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Value-Based Pricing: Breaking the Time Barrier [en]

Value-Based Pricing: Breaking the Time Barrier [en]

[fr] En tant qu'indépendant, il faut absolument s'éloigner d'un modèle où l'on facture pour son temps -- et facturer en fonction de la valuer qu'apporte notre travail au client. Cela implique une toute autre approche de la relation client et du travail de l'indépendant, très bien expliquée dans le ebook Breaking The Time Barrier. Une heure de lecture en Anglais, un peu plus si vous êtes moins à l'aise. Mais elle va vous faire gagner de l'argent.

Today I read Breaking the Time Barrier. It’s a quick read, an hour or so if you take your time. If you’re a freelancer, you should read it. If you have an hourly rate and are selling your time, you should read it even more. Thanks a lot to Claude for sharing this e-book on the Going Solo Discuss group.

I was first introduced to the concept of value-based pricing by Martin Roell on the occasion of his introductory workshop on consulting at Lift’07. It made perfect sense: if your expertise can solve a client’s problem in 3 minutes, should you really be paid only for three minutes of your time?

As I was explaining to a prospective client of mine Monday morning, when you spend half a day doing an exploratory workshop with me (to try and figure out what the f*** to do with social media, if anything), you’re not paying for four hours of my time. You’re paying to have answers. You’re paying to know what to do. Why would I charge you less if I can help you get there in just four hours than if I dragged you along for two whole weeks?

Since way back when, I’ve tried as much as possible to price my services based on their value to the client, and not based on how long it takes me. Time-based fees make my skin crawl: the client wants to keep the number of hours down, the consultant wants them to go up. It’s a really stupid system. It also implicitly encourages an “employee/employer” relationship, with the client possibly breathing down your neck to make sure you’re making good use of this time of yours he’s buying.

After reading Breaking the Time Barrier, I’ve understood one of my missing links: not putting a number on the value my client will get out of my work — which is a necessary element to pricing my service as an investment.

I’m also always a bit torn about my exploratory workshops: I charge for them separately, because too many times I ended up doing a workshop, writing up proposals, and end up with the client walking away. I realize now that on some of the occasions my proposals were not adequate because I had not understood the monetary value what my client was hoping to get out of the investment they would be making with me. One of my issues is also that a lot of the value I bring is advice, and that is sometimes all my clients need from me. Sometimes all they needed was that initial workshop. I still haven’t really decided how to deal with this, but I realize I need to think about it.

I also find it hard to stand firm sometimes with clients who insist on counting in hours. Business is so formatted to function like this that even when you tell people that you have no hourly rate, also because all your hours are not worth the same, and how many hours you spend on something is your problem and not theirs, and that what is important on their side is the result and value they are going to get, the conversation still ends up drifting back to “ok, sure, but how much will you charge for a day a month?”

I’m also having trouble applying this model to training. Training typically is something with a day rate. How do I provide value-based training? Focus on competencies and outcomes — but then, there is the unknown: how well the student learns. It does not take a fixed effort to teach something to somebody. Some people learn fast, and with others… you can start again from the beginning next month.

So there we are… my questions-in-the-guise-of-musings to Karen in the story.

Do you still have a day/hourly rate? Do you apply value-based pricing for your business, or part of it? Do you have any answers for the points I still struggle with after all these years?

3rd #back2blog challenge (9/10), with: Brigitte Djajasasmita (@bibiweb), Baudouin Van Humbeeck (@somebaudy), Mlle Cassis (@mlle_cassis), Luca Palli (@lpalli), Yann Kerveno (@justaboutvelo), Annemarie Fuschetto (@libellula_free), Ewan Spence (@ewan), Kantu (@kantutita), Jean-François Genoud (@jfgpro), Michelle Carrupt (@cmic), Sally O’Brien (@swissingaround), Adam Tinworth (@adders), Mathieu Laferrière (@mlaferriere), Graham Holliday (@noodlepie), Denis Dogvopoliy (@dennydov), Christine Cavalier (@purplecar), Emmanuel Clément (@emmanuelc), Xavier Bertschy (@xavier83). Follow #back2blog.

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Lift12: David Birch, The Future of Money [en]

Lift12: David Birch, The Future of Money [en]

[fr] Je suis à la conférence Lift12 à Genève. Voici mes notes de sessions.

Live-blogging from Lift12 conference in Geneva. These are my notes and interpretations of David Birch’s session — best effort, but might be imprecise or even wrong!

lift12 1100312.jpg

Backdrop: the future is already here, just unevenly distributed. To figure out what the future of something is, you need to look around. Technology is already here.

Let’s make a 2×2 matrix that’ll make for an interesting conversation:

Long finance: Scenarios for 2050.

  • axis 1: is geography still important?
  • axis 2: will the Washington Consensus hold? Democracy, Human Rights, the IMF — or are they replaced by consensuses coming from different communities?

We’re going to look at each of these scenarios.

Long hand. The virtual world dominates, community consensus. Virtual currencies dominate. Balkanisation. A lot like London today. Virtual currencies centered on those communities.

Visible Hand. We don’t change anything but continue current trends towards collapse. National currencies collapse and are replaced by barter, private currency, gold and cigarettes. It’s possible to be too homogenous to survive.

Second Hand. Washington consensus prevails, and the mundane. Sooner or later someone will pass stupid laws restricting what we can do on the internet, and geography counts in ways which are quite hard to explain. Institutional banking is a dematerialized business and yet still a very clustered business, even though it could be digital. There are other things going on.

Many Hands. Mundane and community consensus. Lots of different economies based on different consensuses and communities. The G20 is replaced by the C50 — the 50 richest cities. City-state replaces nation-state. This is what David sees as the most plausible scenario. Competition between different moneys plays a very important role.

People will fight for

  • personal identity
  • credit rating
  • parking spaces

A world in which cities dominate. They are the key economic unit, and their hinterlands become the economies they manage.

Euro: there isn’t a “national” economy. Economy of Greece is not the same as that of Germany. The economy of London is not the same as the economy as Scotland. It’s not the same economy. So, regionalisation of economies.

So, lots of different currencies. A world currency (or even a european one) is a ridiculous idea. It doesn’t work for Germany and Greece, won’t work for Mercury and Pluto. There is no future of one world money.

Regional moneys. We’re all in multiple communities. Now, the cost of creating new moneys has collapsed! M-PESA, Google Wallet…

France is a historical accident. Maybe Burgundy makes more sense as an economic unit than France. (“How long is this England experiment going to last?”)

Regions, cities. Some historical regions make more sense as economic regions than modern countries. Aragon makes more sense than France. And these regions would be responsible for these new currencies.

In England, in 1688, the dawn of an industrial economy, held back by pre-industrial money (silver coins: clipped, mint coins below their value in silver). Nobody would have predicted the Bank of England in 1694 in 1688. Out of the blue, central bank and paper money. By the time Newton died, 1727, there was a completely different money.

We are at the dawn of a post-industrial revolution, and its efficiency is being undermined because we’re still trying to use industrial money.

  • 1971 End of the gold standard
  • 2012 Collapse of the euro

Payments will not be a banking service anymore, they’ll be a utility service. Banks still needed to agree on an exchange rate.


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Writing: Source of Income or Marketing Budget? [en]

Writing: Source of Income or Marketing Budget? [en]

[fr] Ecrire pour gagner de l'argent (en tous cas en tant qu'indépendant) ça ne rapporte pas des masses. Par contre, écrire est un formidable moyen de promouvoir ce qu'on fait (indirectement). Je propose donc de considérer l'écriture comme "budget marketing" plutôt que "source de revenu" (si on arrive à gagner de l'argent, tant mieux... mais ce n'est pas le but premier!)

A couple of days ago I was talking to a friend, who amongst various activities she juggles as a freelancer, is a journalist. Lately, she’s been less satisfied by her journalistic work, which ends up not paying much, and was wondering whether it really made sense to keep on writing. But actually, her work as a journalist is what gives her contacts and leads for her other activities: so it makes sense for her to keep on being a journalist — but not for the money, as a marketing investment.

Come to think of it, I’ve only very rarely earned money by doing actual writing. I did an article for a local paper once, but honestly, the amount I was paid for the work I put in just made no sense. So, yes, as a marketing strategy, it’s interesting, but not for actually putting food on the table.

Even the work I did for Fleur de Pains, though decently paid, was way more work than expected and ended up being not that much money for the energy it took. Consulting, speaking and training are clearly better sources of income, or managing “my type” of projects (blog editing, coworking space, or conference blogger accreditations for example).

Most of what I’ve read over the last six months about writing fiction also points in that direction: writing for a living is insanely hard work and will not make you rich. We’re blinded by the black swans out there named J. K. Rowling and other successful writers. Most people who write for a living don’t become insanely rich, and most of those who try to make a living out of writing fail.

So, where does that leave us/me? I love writing, and I’m not too bad at it. Honestly, writing is its own reward, as far as I’m concerned. That’s why I’ve kept this blog going for the last 10 years (by the way: take a moment now to let me know what your favourite articles from CTTS are — the blogversary is less than 48 hours away!). And honestly, I think I’ll never stop writing. But I don’t think it makes sense for me to try to actually earn a living doing it. Which doesn’t mean I’m closing the door to earning *some* money writing — but if I do, it’ll be a happy *extra*.

So, in times like now where I’m giving quite a bit of thought to all I do for free and which ends up bringing me business, and also (given right now business is going pretty well) cutting back a little (not too much though!) on what does not earn me money directly, I am realising that I need to make it my priority to have enough time to write.

You know these blogging crises I go through regularly? “OMG I’m not blogging much I need to write more?” Well, here we are. If paid work keeps me from blogging, so be it — it means I’m earning lots of money right then, and I can live with that for a while. But if unpaid “marketing budget” stuff keeps me from blogging, something is wrong.

So this is what my hierarchy of priorities could look like:

paid work > blogging > other writing (“for others”, or requested by others) > other marketing/networking/promotional activities

What about you? Where does writing fit in the “stuff you do”?

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Client Phone Calls: House Rules [en]

Client Phone Calls: House Rules [en]

I have recently become aware that I am developing a certain number of “house rules” for my phone calls with clients (particularly first-contact phone calls). I thought I’d share them here with you in case they could come in handy to other freelancers:

  1. I don’t give rates on the phone
  2. I don’t agree to new things
  3. I don’t talk about what I’m doing with a contact to a third party within the same company unless my contact introduced me to them.

I’ll detail the whys and the hows of these below, but first of all…

Me and phone calls

I often describe myself as a phonephobic. There are situations where I’m perfectly comfortable on the phone (with friends, for example), but anything that hints of administrivia or relationship tension just makes me go ballistic if it needs to be dealt with by phone.

There was a time when I would walk into town to the offices so I could deal with admin stuff face-to-face, rather than pick up the call and get it done in five minues.

To be fair, I’ve had my share of traumatizing phone experiences (when I was a scout leader as a teenager, and all through my adult years). I also worked as a phone interviewer (surveys) for a couple of years when I was a student — so I’m not completely incompetent either. I’m not exactly sure why I am so scared of phone calls, but I am.

If you’ve had me on the phone you probably have no idea of this, because I cover it up, but it translates in me procrastinating a lot when I need to call people back, and agonizing for days — weeks — when I decide I need to cold-call somebody.

Still. I don’t like it, but I’m functional — however, I need to take into account that I feel under pressure on the phone and take steps to make things easier for me. (Less blunders = happier clients, in the end.)

Not giving rates on the phone

First of all, let me say that as a freelancer in a pioneering industry, determining how much to ask for the services I offer has always been a bit of a headache. From undercharging (way too often) to overcharging (a few times), I’ve done it all. Convincing people they need me is not too much of an issue, but actually asking for money is where I more often than not start sliding down into the pit of self-deprecation.

I’ve been doing this for four years now, and I’m much better at it than I was. I’m actually even starting to consider myself pretty competent, to say the truth. But even with the worst of the pricing-angst behind me, offering services for which there is no real fixed market-price to a wide variety of clients means that pricing is not simple. (Think Oracle and Intel on one end of the spectrum, and struggling artists and newbie freelancers on the other.)

Recently, I realized that I was much less likely to undercharge (or overcharge) if I had a little time to calmly think about my pricing, without the client breathing down my neck on the other end of the line. (Well, my clients aren’t actually that bad, quite the contrary, but given my phone anxiety, that’s quickly what it feels like.) I asked around a bit, and discovered that quite a few of my colleagues had a “no money on the phone” policy. By e-mail is fine, face-to-face is fine, but not on the phone. If your client is going to go green (or speechless) when he hears your price, chances are you’d rather it not happen on the phone. And if your prices are right, then that’s what’s going to happen.

So, unless you’re going to systematically undercharge, keep the money talk off the phone.

I make exceptions when the service is very well-defined and there is no hesitation about the price. For example, if a freelancer calls me up because he wants to spend half a day with me to make his website, I’ll give the price on the phone.

But even that is not without danger: I have given freelancer prices to small companies in this kind of situation, because I didn’t have enough information at that moment to realize what kind of client I was dealing with. And it’s always very unpleasant to have to send a follow-up e-mail saying “actually, it’s more expensive than I told you”. And it’s even more unpleasant to be stuck with work you’re undercharging for.

Not agreeing to new things on the phone

I’m easily enthusiastic about new projects, and that does give me a tendency to bite off more than I can chew. Again, as there are few things more unpleasant than saying “Oh yes, great, let’s do that!” and having to follow up with an e-mail the next day (or worse the next week or the next month) explaining that you overcommited and have to back out.

This can also help manage scope creep for existing projects.

When I was a teenager, my dad showed me these cards they were distributing students at his school. They were guidelines to help them decide when to say “no” to something. One of the guidelines was something like “If you feel under pressure to say yes, then that alone is a reason for saying no.” Taking a little bit of time to think about something on your own or by talking to a trusted friend cannot hurt. Don’t fall for the “now or never” ploy.

Third-party calls from the same company

I am not a fan of triangulation. I know from first-hand experience that it does not make for happy relationships, and do my best to not fall into that kind of trap with my clients.

If my client is a company, I usually have a single point of contact. If my contact puts me in touch with other people from the company so that I can do my job, that is fine. But if I receive a cold call from a third party from inside the same company, asking for information about an ongoing project, I will not discuss it without checking first with my contact.

In practice

These three guidelines I have are actually there to allow me to make decisions or deal with situations without being under the pressure of having to give an immediate response to something. I think the phone is particularly pressure-inducing because silence is less acceptable than if you’re face-to-face.

I think if you’re somebody who tends to be anxious in this kind of situation or agree too quickly to things, it helps to have these predefined guidelines for what to do in certain set situations — particularly with first-time calls with clients (and, I would tend to argue, for subsequent calls as well; can you tell I don’t like the phone?)

If you have other guidelines for your phone calls with clients, do share them in the comments.

Here are a few useful lines I try to keep handy. Do you have others?

  • That sounds really interesting! I’d like to sleep on it a bit and get back to you in a few days.
  • I’m afraid I don’t give my rates on the phone. I’ll send you an e-mail with my rates by tomorrow.
  • That sounds reasonable. Let me think about it and give you an answer by the end of the week.

And as a final note, yes, I know that my clients are reading this too. I don’t mind being comfortable about my shortcomings. And I’m not interested in entering professional relationships (or any, for that matter) based on power-play. Which is, let’s face it, the only kind of situation where talking about this kind of stuff in the open could be harmful for me.

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Busy Busy Busy [en]

Busy Busy Busy [en]

[fr] Ma vie, cette course.

Two whole days is not enough. It’s the first day, and the last day, and nothing in between. Arrival and departure days do not count.

Next time I come up here, I’ll take a longer break.

I haven’t walked much — the weather isn’t really inviting, and my free access card which lets me use public transport freely in the area is not valid in November. December, hopefully, will be more exciting: some snow, maybe. I’ll be back just before Christmas.

I realised that I haven’t uploaded the photographs of my last trip here. To say the truth, I’ve been horribly busy. Way too horribly busy. At times it seems that I spend my months and years saying that: “I’m busy”. Busy, busy, busy. I always have tons of things to do, and if I don’t, I invent more. I long for a few weeks of leisurely time — India is great for that.

Money is an issue. As a freelancer, I can take time off whenever I want, as long as I can afford it. These days, I can’t say it’s really the case. On the other hand, maybe it’s worth examining how much paid work I actually accomplish each week over the month. It might help me get organised better.

It’s always the same problem: busy, busy, busy, I keep “working” but a lot of it is not directly earning me anything. And often this “work” is not very visible (read Suw’s great article on the nature of work in a knowledge economy), which leaves me with a sense of frustration at the end of it all.

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Marketers and Salespeople: Agents for Freelancers? [en]

Marketers and Salespeople: Agents for Freelancers? [en]

[fr] Discussion à SXSW avec mon ami Thomas Vanderwal: existe-t-il des agents pour freelances/consultants? Je rencontre beaucoup d'indépendants (en plus de moi) qui ne se sentent pas à leur aise dans les négociations "commerciales" (préciser le mandat, le salaire, les conditions). Serait-il possible de déléguer cette partie-là du travail à un agent, contre commission, comme cela se fait dans le show-biz, ou comme on le fait avec un "book agent" ou un "speaking agent"?

Qu'en pensez-vous? Est-ce que ça existe?

Even though I didn’t play the social butterfly at SXSW, I had quite a few nice and interesting hallway conversations with friends I bumped into along the way (the way to where…? that’s another question). Hanging out at my usual haunt [the lego pit](, I had a chat with my friend [Thomas Vanderwal]( about [Going Solo]( (of course) and the highs and lows of freelancing.

One of the things that came up in the conversation was how much difficulty we had with the actual “sales” part of our job as consultants. Getting clients interested and finding contacts is not much of a problem. Convincing people we have something to offer and that we’re the right person “for the job” isn’t either. What is a bigger problem is actually negotiating the terms of the agreement, closing the deal, discussing financials. Sales. Selling. Personally, I consider that I really suck at that, and many of my freelancer friends have said the same to me.

Does this remind you of anything? It should. Head over to read [Going Solo: A Few Words Of Advice]( on the [Freshbooks blog](

[Stowe Boyd]( wrote this nearly two years ago, and it’s been one of the starting points behind developing the [programme for Going Solo]( (yes, he’ll be speaking about this too). I also mentioned it in my [talk about being a blogging consultant]( at the end of last year. I’m telling you this to emphasize how much of an eye-opener Stowe’s vision of freelancing has been to me. To summarize very briefly, the skills one needs to be a successful soloist fall in three categories:

– doing the work
– networking/marketing
– selling/business/money

So here we are. People who decide to go freelance, like me, are usually (hopefully) good at doing the work, good enough at marketing/networking, or they probably wouldn’t think about going solo in the first place.

And so, talking with Thomas, here’s the bright idea that came up (I honestly can’t remember which of us articulated it first): there are book agents, speaking agents, modelling agents — where are the freelancer/consultant agents? Where are the people who have strong selling skills, who will step in to negotiate contracts for us once we have got the client interested, who understand what we do and believe in it? I’d gladly give a percentage of what I earn for this kind of service.

There are communities out there for freelancers, but they seem to always focus also on “finding clients”. One always needs more leads, of course — but that’s not really the part of the job I need to delegate. I actually enjoy the networking/marketing part of my job. They also seem to have a pool of “agents”, and from the outside it doesn’t seem clear how personalized the service will be.

Is there anybody out there who does this? Do you think this kind of relationship can work? As somebody who would hire freelance consultants/workers, how would you feel about negotiating with an agent rather than the person you’re hiring directly?

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Working For Fame Or For Cash [en]

Working For Fame Or For Cash [en]

[fr] En organisant la journée de conférences Going Solo, je me trouve directement aux prises avec mes difficultés face à l'économie du peer. J'organise un événement qui dégagera je l'espère assez de bénéfice pour que je puisse me payer, ainsi que mes partenaires. En même temps, j'espère trouver des personnes prêtes à donner de leur temps en échange de la visibilité que leur apportera leur association avec Going Solo. Mais je ne sais pas trop comment m'y prendre. Je trouve difficile de rendre les choses claires.

I’d like to introduce this reflection by quoting [Tara Hunt](, who writes the following in a post titled [Please Stop Crowdsourcing Me](

> I came and I thought, hey, this is kind of neat-o and it empowered me at first. I thought, “Awesome! They want my opinion! They listen!” and I offered it and the feedback was, “Great idea!” and I watched as you implemented it, then benefitted from it and I felt good. I was great at first, but then after a while, I started to feel a little dirty…a little used…a little like cheap labor, replacing people you probably laid off or decided to save money on not hiring because you were getting so much great value out of my time. Maybe it was because it seemed that you believed you could ‘tap’ my well of ideas or ‘pick my brain’ endlessly? Maybe it was because my generosity goes so far and you overstepped your bounds? Maybe it was because you had a chance to reward my efforts, but dropped me like a wet rag as soon as I asked?

Tara Hunt, Please Stop Crowdsourcing Me

I just came upon her article a few minutes ago as I was aimlessly clicking around in my newsreader. It’s funny, because I’ve been thinking of this post I wanted to write for a few days now, and it’s right on the same topic.

I’ve already [felt uneasy about the “Peer Economy”]( (if I may call it like that before). About the fact that certain businesses actually get a lot of stuff for free from their enthusiastic users — stuff they would have to pay for, otherwise. The point I understood about a year ago is that the fact that people contribute voluntarily to help improve services like WordPress, GMail, Twitter, and countless others is what allows us (the community) to benefit from great tools like these free of cost or way cheaper than what they’re worth. I’m comfortable with that.

However, I agree with Tara, there is a fine line to tread. As a company, you don’t want people to feel used. And like Tara, I’ve had more of my share of people/companies who want me to “take a look” at their stuff and “tell them what I think” — picking my brain for free. And I don’t like it. If I’m [passionate]( about your product, then yes — I’ll give you feedback. You probably won’t even have to ask me. I’ll blog about it. If you’re smart, you’ll point out what I wrote, give me credit and link-love, thank me publicly. But I didn’t do it for that. I did it because I liked your product, or because talking about your product fulfilled one of my agenda, in a way. I’ve given products/companies like [WordPress](, [Dopplr](, [Twitter](, [coComment](, [Seesmic]( and a bunch of others valuable feedback *because I wanted to*, because I loved their stuff.

That doesn’t mean that I’ll do it for any product or service that crosses my path. If you’re one of the lucky ones, well, good for you. If you’re not, you’ll have to pay cash ([experiential marketing]( is one of the ways a company can use cash to make up for lack of immediate passion on the part of this particular human being). Just like I’ll help my friends out for free and open blogs for them just because I love them, some companies out there benefit from “free intelligence”. Others need to pay for a similar service.

You get the idea, I think.

Now, here’s what I really wanted to bring up with this post.

As you know, I’m putting together an event for the month of May, [Going Solo]( (If you’re a freelancer or a small business owner, you should plan to come, by the way ;-).) This is my first event. I’m not going to be doing it alone. Thing is, I realised I’m a bit shy about asking my friends to help me out, because on the one hand, I want to keep the event expenses to a minimum, and on the other hand, I don’t want people to get the impression I’m trying to “crowdsource them” — as Tara expresses above.

This is made worse (and way more uncomfortable for me) by the fact that this is not a non-profit venture. I’m going to be investing quite a lot of time in this adventure, and I hope to be able to pay myself enough to have made it worthwhile. Ditto for my sales and logistics partners. So, yes, we’re hoping the event will make a profit (against all odds, it seems — everybody tells me that if you’re first event breaks even, you’re very lucky).

So, I know that part of the difficulty I’m facing here is my own inner workings. Despite what some people on IRC may think 😉 I’m somebody who doesn’t find it easy to ask for help/stuff. I always feel I owe people (except when I feel I’m owed, in a kind of weird back-swing dynamic).

There are certain things that I need for the conference, where I’m hoping I’ll manage to find somebody who is willing to “work for fame”. Taking care of the website is one. Design is another. Similarly, I’m hoping to strike up a partnership for the WiFi and bandwidth we need for the event.

In fact, there is some similarity between “working for fame” and being a sponsor/partner. You provide stuff for free (or almost), and in return you get visibility. So maybe I need to switch mindsets. Instead of looking for “people to help me”, I’m looking for “individual partners” for the event.

I feel like this is a thought in progress. I’m not exactly sure what I think, or what to do, or what is “right”. I’m particularly embarrassed when I start talking with friends or contacts about this or that they could do for the event, because it’s not clear from the start if we’re talking about a partnership (work for fame) or Real Work (work for cash).

Any insights appreciated. I feel like I need to step out of my mind a bit to find a way out, and you can help me out with that by sharing your thoughts.

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Should I sell it? [en]

Should I sell it? [en]

[fr] Est-ce que je devrais vendre mon blog?