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We don't have a portfolio either and are very selective to what clients we decide to take on. We look for clients that want to make money and aren't stingy on their web development budget.
I agree with Amp that portfolios are a great way for other designers to steal ideas. I also agree that it's about the backend and providing solutions that make the client money.
Almost completely all of our work is from referrals from current/past clients, and we do our best to provide a continuous service to our clients. So, no I do not believe having a public portfolio is necessary. -g
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