Creative Pep Talk
074 - $$$ Pricing Your Work $$$
(upbeat music) Hey y'all, just a quick heads up. The episode you're about to listen to is eight to 10 years old. Now, these episodes were intended to be evergreen, and I still believe there's a lot of good information in these early episodes, but I do wanna let you know that some of my ideas have evolved over time. Times have changed since we made these episodes, and ultimately, I'd like to think I've grown a lot as an artist and a human, and that these don't necessarily represent my best work, or the best of the podcast. If you're new around here, I suggest starting with the most recent episode, or at least go back to around 300, and move forward from there. Enjoy the episode. The passion behind it is I want to help the creative industry be respected as a business. Hey everybody, you're listening to the Creative PEP Talk podcast. This show is about commercial art, finding the balance between thriving financially and being creatively fulfilled. I'm your host, Andy J. Miller. 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Over the past couple of weeks, I've been asking on Twitter for topic ideas, things that people are struggling with in the creative arts, the commercial arts. And the topic of pricing just kept coming up and it was striking a nerve. And so it got me thinking about it. And the more I thought about it, the more I realized I had tons of things to say. Lots of things that I've learned, lots of feelings, all kinds of different things. And so I thought, you know what? I'm gonna do an episode. I'm not gonna make it the weekly episode. I'm just gonna get it out there and see what happens. So I hope this is helpful for you. I hope that you get something out of it. The reason I think that pricing is such a hot topic is because there's no answer. There really is no answer. There's no one, now don't turn off the podcast. I do have some answers, some ideas of how to deal with this so that you get some peace and some traction and feel good about where you stand in terms of pricing your work. But I really think it's a tricky subject. There's no one size fits all. And it's an economic question that's pretty complex. Like I think economists have a hard time answering this question across all kinds of businesses. It's something that all businesses have to worry about. How do you price things to get the maximum profit and to build your business? And so it's a tough subject. I also think this subject is a hot topic because in the face of a lack of information we will fill in the gaps with the story, with the most concrete thing that we can grasp. We will fill in the story. I can't remember where I heard this. It might have been a TED talk. If you know, send me an email so I can put it in the show notes. But the thing about being human is that when we have gaps in the story that we can't fill in, like there's missing information, we will fill it in. We will tell a story to ourselves. We'll make up a story. Usually those stories are not great. We usually let our fear, our lizard brain fill in those gaps with the worst possible situation. And the truth is about being a commercial artist. It's tough. It's a tough battle. This week even I had a dream job come into my inbox and I was super stoked out of my mind about this one particular aspect of it. And I said, let's do it. They said, okay. And then they turned around and said, oh wait, actually that one part that you were really excited about, we changed our mind about that. We're not gonna let you do that. And that sucks. And it wasn't a pricing issue 'cause I didn't price it out, but they gave me a price. But I've been in that situation so many times, countless times. Started in 2008 and every year, several times a year, I go through the process of bidding for something, getting paid to test out some stuff. Jobs that I was desperate for that don't work out. And there have been plenty of times when I thought that it was a pricing issue. Like I said, the wrong price. And the truth of the matter is I'm not sure that's often the problem. I could be wrong, I'm not usually on the other side of the equation. But I think pricing is this concrete thing that we run to, that we feel like we have control over. And we build our stories about why we do get jobs and why we don't get jobs based on the prices that we give. And it makes me think of back in ancient times like where they would worship the sun. And I think it's like, there's this giant concrete ball of fire up in the universe, this massive thing. And we're gonna build a story around this thing. It's the thing that gives us light for our crops and all this stuff. And we're gonna sacrifice our people to this God. We're going to do anything because the weather and the climate and our crops and sickness and all these things, we don't understand, we're missing information. We're gonna try to fill in the gaps. And we're gonna fill it in with the biggest thing we can see, the sun. And I think often, pricing is this elusive thing for us. Like, we don't know why we lost a job, we don't know why things didn't go the right way. And the one thing that we can go back to is the thing that we feel most uneasy about, like we gave the wrong number. And somebody undercut us or we didn't say enough and they didn't respect us. And I think this is the heart of why this thing is a tricky subject. You know, I think if you think about shy people, shy people often get pegged as judgmental because in the missing information, like them not explaining their thoughts and feelings, we make up a story about what they're thinking. We think they must be thinking bad things, right? I've seen that a billion times. But I think really there's more to the story than just pricing. Now, having said all of that, I'm gonna give you, I think I've got seven tips, seven or eight tips here, eight tips. And I'm gonna give you the eight tips that I've learned, things that I apply week after week that have helped me gain some peace in this area that have helped me find processes that mean that whether I get the job or not, I feel like I did everything I could do. And if I do get the job that I get paid the price that I feel good about, one more thing before we jump in here, I think the other reason why this is a hot topic and it's a hard thing to pin down is, this is a complex economic equation and every business has to come up with their own approach to this. Like Mercedes, their approach is quite different than Walmart, there's a different approach. And you're gonna have to figure out how you feel about it, like what type of commercial artist are you going to be? And this is the basic principle, the principle is this. If you get five jobs that you can price for and you price them at a hundred each and you get all five jobs, you've got 500 bucks. If you get five jobs that you price for and you price them all at 500 bucks, you lose four of those jobs and you only get one, you only had to do a fifth of the work for the same amount of money, right? And often when people are willing to pay you more money, they're better clients. And so it's a complex situation and I tend to err towards that kind of thinking of I would rather price hire, lose more jobs, get the better jobs and be able to pour more time and energy into those. And I think that's probably a more high end version of the pricing. But I think this is part of the reason why it's a tough situation. 'Cause you're looking, the real question is this, how do I gain the max profit? That's, it's a business question. How do I gain max profit, least effort and not in terms of laziness, but in terms of, you know, trying to, you know, having to kill yourself over a billion different jobs just to keep the lights on, you know. And I think so this is the equation that you're trying to balance. And it's an equation that all businesses have to balance. How high can I charge to where I get the maximum amount of jobs? And at the end of the day, I end with the max profit. And that's kind of what we're looking for. That's the problem that we're gonna try to solve with these eight tips today. (upbeat music) A good base, a good base place to start is to find your day rate that's preferable for you. Now, just for full disclosure, I pretty much don't give out day rates or don't do work without a real exception to the rule. I don't do day rates because I don't think they work in favor of the artist. I think there's a lot of problems with that. And I think also that assumes that I'm a freelancer whose time is up to be sold. When really, I believe that in order to thrive in the longterm, you need to think more like a small business than like a freelancer who can sell your time. Any given week, I can't give you a full week. I can't give you all of my hours in that week because I spend part of the week doing the podcast. I do part of the week teaching classes. I spend part of the week doing personal work. I spend part of the week doing all kinds of different jobs that I'm committed to to keep all of those income streams going and keep it interesting. And I can't just on any given occasion say, all right, the next three weeks are this one companies and I'm gonna be giving you this day rate. Now, there's a whole other mess of information there in terms of work for hire, work for hire being, I'm gonna, you're gonna pay me hourly or per day and you're going to keep all of the work that I make in that time and own all of the rights and that's really not great for you the artist. There have been times when I've done it for exceptions to the rule, but I generally try to avoid that completely. However, I think a good foundation for this talk is finding your day rate that you feel really stoked about and I think the way to do that is just reverse engineer it. So start with the annual salary that you believe that you need or want your ideal salary. I would tack on extra for expenses and being double taxed as a self-employed person and also extra money for healthcare and keep all of that stuff in mind that you've got to pay taxes, you've got to have expenses, you've got to have extra cash flow, it's not all just profit. So keep that in mind, come up with an idea just for a hypothetical situation. Let's say that's $80,000. If you divide that by 260, that's the amount of weekdays in a year and you're probably not gonna work that many, you're gonna come up with a number like 300. Now, I suggest you add money to that because you can't work for other clients every day of the year. There are days when you need to do admin, there are days when you need to do personal work and there are days that get thrown out because of sickness and vacation and all that jazz. So you need to bump that price up a bit, add a hundred bucks, add a 200 bucks, add, you know, whatever. But that'll give you a base price. Now, without usage, which we're gonna talk about next, I think that you can think about this in terms of, this is my base for just my time, right? And I think one of the things you need to think about in terms of your time and maybe you're not comfortable with the day rate that you come up with, you're not getting paid just for your time. Like, you know, you're sat at McDonald's Flippin' Burgers or something. It's not just manpower. They're not just paying you for that. They're paying you for the expertise that you got when you went to school or the 10 years that you've developed this practice and this process and these skills, they're paying for all of that time too. They're paying extra for that. That's why you pay a doctor so much money. You don't pay him because he spent an hour, you know, doing the procedure. You pay him for going to school and all of the practice and all of the knowledge and all that good stuff. And so don't be uncomfortable if the day rate is higher than you'd expect it to be. Now, this is just for your time. So if someone says we want you to do some work and we're gonna use that in just one place, you're gonna, you can retain the rights of the image or the work, but we just wanna use it in this one place for this one occasion, then you can just say, okay, how much time is that gonna take me? Apply your day rate on your end and that's about how much that would cost and that'll give you a ballpark figure. Next up, we're gonna talk about usage. (upbeat music) (upbeat music) So usage is a really interesting topic that you really need to know about and I suggest going to read the letter Jessica Hish, her blog post, The Dark Art of Pricing. A lot of these ideas were based on this. That was a really pivotal article for me. It helped me kind of wrap around my own take on of it, which is different than hers because she's an industry giant and I am not. So I have a different view of that slightly, but it's a good reference point and you should go check that out if you have questions about usage and she shows you how she prices things out. So for me, this is a general rule of thumb. If they wanna use the image, let's say in a magazine, one time, they're not gonna reuse it. It's gonna be there and they're never gonna use it again. Then I'm gonna give them something comparable to the amount of time versus my day rate and that's about what I'm gonna charge them. Now, if they wanna use it in more than one place, let's say they wanna use it online and in print, then I'm gonna tack on 25% to that rate. Let's say they wanna use it in another place. They wanna use it in TV as well. Then I'm gonna add another 25%. And I just kind of do that as they continue to add things up. Now if they all of a sudden wanna put it on a giant billboard in print, now you're talking about time versus the amount of people that are gonna see it, the value that they're getting out of it and that's the idea of usage. The idea is that they need to pay you for how much they're using this image, like how much value are they getting out of it? If they put it in a pamphlet that 300 people see, that's gonna provide a lot less value than putting a billboard in Times Square where millions of people are gonna see it and they're getting so much more from it. And that's why there's a different price for that. And so if they, let's say the usage becomes a lot larger scale than I adjust that percentage, just in a gut level. So let's say we went from online and magazine to billboard in Times Square. I might tack on 75%. And it's a sliding scale there, and there's no exact number, but that's generally the principle. Now, you will get into situations where they wanna completely buy you out and own the copyright. Now the thing about that is, is that you're giving away your rights to this imagery and it really isn't a fantastic situation for you in terms of your rights and your ability to control what happens with these things. And so when that happens, I think that's when it gets really serious and you need to, you know, more than double the price, maybe triple the price in that situation because you really wanna cover your bases and you only wanna do that when you feel really good about it. One of the ways that feeling really good about it is making lots of money. Otherwise, it's a difficult call, right? And so when I'm in that situation and they want the full rights to use it, however they want, for as long as they want, I often will nearly triple the price. And if they don't understand that, you can refer them to this podcast, just getting in this section and just explain to them. Like there's a totally different value spectrum of what they're getting use wise. - Hey, in case you don't know, we have a monthly live virtual meetup every last Monday of the month with supporters of the show from Patreon and Substack. We have so much fun on these calls and they are the warmest, most encouraging creatives that I have ever met. And we also talk real creative practice stuff. We have authors, illustrators, lettering artists, picture bookmakers, fine artists, musicians, and folks that work in video and film as well. And we have people that are just starting out, people super established in their creative careers and everything in between. For the rest of this year, we're gonna chat through our new Journey of the True Fan series exploring questions and ways to apply these ideas to your own creative practice so that you can leave 2024 stronger than you came in with more visibility, connection with your audience and sales. Sign up to whichever suits you best at either patreon.com/creativepeptalk or AndyJPizza.substack.com. And I hope to see you at this month's meetup. - It's holiday shopping time, y'all. It's time to freak out. - Ah! - Not because uncommon goods is here to make it easy. Listen, all I did was click the for her section on this site and I instantly saw five things that I could get, Sophie, don't tell her, but I'm thinking either the National Park sweaters, the tea advent calendar. There's also just below that little bubble tea kit for my oldest. And then I saw one of these, you know, the retro little viewfinder orange real viewer things, but you can make it your own photos. Okay, it might not make sense. Just you have to go check it out yourself. Here's the thing, I have seriously never seen so many good options for gifts online in one place and unlike lots of other convenient options, shopping uncommon goods actually supports small businesses. To get 15% off your next gift, go to uncommongoods.com/peptalk. That's uncommongoods.com/peptalk for 15% off. Don't miss out on this limited time offer uncommon goods. We're all out of the ordinary. (upbeat music) Tip number three concerns your etiquette, your email etiquette, your phone etiquette. And by the way, I never give prices over the phone because it puts you in a weird situation that you really don't wanna be in. I would rather be able to think about it in my own time and articulate it well in writing. I think that's generally a good rule of thumb. But in terms of your etiquette, it's not always about what you say, it's how you say it, right? And we know that. And I think one of the things to think about here is to really pay attention to crafting the way that you speak about something. In terms of sales, this is a massive deal. You know, salesmen do all kinds of training to learn the way to approach a sale in terms of etiquette, how you talk about yourself, how you talk about your product or service and how other people will perceive it. I think one of the things that you need to think about is if this person's coming at you and they're saying, will you do this job? And you're not really thrilled with the job. It's not really a case of getting the right amount of money for it. Then I think it's fine to use definitive terms like this is how much this will cost you. And just spell it out say it's this much money. And leave it as a closed door. And that way, if they're up for it, they'll say yes. And if they're not, they're not gonna waste their time with tons of negotiating, right? Now, however, often you're gonna find yourself in a place where it's a job that you'd really like to do. But in sales, you wanna remain in that walkaway power. The walkaway power says that you, the salesman, have so much value to give. You have an equal amount of value to give as they stand to get. And so the power equation is equal. And when the power equation is not equal, you're actually hurting yourself. Because someone buying something from someone where the power equation is out of whack, that's like a handout. If they feel like they're doing you a favor by giving you this job, that power spectrum is all out of whack. And you can think about it like George Costanza. He talks about never having any hand in a relationship. He never has the upper hand. And he does a preemptive breakup to get the upper hand with this woman that he's seen. And it doesn't have to be a crazy mind game. It just has to be a fact of you believing that you have value to give and having the self-esteem to approach things in such a way that says, I deserve to be paid a certain amount of money. And I feel strongly about that. I feel, you know, I'm sure of that. And don't position yourself in a place where you're begging and you need to be aware of how this power balance continues because in negotiations, it's a big deal. It's a real thing. And so for me, I've tried to develop etiquette that helps me to talk about things in a professional manner, but that's also really honest and open. And so if this is a job and they're asking me for a price, then I will say, but I really want the job. I won't say this is the price. I will say, here's what I'm thinking. And I'll tell them this price. Let me know if that works for you. And that's a way of saying, this is what I think you should pay me. But I'm open to discussing it. And I think those little phrases have saved jobs for me. They literally have, where they'll come back like, well, that's really not close to what we were thinking. We were thinking something like this. And now all of a sudden, you've got a discussion. What you don't want in those circumstance is you come out strong with, this is how much this costs. And they think, oh, that's so far out of it. And now we're embarrassed to even come back. We don't even reply. We don't even have an email reply. And that's something you can get around often with just having the right type of etiquette. That's different than, I really don't know how much to price this. I'd love to get paid X amount of money. Please, is that okay? Like, that's a totally different way of approaching the same sentiment. And I think the etiquette that you use really can be a game changer. (upbeat music) This bad baby, tip number four is super simple. Shouldn't take that long to explain. Email somebody, email someone who you respect, who you think is just a few steps ahead of you that might know a little bit more than you. And just say, hey, what's your day rate? Or hey, I'm in the pickle. What would you charge for this? I have emailed some legit pros back in the day. And they almost always come back with some helpful information. Most people are willing to help. So if you find yourself in a really tough situation, don't be afraid to ask for help. Go email those people that you think, that you could gain from that, or maybe close to the situation you're in, but maybe know a little bit more than you. And one tip about that, don't email grumpy people. You know, the people that are always angry on Twitter and always talking about their rights and all that stuff. You know, just as another hint, maybe don't talk like that all the time online because there's probably lots of people that don't, you know, that are afraid to email you because of that. So that's kind of a double whammy. Like be nice to people online in public and off and on email. And then also if you're in a pickle and you don't know, and you need to just get, sometimes you just need a foundation. When I first started out and I started getting asked for day rates, I had no idea. So I emailed three different people. One was a friend, two were professionals that I thought were maybe three years ahead of me, and I just adjusted my price. And I think it really can be that simple sometimes. And if you have never had those discussions, I think, I really, really encourage you to just stop what you're doing, email few people, get a ballpark, and then base your price on that. (upbeat music) Number five is strike a balance between confidence and humility. Don't go in cocky, don't go in begging, but you wanna have some confidence and some humility. The times when I've priced out of greed, when I thought, man, I could take this person to the cleaners, that they're the, they've got the right client name, they've got the job is so right, and I think, man, I could probably triple my price and still get away with it. The times I've had that mentality, it almost always blows up in my face. The flip side of that, however, has been also true in that if I come there thinking, oh, I'm so desperate for this job, I'm gonna price really low, maybe I can undercut the other guys and they're gonna go with me, that doesn't work either. Like, a lot of times when you approach it that way, like, you've gotta think about it from the other perspective, the way that other people are going to perceive these things, and I think when you're, one of the things we've talked about on the podcast before is that if you're in the, if you're in the art business, it's a luxury service, you know, it's like lobster, you don't wanna buy cheap lobster, like, that makes you question its validity, and so often going too low and begging and having that low self-esteem, often that really paints a bad picture of who you are and what you're doing, you don't wanna do it, it's not Walmart, you can't just undercut all these people, but at the flip side, you know, going in way too high can appear cocky, it can really come off the wrong way and scare a lot of clients that just, a lot of times if you go way too high, they won't even reply to your emails, and so for me, the best approach is try to find that balance between, okay, what's the minimum I would be happy doing this job for, and then what's the, what number would like make me jump for joy, and try to find some place in between those two things, and that's really how I come up with a lot of prices. I think at the end of the day, you really need to trust your gut, I think you need to think, okay, what is the number I would be really happy pricing this thing at, then go ahead and add 20% because assume that they're gonna try to negotiate a little bit, and you don't wanna end up with a number that's lower than you wanted because you went in right with the number that you wanted, and so I think trust your gut, and don't be afraid to push it a little bit on the higher end, I'll tell you this right now, I'm fairly certain that I've lost a lot more jobs pricing too low than pricing too high. Like pricing too high, usually people come back and kind of try to work with you or do something on the, especially when I was starting out, if I would price really low, I think it was a sign that I was a rookie, and I think it made them not wanna mess with me at all, and so I really don't think there's times where you should price too low, pretty much avoid that completely, but at the end of the day, you probably have a gut feeling of what you should price, and then I would say just boost your confidence up enough to ask for more than that, 20% or something, because usually they're gonna push back a little bit anyway, so that's that. (upbeat music) My last pro tip, because I realized that I got to the other ones while I was getting to the earlier ones, because I just kinda worked them all in there. My last tip is, this is what I do always is ask them for the budget. If they say, what's the price for this thing, I always reply, just as the out of the hopes that they're gonna open up and be honest about it, what budget did you have in mind for this project? What budget do you have? Often, it's just important to get them putting their money where the mouth is a little bit, and it'll give you a really good picture of what's going on there. I would say that works about 30% of the time, so, but it's always worth it. It's always worth getting that going. It's, I think that's probably just a standard negotiation tip, but it works a lot of the time. Yeah, so ask for the budget, ask for their budget. You know, often them asking you for the price is really putting the power in their court, and you want to play a little hard ball, if you will. All right, yeah, ask them for the budget. (upbeat music) So that's it, that wraps up our bonus episode. The analogies were minimal in this episode. We didn't get all philosophical like I like to do, but I'm sure that there are lots of good things to think about and talk about. I'm not an expert, but I have been doing this for about eight years. I've learned some tricks along the way. They're not perfect. If you have feedback and you have more to talk about, please just tweet at me @AndyJPizza or talk on my Instagram at the same handle. Joey Ellis and I, my buddy Joey, we had a long conversation on Twitter this morning about it. You can go reference that too. He has a lot of good ideas on the topic. And yeah, none of these ideas are perfect, and I think that's why a lot of people don't want to talk about it because everybody's conscious of saying the wrong thing. Did I say all of the right things in this episode? Probably not, but the fact of the matter is there are no right or wrong anyway. And so it's good to just get the ball rolling, getting the discussion moving because it is important for us to understand how pricing is done in our industry so we can keep the standards up so we can get the most from our time, get respect for our work and what we do. One last note I want to end on is that don't be afraid to charge what you're worth. Don't be afraid to ask for the right amount of money, don't feel self-conscious about that. Back to this idea of they're not just paying you to push a button for an hour, right? That's not your hourly rate. Your life experience, your skills, your expertise, they're worth being paid for. And we do need to stand together and make sure that we're asking enough money that we can thrive on because this podcast at the end of the day, the passion behind it is I want to help the creative industry be respected as a business. I don't want us to distance ourselves from the business side and also distance ourselves from the art side. You know, we often say, oh, we're not those suits corporate people and then we also say, you know, we're not those artsy guys in the gallery, but really we are both. And I think until we find a word that sums up both commercial and art, I'll just keep using that term, but I believe that we have real value in the marketplace, real value in society, we add to the business world, we can enhance others business for instance on the web, imagery, good visuals, massively mean traction, like the internet is becoming more and more visual all the time and businesses are going to need artists to help them thrive. And so don't be afraid to ask what you're worth. Don't be afraid to come up with a day rate, come up with a price that you feel good about. Joey Ellis said at the end of the day, the only thing that matters is that you have a price that you can live with and that's really what you need to go with and I totally agree with that. And so let's not keep this discussion over, you know, beers and coffee secrets and all that jazz whispering. Let's talk about it. Is it fun for me to say, here's all the things I do and show you behind the curtain? No, it's not fun, it's not easy to do. And I'm sure that I haven't told you 100% totally perfect industry accurate information, but this is what I use in my own business and I hope it helps you. Let's keep the conversation rolling and yeah, I'd love to hear your feedback on this topic. Thank you all for listening, I hope this episode helps you find some clarity and strategy for your creative career. Thanks to Yoni Wolf and his band Y for our theme music. Thanks to our proud syndicate illustration age at illustrationage.com/creativepeptalk. Thanks to the free music archive, we use the song "Cosmich Slop" by the band Enenan. If you wanna show us some love, please review this on iTunes, it's the number one way that the show grows and that means so much to me. If you love the show and you get stuff every week, please consider just giving a dollar an episode at patreon.com/creativepeptalk. It usually averages out to about four bucks a month. That's less than any coffee that you can go buy out there and it's the lifeblood of the show, it really helps make this not a financial burden. Thanks for listening, I think that creative success is really about staying motivated and dedicated in the long run and that means staying peped up. So do whatever it takes. Speak soon, friends. (upbeat music) - Hey y'all, one more quick thing. Earlier this year, I rebuilt my website using Squarespace's new fluid engine and I was so pumped about how it turned out that I have been really thrilled to find as many ways to partner with them and tell you about what they can do and bring you discounts as possible. With social media going haywire, I think having a site that feels as unique as your creative work is essential to building trust with your target audience or your clients. I have had several clients point out how cohesive and fresh my site looks lately and if you wanna check that out and what I was able to do without any code, check out AndyJPizza.com. If you wanna test it out, go to squarespace.com/peptalk to test it out yourself. And when you're ready to launch, use promo code peptalk for 10% off your first purchase. Thanks Squarespace for supporting the show and for supporting creative people. (upbeat music) - I did consider Barney a friend and he's still a friend to this day. - The idea of Barney is something that I want to live up to. I love you, you love me. I call it the purple mantra. - Barney taught me how to be a man. - Generation Barney, a podcast about the media we loved as kids and how it shapes us. Listen wherever you get your podcast. (upbeat music)