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> Everything I've read indicates that bad by default is the way to bet.

Agreed. Once the customer realizes that they make up the vast majority of the vendor's revenue, 99% of customers will press that leverage for everything it's worth. They'd be irresponsible not to!

They might not be too demanding or screw the vendor over right away, but when push comes to shove they will pull that ripcord faster than you can say "Net 30".

Here's the double whammy: chances are that the customer's success will be correlated to the rest of the economy, so when the vendor really needs the money is exactly when the customer will stiff them.

The only exception is government, but that's a different class of sales.

We even did this to ourselves, internally, at a prior workplace.

They wanted a new web-based system to make it easier to onboard client work (less coding!) but picked a test case of a fairly complex client. The idea was of course some combination of them being complex enough to expose requirements, needing a rewrite anyway, and hoping they'd pay for some of it (funding the system development).

What happened in the end was a fundamental tying of the mental model of the software to this particular client - like some weird cousin of Conway's Law, the system was overly complex and complicated for the vast majority of our simpler client work because it was too strongly coupled to the business model and structure of this major client and their work. And it never got simpler, because by picking this complex one to start with, the sprints were always racing to catch up. These wounds were all entirely self inflicted.

> Rule of thumb: Don't let one client be more than 20 percent of your income if you want to actually remain an independent business and not get pwned by these people.

I agree in principle but how does this work in practice?

Keep rejecting clients until they are right sized?

> They make demands, you have no real choice but to meet them because it's such a big chunk of your revenue that you can no longer make payroll without them.

Would you have been better off never having had that money in the first place?

Possibly. You could have made money from other clients who weren't going to do that to you.

There are only 24 hours in the day. Time spent serving them is time not spent on other clients.

One piece of advice I've seen: Diversify your client base if you are seeing too much of your income from one or a few clients.

You describe being a freelancer (or some of US folk call contractor).

It's a pretty good & comfortable life ;)