months for customer-level payback. Closer to 3-6 is ideal. Long payback periods mean you need deep pockets – or exceptional retention – to stay afloat.

Here’s a video where you can learn more.

9. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)

EBITDA stands for Earning Before Interest, Taxes, Depreciation, and Amortization. You can think of this as just your company's operating profit if you wanted a very rudimentary way of referring to it.

It’s not flashy. It’s not fun. But it tells investors: “Here’s what we really make once the accounting fog clears.” and “Are we generating real profits from our actual operations?”

EBITDA is what investors look at because it is the best way of comparing apples to apples when considering startups. EBITDA can provide investors a measure of your operational health.

A negative EBITDA for an early stage company isn't going to raise any eyebrows. Just don’t act surprised when someone brings it up. You need to do that math before the pitch. But, if you have a growing early stage company that's moving from negative EBITDA to positive? Now your getting into grown folks business.

Here’s a video that explains the basics of EBITDA.

And here’s another video that explains how investors look at EBITDA and its value in determining your business’s worth.

10. Valuation: What’s Your Company Worth – and What Supports that Number?

Valuation is a focused exercise that determines the value of an asset, investment, or company. So, how much your company’s worth. And the goal is typically to determine whether that value is a fair value.

Valuations can be conducted in one of two ways:

• an absolute valuation, which evaluates a company on its own merits and entirely independently of other factors/companies, or

• a relative valuation, which evaluates the company relative to other similar firms, or assets, in the same sector or industry. This determines if the company, or asset, is worth that much relative to others.

Depending on how the analysis and conclusions are reached, there are a variety of methods and techniques used to develop valuations. And as you’d expect, there’s often significant variability between outputs (or valuations) based on the inputs and context.

While valuations are predominantly quantitatively driven, there’s often a significant subjective influence that come from the assumptions and estimates made along the way. Valuations are also subject to developing situations and events outside of the analysis or the control of the analyst – for example, earnings reports or material news, or economic news – that can result in a change to a valuation stance.

If you’re pre-revenue and you’re saying $30M because a friend raised at that, please stop. Their experience likely has nothing to do with yours.

Valuation = traction + market comps + revenue + momentum + team.

Valuation isn’t just about what you want – it’s about what you can defend.

Startups are typically valued using:

• Comparable Analysis (Comps): What similar companies are worth

• Discounted Cash Flow (DCF): Projecting future cash and discounting it back

• Revenue Multiples: Often 5x–10x for SaaS, but varies wildly

• Precedent Transactions: What investors paid in past rounds for similar startups

But that’s the math.

Here’s the messy truth: Valuation = Traction + Team + TAM (total addressable market) + Timing + Storytelling.

Hard factors:

• MRR/ARR

• Growth rate

• Churn

• CAC:LTV

• Gross margins

Soft factors:

• Founding team’s track record

• Market momentum

• Hype or scarcity

Don’t inflate. Don’t anchor to your friend’s raise. Know your comps. And show why your model is defensible, not just desirable. Inflated numbers make investors run. They don’t correct you – they just ghost you.

There are numerous books written on valuation and each technique could be its own PhD. But my role here is to give you a sneak peak into the metrics.

Here’s a basic video on valuation if you’re interested in a deeper dive.

And here’s a more detailed video course outlining different forms of valuation. Professor Damodaran from New York University is considered to be one of the aces and thought leaders when it comes to valuation. In this video course he explains stepwise and beautifully so you can understand and explore the fascinating world of valuations.

Real Talk Before You Close That Tab

Real Experience

I met a founder once – early days, rough product, but you could tell he actually cared. He wasn't trying to look good. No buzzwords. No "disrupt" talk. Just someone trying to solve something annoying and important.

He walked into the room with a twinkle. Not swagger – just that gentle intensity. We were leaning in.

Then, in the middle of the pitch, someone asked, "So what's your monthly burn?" And I swear to you, he said, "Umm... I think my co-founder has that. I haven't looked in a while."

That was it.

No freak out. No awkward pause. Just... a cluck. Like a window closing in the background.

The product? Still smart. But the moment? Gone.

Nobody was mad. Nobody laughed. We even said thank you. But nobody followed up.

Why? Because it didn't feel like a business. It felt like a maybe.

Why This Matters

I’ve seen so many versions of that same scene play out. It’s never about charisma. It’s not even about the idea, half the time.

It’s about whether the person asking for money actually knows what they’re building. Not the dream, the mechanics. The guts, nuts and bolds of the business. The ugly Excel math nobody brags about on Twitter.

Unfortunately, no simple pitch deck will do that part for you. No co-founder can answer those questions on your behalf.

If it’s your vision, own the math. If it’s your company, learn the cost of keeping it alive.

The rest? The logos, the taglines, the “go-to-market” plans?.... All of that’s just packaging.

And you don’t have to be perfect either. You just have to be in it. Eyes open. Numbers in your head.
Because if you’re asking people to believe in what you’re building, you’d better believe in the scaffolding holding it up.

So yeah, know your CAC. Your LTV. Your margins. Your churn. Not to check some box on an investor’s sheet, but to prove to yourself and the investor that the thing you’re spending your life on…has legs. That it can stand. And run.

And maybe, someday, outlast you. Maybe!

Conclusion and Final Thoughts

I hope this was helpful to you, especially if you’re a founder or aspiring founder trying to build the next big thing. While there a many more ratios and concepts, these are the crux of them.

A lot of other complex ratios and valuations are either built using these metrics or refer them in some way. And each of these metrics could be an article of its own. But I wanted to give you my top 10 run down so that you could get a head start. Numbers are very much a part of the ideation stage itself, and omitting them from your strategy could prove to be a fatal mistake.

I’ll leave you with one last video on How to Start a Start Up with Michael Seibel (Reddit, YC, Twitch) that I hope you find valuable. It lays out, in a crash course format, the mindset of a founder who has been there and done that. The fun fact is that a lot of the themes he speaks of tie in to the metrics here, directly or indirectly.

I hope this gives you a perspective of being on the other side, evaluating your hard work and passion, and I hope it sets you up for success in your next Investor Review.

I look forward to your thoughts, comments, and feedback. If this was helpful, engaging, and informative, do share it – you never know who may need it, or could benefit from it. I wish you all the very best in your funding rounds.

Until then, keep learning, unlearning, and relearning, folks.

You don't need a law degree to avoid problems, but you should definitely familiarize yourself with some basic principles.

This article comes from my Complete LPI Open Source Essentials Exam Study Guide Udemy course and book. You can also view the video version here:

We'll begin with some best practices:

• Conduct an inventory of all open source software used in your business workflow, including third-party libraries and dependencies. This will help you identify the licenses and terms of use associated with each piece of software. You'll also want to implement a system for tracking licenses and their terms of use. This can include using tools or software that automatically identify open source software and their associated licenses.
• Create a license policy that outlines the procedures and guidelines for using open source software in your business workflow. This policy should be communicated to all employees and stakeholders involved in the software development process.
• Use only approved open source licenses that comply with your license policy. This can help you avoid legal issues and ensure compliance with regulations.
• Monitor changes to open source software licenses and updates to ensure continued compliance. This can include subscribing to notifications or alerts about license changes and updating your license inventory accordingly.
• Document all steps taken to ensure compliance with open source licenses, including license reviews, approvals, and renewals. This documentation can help you demonstrate compliance in the event of an audit or legal challenge.

That sounds like a lot of work. Well, you might consider creating an Open Source Program Office. Let's see how that works.

Open Source Program Offices (OSPO)

An OSPO is an organizational unit or team within a company or organization that's responsible for managing open source software and its use within the organization.

An OSPO helps organizations effectively manage the use of open source software by providing guidelines, policies, and procedures that ensure legal and regulatory compliance, proper usage, and contribution to the open source community.

The OSPO can also help organizations to establish a strategic direction for open source use, including identifying opportunities for collaboration with other organizations or contributing to industry-wide initiatives.

Typically, an OSPO is responsible for ensuring that the organization complies with the terms of open source licenses, including understanding license obligations, tracking license usage, and managing compliance risk. It'll also work to:

• Build relationships with the open source community, contributing to projects, and promoting internal contributions to open source projects
• Develop and implement policies and governance frameworks that guide the organization's use of open source software
• Develop and execute strategic plans for open source software use within the organization
• Provide training and education to employees and stakeholders on the use of open source software, including compliance, governance, and community engagement.

There are some useful business tools that can help simplify the administration of your software resources.

Software Package Data Exchanges (SPDX)

A Software Package Data Exchange, for instance, is a standard format for exchanging data related to software packages, including open source licenses, copyrights, and other related information.

SPDX is intended to simplify the sharing of information between developers, software vendors, and other stakeholders in the software supply chain. SPDX provides a common language for describing software packages and their associated licenses, making it easier to understand the terms of use and comply with license obligations.

The primary purpose of SPDX is to promote license compliance and facilitate the management of open source software. SPDX allows developers and organizations to easily identify the open source software components in their software products and track license obligations associated with each component.

The Software Bill of Materials

A Software Bill of Materials (SBOM) is a list of all the components and dependencies that make up a software application or system. The SBOM provides information about the software's components, such as open source libraries, commercial software components, and proprietary code.

The goal of an SBOM is to improve transparency and accountability in software supply chains by providing a detailed inventory of the software components used in a product.

An SBOM typically includes information about the version, license, and origin of each component. An SBOM can help identify security vulnerabilities in a software system. By providing a complete list of all software components, developers and security teams can more easily identify and address security risks.

An SBOM can also helps ensure compliance with open source licenses and other legal requirements by providing information about the licenses associated with each component. And an SBOM can help manage supply chain risks by providing visibility into the software components used in a product. By knowing what components are used and where they come from, companies can more easily assess the risks associated with each component and make informed decisions about their use.

We should also take some time to talk about lawyers. Or, at least, the things that might get lawyers all excited. By which I mean to say that open source business models can carry legal risks, including risks related to product liability and export regulations. It's important for companies that use or distribute open source software to understand these risks and take appropriate measures to manage them.

Product Liability

Product liability is a legal concept that holds manufacturers or distributors of products liable for any harm caused to consumers by defects in the products. When a company uses or distributes open source software as part of its products, it assumes responsibility for any defects in the software that could cause harm to consumers. This could result in legal claims for product liability, which can be costly and damaging to the company's reputation.

To manage product liability risks associated with open source software, companies should implement effective quality assurance processes to ensure that the software is free from defects and meets industry standards. Companies should also work closely with their legal teams to understand the legal implications of using and distributing open source software, including any potential product liability risks.

Export regulations are another area of concern for companies that use or distribute open source software. Export regulations are laws and regulations that govern the export of goods and technology from one country to another. These regulations can restrict the export of certain types of technology or require companies to obtain licenses or certifications before exporting certain types of products.

Like any other technology, open source software can be subject to export regulations. Companies that use or distribute open source software should be aware of these regulations and ensure that their use and distribution of open source software comply with all applicable laws and regulations.

Mergers and Acquisitions

One more lawyerly thing: mergers and acquisitions can have a significant impact on the use of open source software within organizations. When two companies merge or one company acquires another, they may have different approaches to the use of open source software and different policies and practices for managing open source licensing and compliance. This can create challenges and risks related to the integration of open source software.

One potential impact is that the acquiring company may need to conduct due diligence to understand the open source licensing and compliance practices of the acquired company. This can be a complex and time-consuming process, especially if the acquired company has a large and diverse software portfolio. The merged company may also need to reconcile different approaches to open source licensing and compliance. For example, if one company has a more permissive approach to open source licensing than the other, the merged company may need to develop a new policy or approach that takes both approaches into account.

Mergers and acquisitions can also impact the use of open source software in terms of product development and innovation. For example, if the acquiring company has a different technology stack or development process than the acquired company, it may need to integrate or replace open source components used by the acquired company. This can result in delays and added costs.

And don't forget that mergers and acquisitions can also impact the open source community. If a company that is an active contributor to an open source project is acquired, the new company may change its approach to the project or reduce its contributions. This can have a negative impact on the project and the community that supports it.

Conclusion

The bottom line? Building software can be fun and profitable and can change people's lives in positive ways. But, if you're not careful, it can also get you into a lot of trouble.

So take some time to educate yourself on your business and compliance responsibilities.

This article comes from my Complete LPI Open Source Essentials Study Guide course__. And there's much more technology goodness available at bootstrap-it.com

Learn the answers to these questions and more in an entrepreneurship course we just published on the freeCodeCamp.org YouTube channel.

Business Insider wrote an article stating that book version of this course called 101 Crucial Lessons They Don't Teach You in Business School was voted as the #1 most popular business book of the year by Business Insider readers.

Chris Haroun teaches this course. Chris has sold more than 1,000,000 of his online business and self improvement courses in 12 languages in 196 countries and his courses have been profiled in Business Insider, NBC, Inc, Forbes, CNN, Entrepreneur and on other business news websites.

This course is an amalgamation of business advice that Chris has compiled from his many meetings with successful business people over the past two decades as well as observations of why the founders of giant tech companies have become incredibly successful.

The course also includes a free workbook for you to use as you go through the course.

Here are the sections in this free business course:

• Section 1: Relationships Are More Important Than Product Knowledge
• Section 2: Be Long Term Greedy
• Section 3: Avoid Burnout
• Section 4: Create Off The Charts Confidence; Wear That Super Superman Cape!
• Section 5: Ethics. Use It or Lose It
• Section 6: Every Battle is Won Before It Has Been Fought
• Section 7: Goal Setting
• Section 8: Happiness is...
• Section 9: Legal Stuff is Important
• Section 10: Management Best Practices
• Section 11: Navigating Corporate Politics; Swimming with Sharks
• Section 12: Only Take Advice from Successful People
• Section 13: Only the Paranoid Survive
• Section 14: Risk Taking
• Section 15: Sales Best Practices
• Section 16: Think Different
• Section 17: You Be You

Watch the course below or on the freeCodeCamp.org YouTube channel.

We just published an 8-hour course on the freeCodeCamp.org YouTube channel that will teach you the business of building apps.

Shad Sluiter created this course. He teaches computer science and programming classes at Grand Canyon University. He has multiple degrees in Computer Science, Mathematics and Education, as well as a Masters degree in Computer Information Systems.

This project management course is for leaders, entrepreneurs, and software developers. You will learn everything from determining what type of app to build, effective app design, marketing and monetization strategies, choosing the right tools, hiring and managing development teams, and more.

Here are all the sections covered in this course:

Unit 1.1 What is the value proposition of your app?

• Do you need a web app or just a better website?
• Categories of Apps – which app category is easiest to compete in?

Unit 1.2 Identify the problem you are trying to solve with your app.

• Candy, vitamins or addictive painkiller?
• Fulfillment, recognition, security
• The Five Whys

Unit 1.3 How to discover a niche in the marketplace

• Follow popular trend
• Add a twist
• Your own expertise
• Problems in existing competition
• Unit 1.4 Listening to users
• Users that exist in the market
• Get user feedback
• Idea 2.0
• Homework 1.1 Airbnb and Lyft
• Homework 1.2 App Annie and Sensor Tower
• Homework 1.3 Write an application plan

Unit 2 UI, UX, MVP design

• How to create user stories
• Planning for an MVP

Unit 2.2 Designing an effective UI user interface

• On boarding new users
• The Google UI Case Study
• The Photoshop Adobe UI negative Case Study
• Effective UI elements
• Don’t Make Me Thing Steve Krug
• UI design templates
• Design for your target audience
• Unit 2.3 How to design an effective UX User Experience
• UX is where Design strategy and Technology intersect
• Application Flow
• Measuring Conversion Rates
• UX outside of the app
• The User Empathy Map
• Six principles for a positive UX

Unit 2.4 The MVP

• The Lean Startup MVP concept by Eric Ries
• Planning for future versions of your app
• What is NOT an MVP
• Zappos MVP Case Study
• The MVP design pyramid
• The purpose of an MVP
• Keeping the cost of an MVP low
• Homework 2.1 App Design Case Studies
• Homework 2.2 Develop User Stories
• Homework 2.3 Interactive UI prototype

Unit 3.1 Marketing and Monetization for an App

• The BMC Case Study
• Unit 3.2 Monetization Strategies of Apps
• Apple App Store vs Google Play Store revenue
• iOS vs Android user value per customer
• iOS vs Android market share in various countries

Unit 3.3 Marketing Your App

• How users discover your app

Unit 3.4 Dealing with Investors

• Homework 3.1 Build a BMC for your app

Unit 4.1 Building Customer Loyalty

• Why Customers Abandon Apps?
• First-to-Mind solution
• Compulsion
• Morality of Addictive Apps
• The HOOK app addictive model
• Homework 4.1 Understanding Hook
• Homework 4.2 Applying Hook

Unit 5.1 Choosing the Right Tools

• Five Reasons Not to Build an App

Unit 5.2 Nine Companies Who Nailed their App

Unit 5.3 Development Languages and Cross Platform Tools

• Homework 5.1 Compare Dev Tools
• Homework 5.2 Recommend a Development Solution

Unit 6.1 Full Stack Considerations

• Choosing a Database Backend
• SQL
• noSQL
• SQL vs noSQL
• Graph Database
• Full Text Database
• Vertical Scaling
• Horizontal Scaling
• Data Duplication in Distributed Databases
• SQL Shards

Homework 6.1 Recommend Database Solutions

• Homework 6.2 Explore API services

Unit 7.1 Hiring the Development Team

• Four Roles of a Software Development Team
• Product Manager
• Product Designer
• Front End Developer
• Back End Developer

Unit 7.2 Mobile vs Web Development

• Skills Used in Mobile vs Web Development
• Web vs Mobile Development Salaries

Unit 7.3 Agile Team Management

• SDLC Agile vs Waterfall
• What is Waterfall Development?
• What is Agile Scrum Methodology?
• The Product Backlog
• Spring Planning
• Sprint Backlog
• What is a Sprint?
• Product Increment
• Daily Scrum
• Sprint Review
• Sprint Retrospective

Unit 7.4 How to Write a Job Requisition

• Cross Field Expertise
• Intangibles
• Adjacent Skills
• Portfolio
• Homework 7.1 Team Roles
• Homework 7.2 Internal Job Requisition
• Homework 7.3 External Job Posting

Unit 8.1 Future Trends in Mobile Development

• Cloud Computing
• 38 Artificial Intelligence
• Cross Platform Dev
• mCommerce
• Virtual Reality
• Augmented Reality
• Higher Bandwidth
• IOT
• Wearables
• Security
• Blockchain
• Beacon
• Homework 8.1 Review Past Predictions
• Homework 8.2 Current State of Development Tools
• Homework 8.3 Future Mobile Tech

Watch the full course below or on the freeCodeCamp.org YouTube channel (8-hour watch).

Yes it is – but it's a bit convoluted, and it also only works on one cell at a time. Don't worry, though – we will see at the end how to make it work on a group of cells. Let's explore how to count words in Excel.

The Excel Functions We'll Use to Count Characters

We need to learn about three Excel functions, LEN(), TRIM() and SUBSTITUTE(), before we can use them in the formula.

How to Use the LEN() Function in Excel

The LEN() function takes a cell with text content and gives back the number of characters in that cell.

For example, if we write The horse under the three in a cell, and we use the LEN() function to calculate the number of characters in that sentence in another cell, we'll get 25. You can see how it works here:

By specifying that we want the LEN() of cell B1 (LEN(B1), in cell B2 above), Excel does this calculation for us.

Note: I'll explain why I included the spelling error ("three" instead of "tree") below.

How to Use TRIM() Function in Excel

The TRIM() function takes a cell with text content and gives back the same text without any white space at the beginning or end.

For example, say we have a cell that looks like this: The horse under the three (with 7 spaces before the text and 2 at the end. It has a total length of 34 characters, including the spaces.

The TRIM() function will give us back The horse under the three (with just the original 25 characters) without the spaces at the beginning or the end. Here's what it looks like:

You can see that, similar to the example above with LEN(), when we put the TRIM() instructions in cell B4, Excel calculates the correct value in cell B5.

How to Use the SUBSTITUTE() Function in Excel

The SUBSTITUTE() function will replace a piece of the text with another bit of text. For example, in the text we have been using there is a spelling error (instead of tree we have three). We can fix it using the SUBSTITUTE() function.

The syntax is SUBSTITUTE(text, old_text, new_text, [instance_num]), with text being the text we are going to change. In this case, we'll have the text we want to change, and the old_text and the part we want to change (three) which will be replaced with the new_text (tree).

The complete formula is SUBSTITUTE(B4, "three", "tree"). Note that text in a formula always needs to be put in quotes. Here's how it works:

Just in case you need to know, instance_num is an optional parameter that you use in case there are multiple instances of old_text in the text and you want to change only one of them. But we aren't using it here.

How to Count Words in Excel

We have learned how to use the above single functions, and now we need to use them together in a somewhat convoluted way.

Before putting them together, let's try to understand how we are using them, and then we will build together the complete formula.

How Word Count in Excel Works

Excel does not have a proper word count tool or formula, but there is one thing we can count, and that is characters, as we've learned above. Specifically, we are going to count the number of spaces inside the string. And from that, we are going to derive the number of words just adding 1 to the number of spaces.

When we look at our example, we can see that the string The horse under the tree has four spaces. If we add one, we get five, the total number of words in the sentence.

Counting spaces is also not a trivial task. Since there is not a specific tool or formula that can count just spaces, we need to be a bit creative.

What we are going to do is count the number of characters in the string, and then count the number of characters in the string when the spaces have been removed (we can use SUBSTITUTE(text, " ", "") for this). Then we'll take the difference between the two.

The horse under the tree has 24 characters, while Thehorseunderthetree has 20 characters. The difference is 4, which is the number of spaces in the original string. If we add 1 we get 5, the number of words.

Putting it into Practice

Now we need to put in a single formula that we have seen in the last paragraph. This formula has three components:

• the length of the sentence with spaces at the beginning or at the end of the sentence removed (we want to count only spaces between the words), so we'll use LEN(TRIM(text))
• the length of the string without spaces, in this case, we don't need to use TRIM() as we are removing all spaces, so LEN(SUBSTITUTE(text, " ", ""))
• Then we just add 1.

The complete formula is: LEN(TRIM(text)) - LEN(SUBSTITUTE(text, " ", "")) + 1.

How to Create a Custom Function to Count Words in Excel

We have learned how to count words in a cell, but maybe we don't want to type all that every time we need to count the number of words.

Fortunately, we can solve this by creating a custom function to count words. We can also have a custom function to count the total number of words in multiple cells.

How to Create a Custom Function with Visual Basic for Applications

We can open the VBA editor with Alt + F11 (FN + Alt + F11 for Mac). Then we can go to Insert > Module, and we are ready to write our function.

We can use what we have already written as a starting point, but we need to replace SUBSTITUTE, as that doesn't exist in Visual Basic, with the REPLACE function. So now we'll have LEN(TRIM(text)) - LEN(REPLACE(text, " ", "")) + 1.

Let's name the new function we want to create. I have chosen the name WORDCOUNT, but you can use any name you want. Just replace it in the two places it's written with the name of your choice.

Function WORDCOUNT(text)
   WORDCOUNT = LEN(TRIM(text)) - LEN(REPLACE(text, " ", "")) + 1
End Function

Once you add this code in the editor, you have created the function. Now you can close the editor and enjoy your new function! But keep in mind that it only works for this workbook.

So now let's make the function work with more than one cell, and then we can also add it permanently to Excel.

How to Build a Custom Excel Function to Count the Total Number of Words in a Group of Cells

We will now update the function to work with a range of cells to make it a bit more useful. We take the same code as above, and apply it to every cell within a range, summing together the number of words in each cell.

Replace the code we wrote before with the following:

Function WORDCOUNT(rng As Range)
    Count = 0
    For Each cl In rng
        thisCount = LEN(TRIM(cl.Value)) - LEN(REPLACE(cl.Value, " ", "")) + 1
        Count = Count + thisCount
    Next
    WORDCOUNT = Count
End Function

Note: this version works with a single range of cells, and all cells selected must contain text. You could try to make your own more versatile version if you want to, just explore VBA on your own!

Lastly, we want to make sure that our function is available in every Excel Work Book. To do that we have to close the VBA editor and save the Book we are working in as *.xlam, the Excel Add-In file type.

To do that we can go to File > Save As, give the file a name that will let us recognize it, like "WordCount", chose the format "Excel Add-In (.xlam)" from the drop-down menu. Don't change the folder in which you save the file, as it is set automatically to an *AddIns folder.

Now that we have created the file, we need to import it into Excel. To do that we go to File > Options > Add-ins. At the bottom of the window select "Excel Add-ins" from the dropdown menu, and click Go.... In the new window use the Browse... button, and there it should open the AddIns folder we have saved the file in. Select it and press Ok, then Ok again. Now the WORDCOUNT() function will be available every time you use Excel.

Conclusion

In this article, we have learned how to count words in a string in Excel.

And even though Excel does not have a readymade tool for counting words, we learned how to create our own custom function to avoid having to write each formula every time we want to get the number of words in a string.

Finally, we also learned how to expand our function so that it works with any number of cells.

What should you do when you’re trying to sell your services and hear these words:

• “That’s too expensive.”
• “I’ve never heard of you before.”
• “I’m too busy. Call me some other time.”

Give up and move on to the next one?

If you do, your pipeline will soon run dry.

It may be disappointing to hear these phrases over and over again, but these are some of the most common client objections in virtually any industry.

You may not like it, but working on sales is vital to start your freelance web development business.

Client objections are inevitable, but the key to overcome them and close the sale is to come prepared with techniques and strategies on how to handle these objections like a pro.

What are Sales Objections?

Sales objections are problems that prospects tell you are the reasons why they can’t buy your services.

The key to handling objections is seeing them with the right perspective.

Some objections are valid, such as a real lack of budget (in that case you have to move on). But sometimes they represent an opportunity for you to explain the value that you can bring or clarify any questions they might have – which brings them one step closer to a sale.

When your prospects object, you have to understand what’s really going on in their minds so you can handle those objections accordingly.

As with any skills, handling sales objections takes a lot of practice. But over time and with enough practice, you will develop an instinct and familiarity that will help you handle objections with more finesse.

4 Types of Client Objections During Sales

Sales professionals use a qualification methodology called BANT to help determine whether a prospect is a good fit based on their Budget, Authority to buy, Need for the product, and Timeline.

Since a successful sale usually happens because all these four qualifications were met, it makes sense that the most common client objections are the opposite of these.

Almost all client objections can be grouped into the following four categories:

• Lack of budget
• Lack of authority to buy
• Lack of perceived need for the product
• Lack of urgency

“It’s too expensive.”

Any concerns regarding cost, budget, or ROI fall into this category. Clients are worried about the cost often because they’re not sure if it’s worth the risk, or they’re not sure what makes your service worth the higher cost than a competitor’s.

Your job is to justify the cost by showing the value of what you have to offer.

How to handle budget-based objections:

Sometimes, when people don’t want to deal with another sales conversation or aren’t ready to commit to a sale, the first thing they will say is they don’t have any money, even if that’s not the case.

Ask a few questions to uncover the real reasons behind the objection. Try to find out what makes the prospect think that your service is expensive. Putting the price in context will often help ease their minds. Explain the ROI in relation to the price or how much it will cost if they don’t get your service.

This is also why it’s best to offer a pricing tier, like 3 options. Learn how to write winning proposal templates.

Clients with budget concerns will feel more at ease availing of your lower-priced options. You can then upsell them later on.

Learn more about how to price your web development services here.

If the client really has no budget for your service, let it go and move on to the next prospect.

Lack of authority to buy

“I need to clear this with my boss”.
“Let me run this through with my partner”.

You’ll hear this if you’re talking with someone without the influence or authority to buy. What you’ll hear specifically depends on how big the company is.

If it’s a large company, they’ll say they need to talk to their boss about it or they can’t decide on that matter. A small business owner with a business partner will tell you they need to talk about it first.

How to handle authority-based objections:

This one is pretty straightforward. If they really don’t have the authority to make the decision, ask them to connect you to someone who does.

If they need to talk to their boss about it, you can help out by anticipating questions and providing clear, convincing answers.

Lack of need

“I don’t see why I need this.”

This is when a client expresses doubt about whether they need your services.
The key here is to understand and evaluate their needs by asking open-ended questions.

How to handle need-based objections:

Get them to elaborate on why they don’t think they need your service.

This kind of objection commonly arises when you’re proposing a website improvement project and they’re not convinced that something is wrong with their current website.

After all, people don’t want to fix something that’s not broken. In this case, ask them why they think they don’t need the website improvement.

Then explain to them the website’s flaws and why these problems need to be fixed ASAP. What are they losing because of the issues with their website?

Then ask for an appointment where you can show them how you can fix it. You can also send a detailed proposal.

Likewise, if the client is not sure if they need a website for their business, ask questions to understand why they think this way, then respond accordingly.

It often helps to explain how a website can contribute to their bottom line. You can also throw in some data. If you can cite a case study about one of your clients, even better.

Lack of urgency

“I don’t need it right now.”

When prospects say this, it’s important to identify if the timing is really an issue or if they’re trying to brush you off.

How to handle timing issues:

Ask them to elaborate on why it’s not important to them right now or what competing priorities need their urgent attention.

If their response conveys a concrete timing issue, it’s best to ask when is the best time for you to call back.

If they’re giving vague excuses, they’re most likely just putting off taking action on a real pain point, so you may have an opening. In this case, it works best to explain the cost of NOT acting right away.

Tips on Handling Client Objections

Listen to what they have to say.

I’ve come across some salespeople trying to dismiss my objections perhaps in hopes that I will realize that I was wrong and they were right… You can be sure they never heard back from me!

Selling is, in essence, communication, and communication is supposed to be a two-way street. Your prospect needs to feel that they’re in a real, engaging conversation so you can build a good relationship with them.

A trick that always helps in making prospects feel heard is repeating what they just said. When a client objects, confirm their concern back to them: “So what I’m hearing you’re saying is __. Is that right?”

Then you can answer their objection. Don’t dismiss their objections right away. It’s a little way to show that you actually care about their situation.

Ask open-ended questions.

Objections are often great opportunities to understand the needs of your target customer. After all, there’s no better way to know what your target market needs than asking them yourself.

Ask as many questions as you can to help you understand your prospect’s objection and get down to the real reason for their hesitation.

But it’s important to have the right tone – you don’t want it to feel like an interrogation. You have to sound calm, positive, and inquisitive.

Once you get down to the root of the problem, you’re in a better position to deal with it effectively.

Share customer testimonials.

I’ve found that one of the best ways to handle objections is to share the stories of your past clients who had a similar objection but went ahead with your service anyway and saw a positive result.

This approach shows that you are acknowledging the validity of their concerns and the value that others have found in your service.

Be honest.

The last tip that I’ll share is being honest about your service. Don’t make false claims – ever.

Don’t say the website you built for a restaurant directly resulted in a 200% in-store traffic if it didn’t. It’s just part of business ethics.

Always be upfront about what you can offer, your past results, and back it up with customer stories if you can.

When No Means No

The tips above will help you get past your prospects’ first line of barriers and help you understand the real problem.

But at a certain point, no means no.

If you’ve tried to identify what your prospect is really concerned about and you’ve said your piece, and the prospect still objects, let it go.

A good rule of thumb is if the prospect says an objection twice, it’s true.

Client objections can seem daunting at first, but once you understand the psychology behind it, it gets easier to handle.

Thanks for reading, and I hope this will help you handle client objections more confidently :)

Check you on Twitter.

Economics is the study of scarcity. It's how people interact with value.

Economics gives you tools to understand how people produce, distribute, and consume goods and services.

By applying economic theory, you can make well-reasoned business decisions. You can better understand competitive forces.

You can also understand concepts like the “diamond-water paradox,” which economist Adam Smith pondered but was ultimately unable to solve.

In this paradox, Smith struggled to explain why in this life – which cannot exist without water but can easily exist without diamonds – diamonds are far more valuable than water.

There are entire books written about the study of economics. There's no way I can outline the entire field of study in this one article. But here I will outline the core of this field of study.

Microeconomics vs Macroeconomics

At the highest level – and even this is perhaps a slight oversimplification – there are two branches to the study of economics:

1. Microeconomics: A firm or individual view of how companies and people make decisions.
2. Macroeconomics: How entire economies (countries) interact and trade, how nations' economies are structured, and the decision-making of economies writ large.

Within each of these branches there are multiple sub-segments:

Microeconomics:

• Understand consumer behavior
• How firms make decisions
• Examine market structures (monopoly, oligopoly, competition)
• Use supply and demand to analyze impact of changes in supply or demand on price and quantity
• How people and firms act to reduce costs and maximize profits
• Understand the behavior or individuals or firms when facing uncertainty.

Macroeconomics:

• Economics and global interactions
• Business cycles at a country level: unemployment, inflation, aggregate supply and aggregate demand
• How domestic output is measured
• Monetary markets
• Monetary policy
• Fiscal policy.

First Principles: Economic Concepts, Definitions, and Examples

When studying either microeconomics or macroeconomics, a few concepts remain the same, which for the sake of this article I will call First Principles.

At a high level here are the economic concepts that apply to economics (and the study of this field) and that you must be aware of.

1. The Law of Demand: The law of demand states that the quantity purchased varies inversely with price. In other words, the higher the price, the lower the quantity demanded.
2. The Law of Supply: The law of supply states that as the price of an item goes up, suppliers will attempt to maximize their profits by increasing the quantity offered for sale.
3. Scarcity: A good is scarce if it is impossible to consume more of the good without having to give something else up. Back to the diamond-water paradox: diamonds are scarce, and therefore expensive.
4. Opportunity Cost: When a decision is made about how to allocate a scarce good, an opportunity cost is incurred. The opportunity cost of an allocation is the next best allocation that is no longer possible (because the scarce good has been used up). The standard terminology is that the opportunity cost of a good is the “value of the next best foregone alternative.” When estimating the opportunity cost, you should consider all costs and benefits that vary as a consequence of a decision, and only those costs and benefits that vary with the decision. Typical examples of costs are overhead, depreciation, research and development.
5. The Cost-Benefit Principle: this principle simply says that an action should be taken if the additional benefits are greater than the additional costs.
6. Marginal Cost: Is the additional cost to produce one additional unit of a good. Typically, as output increases, marginal cost increases.
7. Producer Surplus for a Single Unit of Output: The difference between the price a firm receives from producing and selling a unit of output and the marginal cost of producing that particular unit.

Economics: Case-Study

I want to use a simple set of examples to demonstrate these core economic principles in practice.

Imagine you own a store that helps people buy engagement rings. You have a website and a physical retail space, equipment to make and fix jewelry, and a small team of dedicated employees.

The law of demand states that as the price of your rings goes up, people will buy fewer of them.

The law of supply states that as the price of rings goes up, you will try to increase the number you can sell.

Where this supply and demand meet, an equilibrium is obtained.

Scarcity states that as the material of the rings is harder to come by (for example gold, diamonds, and so on) the prices of these inputs will increase.

Opportunity cost states that when using gold to make a ring, you are not using this gold to make some other product - like earrings or a watch. You are making an explicit decision to use the raw material to make one final product: a ring. Because you can’t use that same gold to also make another item, this represents an opportunity cost.

The cost-benefit principle states that you should take an action if the added benefits are greater than the added costs. For example, let’s say that you want to sell one more ring but doing so requires you to keep your store open for another 30 minutes. What should you do? If the economic benefits of remaining open outweigh the costs of keeping the store open, that action should be taken.

Marginal cost is how much it costs to produce another unit of a good. Imagine that getting the property and equipment to make a ring is really expensive: you need space, a furnace, and trained technicians. These costs are all fixed: you need to buy these to start your operation.

But once you start making a single ring, how much does it take you to make a second? Or a third? This cost is your marginal cost.

In general, some businesses have high variable costs and others have very low variable costs.

Imagine an airline.

Every time an airline flies a plane they are paying for the use of the airplane, fuel, a flight crew, landing taxes, parking fees, and so on. Their variable costs are seemingly very large.

It is hard to start an airline because the fixed costs and the variable costs are high. Before flying your first flight you will need shell out a large sum of money.

Compare that with Google: it took a lot of money to set up data centers and hire really smart people to build Google Search. But each incremental search query costs Google very little (fractions of pennies). In short, Google’s core search business has low variable costs that are driven even lower by distribution and scale.

Software is a field that usually has a low to moderately low variable cost structure. That is because once the software is built and deployed, it can be run at scale relatively cheaply. Here are some additional examples you can think through:

1. QR Code Generator: takes a lot of work to build but can essentially run without heavy lifting once it’s live. When you have a product that doesn’t take too much specialized inputs to build - and has low costs to run, what do you think happens? The answer: you have lots of entrance into the space competing for users.

1. Shopify: an e-commerce platform for online stores and retail point-of-sale systems. Again: many years of work to start and build but each additional merchant that uses the platform costs very little. Many merchants on Shopify run off network websites for monetization. Why? Because websites are the ultimate articulation of a low fixed cost, very low variable cost business. Each user (or piece of traffic) doesn’t cost the owner more money. The same cost structure applies to Business-2-Business marketplaces as well. This contracts decisively with the manufacturer of airplanes or rings or cars which have underlying costs each and every single time they are consumed.
2. Many software companies are trying to create their own software delivery platforms in-house, which can take a lot of time, and usually it is hard to forecast the many different fixed and variable costs that are associated with this development. Even further, once this software is built, it takes a lot of engineers to manage the platforms, perform QA/QC work, and continuously perform upgrades. Given this cost structure, what do many firms do? They turn to 3rd parties to perform this work because their internal people are a scarce resource.
3. A final example is software development: much like the tools you learn on freeCodeCamp, software development is all about the “start”. This represents the fixed costs to get going: a computer, an IDE, and access to programming languages. But once you build an app or website, your incremental costs remain low.

Conclusion

At its core, economics is the branch of knowledge concerned with the production, consumption, and transfer of wealth. If you want to understand why people, firms, and countries behave the way they do – and how they interact with and manage scarce resources – economics is an incredibly useful guide.

By understanding supply, demand, scarcity, opportunity costs, the cost-benefit principle, marginal cost, and produce surplus you are well on your way to scratching the surface of this important field.

CapEx stands for capital expenditures, which is money used by an organization to purchase, improve, or sustain physical assets.

Commonly held physical assets include PP&E (property, plans, buildings, and equipment for running and sustaining the business).

In order to explain CapEx further I want to use a fictitious business to illustrate examples in a clear and concise way.

What is CapEx?

Firstly, imagine a company that makes jewelry - like engagement rings. In order to produce rings, the company needs basic materials (gold, diamonds, etc), equipment to turn these raw ingredients into final products, and labor.

Now imagine you own and operate this business.

As the owner of this company you decide that you will buy property (perhaps a warehouse for storing raw materials), equipment (such as a high temperature furnace to smelt gold), or fans to keep the showroom cool and comfortable.

What would you call this property and equipment? How would you account for them? To put it simply, this equipment is a capital expenditure.

Why?

In this case you are quite literally expending capital (money) in exchange for other types of assets to help the business grow.

And that is precisely what CapEx is.

Because buying the machinery, equipment, and property would help the business maintain or increase its operation, we classify these transactions as CapEx.

Another example is Goldspot Pens, a fountain pen store that sells bottled ink and fountain pens, who are investing in new, bigger warehouses for storing their fountain pens and ink. This costs more money, but increases Goldspot Pens' scope of economic performance in the future.

In this simple example, the choice to buy these future economically productive assets represents CapEx.

In summary, CapEx is the money an organization spends to buy, maintain, or improve its assets to increase its scope and economic performance.

How to Calculate CapEx

Now that you know what CapEx is, and are armed with an example of CapEx at a jewelry business, you might be curious how a company calculates CapEx in practice.

There is a simple equation: CapEx is equal to changes in PP&E added to Current Depreciation.

The formula: CapEx = ΔPP&E + Current Depreciation

Let’s break down these parts of the equation to clarify.

1. CapEx: spending on business critical property or equipment or technology to grow the firm.
2. ΔPP&E: changes in PP&E recorded on the balance sheet. If a firm buys a machine for $1M, for example, it will mark this machine in the PP&E section (usually under long term assets).
3. Current Depreciation: a concept that captures the cost of the asset by the useful life of the asset.

Specifically, here are the steps to calculate Current Depreciation.

• Declare the useful life of the asset (10 years is a fair value to use).
• Subtract the salvage value of the asset (that is, at the end of year 10 the machine will be worth some value).
• Divide this value by the starting cost of the asset ($1,000,000)

In this example, let me show you what a depreciation table will yield. The asset starts at $1,000,000 on Day 1 but ends the depreciation cycle at $25,000.

Now that you know how to calculate depreciation, you can solve CapEx mathematically, using either a Direct or Indirect Method.

Direct method:

• Amount spent on asset #1
• Plus: Amount spent on asset #2
• Plus: Amount spent on asset #3
• Less: Value received for assets that were sold
• = Net CapEx

Indirect Method:

• PP&E Balance in the current period
• Less: PP&E balance in the previous period
• Plus: Depreciation in the current period
• = Net CapEx

If you bought an asset for $1,000,000 and sold it at the end of year 10 for $25,000 your Capital Expenditure would be: $1,000,000 - $25,000 = $975,000.

The Meaning of CapEx in Practice

When you decide to buy equipment today, you are doing so because you believe that the equipment will generate future economic benefits, or profits.

If you didn’t believe this, you likely would not have purchased the property, hardware, or equipment in the first place. Because CapEx is any type of expense that a company capitalizes, or shows on its balance sheet as an investment, you will need to justify how the purchase adds economic value to the firm's future.

For this reason, CapEx is considered a capitalized expenditure and not an expense.

This enables you, as the business owner, to match the economic benefits of the items you are buying with the costs in a given period of time.

If you were unable to match the purchase with economic benefits, you would treat the expenditure as an expense and not as an investment.

Summary

Many businesses, but not all, have CapEx.

Think about large companies like Google, AT&T, and Apple with large data centers, 5G networks, and fulfillment centers, respectively. These are all examples of CapEx.

These companies invest in these pieces of land, equipment, and machinery because each firm wants to secure a profitable future.

And without this CapEx, such a future would be harder to obtain.

The COVID-19 coronavirus pandemic has resulted in many people working from home. So you might be wondering - how do I remain productive at home?

Remote work has been on the rise for years in many companies. Some offer remote work as a benefit to employees for better work-life balance.

And today, millions of people around the world have recently started working from home (WFH) because of the COVID-19 coronavirus outbreak.

Some companies do not advocate for WFH as they believe people cannot work without supervision. Instead, they adopted a controlling and micro-management culture.

However, which is a more productive environment for employees? The home office or the office office? Well, it looks like we have the opportunity to find out.

The situation may extend for weeks or even longer. Nonetheless, it is a great opportunity for a lifestyle change. There will be no rushing to leave home and skipping breakfast so that you won't miss the train.

A joint report by Buffer and Angellist surveyed more than 3,500 remote tech workers. It found that the top benefits of WFH are a flexible schedule, the ability to work from anywhere, and not having a commute.

On the other end of the scale, the challenges of team collaboration and communication become apparent when team members are dispersed in isolation. They also feel constantly attached to work while distracted by things at home.

WFH is awesome. To some, it may seem like newfound freedom, but along with it comes responsibility as well. To help with the transition into this new way of working, here are some useful tips:

Daily Routine

Be disciplined. It is important to cultivate strict routines or working hours, but also be kind to yourself. Wake up at your usual time and go through your usual routine. For me, I use the time usually spent on commuting to read or stretch my legs.

Dress properly. Do not wear pajamas. The way you dress can influence your mood and attitude, so dress in proper work attire.

Set work hours. WFH allows for flexibility, but the start and end of your work day should be as routine as possible. Enforce a hard stop at the end of the day, and plan for personal errands after that. Setting a target end time will dictate expectations and increase productivity.

Create a good routine with short exercise breaks. I personally feel that moving and stretching my body energizes the brain. The truth is, endorphins are produced when exercising, which increases happiness and interest levels.

Communication

Have a daily standup meeting with your team. This can be done remotely (whether standing or sitting). Just maintain the essence of keeping it short, and keeping team members accountable to one another in their respective tasks.

Have more social interactions. WFH can be lonely, so I do plan virtual coffee breaks with co-workers (with a real fragrant cup of coffee). Keep talking to people so you do not feel isolated.

Over-communicate. WFH means I cannot walk by a colleague to say something. If the matter is urgent, I usually do redundancy in communication. For example, after an email is sent, I also send a text message to the recipient, or leave a ping on Slack.

Use emoji. Text messages usually look more formal and serious on their own. To keep messages positive, sometimes I like to lighten the mood by adding a smiley face. There's a world of difference between saying DONE and done :-).

Distractions

Keep the television turned off. It is a big distraction. The radio or music on YouTube might be better if you are the type who works well with some background music. Relaxing jazz creates an unwinding mood, whereas video game soundtracks keep the energy level high.

Stay off social media. We are all guilty of this one from time to time, and social media can be one giant time-waster if you're not careful.

Separate space to work from space to rest. You should not work in the bedroom (the bed is so comfy! And it gives you backaches), and also not in the kitchen (You have full access to all the snacks! And it upsets your diet).

Leave Home. If temptations are too distracting, go to a WiFi-enabled cafe like Starbucks. A new environment is also a great stimulant for creativity and attention.

Time Management

Keep a daily checklist. Whether you work in the office or from home, it is essential to set a schedule for the day and keep track of daily tasks.

Use online tools. There's a lot of free software to improve productivity:

• Video conference: Skype, Zoom, Google Meet, Cisco Webex
• Tasks and project management: Air Table, NovaTools, Trello
• Team communication: Whatsapp online, Slack, Workplace by Facebook
• Shared documents: Dropbox, Box, GoogleDrive

Schedule frequent short breaks. Although taking breaks might seem counterproductive, research has shown that taking short breaks can actually increase productivity and creativity levels. Go get some fresh air outdoors, listen to the birds, enjoy the breeze, take time to smell the flowers, connect with nature with a short walk or cycle.

Avoid work creep. WFH can be invasive to your personal life. Without scheduled work hours, work can creep into your home life and just like personal errands can creep into work hours. Do not mix household chores into work hours.

WorkSpace Logistics

Prepare a conducive workspace. Apart from having a high-speed internet connection and a reliable router, get a comfortable chair and reserve a quiet space to be able to do focused work.

I have converted the guest room into a home office with ergonomic chairs, extended monitor screens, a full suite of stationery, and a printer. Most importantly, it is well lit and ventilated.

Use a comfortable headset or earpiece for calls. It is a good habit to mute your microphone during conference calls (unless you’re speaking) to minimize the amount of audio feedback and random sounds that interrupt the conversation.

Other hacks include: lower the video resolution when the network traffic is heavy, and use a collaboration tool to share your screen but get audio through the phone.

For Parents

Keep children in your plans. Due to school closure, children may also be around at home. Plan and schedule some activities to occupy them while you work.

Have staggered lunchtime to spend with children; for instance, one partner can have a lunch break at 11 am-12 pm, and the other breaks at 12 pm-1 pm, so 2 hours are spent with children.

For all we know, working with children around us might become the new norm from this season on.

Get family support. I am fortunate to have my mum to watch over the little ones during the day, along with a domestic helper to do the chores so my wife and I can focus on work.

This can be a good thing.

WFH is great for work-life balance. It increases ownership and performance. It trains people to be focused and disciplined. I look forward to seeing the productive benefits of trust and empowerment.

Everyone’s situation is different in terms of home environment, personality and habits. My advice is to ignore any tips that clash with your personal beliefs. Tailor the most effective way of working for you and keep practicing until it becomes part of a lifestyle or culture.

“It takes 21 days to form a habit”

Once a new way of working has been established all over the world, it might be hard to go back to the old ways.

I had no coding or engineering background. I studied biology in college, with no clue about what to do with my degree.

My first jobs were making cold calls in sales, but I made almost no money and was miserable with my work.

After failing at a few different sales gigs, I gave up and found a job preparing vegetables at a restaurant — not exactly the plant life I was expecting to work with after college.

I needed new prospects, and I was ready to find anything better. All it took was a strong work ethic, a willingness to learn, and a few key resources to get me onto a whole new career path.

This also got me involved in a coding competition that took me way outside my comfort zone.

While working at my restaurant job, I started hearing stories about people who taught themselves how to code and managed to develop that into careers. Willing to try something new, I started taking online courses with freeCodeCamp during my off-time from work.

Hours here and there turned into a full-time commitment. I left my job and followed freeCodeCamp’s curriculum, aggressively studying full-stack JavaScript as my new full-time job.

I spent a year and a half focusing on learning coding, and it paid off, too. I was accepted into a long-term contract as an entry-level coder at a New York City fashion company, which was generating over $2 billion a year in sales.

Learning was my top priority. Even in this new position, I continued to practice during my off-hours, this time focusing on best practices for my specific job responsibilities, which involved writing automated tests using the NodeJS version of Selenium.

I spent 10-15 hours per week doing Selenium tutorials, which helped me get my work done faster and gave me leeway to learn from my colleagues during work hours. I maximized in-between work times, talking to co-workers in the elevator or while walking to my desk. I learned what others did and what their responsibilities were for our company.

It didn’t matter if they were in the same role as I was. I spoke to my engineering supervisors and to people in our business units so I could better understand the structure of our company, find out how others had made progress in their own positions, and see if I could find some big problem that I’d be able to solve.

Around my third week of work, while talking to my senior director of engineering, I noticed a number of awards by his desk. He told me were from his past wins at our company’s annual Hackathon.

“Wow,” I said, “You've won a lot of awards.”

He responded, “Thanks. You should participate in the next Hackathon. It will be in a few months.”

I was still relatively new to coding and had never participated in a Hackathon, so after a day of mulling it over, I went back to his desk.

"Hey, I've seen a few other people with Hackathon awards,” I said, “but no one has nearly as many awards as you have. Plus, most of your awards say first place. How do you win so often?"

He told me, “I focus on projects that make an impact. For instance, for one of the Hackathons I built a prototype that would let our customers order off our website and pick it up in our stores. The judges realized this would be a big hit with our customers and would greatly increase revenue.”

When I asked him how to find a project that would make an impact, he explained that, during his time at our company, he’d gone ahead and learned all of the many different subsystems that powered our eCommerce business.

“Knowing the whole system makes it easier to see where the opportunities are," he said. "In fact, my broad understanding of our entire platform is what differentiates me and has allowed me to reach my current position.”

Finding a Project

I realized that the Hackathon would be the ultimate test of my abilities: could I take the strategies of hard work, learning from my co-workers, and my intense study of coding to the next level?

After years of feeling like I had been wasting my potential, I’d finally found a way to prove my worth. This wouldn’t just be about showing off, because I would need to find a project that was actually of use to the company.

I didn’t have a lot of time on my side, and my tech skills were relatively basic compared to the highly skilled senior level engineers I’d be competing against.

Even though I felt out of my league, I had the secret sauce for a solution in my back pocket: lessons I’d learned from Neil Rackham’s sales strategies book SPIN Selling, which gave me the four-step model for finding problems in large enterprises.

Step 1: Learn how something works.

Since I was advised to learn the inner workings of our eCommerce business, I started talking to employees in our planning department, conveniently located between my desk and the lunchroom (and between my desk and the bathrooms). They were responsible for deciding how much merchandise to buy and at what prices they would be sold.

I’d leave my desk and take a moment to ask questions like how they chose how much inventory to purchase in advance, how they set their prices, and if retail and eCommerce had different rules for pricing. Through my questions, I learned how planners introduced new clothing lines and calculated what to sell them at.

Step 2: Ask questions to find a problem.

Once I’d gotten a sense of how planning worked, I started looking for issues that might come up. Once they set an amount for inventory, does the company ever purchase the wrong amount? Do prices ever get set incorrectly?

I was trying to find the sort of mistakes or frustrations that I’d be able to solve.

Step 3: Ask questions to explore the problem’s implications.

After several days of asking questions, I learned about pricing issues, where prices would be set and appear incorrectly on our website. How did this problem come about and what were the implications?

I asked how often pricing errors would occur and what kind of further issues they might cause.

Step 4: Ask questions to explore the value of solving the problem.

If there were an automated computer script that found all the incorrectly priced eCommerce items, how helpful would that be?

I asked the planners questions that would help me figure out what sort of value I could offer them. If I was going to fix something at our company’s Hackathon, I wanted to make sure it had a noticeable impact.

After my conversations, I found that pricing mistakes would be a worthwhile project to work on. Each of our three or four assistant planners were spending 30 minutes per week manually checking for pricing errors. An automated system would save that time — an estimated 100 hours per year that would no longer be wasted.

Even though I had already been told about the Hackathon, there was no official date yet. I had a solvable problem in my back pocket, and, while I didn’t know for sure that I had the coding skills, I was fairly confident in my chances. Until the announcement came, I’d focus on my work. But whenever it arrived, I’d be ready to get started.

Confirming with the Planners

Two weeks later, I had an email in my inbox. The Hackathon event would be in one month, going for two days straight, which included a presentation on day 2, a Friday.

Project ideas would be judged on four criteria: originality of the idea, impact on the business, completeness of the prototype, and strength of the pitch. There were so many unknowns and it was impossible to predict whether one month would be enough time to prepare.

I went over to the planners and confirmed that the issue was still present — checking online pricing sales was still being done manually.

I was happy to learn that our company had a dedicated eCommerce merchandiser, who was responsible for reporting all incorrect website prices and resolving them. She would be able to give me far more information and could confirm whether or not it was an issue worth the effort of fixing.

I was unhappy to learn that she was on vacation, and I’d have to wait a week to speak to her. The clock was ticking, and I was stuck until then.

With three weeks until the Hackathon and our eCommerce merchandiser back in the office, I was able to start exploring the problem in more detail. She confirmed the issues I had heard about and said that building something that could automatically scan the website and find incorrect prices would be a big help.

In further conversations with the planners, I learned how pricing was uploaded to the website: planners would copy and paste a list of prices from an Excel spreadsheet to SAP, a software that does many things such as managing inventory for retailers. SAP would then push the prices to our eCommerce website.

I realized that the Excel prices could be compared to the website prices to find any issues. I would build a simple website that would let planners upload Excel pricing lists.

A script would then read the Excel pricing lists and compare them in real-time to our website prices. Any and all discrepancies would then be batched into a list and sent to our planners for review.

Excited that I had a way to solve the problem, I began explaining the project idea to other developers in our organization, asking if anyone wanted to join my team. However, I made it a strict requirement that any potential teammates would have to first speak to our planners in person and hear the problem from their perspective.

As part of the SPIN system, I needed teammates who were willing to understand the process and the problem before we could fully design the solution. Unfortunately, I failed to recruit any other software engineers to my project, but other engineers gave me valuable advice on how to code out my project and what technologies to learn.

I was on my own, but I was excited, feeling confident in my solution.

Needing to Pivot

Two weeks before from the Hackathon, I revisited one of the assistant planners and explained my idea for an automated script that would compare Excel and website prices and report discrepancies. She quickly informed me that my idea would be useless, since the Excel prices and website prices would always be identical.

The assistant planner continued to explain that the original Excel pricing lists were generated by a tool that took in product manufacturing costs, delivery costs, and other relevant factors, and then spit out Excel pricing lists, which our planners would then upload to the SAP software powering our website.

If the planners accidentally entered incorrect manufacturing costs or delivery costs into the pricing tool, then the price would similarly be wrong on the Excel lists.

“So you're saying there is no master list that is guaranteed to always contain all the correct prices?” I asked.

“Exactly,” the assistant planner said.

It was the opposite of what I needed to hear. There went weeks of planning, thinking, discussing, and waiting — gone.

I was two weeks out from a Hackathon where my lack of experience was already holding me back, and I had nothing. There weren’t enough days to do this all over again.

I had to rethink my process.

Since timing was tight, I couldn’t do all the research and work I had tried the first time around. Instead, I would let the planners come up with the project requirements for me.

I came back to the planning department, this time with a different question: “Imagine you had a robotic script that could automatically grab numbers from anywhere, such as an Excel spreadsheet, a database, or a website, and automatically subtract, add, or compare the data. What problem could be solved with the help of such a script?”

After the assistant planner I was speaking to thought about it for a few minutes, she told me it would be useful for checking sales prices. She explained that our website ran weekly mass sales every Wednesday. The sales would be listed on our homepage and would use text such as “25% Off All Men's Jackets” or “15% Off All Women's Dresses.”

Every Wednesday morning, our 3-4 assistant planners would spend 30 minutes to manually click through our website and confirm the correct discounts were applied. If the planners found any incorrect sales prices, they would send them over to our eCommerce merchandiser.

Only IT was able to change live sales prices. To keep things simpler for IT, our eCommerce merchandiser might wait and send a list to IT in batches.

That meant that even once an incorrectly priced item was found — unless it was an emergency — the pricing wouldn't get fixed immediately.

I had a problem, and the solution wasn’t far off from what I’d originally planned: an automated script that could report all incorrectly discounted items would save time by reducing the amount of work involved for our planners, for our eCommerce merchandiser, and for IT, and it would make for a better customer experience by reducing the amount of incorrect sales prices and doing so quickly.

I’d only need a master list of all ongoing sales that could be compared to website prices, but the planners told me that no such “100% accurate” master list existed, at least not on paper.

“But a fully correct pricing list exists in our heads,” they said, “because we know our products through and through. That’s why we can click through our website and spot incorrect pricing.”

After thinking about it for a few moments, I asked, “What if you didn’t have to click through our website? What if you could get all our live website prices in a neat list just by clicking a button?”

“That would dramatically speed up our price checking,” they said.

We came up with a plan: I would build a simple website that would allow planners to upload dozens of item names and immediately receive an easy-to-read list of those items’ live website prices and sales discounts.

The idea was concrete and doable. It had an impact — conserved manpower, faster QA, and improved customer experience — and I was confident in my own ability to build it (even if I didn’t yet know exactly how).

I went back to my desk and typed up a document explaining the business requirements of what I planned to build, how it would be helpful, and the Hackathon date when I would build it.

I went back to the planners and had one of the planning managers and the eCommerce merchandiser read my document. There was no time to backpedal again.

They gave me the confirmation. The idea was set, and with a week left, it was time to figure out how I was going to make this a functioning, usable reality.

I went to the engineers at my company more advanced than I was (of which there were plenty) and asked, “How would you code a script that automatically returned the website prices for items we sell?”

After speaking to several engineers, I learned that our website product pages got their prices by querying our internal eCommerce database, which in turn got its pricing info from SAP. This was a Redis database that had its own neatly written documentation showing exactly how to request any pricing info from it.

I found the engineer who had built the database and learned that I could retrieve the website prices and sale prices of a whole list of items using just a single database call.

Even though my plan was coming together, I was still very aware of how much work I had ahead of me. I tried to recruit other engineers, but didn’t find much interest, especially when I told them about my expectation for them to speak to the planners.

With no engineering teammates, I spent every moment I could after work studying the material on my own, experimenting with making database calls and studying how to write JavaScript code to read Excel spreadsheets.

Expanding to our Main Brand

The day before the Hackathon, out of curiosity, I asked our planners how they knew what inventory options to sell. They responded that our company’s merchandising department was responsible for those decisions, so I went to speak to our merchandisers.

During our conversation, they mentioned in passing something about their counterparts in our main brand.

“Our main brand?” I asked. “Aren't you guys our main brand?”

“No,” they said. “The merchandising and planning for this floor is dedicated to our smaller brand, which is 15% of our total revenue. Upstairs is our flagship apparel brand.”

This couldn’t be happening. I knew we had several brands at our company, but the day before the Hackathon, I was finding out that my project was being built for the smallest brand in our organization.

With a weaker background in coding, no other engineers on my team, and the need to do something big to impress the judges, I wasn’t looking too great.

I walked upstairs and started asking around where I could find the planning department for our main brand. I needed to speak to them if my project was going to have a big enough impact.

There seemed to be at least 20-40 planners in our main brand. Who would I speak to?

I needed to find a planner who would understand what I had in mind, but also have the knowledge base and the creative thinking to find the areas I was missing.

What if the larger brand used a different system? I needed somebody dependable, and I didn’t have the time to spread out over a few weeks.

With the Hackathon a day away, I took a shortcut.

Planning had an open office space environment, which meant people were at cubicles with no walls. I began talking about my Hackathon idea to one of the planners in our main brand.

As I spoke, I raised my voice and began walking up and down the aisle, looking around at other planners as I did so. This allowed me to get the potential attention of up to eight planners at once.

One of the planners showed a ton of interest and asked a lot of questions. He was specifically interested in our Redis database and whether other information besides pricing could be found.

I showed him our database documentation and we quickly went through it all.

He mentioned that there was other information besides pricing that could be useful, such as whether the items were listed on our website, and what categories they belonged to. He then introduced me to eCommerce merchandisers from our main brand, who agreed that what I was building had potential beyond just pricing.

There wasn’t enough time for me to make any drastic expansions to my coding requirements, but we agreed that I could build my project in a way that was flexible enough for it to be used by planners from either our smaller brand or our main brand.

Hearing about my project’s value and viability from co-workers who were really enthusiastic about it was just the push I needed.

I had the confidence, the resources, the research, and, hopefully, the ability. Even if I didn’t, there would be no avoiding it — the Hackathon was starting the next morning, and it wasn’t going to wait for anything.

Finding a Teammate

The Hackathon was a two-day affair, over the course of a Thursday and Friday.

When I looked at the calendar for the date, I realized that I had a family commitment on Friday afternoon that I wouldn’t be able to avoid. The presentation and judging would both be on Friday, which meant that I absolutely had to find a teammate who would be able to present, or the project would be dead before I’d even written a line of code.

I approached the planners from our company’s smaller brand who I’d been in conversation with for several weeks already. I asked if any of them would be able to present our project to the judges. None seemed enthusiastic. A few told me they had meetings on Friday while others said they were nervous about public speaking.

Needing a teammate, I went straight to Oliver, the planner from our main brand who had such an active interest in my project. He was a popular guy with a kind face. His hair was greying, though he was in his mid-20s, and he had surprisingly made it to the role of senior planner within just four years out of college, when most took five to eight years to get to that point. He had a lot of awards at his desk, and plenty of snacks, too.

Oliver immediately agreed to present the project and said he was excited to do so.

We went downstairs to the Hackathon’s dedicated meeting space and we signed up as a team. We needed a name for our project so we called it PriceSeeker.

There were nine other teams competing, most of which were comprised of senior engineers. Some project managers and UX designers were also part of a few teams. With the exception of my planning teammate, everyone else competing belonged to our eCommerce department.

Simplifying the Design

I had my plan in mind going into the Hackathon: I’d build a simple website that would let users upload Excel lists of items.

My website would parse the Excel spreadsheet, retrieve the list of items, and request their prices from our Redis database. It would then return to the planners a new Excel spreadsheet containing items and their prices.

With this, instead of manually clicking through our website to check item prices, they’d be able to immediately see all relevant website prices at the click of a button. It would make price-checking a whole lot easier and more convenient.

We had two days to work on our project and then present it to the judges, who were high ranking leaders within our eCommerce department. My senior director of engineering — who had introduced me to the Hackathon in the first place and taught me about making an impact — was one of the judges. He was also available throughout the Hackathon to answer any coding questions.

Excited to begin, I sat down at my computer.

I soon got up from my computer, because I had very quickly hit a wall: I didn’t have enough coding knowledge to figure out how to set up a basic HTML website that could easily read from an uploaded Excel sheet.

I approached my senior director of engineering for advice, and he suggested I simplify my design and just make a form with a text area. Users would copy items from Excel into the form and submit it.

Upon submission, the pricing would be requested from our database. The pricing would then be returned in a simple HTML table, which users could copy into Excel if they wanted.

No longer needing to write code to read Excel documents simplified things a lot.

Building PriceSeeker

Even with the help, it was still an intense day of near-constant coding.

I took some breaks to check in with our planners and get approval on the design. I grabbed plenty of snacks from Oliver’s desk. I also spoke with other engineers whenever I needed help or got stuck on the code.

I wasn’t alone, and I was grateful for the help, but it was my responsibility to keep pushing through the difficulties and put in the physical and mental effort of writing out all the code.

I was extremely aware of my disadvantage in the competition, but I was happy to find that by the end of the first day, I had managed to get a decent prototype working. It returned information for small lists of four or fewer items, but for larger lists it returned nothing at all.

The day was ending and I didn’t have the time to investigate or troubleshoot, so I uploaded PriceSeeker onto Github Pages, emailed the website address to several planners, and went home. Hopefully, a good night’s sleep and some time for responses would help me along my way.

When I got back to work on the second day, I found an email waiting for me from Oliver — he wasn’t able to get PriceSeeker working, but he helpfully sent me several screenshots showing what he’d tried.

Seeing the screenshots, I immediately realized that I hadn’t properly explained how to copy and paste items into the form. I emailed Oliver back a screenshot showing him how to do so, and he emailed me back two minutes later, showing me that it was working.

After taking some time to get into the proper headspace, I went to Oliver’s desk. There were several other planners around his desk and on his screen was PriceSeeker, which they were discussing.

Oliver had sent the website address to all the other planners on his team. The planners were discussing how amazing it would be to further explore collaboration between planning and engineering. I was excited by the enthusiasm, and especially by the possibility of opening new doors with this collaboration.

This especially excited Oliver, since he loved the idea of breaking through the barriers that siloed departments and closed them off from each other. Maybe we could create further opportunities for finding problems and impactful solutions by encouraging communication between departments.

Since I knew I wasn’t going to be around for the presentation, I spoke to Oliver, and we went over his five minute pitch. He started by displaying our working PriceSeeker website and showing it in action. He copied and pasted items into the form, submitted it, and explained why it was so useful to be able to get the prices instantly.

His demo went on to explain how “the sky's the limit,” with examples of other data that would be useful to receive. He explained the business impact of how our automation website would reduce manual effort and lead to an improved customer experience.

He concluded that though PriceSeeker currently only returned pricing, there was a lot more that was possible. It was amazing hearing him speak about the website's possibilities. He focused entirely on business terms like “reduced manual effort” and “increased annual sales,” and given that he was a planner himself, Oliver was able to talk about our project with far more accuracy than I ever could have.

When he finished his presentation, I asked questions to both learn more about our project's value and to give him additional practice at explaining its potential impact: “How much manual effort could be reduced?”

“How would automating the checking of our website data improve your abilities to order the right amount of inventory?”

“In addition to planning, what other teams or departments would benefit from automated checking of website data?”

“Why?”

I knew to ask these questions because I learned this question-asking technique from the book Spin Selling. Spin Selling acknowledges that sellers sometimes cannot present directly to buyers and need to rely on intermediaries to pass on the messages. The book advises coaching your intermediaries by asking them questions that get them to explain the product's benefits in their own words.

That’s exactly what I did, asking lots of questions that got Oliver to further explain all the many ways our project could add value.

About an hour before the judging would begin, I had to leave. I was sorry that I wouldn’t be able to be there for our presentation, but I was comforted to know that we were in good hands.

I wished my teammate good luck and asked a coworker to text me if my project placed in the top three.

The Results Are In

After leaving, I sat on a train for two hours. On the way, I mentally prepared for what would happen once the contest was over.

I'd gotten the feeling that we were the only team that had extensively started planning even before the Hackathon was officially announced. I'd also gotten the impression that we were the only team who had prepared our presentation to focus exclusively on a business impact.

I had some confidence because of this, but I was still nervous because there were so many uncontrollable things that could prevent us from reaching the top three places or even winning the Hackathon.

I kept imagining all the things that could go wrong without me being able to do anything. Maybe it would turn out we’d done something wrong and we’d get disqualified somehow. Maybe Oliver wouldn't be able to present. Maybe another team would deliver a superb presentation that rocked the house.

While sitting on the train, I realized that planning to win the Hackathon was not something useful, as it wasn’t something I could control. I decided that — regardless of the results — I would continue working on my project and implement it in a way that would lead to an increase of $20,000-80,000 in profits.

I chose those numbers rather arbitrarily, but it felt like something achievable. To reach my goal, I knew there was still a lot of work that would have to be done after the Hackathon was over.

I got off the train and made it to my family event. Part of me was still somewhere else, but I knew there was nothing I could do now. I didn’t look at my phone for a bit, which is why it took some time before I saw the text. The results were in. My team had won.

For a brief moment, I was shocked, relieved, happy. I’d reached this point after so much work, so much waiting and struggling, and it looked like it was finally paying off.

Victory didn’t last long, because now I was overthinking all the negative possibilities again. To pull off this win, I’d done a lot of things at work I’d never expressly gotten permission to do.

I'd given the link to our database's documentation to planners who quite clearly were not members of our eCommerce department. I'd hosted our Hackathon project in my own personal GitHub rather than in our company's code repository. I'd been constantly sneaking off during lunch breaks and at the end of the day to talk to the planners, which meant my coworkers could argue that I was neglecting my regular workload.

Even more than all of this, I was worried about the social repercussions. I was extremely far from any level of seniority in my engineering department, so what kind of reception would I get for besting the more senior engineers?

After the Hackathon

I made it to work after the weekend, concerned for the worst, only to find that no one seemed to care much.

When I returned, a bunch of people gave me high-fives and wished me congratulations. But my regular day-to-day workload stayed the same as it was before the Hackathon. I was told by upper engineering management that there wasn't enough engineering leeway to let me or any other engineer be given official permission to work on PriceSeeker.

Our heads of planning said they were in the midst of a major restructuring and said they wouldn't be able to devote time to my project for at least several months. I was frustrated to find that, while I was receiving positive feedback from coworkers, all my efforts amounted to a neat side project I could be proud of, but wouldn’t be able to actually do anything with.

I had a lot of work to catch up on now that the Hackathon was over, so I went back to focusing solely on my workload, with 5-15 hours per week after work spent studying Selenium best practices. It took me about a month or two working on my skills to get to the point where I was finishing my workload in enough time to have a few hours during the day to spare here and there.

PriceSeeker was almost done and there was just a bit more coding that had to be done to fix all the bugs. I felt I needed maybe a day or two more, but without official permission, it would have to be my own project to secretly complete on my own.

None of my coworkers knew I was spending time on PriceSeeker, nor did they care, since I was getting my regular work done and submitted on time.

After some considerable effort and tinkering, I managed to solve all of PriceSeeker’s bugs.

Excitedly, I headed to the planners from our minor brand to show them the working model. They told me they didn’t need it anymore. I couldn’t believe it. I was so shocked that I could barely even ask what was wrong.

As I found out, the issue of incorrect pricing had been a temporary one caused by a recent change in how pricing would be displayed. At some point after the Hackathon, the pricing displays had been updated in a way that would let planners find any incorrect pricing a lot quicker.

In hindsight, I should have realized this during the lead-up to the Hackathon, but I must have been so enthusiastic about my plan that I hadn’t properly investigated all areas where it could go wrong. Regardless of why I’d missed it, this meant that PriceSeeker had been effectively useless for quite some time.

Oliver told me that PriceSeeker as it was would likewise be useless for our main brand. However, he told me that there was an issue where items on our website would occasionally “fall off.” This meant that certain items and colors that were in our inventory would accidentally get removed from our eCommerce store.

This happened rarely, but the planners wouldn't know about it until reviewing weekly eCommerce sales reports, noticing some items had zero sales, and then checking if they were on our website. At that point, they would mark the products to be returned to our website.

Once again, this was more manual work and less productivity than was optimal, and Oliver advised that it would be very useful if PriceSeeker could be modified to let them know whether or not an item was on our website.

After going through our database documentation, I realized it would be a very simple matter to query our database to see if an item was listed on our website or not, so I quickly updated PriceSeeker to also include that check.

Oliver told me that our eCommerce merchandisers were the ones who were responsible for quality checks of website inventory and they would benefit most from this new feature within PriceSeeker. I approached the eCommerce merchandisers for each of our brands and found that they were very happy with what I showed them.

They copied and pasted hundreds of items into it at once and quickly verified that PriceSeeker was properly reporting all items that were unlisted on our eCommerce store. And just like that, they began using it several times per week.

Over the next several weeks, I continued to talk to planners and merchandisers, trying to find other areas where PriceSeeker could be useful.

I learned that our planning department had recently set up a data science team. The team was responsible for building automated scripts and dashboards to help our planners make better decisions. Reporting unlisted eCommerce inventory had actually been on their to-do list.

I enjoyed speaking with the data science team and exchanging ideas, but with no official sanction to work on PriceSeeker or anything else, our conversations were mostly theoretical. Still, I was happy to know that my project had accomplished something and was finally seeing the light of day.

It wasn’t long afterward when I got an email from my consulting company’s human resources department. They wanted to schedule a meeting.

I went in to talk to them and was told there were going to be layoffs. Several consultants would not have their contracts renewed. I was one of them. I had three weeks’ notice before my contract ended.

I knew that the fashion brand had been facing a decline in sales and firing a consultant was easier than getting rid of a full-time employee. Nonetheless I was still quite surprised that I would be among those let go.

In my last few weeks, I tidied up my regular work and gave some extra attention to PriceSeeker. I wanted to see if I could quantify the financial impact it had made, but the value of detecting accidentally unlisted inventory would not be easy to quantify.

When I went to our eCommerce merchandisers, they told me its impact would be impossible to measure. There were so many complicating factors involved, such as how many unlisted items would be detected, what brand they were from, the popularity of those items, and how much inventory remained.

Oliver summed it up, “though we can’t give a monetary value to PriceSeeker, we are certain it has a positive impact on our bottom line.”

With my contract ended, I was left looking back at around seven months in a company where I’d had some amazing adventures, most exciting of which was our Hackathon.

After our Hackathon was over, many of my colleagues told me that I won because I “focused on a business impact.” Though they meant it as a compliment, I always felt hollow when I heard that being given as the sole reason.

Personally, I credit my win to actively preparing even before the Hackathon was officially announced. By doing so, I was able to continuously get the feedback I needed to improve my proposal so that it eventually had a legitimate business impact.

I couldn’t have done it without the help of others. So much of the work felt like it was up to me, like I had to be the one to push and discover and self-teach and work.

The truth is, I wasn’t alone. The ones who offered passion and enthusiasm — my senior directing of engineering and my teammate, Oliver — were the ones who pushed me to be part of a competition I wouldn’t have ever gone near two years earlier.

I’m still learning. I’m still trying new things. I’m still hoping I’ll find more of that collaboration that enabled me to create something helpful for my company and meaningful to my own journey.

Thinking back, it’s still hard for me to believe that someone like me, who had struggled so hard to land a career, would be able to enter the corporate world and turn their life around.

For me, the Hackathon was a second chance. And I made the most of it.

Discover how to turn a great idea for a product or service into a beautiful UI design for a web or mobile app with this simplified guide for tech startups.

Turning brilliant ideas into beautifully designed user interfaces for web and mobile apps is time-consuming. It is an often difficult task for developers and tech founders to undertake.

It might seem like it should be a straightforward process after the ‘Eureka!’ moment. The reality is that a lack of design experience in even the most technical of engineers can prevent an app from performing at the top of its game — at least as far as users are concerned.

At this stage, I’m going to assume you’ve conducted some user research. Or at the very least, spoken to potential customers to test your assumptions. That way you’ll be much better positioned to turn your ideas into the actual design.

This simplified guide breaks the process down into logical steps for those who just can’t afford the time to get their heads around all the complexities of UI and UX design.

What is the problem at hand from a UI design point-of-view?

The starting point is always to not only define the problem you’re trying to solve but to understand it from your customers’ perspectives. There will, of course, be many perspectives in your target audience.

Defining the problem at hand from a UI design point-of-view

A founder’s vision can only work if it is designed in such a way that customers can actually use it. This depends heavily on their ability to articulate the idea to the right people with the right set of skills.

It may sound simple, but the real issue is typically in the lack of design expertise at tech startups. It can be a poor use of crucial resources to step onto a steep learning curve at such an early stage of the product’s development. The first problem you have to solve is how to solve the problems your customers are facing in the quickest, smartest and most efficient ways.

Once you’ve done that, you can work on how to turn those ideas into genuinely useful UI designs

…the first issue you have to solve is how to address the problems your customers are facing in the quickest, smartest and most efficient ways…

Develop a simple design process for your app

The crux of it lies in forming a straightforward process for the UI design of your app — here are the steps I always recommend:

1. Create a user-flow diagram
2. Research different design patterns and styles
3. Create wireframes
4. Create mock-ups

Create a user-flow diagram

Start by taking a top-level view of the ways in which users might interact with your app.

How might they achieve the specific goals they have? What are the potential paths they might take to realize them? Can you easily visualize all of the possible user journeys within your app in a user-flow diagram?

It’s critically important to keep things as simple as possible by reducing any clutter and removing any unnecessary steps. A bird’s-eye view of this can really help to inform your UI design from the outset.

Some of the tools I like to use are the flow chart templates by Miro, Milanote and Whimsical. You can easily shape the journeys by understanding the three typical shapes you will find in flow charts:

• Rectangles: Used to represent different screens within the app
• Diamonds: Used to represent decisions the user will make within the app
• Arrows: Used to display the connections between the screens and the decisions

An example user-flow diagram for app design

This image illustrates a user-flow diagram for the pre-design phase of an app. You can explore other common user journeys and filter through a wide range of screenshots from iOS, Android and Web apps here at Page Flows.

Research different design patterns and styles

Planning makes the implementation easier. I always break tasks down into smaller, more manageable parts to be able to achieve my design goals for apps.

Creative instincts will come into play here for UI designers with years of experience under their belts, but it’s easy for founders and developers to fall into the trap of calling upon their daily routines to inform these decisions, such as taking too much influence from the apps they simply use on a regular basis.

…break tasks down into smaller, more manageable parts…

It’s important to see this as more of a starting point on your research journey. Use the insights to research different UI design patterns in different industries, such as forms, menus, and tables. Draw upon the insights to not just replicate what works for your audience, but to improve upon it to make your app as good as it can be.

A great source of information about this is UI Patterns. It’s a brilliant resource for getting familiar with the most commonly used design patterns, including how and when to employ them.

A screenshot of UI-patterns.com

Once you have gleaned a deeper understanding of which components you might need to include in your own app, check out sites like Behance and Dribbble for more inspiration. You might want to take what you see on Dribbble with a pinch of salt, though. Much of what you see on there is conceptual as opposed to the finished product when it comes to real applications.

Here are some more great resources for screenshots for popular apps with industry-leading designs:

• UX Screenshots
• Laudable Apps
• Mobbin Design
• Pttrns
• Mobile Patterns

These are fantastic sources of visual inspiration for the design of new web and mobile apps.

Create your wireframes

Now, here’s where we can start getting creative. Wireframes are a crucial part of the design process, so they shouldn’t ever be skipped.

If you are familiar with a prototyping tool, that’s the preferred option for helping you achieve the best design for your app. If that’s a whole new world for you, then you might want to go old school and revert back to the classic pen and paper. The time it takes to get used to the new tools will only slow you down, so don’t be afraid to go retro.

Wireframes are a crucial part of the design process, so they shouldn’t ever be skipped.

Have a look at SneakPeekIt for a large range of device templates that you can print off to use for your sketches. They are a completely free way to get the inspiration you need to get your designs off the ground.

A screenshot of SneakPeekIt.com

Be sure to check out Balsamiq, Whimsical and OmniGraffle, too. For more variety in terms of the pre-build components, you need to make a start on the hierarchical structure of your web or mobile app.

A screenshot of wireframes in Whimsical

Your first UI may well come from an amalgamation of a few different design templates from these sites. Checking them all out in depth will only stand you in good stead for optimizing your in-app experience.

If you’re an engineer or tech founder in the early stages of design, don’t be tempted by the urge to skip wireframing. You need to fully comprehend every angle of the app’s user journeys by visualizing them before it’s too late to change them further down the line.

Create mock-ups of your web or mobile app

Once the hierarchy is in place and the structure of each screen is defined, you can move onto software like Figma or Sketch to design your product. Figma is a cloud-based UI design tool that’s built for teams which are ideal for bringing wireframes to life at this stage of the process.

A screenshot of UI designs in Figma

Initial design mock-ups will help you more effectively realize your vision and give your app the look and feel of a real product. It should be able to be used as a true reference point for developers when it comes to building the app. Don’t be concerned about spending a tad more time on this stage — the greater the detail, the better.

Are you still struggling with your UI design?

If you feel like you have done all you can with your idea and you need help turning it into real UI design, you might want to call upon an app designer to help you.

Rather than plowing on through it and risking mistakes, I can apply my decade of experience in design to carry out the robust process required to put your idea in front of real people.

If you would like a consultation on your project, whether it is the full design of your web or mobile app or ongoing UX design support, I’d love to provide my expertise and integrate with your development team to realize the best end-product possible.

Need additional advice? Request my FREE Cheatsheet which includes ‘47 Actionable UX Hacks to Fix Your App’.

Thanks for taking the time to read this article. If you found it helpful, please let me know. ???

If you’d like to read more, check out my blog for regular updates.

This article was originally published at www.simonmccade.com.

Why insurance carriers, Silicon Valley, and society at large are gung ho about telehealth apps and health-monitoring wearables.

As the public ogles foldable displays, augmented reality applications, and other mobile technology trends, tech giants around the world are busily…

How to market your services, find clients, and charge more as a data science freelancer

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While it’s true that the best data science is done by those who know their organization very well, there’s a lot about data science that lends itself well to consulting style engagements. I’ve worked as a freelancer in data science (and analytics more generally) for the better part of a decade, and in this post I’ll be showing you how to freelance using your data science skills.

The only requirement

There’s really only one thing you need to do in order to become a freelance data scientist — you need to get clients to pay you money to do data science work. That’s it.

Other posts on this topic will discuss things like getting a business license, saving up 6 months of expenses. They’ll list all the skills you should be proficient in before seeking your first client. But that’s how you do things the wrong way around. You could have all the skills in the world, a business license, and a nest egg. But without paying clients you’re not a freelancer, you’re just taking a career break.

With that said, let’s get started on the important stuff.

How to get clients

There’s an adage in the freelance world that goes something like this — anybody can get a first client but only a true business person can get a second. What this means is that anybody can find a client through their network. They can pester friends, cousins, successful uncles. They can contact previous employers. They can talk to enough people that they’ll eventually stumble into some work.

Leveraging your network like this is both a blessing and a curse. When you land that first client the day after starting your freelancing experiment, you’ll think that it will always be that easy. You’ll rely on your network to get you the next project. And you’ll cruise through your relationship with your first client without ever putting in the sales and marketing work needed to ensure that there’s another one waiting for you when you’re finished. Only to find that the network has dried up.

Let me be clear. You should tell everybody you know that you’re going freelance. A network never hurts. But if you want to have a serious go at being a freelance data scientist, you absolutely can’t rely on your network to find you projects every time you’re out of work.

Data Science is different to most freelance disciplines - very few people need it (unlike hairdressing services, for example), success is objective (unlike logo design), and it’s very high-value work that hasn’t been commoditized yet (unlike basic coding). It’s important to keep these distinctions in mind when planning your marketing and lead generation efforts.

Know you customer

There are usually only a handful of people in every organization that have the power to purchase data science consulting services. They’re the CEO, the CTO, the software engineering manager, and the department head that’s working on a crucial project in their domain (such as a Head of Risk or Head of HR).

These people are your customers. You should get to know them.

If you’ve put up a website describing your services and set up an AdWords campaign hoping that these people will be looking for ‘Freelance Data Scientist’ in Google, you’ve done it wrong. This group of people will never find you that way. What you find if you search for ‘Freelance Data Scientist’ is articles like this one (including another one of mine), articles explaining how to become a freelance data scientist or what the day-to-day life of a freelance data scientist is like.

The people in the position to purchase your services don’t start with a desire to purchase, they start with a problem.

Here’s a case-by-case explanation of what I mean:

CEOs are under pressure to stay competitive and profitable. Their problem is finding the best ways to gain an edge in a competitive marketplace. They (usually) don’t care if you know your Adaboost from your Adagrad. They simply need help improving the one or two numbers their job performance is judged by.

CTOs and Software Managers are the people CEOs turn to when they think a business problem needs to be solved through the smart use of technology. CTOs aren’t looking to hire freelance data scientists for the hell of it. No CTO I’ve ever met has had the ‘my budget’s too big’ problem. These are the people who will try to figure things out themselves (with help from their teams). This means that they’ll be searching for specific answers to specific questions. What is the best algorithm for Churn Prediction? Can I use Azure ML with AWS Redshift? That kind of thing.

Finally, the departmental managers who run vertical-specific projects are not looking for freelance data scientists because they have no idea what a data scientist is. They need to know how to calculate employee turnover on a pro-rota basis over a group of 10,000+ employees. They need to know how to automate certain sections of their underwriting procedures to reduce the man-hours spent on menial tasks. They need honest advice from an expert in words they can understand.

Running ads against the words ‘Freelance Data Scientist’ might be a lot easier, but it’s a lot less effective than helping any of these people with their actual problem.

Pick a niche

Data Science is a broad field. Nearly every data scientist worth their salt could put together a rudimentary data warehouse, create a dashboard, implement linear regression from scratch, and train a convolutional neural net. This is what makes the field fun.

Unfortunately, diverse skill sets make for indistinguishable businesses.

In order to reach your customers (listed above) you’ll have to create marketing plans dedicated specifically to their problems.

Some people think that data science is already a niche. I’d argue otherwise but that semantic distinction isn’t even important here — the more focused you can be, the better your marketing will work.

The reaction you want from someone visiting your website is ‘I can’t believe this exists’. You want to come up with an offering so unique and tailored to a specific group of people that their decision to purchase (or contact you at the very least) becomes automatic.

This doesn’t mean that you can’t do anything else for your entire career and that you’ll always be known for just one thing. It means that the people you care about finding you will find you. Once you’re in the door, and once you’ve built up trust, you can work with them on any projects you wish. In fact, if you do the first project well, they’ll probably ask you to do the second, regardless of whether or not it’s in your niche.

To give you some examples of niches, here are the ones that I’ve had throughout my career:

• Building data warehouses for data science projects in FMCG businesses
• Building recommendation engines for content websites
• Predicting rare events in retail and e-commerce (purchase, churn, fraud, theft)
• Using computer vision in SaaS apps

Each of these relies on a specific area of data science and a specific industry. For your first niche, you should pick the area of data science you’re most comfortable with and an industry that you care about helping.

Marketing by sharing

Once you’ve chosen a niche you need to get to work marketing inside of it. Most people like to learn and most people will try to solve their problems by themselves first. You will go a long way teaching others.

I read so many data science blogs that analyze the same Kaggle data sets over and over again. Or worse, they use np.linspace to generate a data set to explain some concept or phenomena. This is not how data science works in business. Articles like this start too late (they don’t describe the data retrieval and cleaning efforts) and stop too early (they don’t describe the business impact of the solution).

If you’re going to write a blog post to explain a concept in the hope that a potential client will find it, you need to explain in the article how the concept solves their problem.

People seeking data science clients should never write a general exposition of a particular algorithm. Go the extra distance and find a problem area in your niche that you can apply it to. And do this a lot. The more you write about your niche, the more people will equate your name with that specific area, you’ll become the no-brainer hire.

If you build up a large enough body of this kind of work, your SEO game will be on top form and customers will start finding you. Not everybody will convert but some will and they’ll be the people whose problems you know how to solve.

Build a process

Now that you’re getting clients, you need to optimize the process of working with them. This is important for two reasons:

1. It helps the engagement go smoothly and prevents scope-creep
2. It allows you to extract and reuse key deliverables

Another benefit of having a niche is that you end up seeing the same problems time and time again. You can reuse the same algorithms, explain your solution in the same way, and run the same discovery meetings over and over again. This saves you an incredible amount of time and allows you to focus on the important work in the project.

The process you end up developing will become a selling point. It will be the thing you use to explain how you work in case studies and pitch presentations. So as soon as you can, you should start documenting the stages of every project, getting all of your deliverables in order, and learning how to write case studies based on your process.

Double your rate

Most freelancers charge too little. They’ll do some algebra and work out how much they made per hour at their old job and use that. Despite lots and lots of advice to the contrary, that still seems to be the way people go.

So, what I’ll say is this — if nobody pushes back on your rate when you submit a proposal, double it next time. And keep doubling it until someone says it’s too much.

It might be easy to write this off as greedy or self-destructive but the fact is, if you are doing very niche work, you’re going to very quickly become an expert at it. Experts get to charge a premium. You should be adequately rewarded for developing processes and deliverables that allow you to do the work quicker than anyone else. Why should you be penalized for being efficient?

Have an exit strategy

Without a specific plan, relationships with clients go the way of entropy. They say they’ll get back to you when they have a new project, you’ll say thanks for the opportunity.

The moment that you’ve finished doing great work for a client is the exact right time to ask for referrals and testimonials. When you’re finished, sending an email with a short questionnaire about how the process went and asking for the names and contact details of people with similar issues makes you look like a professional who cares about helping the community.

The only time this would be a problem was if the work was substandard. So do good work and ask to be referred.

Glowing quotes help with social proof for your marketing materials. And the exit questionnaire allows you to determine what the client would be happy to see in a case study about them.

Asking a client to write you a recommendation (without being pushy) gives them the chance to reflect on the good things that happened throughout the project and to end on a high note instead of the pressured, rushed feelings that large-scale deployments can usually leave you with.

Thanks for reading

If you have any questions about being a freelance data scientist, feel free to email me.

If you’re interested in getting more specific advice on freelancing as a data scientist, I’m now offering a course.

Originally published at machinelearningphd.com on March 9, 2019.

How to think in terms of value, not time. Follow this pricing strategy to find your true market rate.

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When you first start freelancing it’s very difficult to determine what to charge. You have no previous context, and colleagues are often tight-lipped about their own financials.

I admit I was clueless about pricing when I started. How about you?

Many freelancers make the mistake of using an online rate calculator to set their freelance hourly rate. There are heaps of these calculators online, and they all follow the same pattern:

1. You start with your desired annual income.
2. You add up the cost of doing business — like office space, internet, hardware and software costs.
3. You add up other living costs, such as insurance, self-employment tax.
4. You add these things together to get your desired adjusted income.
5. Then you calculate your billable hours by starting with your maximum working hours per year, and subtract for things like vacations, national holidays, and sick days. You arrive at a realistic number for the number of hours you could work each year.
6. Divide adjusted annual income by billable hours, and that equals your hourly rate.

This seems logical, but it’s completely backwards.

Let’s ignore the fact that there may be better ways to price yourself than hourly rates. When you first start out, value-based pricing isn’t a realistic option. Most of us will come to terms with the fact that we are trading our time for money by charging by the hour, at least for the first few stages of our careers as consultants.

The problem with these popular hourly rate calculators is that they get off on the wrong foot right from the first step. There may be no connection at all between your desired annual salary and your actual value to the market. If you’ve come from being previously employed, it’s easy to think “I’d like to keep making at least as much as I was making at my last job.” But why assume that you’ll retain that same value in the freelance market?

If you haven’t been previously employed in a capacity that provides enough reference for this decision, then you’re literally picking a number out of thin air. The alternative is to spend the time to interview colleagues with a similar skill-set and experience level as you, in order to form a baseline as context for this figure. And that assumes you can find enough of these people that will be open and honest about their pricing!

It’s a big ask. No wonder most people take the easy way out and ask a calculator to figure it out for them.

So you end up with a starting figure that rarely has concrete justification in real life, and all other calculations from that are tainted. The resulting hourly rate isn’t backed up by much of anything, and can be way above your actual value. You struggle to find work and think freelancing is too hard.

This is all a misunderstanding of what rates mean. Let’s look at some pitfalls of the rate calculator system that amplify this confusion.

Pitfalls

Billable hours are never as many as you think

Let’s say you did manage to get some solid context for the determination of your desired annual income. You went through the calculation to come up with an hourly rate. You paid close attention to detail on all the expenses to ensure you didn’t short-change yourself.

You’re still going to land short of your goal, because your billable hours are a fantasy.

When you’re a freelancer, you are also running a business. You are doing everything: admin, marketing, accounting, proposals, quoting, networking. If you used to be an employee, you either didn’t have to do those things, or you got paid to do them.

As a freelancer, you have to wear all those hats and you don’t get paid for most of it. The amount of time you have for actual focused work is 75% or less of the time you’re “working”. That means a standard eight-hour day might only have six billable hours.

If you start with the false assumption that you can bill for 40 productive hours per week, you’ll be quickly disappointed, unless you’re willing to work a lot more daily hours to make up for the admin time. But most of us get into freelancing because we want a more flexible schedule, more time for family, more time for leisure. Working a lot more is not part of the freelance dream.

I run a really efficient freelance business, with admin and marketing time cut down to a bare minimum, and I still average no more than six billable hours per day.

You won’t have work all the time

Don’t forget that you may not have a continuous stream of work to fill all potential billable hours. In fact, if you’re new to freelancing, you’ll almost certainly not have consistent work until you build up a reputation and a larger client base. Even very successful, in-demand freelancers like myself will have bits of downtime — maybe a week or two between projects when schedules can’t align perfectly, or a slow patch around the holidays— that can eat into expected earnings.

Your definition of billable hours needs to account not only for the extra admin tasks required to run a freelance business, but also for the uncertainty of work in your pipeline.

Unrealistic charging rates run rampant

The result of all this faulty rate calculating is that you’re told to charge more than you’re actually worth, if you want to meet you annual earning goals. The reality might be that your current level of value can only earn you half of what you expect. You’re not yet valuable enough to make full-time freelancing work for you. More on this later.

At best, these online rate calculators can be a useful tool to help you learn about your costs of doing business, and to budget a baseline rate you’ll need to make ends meet. That can form a good reference point to fall back on when you determine your rate.

But it should not be mistaken for a real-world rate. Those calculators don’t take into account almost everything that’s really important about determining the right rate for you.

A better way to think about pricing

Time to get back to reality. Forget your preferred salary or even your baseline living wage. Your hourly rate should have very little to do with how much you think you’d like — or need — to earn. What really determines your rate is how much value you offer your clients.

I’m not a gung-ho capitalism lover who thinks “the market” will solve everything. But you can only command a rate that clients are willing to pay. They have to perceive enough value in you to justify that rate, otherwise you’ll get no work. And no work at a high rate is worse than some work at a fair market rate. The amount of money you think you need to make doesn’t enter into that equation.

Change your frame of mind towards value, not time

We need to stop thinking about this backwards. Stop framing the decision about rates around what you need to earn and how much time you can work. Instead, start thinking in terms of value on offer. Your rate is a reflection of your value to your clients — compared to the value of your competitors — and nothing else.

With this frame of mind, we can see that rate calculators — based on expected earnings divided by time — don’t account for the value you provide your clients. The only assumption is that more time equals more value.

But we know from experience that this is rarely the case.

If you have five more years and experience and heaps of new skills along the way, but your cost of living has stayed the same, should your rate be higher? A rate calculator would say no. But of course the answer is yes. Rate calculators don’t take into account skill, experience, professionalism, or effort, when in fact those things are the largest contributors to the rate you can command.

If you’ve learned new techniques that allow you to do the same work twice as fast as you could before, you want to be compensated for that by doubling your rates. Rate calculators don’t take into account the speed at which you work or the quality of work performed.

Think of rates in terms of abilities such as experience, speed, skill-set, location, project management capacity, communication skills, and reliability. These are the metrics you should be judging yourself by.

How do you increase your rates?

Simply increase your value. Gain more experience. Learn new skills. Refine your soft skills. Beat everyone on effort. Be ultra-professional.

Do you work faster or offer better quality work than a competitor? Charge more than they do.

Are you more professional and reliable than your colleague. Charge more than they do.

Do your extra years of experience allow you to come up with the right solutions more economically? Raise your rates — because your experience is directly contributing to a better outcome for your clients, and your efficiency is saving them money.

Your value determines the right time to go freelance

If you’re not yet valuable enough to earn a living at the freelance rate your market dictates, it could mean full-time freelancing isn’t right for you yet.

Consider getting employed for a few years to up-skill and increase the value of your craft, while freelancing in evenings and weekends to practice the skills of running a business. Then when you have the experience and confidence to command a higher rate, ease into full-time freelancing.

You learn faster where you have collaboration and mentoring. Freelancers who don’t have the same resources are disadvantaged. I went straight into freelancing after I graduated university. Looking back I would have been better off finding employment at a design agency for a few years or, at the very least, a business/design mentor to learn those early lessons twice as fast, and increase my market value quicker. Then I could have transitioned into freelancing at a point when the value I offered better correlated with the amount of money I hoped to earn.

I was fortunate enough to have a low cost of living at the time, which allowed me to gradually build up full-time work and respectable rates over a transition period of 6–12 months. But not everyone has that luxury.

If you need to make full-time freelancing pay the bills from day one, don’t make the leap until your market value/rate is adequate to support your earning goals. Until then, find a career path that emphasizes increasing your value over all else.

A gateway to value-based pricing

The added benefit of basing your rate on value — rather than expected earnings divided by time — is that it’s easier to start thinking about value-based pricing methods and transitioning away from trading time for money.

Value-based pricing requires a huge shift in mind-set. Even if you’re thinking about your hourly rate as a reflection of value, it’s still tied to time. Decoupling your earning entirely from time spent on the job is another massive mental hurdle. To be perfectly honest, after 17 years of freelancing I’m still coming to terms with it and wrapping my head around the unique challenges of value-based pricing.

This is a huge shift for your clients as well. They need to buy into the concept of value-based pricing as much as you do, because it requires complete transparency and trust to help you define a project’s true value.

Try weekly, instead of hourly, billing

One way to ease this transition is to start pricing your time in larger, more abstract chunks. I often price based on a weekly retainer system, where my work is charged by the week, instead of by the hour or day. I still define minimum and maximum numbers of hours that will be worked during each week. But it’s perceived by clients as a weekly fee, rather than an hourly rate. If the scope changes and we need to extend the project, no problem. Simply add on an extra week.

It’s a pricing system that retains most of the flexibility of hourly billing, and all the same ease of understanding and fairness. Yet, because the unit of time measurement is larger, the perception is that my rate is less connected to the number of hours I work. That forces clients into thinking more about the value I’ll be supplying during that week, rather than just how many hours.

It’s a subtle difference. But that could be all it takes to tip the balance towards value-based pricing. If you get clients comfortable with a week-based pricing arrangement, they’re one step closer to embracing the abstraction of true value-based pricing.

Hourly pricing is here to stay

Whether we like it or not! It remains the default method of pricing creative work. So — like many of us — if you’re stuck with hourly pricing, the least you can do is do it right.

Do everything you can to make sure your rate is in context of your industry and location, and is justified by your skills and experience.

Shift the way you present your pricing to clients so that you’re perceived as being more about value and less about time.

When you do so, you’ll find you never get questioned about your rate. You never get called too expensive or too risky. Because your clients fall in love with the value you’ll offer them, and finding the right person to trust is invaluable.

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This story can also be found on solowork.co