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Why I'm BLEEDING money (and what I could have done to prevent it)

DennisD

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In the past month I've been offered over $30K in video gigs
and I had to turn every single one of them down.

Why?

Because in October, I had the opportunity to invest a few thousand in my business and chose the wrong area. Now I'm losing money faster than I can make it.

Let me explain.
I do video work for clients... It's my primary way of making cash. In October I had a decision to make: I could either invest in
  1. Stock footage/music/template licenses
  2. New hardware
I ended up choosing the stock footage. My logic was that because I didn't have a camera, I could use the stock footage to increase production value on the videos I made for them. I could take on bigger and better gigs, and make more money.

It seemed like buying something NEW was a better option than replacing something OLD.

Bottleneck
Had I thought more about it, I would have realized that the thing limiting growth wasn't a lack of stock footage... My limiting bottleneck is my workstation.

Let me tell you about this piece of garbage laptop I'm using now.
  • Screen flickers 4-5 times per minute
  • Sometimes it just doesn't feel like working.
  • constant crashes
  • Makes noises
  • overheating problems
  • harddrive failed in january, expecting another failure soon
  • video editing takes forever.
This thing was a GREAT purchase for me in 2006 but it's REALLY time to upgrade.

To give you a comparison... a 2 minute video takes me two weeks to do on this machine.
It takes me A DAY on something faster.

These are the type of videos I can produce when I'm sitting down in front of a clients workstation:
These aren't projections, this is fact based on prior experience. Better work, quicker delivery.

The Client
I was approached this month by a large sports clothing brand. They wanted 10 videos for each of their upcoming clothing lines. They wanted it done in a week. I told them this would cost $20K total, and they accepted.

However, after looking a bit more into the project, I realized I couldn't do it! My workstation just wasn't good enough, wasn't fast enough, wasn't powerful enough. I needed to find a way to make this work!

Unfortunately, there just wasn't a way. This project was time sensitive. I had to reject the job. I'd rather not take the risk of failing to deliver.

Since then, I've been approached to do MORE videos. After 10K in lost opportunities, I realized what a mistake I've made and am now trying to rectify the situation.

The Lesson
The outdated workstation represents workflow inefficiencies.
The stock video represents marketing (me pursuing different types of clients.)
Pursuing more work before you can handle it is a risky move. You have to have a solid plan to scale up first.

I learned a lesson. For now on, when dedicating funds to future projects... I will optimize existing workflow before pursuing a bigger workload...

I'd be 30K richer right now, if I had invested differently last October. Hindsight is 20/20.
I'd love to hear your thoughts on this lesson and if you agree or not.
 
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RHL

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I'm a huge advocate of rifles before uniforms (tools for the job before the trappings and or polish of total success). I got my camera equipment before I got business cards, got a full suite of camera stuff before I got any editing software, got things rolling before I started advertising anywhere (still haven't really). You can defend yourself, claim territory, and take prisoners with a rifle. A uniform is just a decoration without the tools and training to back it up. To be more direct, you can boot-strap with a camera, you can't with a business card and a product-less landing page or the frills that would go along with it.

I think you hit the nail on the head- you need to know what to spend money on early when it's tight, so that you can build your reputation and reach as fast as humanly possible. I've made mistakes along the way too. Don't stress.
 

Darius

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When doing video work for larger clients, I fixed a lot of bottlenecks in my upgraded macbook pro by renting out a workstation and keeping program files (AE, FCP, AP) on a 2TB hard drive. It worked until I had access to better, more cheap equipment.

Also, if you're close to a community college that has video or photo editing classes. Enroll in those just so you can have access to the editing computers in the library. You don't even have to go to class. For a few hundred dollars a semester, it was well worth it haha
 

RHL

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Wow. So I just looked at the price for workstation GPU's for rendering. $4,500 for a top-of the line, run them in RAID with a high end CPU/mobo you're looking at $13K easily for a rig for rendering. I understand your plight a bit better now.

I'd still suggest you see what you can get away with in the consumer GPU market and limp along with that as well as you can.

The clear alternative, and I don't mean this disrespectfully so please don't take it that way, is to stop being a wuss and believe in yourself.

When I started flipping cars, all kinds of family members offered me interest-free untimed "loans" if I could get them a piece of the pie. I didn't believe in my ability to not make mistakes with other people's cash, so I grew with my own money, much more slowly than I needed to. I saw deals I could convert everywhere, I knew I could do it with someone else's money too, but then if I failed there would be consequences, and I wimped out.

If you really have $30K in business PER MONTH passing you buy, and you know you do reliably, you know what you need to do-Call your folks, call your bank, get the money for a new rig. If I knew I could make $30K this month with a 15K outlay reliably, I'd put the money out so fast Jimmy John's would make a commercial about it.
 
D

DeletedUser2

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Why don't you make an offer,

200 dollar videos. and your will produce them for everyone who pre pays you.

make it a kinda Fastlane Kickstarter.... if you prepay, ill provide you a kick a$$ 1K video, for 200 bucks. save 800. only X spots avail.

:)

ill order my first one.
Z
 
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DennisD

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I name every substantial piece of equipment I get.
The previous equipment (camera, lighting kits, edit rigs) I've owned as a video guy:
  • Cerebro
  • X
  • Wolverine
  • Nightcrawler
  • Cyclops
Through some very creative deals, I could finally afford to welcoming a new addition to the family.
My new editing rig, Galactica, arrives tomorrow at 2:00pm.

It's 50% of what I aimed for, but 10x better than what I have now, and good enough to put up one hell of a fight.

I will use this to keep making cash.. with which I will be able to buy the machine required for the complex stuff.
When I upgrade, Galactica will go to my assistant and I'll purchase a new system.

I've officially fixed the bottleneck in my business. Just watch what happens now.
 
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DennisD

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Just paid for a $9 'marketplace' ad and set up my indiegogo account.
Shot and edited this today:
Will run the indiegogo campaign for 2 weeks and see if my fellow fastlaners are down for videos. I will also pimp this across facebook, my JV group, twitter, etc.
It'll be a lot of work on my end if this gets done, but it's the best creative way towards a win/win situation.

This is the campaign preview: https://www.indiegogo.com/project/preview/44082091
If you're interested, let me know if there's anything you'd like me to change before I go live
 
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Red

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So I'd watch my videos frame by frame, and then send them off to the client, fingers crossed that it was passable without have even seen the videos.
I DID learn to work around most of my problems. lowering the resolution to 1/10th, using preview areas, turning off unnecessary effects until the final render, only rendering every 3 frames during previews.

Holy. Shitballs. Batman.

Please video you smashing that old machine to bits. I will enjoy it vicariously after reading your paragraph of pain above.
 
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integrity

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The Client
I was approached this month by a large sports clothing brand. They wanted 10 videos for each of their upcoming clothing lines. They wanted it done in a week. I told them this would cost $20K total, and they accepted.

Could you have negotiated a deposit up front, then bought the equipment/software you needed and completed the job?

When I watched The Men Who Built America, something about Rockefeller's story stood out to me. While he was still starting out, he made a potentially life-changing deal with Vanderbilt about filling all of his trains with his oil. Problem was, Rockefeller didn't have anywhere near the production of oil required to fill Vanderbilt's trains. But he made the deal anyways; then went on to figure out how in the world he'd make it happen. And he did.

If he had turned down the deal with Vanderbilt because his oil refinery wasn't big enough at the time, we probably wouldn't know who John D. Rockefeller is today.

Not saying you should jump into deals you can't handle, but some of them could have the potential to change your life.
 
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DennisD

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Could you have negotiated a deposit up front, then bought the equipment/software you needed and completed the job?

I love the way Rockefeller handled that deal!
I did get them to agree on 7K up front, In my case, time was the limitation.
There was a fashion show at the end of the week and their previous video guy bailed on them. They needed 10 videos in 7 days.
This means me completing 1.5 video every day which I could do if I already had the system.

However, there was a failure on my end to locate the parts I needed. It was going to take 3 days to assemble the workstation, leaving 4 days for the work to get done. That's 2.5 videos a day which would be a LOOOONG shot.

The math for reward vs potential risk just didn't work out in that particular situation. I didn't want to risk leaving a client hanging


I would probably order one of those videos for $200...what would it include, any voiceover, etc..?
Yes. Since it'd be a big group of people, I can strike a 90% discount with my VO actors. They typically charge $100/minute, but I've successfully negotiated $600/hr when it's guaranteed work.
 

ZCP

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Hire / contract out some help! They could have been doing video or building the machine while you did the other. Even if they are only 5% of what you can do, you are now at 105% capability. This leads to a key question.....how do you plan to scale this if you do it all yourself? Procedures and training. Find some interns. Time to find some other guys that do what you do and help cover for each other on large jobs, backlogs, or when you want to go out of town.

I have made a lot of excuses in my businesses, but never $50k excuses......
 
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johnp

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Unfortunately, there just wasn't a way. This project was time sensitive. I had to reject the job. I'd rather not take the risk of failing to deliver.

Since then, I've been approached to do MORE videos. After 10K in lost opportunities, I realized what a mistake I've made and am now trying to rectify the situation.

I understand your point and good post. But couldn't you have found a way to make it happen? What about a local college or university? I bet that they would have the tools that you need.

This is when you have to beat the streets and be resourceful. You seem like a resourceful person..Go knock on the door of a college and ask them to use their equipment. If they say no, then go to another school. Keep doing it until someone says yes. Maybe you can't do it for something like this?

This story kind of reminds me of my sister.

My sister is an amazing baker. I hate cake. I can't stand it. But I always end up eating my sister's cake because it looks and tastes so good. She makes a few hundred dollars per month selling cake out of her kitchen to locals.

Last year, a popular local restaurant contacted her. They wanted her to cater all of their desserts every single day. The problem was that she didn't have insurance and approval from the state to even be making cakes. The restaurant wanted nothing to do with her when they found out.

I told her that I would help her. That I would invest in her and give her the money to get started. But she told me that she didn't have the equipment.

Bullshit.

There are kitchen shares all over the country. I found her a cheap place where she could rent an FDA approved kitchen for a small fee as needed.

She still didn't do it. Instead, she made an excuse and she continues to live in poverty on welfare.

Your situation is more complex I think. And maybe rush to finish the project wouldn't even allow you to find a place to get the work done..but i don't know. I read this post and I see someone who was that close to pulling in 30k. The only thing that may have stopped you is lack of resourcefulness. I could be wrong
 

DennisD

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The reason renting is a problem is because even the schools nearby don't have the hardware or software I need.
When I went to a broadcast school I eventually had to buy my own, because theirs didn't do a good enough job.
I'm not sure of the rules, but I'm unsure if they let me spent 170hrs/week there editing.
Having a machine I can wake up next to is the only way I can meet my workload.

Why don't you make an offer,

200 dollar videos. and your will produce them for everyone who pre pays you.

make it a kinda Fastlane Kickstarter.... if you prepay, ill provide you a kick a$$ 1K video, for 200 bucks. save 800. only X spots avail.

:)

ill order my first one.
Z

Brilliant. This is much more useful to me.
I'd need between 25-35 people to sign up.
I wonder if I can get that sort of volume?

@MJ DeMarco is it cool with you if I do this?
 

DennisD

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I'm hearing lots of excuses which seems unusual for you.
It IS.
I'm annoyed at myself
I feel like a little F*ckin kid with the excuses.

Facts:
  • I made some bad business decisions.
  • I could have done more to secure the deals
  • There's a lot in front of me I can do right/wrong now.
  • I'm still learning.
I don't want to deny responsibility, but at the same time I'm not going to linger too long on the failure.
There are a million possible solutions for any given situation. The only way I learn which ones are right/wrong are to make the decisions and see what happens.

My OP was intended to spark a discussion about workflow vs marketing.
I didn't mean to instead spark the discussion about what COULD have happened had I been more experienced.

Is there any demand for a deep voice with a slight hick accent?
Depends.

Can you:
  1. Maintain your own equipment
  2. Denoise your audio
  3. Debreath your audio
  4. Time your delivery to the script
  5. Speed up your own legal reads
  6. EQ your own tracks?
If so, welcome aboard!
 

RHL

The coaching was a joke guys.
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Anyway, to get this whole thing back on track about general principles, this is why progress threads are worth their weight in gold. Building out a business costs a ton, and you're more likely to lose your shirt in this nascent stage, and send good money after bad, than at any other point barring some sort of economic cataclysm or market shift. I think it's important to remember these things, God bless you if you communicate them to others in your field, and move on. When you're a success this stuff will look really good in your books.
 

DennisD

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So. the campaign is over before it started?

Shucks man, let me know if you ever decide to do one like you mentioned. I think you could launch the campaign but sub alot of it out and just oversee.

I'd be interested if you ever decide to try it.

One or two vids

R
I had the offer open for two weeks, linked to it in my sig, purchased a marketplace ad, and not a single purchase went through.

Plenty people say "I'd get one"
Yet actual purchases were at 0 when the offer's open.
Failing on my part, I should have done things differently

I actually AM thinking about officially starting a video editing service...

I think I can be a top contender in the space fairly easily with the right framework. With my new rig, I'll easily be able to kick things off the right way.
 

csalvato

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maybe I'm missing something...how many gigs/how much money are you turning down regularly?

getting the gigs is the hard part. seriously, you already solved the biggest problem.

you don't even need to do the work...you can outsource or subcontract, no? can't you subcontract this work out to finance your next gig that you do yourself? then the game is selling more than you spend on subcontracts...which is easier than it sounds, because getting the business is the hard part...

if you ever want to scale this you will need to start outsourcing/hiring at some point anyway, no?
 
D

DeletedUser12

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I've been a video editor for almost 15 years and I'm looking to get out. Everyone wants things on a tighter and tighter deadline for less pay. Because the price of an edit system has dropped 90% in the past decade, people assume the price for an editor should have dropped the same amount.

Subcontracting these type of things is very difficult because clients want *you*, and it is extremely difficult to find someone with your exact skill set and creativity.

I think there are some opportunities with remote editing. I'm currently editing on someone else's edit system and drives from 1,000 miles away. This will become more and more common. Perhaps there are rental opportunities here. I know there are render farms for AE you can rent over the web.

They wanted 10 videos for each of their upcoming clothing lines. They wanted it done in a week.
That is an insane deadline -- it may have been for the best you turned it down. It's normally not a good sign...
 
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cautiouscapy

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photo editing classes. Enroll in those just so you can have access to the editing computers in the library. You don't even have to go to class. For a few hundred dollars a semester, it was well worth it

Now that is excellent "outside the box" thinking...like many of the posts in this thread.
Inspires me just by reading them.

Thank you all of you.
 
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RHL

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But you might want to look on Ebay and see about getting a bigger rig. You could probably get a core i5, 16GB DDR3, a 250GB SSD, modular power supply, and an older video card (GTX 580) in a tower for $700 or less. It really is life changing for video.
 

DennisD

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But you might want to look on Ebay and see about getting a bigger rig. You could probably get a core i5, 16GB DDR3, a 250GB SSD, modular power supply, and an older video card (GTX 580) in a tower for $700 or less. It really is life changing for video.

For my line of work, I need at least 32/64gb ram, GTX780/QuadroK400, Xeon8core, among other stuff.
I know it seems like a lot, but even a powerful machine chugs with some of the renders I have to do.

Typically a client will want 4-6 revisions on a video.. so I aim to optimize turnaround time on render speed.
The quicker I can render and ship a 3d scene, and the quicker I can start their revisions. This is what kills me about client work and what adds the most hours to a project.

I'm also unwilling to buy refurbished. It never ends pretty.
I've gotten 3 "upgrades" to this machine that have all shit the bed in the past 3 years... all because I tried to save a penny on it.
They always seem to fail at crucial times.

From my experience buying equipment for the agency, it's better to have something that the seller will guarantee/vouch for.
But I'm still searching every day so I may stumble across something for less that will owrk for me but I doubt it.
 
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DennisD

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But you might want to look on Ebay and see about getting a bigger rig. You could probably get a core i5, 16GB DDR3, a 250GB SSD, modular power supply, and an older video card (GTX 580) in a tower for $700 or less. It really is life changing for video.

You know what? You're totally right. I'm going to take another look through some refurbished stuff.
I'm turning down gigs left and right, I can't afford to be doing that.

I don't need to buy the machine I'll be editing on for the rest of my life,
just something good enough to keep making me money until I can upgrade.

Rep$+ for the inspiration. It helped out a lot.
 

RHL

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Sure. It changes your life, to have a fast machine. I was editing on my 3 year old Alienware M11x R3. It wasn't a slouch when I bought it, but now its traditional spindle drive, limited ram, and general deterioration (I have to lay the power brick a certain way to get it to charge, the backspace key broke off) is taking its toll. It can't even manage a smooth play-through of a 4K video longer than 30 seconds, which is bad news bears because I can't insert cuts into my drone footage when it's in the air, and my drone is modded to have a 20+ minute flight time, which is really long for a battery UAV.

My computer has 32GB of ram, core i7 processor, 400GB of SSD storage and dual GTX 580 GPU's running in SLI. I'm sure it could still get over-taxed with some 3D renders, but it absolutely crushes everything I've thrown at it so far. I'd make sure you're not over-buying by trying out older kit. The latest and greatest is very expensive, sort of the way that a Ferrari 458 is only 0.2 seconds faster to 60MPH than a Corvette ZR1, but costs 3x as much. I don't do animation, so only you can know for sure, but I'd give it some thought.

Also, if I had to do it again now, I'd go to ebay and get GTX 590 cards instead of the 580's, since I have a 1200 watt PSU and then I'd essentially have 4 cards instead of two and for only $150ish more. When I built the computer the 590s were extremely rare, sold out everywhere, and more than 2x the cost of the 580.
 

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I would probably order one of those videos for $200...what would it include, any voiceover, etc..?
 
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Carny

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I'm hearing lots of excuses which seems unusual for you.

If you can consistently make that kind of money your next post should be about how you had a major brain fart and focused on obstacles but then came to your senses and figured out a way to get it done.

If you spend a lot of time waiting, would you be better off with 4 $1500 machines than 1 $7k rig? You could (maybe) keep working and not have any idle time.

Also, tech guys tend to get caught up in the latest greatest. Be realistic about what you need and what you WANT.

Either way, after a couple of months you should be able to get whatever you want.
 

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Dude, I don't know your whole situation. But, if you are getting sums as large as 20k at a time. Building a rig should be zero problem. I recently just built a gaming PC for a friend and have built quite a few with unique requirements throughout the years (in-car solutions, workstations) If you don't have the cash on hand, Newegg offers 1-year interest free credit. Even I have a card with a $4800 limit where I can have zero interest for a year. I'm sure would qualify for something similar.

Even if you don't have the cash to build your 'ultimate' PC. We can build with future upgrades in mind but still build a solid rig. I know where to skimp and where to dump the most $ when it comes to hardware. Even a $700-$1200 PC sounds better than what you are working with.

If you truly do need a workstation or help building one, just send me a PM. There is no reason why we can't get this done. I'm quick and cheap. So stop making excuses, bite the bullet and put down some serious money on a computer so you can get shit done and bring home the bacon.
 
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