Is Your Small Business Extractive?

It's all take, take, take!

This week is all about how extraction – a pattern of one-sided taking from others – can show up in our small businesses.

I cover how it's hardwired into big businesses, and how things can get confusing for small business owners.

Traps of being exploited, or of exploiting others through icky marketing and pricing strategies, can leave small business owners feeling overwhelmed.

If you want to learn more, sign up for Bear Hebert's inspirational Marketing for Weirdos course, which discusses extraction in more detail.

In the episode, I mention hybrid publishing. If you don't know what that is, check out Jane Friedman's blog post.

And finally, here are my thoughts on Save the Cat!

Chapters

• 0:00 Introducing Extraction!
• 2:31 Extraction in Big and Small Businesses
• 4:46 Why Small Business Owners Can End Up Confused or Exploited
• 10:03 Recognizing Extractive Practices in Your Business
• 14:48 What Kinds of Marketing Are Icky and Why?
• 19:08 So What’s the Solution?

Transcript

Hello, and welcome, folks, to The Freelancer. This podcast discusses all things publishing through a social justice lens. My name is Andy Hodges, and I'm a cultural anthropologist turned fiction writer and editor. And I own a book editing business called The Narrative Craft. Please, please, please subscribe to the show so you never miss an episode, and sign up for my fortnightly newsletter in the show notes if you want more regular updates.

Right. So this episode is a business advice episode, and it will apply to anyone with a small business. But I'm gonna use examples from my own experiences in publishing. Today's topic is all about how extraction can show up in our small businesses, and I'll start with a quick definition. My first thought is of a tooth extraction.

You know, when you go to the dentist – it's not happened to me yet, and I hope it never does, but it probably will happen one day – so you go to the dentist, and they take your tooth out. It's taken out. It's removed with force.

So with extraction in small businesses, it can be a little bit different. When you go to the dentist, there is clear consent there. You consent to that happening. But with extraction in small businesses, there may be a lack of consent. 

Basically, extraction in the abstract is a kind of asymmetrical taking, often repeatedly, that benefits one side, but is bad for the other.

And let me start off with an everyday example that isn't even about business. You've probably shared a flat with someone at some point, and that can get niggly. 

Imagine you're sharing a flat with someone, and you're buying things for the fridge, lovely meals for every day. And this other person, they just keep taking a little bit. And it's not like they took something one day, and then a few days later they provide, and they add things to the fridge.

That would be kind of like a gift economy, anyway. We're getting technical here. 

But if they just keep taking and it's all one-sided, then that would be extraction. What does this look like for a really big business, a corporation? Well, it could be a corporation taking lithium ore from a country, and there's been massive discussions about this, in relation to Ukraine and also Serbia.

In small businesses, what could extraction look like? Well, if you wanted to take from lots of other businesses, You might want to trick them into buying something stupid and unnecessary, something based on a false or an unrealistic promise. That might be something like buy my PDF course and learn how to become a six-figure proofreader. And I put that phrase in because you'll often hear like overblown claims like this and that. You know, start this business and then six figures, etcetera.

And I would say right now, there are there are easier ways to earn six figures than to become a proofreader. That's for sure. So here there's often some kind of beautiful lie, and this beautiful lie taps into a customer's fears or pain points. And there's often a lack of informed consent here. Because that judgment's often clouded by emotions, by urgency.

They might say you have to buy this thing by the end of the day, etcetera. And it's not just emotions and urgency. Sometimes the customer just doesn't know enough. This often happens with hybrid book publishing. A new author invests heavily in a nice cover, nice editorial, and so on.

And that's what the hybrid publisher makes their money from. But then they don't have a clue about marketing, or they don't know that you have to market a book heavily and build an audience. And the hybrid company doesn't always offer them much help with that, and that can be a real problem. So they can feel cheated, etcetera. That's one situation in publishing where this shows up.

What does this look like for you as your small business in publishing? And I'm assuming here, you're not a hybrid publisher. And if you don't know what that means, I've got some links that I'll leave in the show notes. So when you run a small business, you can be extracting from other people. Other businesses can be extracting, taking things from you.

You can be the person or the business that's being exploited, or you can be exploiting others, or you can be doing neither. And this can quickly become a blurry mess, and it can be confusing to navigate. And I think this is one of the things which is behind why a lot of small business owners feel icky about marketing and about pricing and about selling their services. Because sometimes they feel like they're exploiting others, and sometimes they feel like they're being exploited, and it all just becomes like a mess full of contradictions, and it's super confusing. So in this episode, what I want to do is break through the confusion a little bit.

And I'm not saying this will solve your qualms and your issues with pricing in general, because there's so many different things which contribute to what makes up a price, so many different thoughts and feelings. But to break through the confusion, I'm gonna discuss a simple way of thinking about extraction. And I learned this on Bear Hebert's amazing course, Marketing for Weirdos, which I've also linked to in the show notes. And I'll start with the situation where someone else is extracting from you. So you are being exploited here.

And it's a little bit abstract, but I'll give you some examples. So, in this situation, they are following the logic, this other business or whatever, they are saying, "I want to get the most amount of work for the least amount of money." And what can this look like when you're exchanging emails or jumping on a call with someone? Well, it can look like them asking you for a discount without giving a good reason for it.

It can look like them asking you for your so-called best rate. And I've got a lot of friends who work in the translation industry, and it's one of those phrases, "your best rate," that [translation] agencies often pull out. And it's a funny phrase because, you know, it's like gaslighting in a phrase because it's not the best rate for you as a freelancer. It's the best rate for them as an agency. So that's one situation.

And if someone else is exploiting you in this way, there are a few clues that that might be happening. So first of all, think about: Do you have the power to set your own rate? Is there a debate in a discussion, or do you have to work for their rate and it's fixed? Point two, do you have control over your workflow and the tools that you use to complete the job? And I give you one example here.

So when I started out as an editorial freelancer in my first year, I used to take on quite a lot of translation work as well. And some of the translation agencies who were not so great quality, in my humble opinion; they would impose workflow conditions on me. They'd say you have to use, specific translation tools. It's called a CAT tool if you work in that industry. And that involved some learning, but you just had to learn how to use that tool, and you weren't paid extra for that.

It was just assumed that you would jump through that hurdle if you wanted to work with them. Other [better] translation clients I had were like, you do your own thing, have your own processes, use your own CAT tool if you want. All we care about is the quality at the end. So that that's one thing to watch out for. How much control do you have over your workflow and the tools that you use to complete the job?

And in my experience, editors and proofreaders who are often working for very big corporations, mostly, like, publishing presses and so on, very large presses, mostly fit into this category. And that is because corporations are designed to maximize profit. And you maximize profit by following that principle. "I want to get the most amount of work for the least amount of money." A small press or another freelancer is more likely to look at you not as something that can be extracted from, but as another human being with needs and desires, etcetera.

And that's why they're much less likely to follow that principle. So it is a little bit linked to the size of a business and how much they're focused on being a business. Now let's flip all of that over and look at situations when you, as a small business, might be exploiting others. In this situation, you might be being extractive if you follow this principle, and I'll say the sentence a couple of times again. "I want to get the most amount of money for the least amount of work."

Sounds pretty good. Right? Let me say that again. "I want to get the most amount of money for the least amount of work." So if I followed that principle to the extreme, this might show up as charging a really, really, really high amount for a one-hour coaching call or something like that.

And I mean ridiculous. I don't mean doubling your rates or something like that. So what does all this mean for you as a small business owner? Well, the first thing that I learned when I got my head around these two sentences – I was able to categorize lots of my business interactions with different big publishers and other freelancers and so on. And it really got me thinking about situations where I'm being extracted from, and where I might be being extractive towards others.

I think one of the phrases that you've probably heard is scope creep, and that's when you sign up for a job. And for some reason, the clients asks or makes many more demands on you. And you should just say no, but sometimes there's an unfirm boundary there. Like, there aren't strong boundaries asserted, and that's the situation of scope creep when you can be extracted from. I think that's especially common at the start of a freelance career, and a lot of it comes from not knowing, as well, and not being firm and confident in your workflow and your pricing, etcetera.

I want to add, I don't think you should get paralyzed by this idea of being extractive. I think it's useful to recognize situations when we are being extractive towards others. That could involve, like, the opposite of scope creep, for instance, cutting corners on a particular task, etcetera. But even if you doubled your rates for editing services: let's say, instead of editing for twenty hours a week, I was like, oh, I'll double my rates and I'll just do ten hours a week instead. Well, I'd still be earning the same amount, and there's no freelance law that says I have to work ten hours, twenty hours, forty hours, eighty hours a week.

That wouldn't necessarily be extractive because I'd still be working in a way that just met my needs and freed up time for other stuff. That could be cool activist stuff, that could be community building. It could be, I don't know, household tasks and so on. Care responsibilities. There's all sorts of reasons why I might just want to work for ten hours a week.

But if I were to charge, like, a hundred times as much, then I wouldn't be able to spend all of that money on my everyday costs and, you know, a bit more than getting by, you know, comfortable stuff. But I wouldn't need all that. And what would happen then is that I'd reach a moment where I was starting to hoard money and hoard resources. And when you think about these principles and you look around, you'll be able to see it a lot in everyday commercial culture, especially if you live in the UK or the USA. I'm just thinking of ideas like the all-you-can-eat buffet, for instance, that feeds into this logic of I want to get the most amount of stuff for the least amount of money, and lots of offers that you'll see in the supermarket.

Like, buy one, get one free. Do you really need that second thing? You feel like you've got some kind of bargain or special offer, but if you just needed one of those things to meet your needs, then maybe you've bought too much, that kind of thing. And it's interesting that these buy one, get one free offers were actually not legal in Germany where I used to live, until the early 2000s. 

So how can you avoid being extractive or being extracted from in your small business?

Well, the first thing is to recognize when extraction is showing up and when it isn't. Charging someone a fee for something isn't capitalist and extractive. Marketing has existed for thousands of years, as has the exchange of goods and services. And Bear Hebert emphasizes on their course that this exchange is basically ethically neutral. It's come to feel icky because a lot of the exploitative and extractive marketing tactics have been baked into marketing as a thing and, the small business space in general. So point two on how to avoid extraction, I would say, be careful around big businesses in particular. That's corporations, very big publishers, and so on.

They are trained to extract. It's behind the principle of maximizing profit. If they can reduce the fee they give to freelancers by $1, when you multiply that across the many freelancers that they have, they will be saving millions of dollars or millions of pounds. So watch out around things which are trained to just think of themselves as businesses. Also be careful around freelance marketing advice, and that's because lots of it is loaded with tips and tricks that encourage extraction, and that'll be a whole other episode.

Playing number games with pricing when you're buying something, saying the first price is twice what it would actually cost, etcetera. That is one example. Another example is fake urgency, saying you have to make a decision by the end of the day, by the end of the week, by a certain date, and that places are going fast. Say if it's a course, something like that. So by setting fake deadlines and creating a sense of fake urgency, they can create tension in the person who's thinking of buying the thing.

And that tension can then cloud their judgment, and they can end up buying something that wasn't quite what they needed or what they wanted and so on. 

And this has probably happened to us all. It certainly happened to me when starting to run my small business. And it's really easy to promise a formula or a five step plan that only this person has or this company has, and, like, this five step plan will bring you fame and fortune. You know?

And you see that in the book publishing space a lot too with the really overblown claims of Save the Cat! and, like, other outfits like Story Grid saying that they have the one formula. They know how storytelling works, and they're telling you how to do it. When in actual fact, it's not like that at all. And if you follow their formulas very strictly, you might end up adding completely unnecessary scenes and creating a novel that just doesn't work. And finally, I'd say, be careful around content marketing as well, and social media marketing.

So it's in the interest of lots of big corporations that people are on their platforms for as long as possible, as they're trying to capture your attention. And it's also in their interest that these people create free content on those platforms too, because that's effectively a free way for them – for those businesses – to keep other people on their platform, the readers. So please, please, please, if you do choose to pursue content marketing, and I like content marketing and think it's really cool, please make sure it's working for you and that you're not self extracting, that you're not producing a lot of content that's nice and is maybe creating visibility on these platforms, but isn't really helping your business in any big way. And I see this quite a lot with posts on social media. So, at the end of the day, Bear Hebert and myself recommend picking a price which is focused on your needs.

And that doesn't mean your basic survival needs. It can be a zone of comfort as well. Absolutely. And rates and pricing that take into account all of your costs, holidays, sick pay, pensions, etcetera. And this isn't easy, and I could probably do five episodes discussing different aspects of pricing.

But by making a note and writing down all of that information of what you need to survive, like a a basic income, and what you need to be comfortable. That is a good approach. And that's basically what I do with my business. And as a separate topic, if you want to avoid extraction, think of ways in which you can give back to the communities you're working with. Think of ways in which you can model what's called reciprocity, kind of a mutual giving and taking.

And when you do that, you're building relationships as well. And I think this works better because if you want to create a small human-sized business, then relationship building's incredibly useful for that. And it's potentially a lot less draining. You need a lot less energy than you would to build, like, a a really large audience. And for those of us who have been in business for several years, it's easy to see, like there is a certain kind of business that might be a little bit scammy and people might only buy from them once.

And then they constantly need to find new clients. So that ends up being one-sided. It's a one-sided pursuit of growth just to keep going and to find new clients that [they] don't build relationships with. You would just do one exchange with them. Whereas the kind of the services work that I do and loads of other editors and authors do, well, someone might come back to you in one year, two years, five years, and this happens, and it's really nice when people get in touch again.

But it makes a lot more sense, and you can conserve a lot more energy if you're relationship building rather than just working with people very much on a one-off basis. Sometimes people only need a service once and that's fine. But if you're thinking about building relationships over trying to make [your] audience as big as possible, then you'll probably grow in a smaller but more sustainable way, I would say. Okay. So that's extraction.

I will be doing other episodes looking at extraction in other settings, like academic settings, other publishing settings as well. But I just wanted to give you a taste of the kind of socially informed approach to business that I take. So thank you very much, folks, for listening. Don't forget to take a look again at the show notes for all of the useful links. And if you want to keep in touch with me, first of all, you can contact me about this episode, send me an email, sign up for my newsletter, or leave a review.

And I'll see you next time.