This is the hardest post for me to write as it requires me to admit my failures, but it may be the most valuable post for those considering working for themselves. You may have heard these issues before, but I hope my experience will help save you from similar problems.
Making money without working for someone else is hard. We’ve all probably heard that before, but like everyone else that has tried, I expected to be the exception. After all, I was ready to work harder, longer, and for less money than I had at my old job while doing roughly the same things and at a significantly lower cost of living. I was wrong for many reasons.
Value Precedes Profit (by years)
Earning your first dollar as an independent businessman (or woman) may be the hardest task you ever face. Just think about the last time you made a discretionary purchase. In a world where near limitless archives of music and videos are available for a few dollars a month and most apps are free, it’s hard to justify spending any money to the budget-conscious consumer. You can’t expect to throw together something that will earn you a few bucks. If there isn’t quality, then no one will buy it. It’s an all or none proposition. Sure, it may take some time to build an audience for even the best products, but shoddy products will never grow. They won’t produce return customers, positive reviews, or social sharing. You must invest value into your product before you can expect a consumer to recognize that value and pay for it with their hard-earned cash. Many successful entrepreneurs report putting years into their business before it paid off and even the extreme cases took months. Don’t expect to make anything until you’ve put in your time.
Time is NOT Money
The truth is that time isn’t money. There simply isn’t an amount of time you can throw at a task (outside of a job) that will guarantee a profit. You could spend years building the perfect product, but if the market isn’t there, then all that time will have been wasted. You have to know your market, prioritize your tasks, execute well, and you still may fail.
After my first couple weeks in Chiang Mai, I was settled in and ready to get to work. I threw hour after hour into a Chess app with a puzzle twist for iOS and Android. I wanted to practice launching an app before moving on to my big ideas. There were many problems with this. I underestimated the project size and allowed feature creep (continually adding features without prioritization) to take over and delay user-testing. There was always something that wasn’t quite ready yet, one more feature that would make it perfect. However, the biggest problem was that I was focused on working harder when I should have been focused on working smarter.
Work smarter, not harder
If I had done my research I would have found that I could buy a pre-built Chess app license for $200. If I had focused on my true goal of getting experience launching an app, I would have done this research and the license would have been a no brainer. Instead, I had fallen for the sunk cost fallacy and felt I needed to finish the app. I was working harder, but I needed to be working smarter.
I should have learned this lesson a million times by now. Build the minimum viable product. Get it out there and confirm there is a demand before sinking tons of time into it. Let your customers’ early feedback guide your future priorities. Do your research and figure out which tasks will produce the maximum results for your efforts and do those. It may turn out what your customers really want is a lot simpler than you expected or you may have been going the wrong direction all along. Find out now before you move forward.
Focus on your goal
Eventually, I took a step back and reprioritized. I started reading about the fundamentals of marketing. I explored various other methods of making money while working for yourself. I joined a mastermind group and received feedback on my strategies. I payed attention to what fellow digital nomads were doing. I came up with a solid plan for moving my career forward.
When I left, I left not only for the better lifestyle, but to find my own definition of success. Many of those that I think of as world changers are all entrepreneurs. They made their own careers. I didn’t want to run away from work to live cheaply in a foreign city. I wanted to run away from a life based more on hours than performance. I wanted a life where working harder actually benefited me and where I could make a greater impact through my work. Unfortunately, I learned the hard way that being a digital nomad provides a few more hurdles to that goal than I originally anticipated.
The money is in another castle
Before I left, I thought the average remote online worker was making at least several thousand dollars a month. That would be enough to live in many interesting cities around the world including Prague, Hong Kong, Osaka, Lisbon, Genoa, and more while still having a small amount leftover for savings. I expected that working remotely would pay off for people who didn’t mind the lack of stability and knew living across the world can cost less than most metropolitan U.S. cities.
Actually, the average digital nomad makes around a thousand dollars a month according to Forbes. Even that average is skewed by freelancers making around eight thousand a month and the exceptional earners making figures like fifty thousand dollars. A thousand dollars may provide a good life in southeast Asia, but doesn’t leave much room for saving or traveling elsewhere around the world. It’s possible to make more, but it turns out that how the money is split is the same on the road as it is everywhere else. Successful entrepreneurs and a small subset of in-demand jobs are making all the money. Everyone else is breaking even. I expected moderately successful nomads to be building savings through lower costs of living, but the difficulty of making any money independently prevents this.
Knowledge is Power
Many of those with independent online careers make their money earning commissions from marketing the products of others or by selling their expert knowledge (either on hobbies or business). The reality is that when you’re working remotely, there simply isn’t much to sell other than software, information, or time. Though there’s still plenty of room for providing simple and easily accessible information, you’ll need to become an expert before you can make money. This means extensive hours of research, staying on top of the newest data and trends, and distilling that information down into they key takeaways for your readers.
But it only goes so far…
All the knowledge in the world will only get you so far. Knowledge without action is useless. Working for yourself requires a big commitment and a lot of work, but it can be incredibly rewarding.
I hope you enjoyed this article. Let me know your own lessons in the comments. Now, get to work!