The Danger Of Referrals | #17

Referrals can be great. They can help you build up your portfolio, provide a few client testimonials, and give you some extra cash to get your business going.

The danger of these is that they are not predictable. When you’re a beginner starting out, getting clients handed to you via referrals can be really dangerous. If someone is working with you because you were referred by a friend, they're not working with you because of your efforts. They're working with you because you’re in their network.

Getting referrals doesn’t prove you can get clients. This can be really dangerous early on. Referrals can dry up in an instant, and if you’ve always counted on them, you’ll be screwed.

If you’re trying to figure out whether you can quit your job and do this thing full time, you need a system in place for getting clients that isn’t dependent on referrals. A great system a lot of people use is cold outreach. This can be done via cold email, cold messages, cold calling, etc. Here you control the number of messages you send and you can have a predictable number of conversions from these messages.

Another system could be paid ads. You can experiment with advertising on different platforms and after a while, you might realize it costs $250 to acquire a new client.

In both of these examples, you know exactly what it takes to get a client. If you can replicate this enough times to provide yourself a livable income, you can know that your business will work and you can go all-in on it.

With referrals, you’ll never have this predictability.

Yes, referrals can be good, but when they’re the only place your clients are coming from, they can give you false confidence that will prove dangerous down the road.