Earning My Self-Employed Degree

This month’s newsletter covers the financials of my fourth year running a single person design and development studio

It is a well known fact that famed designer and showman Stefan Sagmeister takes a year off every seven years. Here is his TED talk on it from 2009. I learned about this when I was an undergraduate studying design. Every once and awhile I think about this cycle and how it applies to me. The idea of cycles makes a lot of sense. However, growing up in the United States, I find four years to be more salient than seven. Every four years we have a presidential election, an olympic games. High school and university students commonly study for four years. Coincidentally, the four year mark (or so) has also been my unintentional moment of career change. I left Google in the middle of my fourth year. I started graduate school in Paris after almost four years at VR startup WITHIN. So with all this in mind, I share my financial insights of the fourth year running my business full-time.

Over the four years I have been able to stabilize my income stream. While my fourth year is my lowest earning year, it is also my most consistent month-to-month. This is thanks in large part to changing my pricing structure from an hourly rate to monthly retainer. This year included a few vacations and the best work-life balance I have had during my career. In my second year, I had set a goal to increase my passive income. That amount is still very small and marked in green and purple by sales and subscriptions respectively. You can see that it has only decreased year over year in the chart below. Despite having the time, I have found it difficult to do both client services and product development well. It is like they use different parts of your brain, even though the daily work of each one resembles the other.

One reason I started my company was to have more time to dedicate working on personal projects. Above, the commercial vs personal graph is fairly erratic. As a reminder, these numbers are derivatives from the amount of code commits to repositories I have contributed to. Commercial roughly represents private repositories. Personal roughly represents public repositories. This is very easy to query through Github’s API and thus was alluring as a hypothetical indicator of how I worked. However, with four years of activity logged, it is clear that it is not a clear indication of commercial vs personal work. The unpredictable nature of the commit history has more to do with different coding practices, rather than actually being able to measure working time effectively.

Despite the disappointing results of these numbers, the average commercial vs personal split lines up quite well with this year’s graphic found above: two-thirds of my time spent working on client work (commercial) and one-third of my time spent on personal projects. This is reminiscent to Google’s twenty percent time. While I have not published a personal project this year, the personal work that I am doing (and which I will be sharing more of this year) is both challenging and enriching.

A note about inflation: during my this four year chapter of running my business, I did not raise my prices. I felt that running my own business, I could offset inflation amounts by working more. I thought my prices did not need to be elastic. Given that all my leads are referrals from peers or from this newsletter, I made the decision to be consistent with pricing over being too analytic. I do not recommend this. My time, like everyone’s, is set at 24 hours in a day. As such, that time can come at a premium and vice-versa.

To sum up, in the first four years of running my business I refined and stabilized my income through monthly retainer client work. I was able to find a good work-life balance, but had difficulties both carving out and capitalizing on my time. Lastly, I failed to make meaningful passive income. As always, you can view the exact numbers by clicking the link above. While these outcomes are fairly inconsistent, I learned a lot. That is why I am calling this review my self-employed degree.

I will not be taking the next year off like Sagmeister, but I am very excited to share my goals for the next four year chapter of my business, career, professional practice in the near future. If you have any questions or feedback, you know where to find me.

—Jono