We interviewed Jef, a partner at Spatie about how they grew their consulting agency. It sure has been an insightful journey for them, and a lot to learn from their experiences.
What is the background behind Spatie?
Originally, Spatie was founded 12 years ago by Willem Van Bockstal as a one-person company. In 2009 both Freek and I jumped on board, and we founded the official company Spatie as it is known today.
In 2007 and 2008 I was working for a large communication company in Belgium, and subcontracted jobs to Willem. For this Willem needed a developer, and he got some help from Freek who was working as a freelancer. I became more interested in becoming independent and working with Spatie rather than just providing jobs to them, so I switched sides. It was and still is a perfect fit because the founders each have their own domains:
- Willem: UX/UI and front-end development
- Freek: back-end development
- Jef: sales, project management and administration
Being free to organize yourself as you want and work with the technologies you love was a major driving force.
How did you grow your company?
It started a bit like a roller coaster because we got lots of jobs from my previous employer. Our quality work paid off, so switching sides wasn't an issue for them. My former employer worked with a marketing automation platform of which the provider went broke. So that roller coaster came to an abrupt halt. We were too dependent on one big client. So 2010 wasn't an outstanding year for us. But we bounced back the next year, and since then our revenue grew every year.
We're very fortunate not to need to do cold calling or anything like that. We've never been spammy. What worked for us:
- organic search and prospects looking at our work
- referrals (was and still is extremely important)
- being able to execute more complex web projects
- our activities within the open source community
What was your biggest mistake?
Don't become too dependent on one big client. It's easy and comfortable, but financially risky as well.
How are you able to sustain this business for years?
Focus on the quality of your work. Make your customers happy. Don't just execute but think along with your clients to find and develop the right solution.
What are your revenue statistics?
Real numbers: confidential.
Apart from that hick-up in 2010, we've grown every year linearly. Our revenue and profits are related, so we're able to keep our costs in check. Not explosive but healthy and sustainable growth. We're fully independent. We've only taken out a loan to fund the purchase of our office building.
How did you go about your hiring strategy and what mistakes did you make?
We're always looking for talented people. But we're also very critical. We haven't made any mistakes yet, but ask again in a few year's time ;-) We're open to internships and that's the best way to evaluate someone.
How do you charge your clients?
It depends on the project: mostly project but some on an hourly basis as well.
We don't consider the change requests in our initial cost. You can always mention your hourly rate, but that's just a number. What can you achieve in an hour? We try to be very transparent and pragmatic towards our customers. This approach creates trust and avoids lengthy discussions about change requests.
How is your overall experience today? Is it satisfying? How do you measure your success?
It's very satisfying, but that's something we work on continuously.
Success in a nutshell: having customers telling you they're pleased with your job + enjoying working + making a profit.
Freek, you have a blog and people see you as an expert in Laravel. How did you reach there?
A couple of years ago Spatie consisted of three co-owners. I was the sole developer. We had a (sort of) intranet to share links that we found interesting. But soon it became apparent that the stuff I was interested in, wasn't as valuable to the others. So instead of keeping those links to myself, I decided to start a blog and save them there. Maybe they could serve other developers outside of the company. So I consider my blog as a sort of public bookmarking tool. And along the way, I started being more active in open source and released a couple of packages. For every package, I also write up a friendly introduction to it with many practical examples.
Though it wasn't a deliberate strategy to advertise our company, we attracted some clients through our open source work and my blog. Because of the technical nature of the articles on the blog, most of the leads give us impressive professional work as well. Reaching clients through word of mouth has always been important to us, but we see the percentage of customers that get to know us via opensource, and my blog is rising.
Freek, what do you recommend freelancers about starting technical blogs and sharing knowledge? What should they start sharing?
Only start a blog if you like sharing things. The chance that you are going to attract new client from the get go via your blog is very small. It took me about three years. Do not consider blogging as a necessity. I know plenty of prominent developers that don't blog.
If you want to start a blog, of course, write about things that spark your interest. Start reading other blogs about the same subjects. Do not be afraid of writing about something somebody else already wrote a blog post about before you. The chances are that you have a different style and will have put emphasis on other aspects of the subject.
There are all kinds of blogs. Some people only write original articles, some only link to other people's blogs, and of course, there's the combination (what my blog is like).
My advice is just to start a blog, get your first post out there as quickly as possible. Chances are that you'll get a small (or if you're lucky, big) reaction from your audience. If you feel motivated enough to do it again, do so…
What advice would you give the freelancers/agencies who are struggling to achieve financial security and be truly independent?
There is no short answer for that question.
As far as financials are concerned: calculate an hourly or daily rate which suits you. Offer reductions if people want to hire you for extended periods. But stick to it, don't hassle.
You want a signed document (or confirmation by email) from your client that describes what you're going to do for which price. Ask for an upfront payment before starting the job, let's say 20%. If it's a big project, you want to make several smaller invoices instead of one big at the end. And very important: always invoice on time! When clients don't pay on time (30 days in our case), immediately notify them about it, but always in a friendly way.
And don't make the mistake we did: become dependent on 1 or 2 clients.
What are your goals for the future and how do you intend to achieve them?
We're trying to (and achieving in) attracting more mature customers with more complex websites and web applications. We hope to welcome some new talented people. Currently, we're 5, but we hope to attract some new friendly colleagues by the end of the year. You can check our current vacancies at https://spatie.be/en/vacancies.
- We'd like to keep our work as diverse as possible so we can keep it interesting for ourselves.
- We want to grow without making any compromises on quality, and, of course, this should also result in more revenue and profits so we can keep on being financially healthy and being able to invest in the company and its people.