

Ask HN: How do you control consulting work and concentrate on startup work? - milofelipe

I'm doing consulting to bootstrap my startup. Business has been great these past years. My problem is it's taking me so long to release my product. I also have a couple of other ideas that I can't find time to work on. The immediate income gained from consulting is very tempting for someone with a wife, a kid, monthly expenses, and mortgages. Consulting became the priority and startup work moved back. For those who experienced something like this, how did you handle it? How did you break free from consulting?
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mahmud
Paul was right when he said not to do side consulting work.

For me it was simple; a 3-month consulting gig will give me a financial runway
for the next year. So I am doing it, and nothing else. Come December 1st I
will have enough to live comfortably for the next year, probably 2 years if I
move to somewhere cheaper and bring my fiancee over.

~~~
tptacek
Are you sure Paul was right? If you can pay for a years expenses in 3 months,
it sure sounds like you're in a good position to hire; pay someone to reduce
consulting workload, and pay someone to work product.

'mahmud, this isn't particle surgery. This is every real consultancy. Ever.

~~~
jasonkester
Presumably you're charging the rate you charge because you're you. You can't
simply drop Junior Dev Jimmy onto the project and keep billing away at the
same rate.

It doesn't take a very savvy client to notice when throughput drops by a
factor of 10. So unless you're a body shop that's already sending out mystery
devs, or you're very good at explaining away a huge drop in productivity,
hiring is not going to help this situation at all.

~~~
tptacek
Nothing in life is free. If you hire Jr. Mahmud to take over 80% of your job,
and your aggregate productivity drops by 1000%, you will probably lose your
client and be forced out of business.

So don't do that.

A steady $200/hr consulting gig offers an _awful lot_ of wiggle room to figure
this stuff out. When we hire a new consultant, (a) we're very picky and (b)
they tag-team with us on projects, often for months, without being billable.
That costs money in the short term, but pays for itself in the long term.

Also, it's wrong to assume that a consulting gig has to be performed by one
person. Time and again friends of mine have found that they could hire cheap
for 20-40% of their project work (documentation, test harness coding,
automation, etc) and then had that person grow quickly into a full-on
replacement. And all due respect to 'mahmud's domain knowledge, but the
examples I'm thinking of are pretty high end.

At the end of the day, this problem is a fundamental challenge of _running a
business_ , and I have to respectfully/tentatively suggest that if you can't
figure out how to hire and train a replacement for _your own work_ , you stand
very little chance of running a successful software company, where you'll also
have to hire QA, ops, marketing, and sales.

Think of this current challenge like a warmup.

~~~
mattm
Can you explain this? I don't understand it.

"they tag-team with us on projects, often for months, without being billable"

~~~
tptacek
I hire Joe the Up-And-Coming Vulnerability Researcher (or rather, Cory does,
since we hired someone to replace me 2 years ago so I could do more product
work; see how this works?)

Joe and I work on projects together for 2 months.

I'm the billable resource on those projects. Joe doesn't bill.

I start out working _harder_ (I have to deliver for clients and ramp Joe up).
Pretty soon Joe ramps up and we start delivering the same work a lot faster.
Eventually, Joe's so demonstrably capable (in our case, he's finding the same
number or more security vulnerabilities in code that I am) that he becomes a
billable resource, scheduled just like anyone else.

Depending on who you hire, this process can take months, or it can take weeks.
If you hire someone with experience in your field, it may not take more than a
week or two. If you hire out of University, it might take 2 months. It's
almost always worth it.

I actually think Matasano has a _harder_ time doing this than many other
companies would. Our clients are extremely discriminating (we're a high-end
firm) and we have to be very careful about hiring. We have clients that pick
researchers from our firm by name. Staff bios go on every proposal. I can't
imagine that this is the case for, say, iPhone development; most consulting
companies are paying for an outcome, while security research contracts are
paid in part for the process.

------
thibaut_barrere
I'm not free from consulting (and want to continue doing it as well
actually!), but a few points:

* I treat each of my own projects just like a regular client

* I consider all the projects like a 'scrum' of 'scrums' (ie: I get to prioritize between projects just like I prioritize inside a given project)

* for billable and non-billable projects, I take great care to ensure I keep a sustainable rhythm (I work a lot periodically when required, but not on the long run)

* I keep track of my 'pulse' with Freckle, very helpful

* for each project (home-made or not) I try hard to limit the amount of time I dedicate to it

* I keep high rates

* we've lowered our expenses quite far (including moving to a very cheap area in France, considering buying a house without a mortgage as a result etc)

In my case and when it's in control, consulting is both a risk-splitter and a
great way to keep up to date and financially 'confident'.

As well I get to work in various, real-world situations that give me ideas for
my own projects.

Last point: as I consider myself an investor investing in ourselves, where my
resources (time/money/energy) are scarce, I find it great and sustainable to
work this way, slowly building what I like.

~~~
thibaut_barrere
Cross posting but relevant I believe:

<http://news.ycombinator.com/item?id=1604820> (techniques to prioritize
between projects and inside a project)

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thaumaturgy
I've been doing exactly this transition for the last couple of months --
transitioning from consulting to running a business and working on services
(basically, a startup, just under my company's brand).

For me, trying to schedule "startup time" didn't work. There was always too
much immediate consulting-type work to take care of.

So about a year ago I ran a Craigslist ad, spent a day wading through
applications and making phone calls, and found someone that was willing to
work on a part-time, on-call basis, for good wages but less than my consulting
fees.

A year later, I've got a couple of people that I work with now -- sort-of
employees-on-call -- and I was just able to take my first real vacation in 2.5
years. Everything was handled fine while I was unreachable. So now I've got
plenty of time to work on software.

So, one solution is to run your consulting like a business for a while, grow
it, get some contract help, stabilize it, and then manage it part-time.

~~~
erikpukinskis
I don't understand... sounds like you still have to schedule startup time
around a job. Is it that you're working fewer hours than you were before?
Wouldn't it have been easier just to take on fewer consulting hours?

~~~
metamemetics
Maybe he has a lot of pre-existing repeat-clients who always come to him for
their tech stuff that he doesn't want to send away permanently.

~~~
thaumaturgy
Yes, exactly. And, both the consulting and the startup stuff are part of the
same business, just different aspects of it.

I know it depends on the individual, but I find it a lot easier to concentrate
on startup work when I'm not developing an ulcer over finances. (And I can't
wait to stop developing ulcers over finances. ;-)

------
kbob
Treat the startup like a client. Juggle it into your schedule with the same
priority as your other clients.

~~~
Vitaly
doesn't work. It fails for almost anyone that tried it. The only solution I
can think (and trying now) is to pay someone to do it for you ;)

------
chriskelley
For me, it's been very important to just "keep moving forward" on my startup.
At the end of every day if I'm at least one step closer to my destination,
it's a win. Some days I get a huge surge of startup movement, some days my
"money maker" zaps all of my energy and maybe I only answer one FAQ in my
knowledgebase.

The bottom line is keep moving forward, and eventually you'll exit the
workload brackish and emerge on the other end full-time on your startup.

I'm 100% bootstrapped and I'm going full-time on my startup November 1st -
until then, babysteps shall continue!

------
kranner
I can only do one large thing at work at a time, probably because I refuse to
give up my leisure activities: I enjoy them and they keep me sane.

So I did a substantial 7-month consulting gig last year, collected the cash
and have been working on my startup since.

Incidental details: 1\. I blew two months on a startup idea that was going
nowhere. 2\. I live cheaply.

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sosuke
Have you tried prioritizing your startup like you do your consulting? I'm sure
you meet all your consulting deadlines and requirements. I'm addicted to
consulting right now and I've been using it to help bootstrap my startup ideas
as well. I don't think I'll be backing off consulting until my startup
ventures actually make as much money as my consulting and even then the
consulting dollars will give me more options in promoting my startups!

I love the variety of consulting so much that even after my ventures bring
success I will still want to do consulting because it gives me that instant
achievement satisfaction.

Don't focus on breaking free from consulting and before working on any other
ideas get that first product released. Set milestones and treat it like your
other work.

I'm still consulting until I get my own projects off the ground, my first
launch took 1.5 years to finish, my next launch will be in a fraction of the
time.

------
ojbyrne
Charge more.

~~~
nfriedly
Not sure why someone down voted this, I think it's a good solution. Each time
I had more consulting work than I knew what to do with, I'd raise my rates.
Its a good way to throttle incomming work and either earn more money -or- what
youre looking for: have more time for your startup.

~~~
ojbyrne
I think I was too succinct. I'd disagree with "a good way" - it's "the way."
Though you don't necessarily raise rates across the board, for every customer
or every job. You do marketing. MARKETING.

Good customers, you explain your situation, raise your rates, but offer
grandfather clauses if they're willing to guarantee some level of minimum work
or pay upfront or with better terms. Bad customers, you double your rates
overnight (and then do it again 3 months later). In between customers, you
offer different packages that trade off them paying you more with them paying
you more reliably, and/or offering you things that help you market your
offerings better (referrals, testimonials, etc).

Additionally you specialize. If its something you don't like doing, you charge
more. If its something that teaches you a skill that you can use for your
nascent startup, you charge less.

Eventually if you're good, your "startup" becomes the R&D department to your
burgeoning consulting business, and you've got something that feeds good
things back and forth. The startup makes consulting more viable, and the
consulting makes the startup more viable. Somewhere along the way you hire
people.

------
davidamcclain
Launch. Maybe see if you can postpone some of your features until v2 and just
get something out there ASAP that people can use and ultimately pay you for.
Easier said than done of course, but that's your real answer I think.

------
asanwal
1\. Can you contract out any elements of consulting work to others to free up
time? Perhaps some of the lower-value work? You'll make the spread b/w the
rate you get and what you pay them. You'll profit less but gain incremental
hours for your venture.

2\. Pick or find consulting work that "scales well" meaning it allows you to
leverage (sorry for jargon) knowledge/things you've already done or built.
This type of work will be more efficient for you, more profitable and you can
reinvest saved time into your startup.

3\. Regarding multiple startup ideas, I'd pick one to focus on. Diversifying
amongst startup ideas esp if unrelated doesn't work in my experience. It leads
to doing them all half-baked which ultimately won't get you further from
consulting which is where you want to be.

4\. As mentioned below, we treated our own company as a client which meant we
acted with same sense of urgency as we would with other clients. It is a good
way to make your own venture a priority else it always gets back burnered.

5\. This one is a bit drastic but exit the mortgage if you can by selling your
home and renting. Fixed costs like mortgages can be like anchors for an
entrepreneur. Take the money you may make and put some away for a rainy day
fund for the wife/kids/you and a portion can be used to give your own venture
some additional fuel or runway.

In same boat as you my friend so "feel your pain" although sounds like you
have too much consulting biz which is a high class problem IMO.

Good luck. And if you figure out a "solution", pls let me know.

~~~
petervandijck
Don't sell your house though. Rent costs money too.

~~~
asanwal
True. Perhaps it's me being in NYC where you can rent for significantly less
than carrying cost of mortgage/maintenance on your own condo.

Plus why invest in real estate (highly uncertain and perhaps going nowhere in
near future) vs. invest in oneself?

~~~
mgkimsal
Selling for most people now is not a great idea for a couple reasons.

A) as the other person pointed out, you'll still likely have rent. As for
bouncing around looking for cheaper rent, you typically get locked in to a
rental agreement for at least 6 months, if not a year. You can't just move
every month to save a few bucks.

B) Moving costs money (and time) in and of itself.

C) Selling costs. At least in the US, most housing sales are going to eat up
5-6% of the house price in commissions. On a $150k house sale, it's going to
cost you $9k (plus, again, the time and expense of moving).

Unless moving is going to save you _significant_ expenses vs renting, it's
probably not that wise to blindly sell and move. Assuming, that is, you even
_could_ sell to someone in this market. It's not great in many areas for
sellers right now.

If I could rent someplace $800-$1000 less than where I'm at now, I'd consider
it, because the cost/expense would be recouped in probably a year, but I
wouldn't go through all that hassle/cost/expense to save a couple hundred per
month.

YMMV.

------
gordonguthrie
In his book The Innovators Dilemma
([http://astore.amazon.com/hypernumbersc-20/detail/B001I05ZVK)...](http://astore.amazon.com/hypernumbersc-20/detail/B001I05ZVK\)Christensen)
makes a throw-away line that rocked me back on my heels.

He said something like "resources are allocated by customers not managers, so
choose your first customers carefully".

The point is if your customers are for your consulting business they will
allocate your resources in that direction.

------
thecoffeeman
As soon as your startup brings in money this is no longer a problem.

Thus the solution is simple, at least in theory: make money. Now.

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erikpukinskis
I'm still struggling with this myself, but these things are the ones I've
tried that seem to be working:

1) Confine your contract time. I try to basically do contract work between 8am
and 1pm. Other people only work on certain days.

2) Work with your clients to set priorities. Know what are the most important
things to them, and tackle those first. This helps with....

3) Work a fixed number of hours. Don't do overtime. If you stay organized,
estimate well, and stay on task, you can do your job and then stop.

4) Whoever else said to launch, I second this. You need someone yelling at you
to get your startup shit done. Customers are very good at this job.

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giffc
To break fre, the way i would recommend is to save up enough money that you
have a reasonable runway to pick one startup idea and pursue/iterate it
intensely. Set a goal for how much money that is and save as rigorously as you
can. During this time of earning money, you can at least do some customer
development around your ideas. And my advice is that unless your consulting
and your product are really tightly tied together, you are better off keeping
them entirely separate from a legal perspective. If one or both start growing,
keeping them together can get really messy. Obviously there are are exceptions
to that.

------
milofelipe
Thank you for all your replies. I'm learning a lot from them. I think I'd move
towards hiring a promising junior dev to help me with my tasks. But I'm not
yet sure if I'll have the dev work fully on the consulting side or the startup
side. It might depend on the type of consulting work needed.

I guess my problem is also really because I'm a one-man startup. So finding a
co-founder or startup team to help me on the startup side could solve my
problem. Or it might be another problem too...

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jberryman
Just curious as an outsider: what kind of consulting do you do? How did you
get into it?

... guess this might be an "Ask HN"

~~~
milofelipe
I do Java consulting (anything Java-related). When I was still an employee, I
was freelancing on the side. When I resigned, I continued freelancing. An old
client (from my freelancing days) hired me as a full-time consultant during
that time and I've been working with them on different projects ever since.
The client is aware of and fully supports my startup activities.

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srwh
If there are at least two people in the company and one consulting can cover
their expenses I think that's the way to go. MSFT (Paul Allen and Bill Gates)
did consulting in Microsoft.

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amorphid
Hire a junior programmer with potential. Go for cheap and good, not fast. Cash
expense should exceed any opportunity cost of waiting if idea is good.

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epi0Bauqu
I used to restrict to 4hr/day max and stick to it.

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tptacek
Hire.

