
Consulting is like selling crack (go work for a startup) - javery
http://team.adzerk.com/post/6796040368/consulting-is-like-selling-crack
======
tptacek
It is hard to go from solo consultant to software business.

That's why people don't do that. They build a solid pipeline of consulting
work, _then they hire people_.

It is straightforward to build a software business with 1-3 people paid near-
market wages by another 1-2 people doing hardcore consulting.

I could go on and on and on and on about how much better this model is than
the "eat ramen and hope for VC" model, but the nut of the rebuttal to this
particular post is so simple that I'll spare you.

~~~
javery
The problem with this is that which one are you? If you are doing the hardcore
consulting how can you devote the time and mind share needed to build a
successful startup? If you aren't doing the consulting how do you find two
chumps willing to fund your company for you?

~~~
tptacek
Whichever one you're better at. When people talk about "ability to execute",
this is what they mean: being able to come up with a plan ("I'm going to
consult, you're going to build, in 3 months we launch") and then stick to it.

If you aren't doing consulting, this model is not open to you. But if you
can't consult, you probably can't sell product either. This is like asking,
"if you're a business guy who just needs a web guy to implement his idea", &c
&c.

~~~
javery
At that point you are basically just an investor in the project - since you
will need to focus your time and energy on consulting and won't be able to
contribute as a co-founder.

~~~
tptacek
What does this even mean? People aren't chess pieces. Just because you walk
two spaces to the left and one space forward, doesn't mean you're a knight for
the rest of the time you're at the company.

Contribute to your product offering as much as you can. Participate in
discussions. Talk to customers. If you're lucky, your consulting customers and
your product prospects will overlap. Over time, ramp up revenue so that you
can wean yourself off consulting.

This attitude that there's some status hierarchy of kinds of people in a
startup is toxic. Working companies are comprised of people who will move
mountains to get stuff done. You can spend tons of time pushing on the
mountain of external funding, or you can push on the mountain of getting
immediate and comfortable levels of cash from consulting. Both have their
upsides and downsides. Either way: you're going to have to do stuff you
wouldn't otherwise want to do.

~~~
javery
What I mean is that you will be so focused and busy on the consulting piece
you won't have the time to work on the product - trust me I have been there.

~~~
tptacek
Me too. I'm on-and-off billable all the time. Ask my dev team how disengaged I
am with the product we're launching.

------
bradleyland
I strongly disagree with you James. Virtually all of the drawbacks you mention
are choices. They are not implicit to acting as a consultant. I used my
earning potential as a consultant to build a significant savings. I lived on
about half of my income, which wasn't all that uncomfortable, and sacked away
the rest. Within three years, I had enough money to make cash loans to my own
startup and work for a year without pay.

The fact that I was a consultant prior to bootstrapping wasn't all that
relevant. I could have done the same with a salary, but I would have been
forced to quit when my start-up's time requirements encroached on my job. With
my consulting gig, I was able to sell the work to a couple of trusted
consultants and collect a trailing commission on work I wasn't even doing. I
couldn't have done that with a job.

Transitioning to a start-up will be whatever you make of it. Yes, one should
be aware of the pitfalls you outline. If your trajectory is that of a founder,
having three kids and moving in to an expensive house is probably not going to
make things easy, but there's nothing about being a consultant that implicitly
requires these things.

------
joe-mccann
Epic linkbait.

"Consulting is like selling crack, if you want to be a founder of a startup -
so go work for a startup."

should be the title. As an independent consultant I can only laugh at
fallacies ridden in this article as if it applies to consulting in general.

"You get used to spending whatever you want on hardware, furniture, tools, and
being fairly loose with your money...You get used to making that much money
personally...bad habits, blah blah"

Give me a break. Proper personal finance is almost always relative to your
income. If you make $250k/year or $50k/year it is still your responsibility to
be _responsible_ with your money. If you buy a $1M condo on a $250k/year
salary and drive a Maserati, yes, you may have issues as a FOUNDER of a
startup with no $$, but maybe you should have thought about _investing_ or
even _saving_ (gasp) your money for padding when you started your startup.
Common sense.

~~~
javery
I started out with a 100k in savings from consulting - but the bad habits
aren't just personal finance. It's a big leap to jump from selling time for
money to investing time for future potential.

------
dasil003
Because the lifestyle is too good? I guess if you get used to that much money
it could create a motivational problem, but that could happen regardless of
what you're doing. Don't forget the valuable things that consulting teaches
you:

* How to maximize billable hours. This translates well to finding your minimum viable product and staying focused.

* How to hustle. I guess it depends on what kind of contracts you are getting, but the client relationship has parallels both to the customer relationship and b2b relationships. You often have to sell your ideas to your clients.

* How to build a lot of different things. If it's software you're doing, you'll get more under your belt by contracting than working at one company for a long time.

* How to run a business. You will learn a reasonable amount about the boring accounting, tax and legal issues of running a business. May not be super-applicable, but on the other hand it's a lot more useful than the distorted edicts that make their way down the corporate pipeline ostensibly because of some business or legal requirement way outside the view of the rank and file.

I guess when it comes to entrepreneurship I'm a glass half-full kind of guy.
Pretty much any job you have can lead to experience that helps you succeed as
an entrepreneur. Even a burger flipper may see things on the inside of the
fast food world that could form the seed of a startup idea. If there's one
thing that good entrepreneurs have in common, it's a relentless pursuit of
success using the tools they have available.

------
jefftougas
This is pretty interesting in light of a post that was on here a couple days
ago: <http://joel.is/post/6687368692/startup-bootstrapping>

It seems that if you look at full or part time consulting as simply a way to
pay the bills while you work on getting a startup off the ground (or working
for free as a super early employee at a startup), to the point that its ramen
profitable, then consulting can be quite beneficial. In fact I believe I read
somewhere that Chris Wanstrath and PJ Hyett were both doing freelance work
when they first were bootstrapping github. Remaining extremely frugal despite
a six figure salary also seems key here.

This seems like a "it depends on the individual" sort of thing.

~~~
javery
Consulting as bootstrapping can work - but it is very very hard. I did this as
well and it's easy for the consulting to eat up more and more of your time. I
spent a ton of time in 2010 doing 2 consulting projects to keep money coming
in - if I had instead looked to borrow the 50k those consulting projects
brought in I would be much farther along then I am now.

~~~
checker
Do either of you have any advice on becoming an independent consultant? I'm 1
year out of college and working with a government contractor but I'm not sure
how much marketable experience I have in that realm, or how to gain it
(besides slugging it out for years).

~~~
MortenK
Call a consultant recruitment agency, they'll be able to guide you. The bad
news is you DO need to slug it out for years, to gain experience. Not many
companies will pay you 100+ USD an hour, if you are fresh out of college.

I talked with a handful of consultant recruitment companies before landing my
current contract through one of them. They all said that to get seriously
considered, you need a degree and 5 years of full-time commercial experience,
OR no degree but 10 years of full-time commercial experience. And that is
today. Just 2-3 years ago the requirements were much tougher, due to many
consultants on the market, but not very many assignments. This is on the
Scandinavian market at least.

Basically, the more experienced you get, the higher hourly rates you can
generally get. You'll also need to be able to sell yourself though, which can
naturally be hard. That's where the recruitment agencies or agents come in.
You get 10-20% less money by going through an agent, but they take care of the
selling. You just show up for the interviews.

------
nhashem
It's probably true that starting a startup is the only thing that can prepare
you for starting a startup. But consulting is still a lot better for
experience than a typical full-time jobs. What FT job will teach you about
provisioning equipment or anything about accounting?

I believe it was Joel Spolsky that said the success of a software company was
based on how well it turned developer hours into money. What better place to
do this than somewhere where you trade your own hours into your own money?

It's obviously not a seamless transition from consultant to startup founder,
as the author has indicated. But in general you'll learn a lot more about
running a business as a consultant than you otherwise would as an FTE
anywhere.

~~~
javery
I don't think it does that actually - as a consultant taking longer isn't a
downside. It's a downside for your client - but in the end if it takes you 40
hours or 10 hours it doesn't really matter to you other than that you get to
bill more.

~~~
eropple
It certainly is a downside. Blowing your estimates (as a solo consultant)
means they don't ask for you back.

------
benaston
Well, if you want to use this provoking analogy, then I disagree. Recruiting
for a company (whether that be a startup or any other) is like selling crack -
you hope to make massive profits by taking advantage (long hours, low pay) of
other peoples' dependency on you (not enough savings/skills/personal
commitments/psychological barriers to move elsewhere).

------
loboman
So what's the disadvantage? That you get too much money?

Can anybody mention the disadvantage of being a consultant over having a
startup? Or could it be that consulting is better than starting a startup, at
least sometimes?

Edit: what about consulting only for interesting projects, for example?

~~~
javery
The disadvantage is that you are always trading time for money - you only have
so many hours a year (2000 or so) that you can bill. So your earnings max out
pretty quickly.

Building a startup you are building a company that can grow and end up being
worth millions and millions of dollars (and it more rewarding to me then
working on other peoples projects).

~~~
jessedhillon
You have a very slim chance at even breaking even, let alone getting the big
payout. Your article, frankly, does more to convince people to become
consultants, rather than the opposite.

The choice you present is as if a person with the motivation and insight to
start something has no choice but to throw caution to the wind, abandon any
semblance of stability, and burn the ships (as the saying goes). Plenty of
very successful entrepreneurs have proven this wrong -- there is no need to
romanticize a very risky proposition.

On the one hand, you present a choice where a lot of one's income is scalable
and under your (mostly) direct control. Sure, there is a limit of around
$250k/year -- that's a gross of $2M+ in a decade. Meanwhile, you have more
flexibility with your time than you would at most jobs. The typical startup
entrepreneur, if they last a decade, will have gone through multiple
ideas/ventures in that time frame, while earning 10-20% of this.

On the other hand, you present the notion of taking a wild, largely
unmitigatable risk -- live an austere lifestyle while devoting 60+ hours/week
to your pet project. Your only way to manage risk is to try to confirm early-
on in the process that you are actually building what people will pay for (or
even want) ... _before you build it_. Even then, the territory remains largely
unknown. Any number of black swans can swoop in and completely destabilize
your agenda, turning what you think you know upside-down. You simply cannot
plan for success -- high-risk proposals are always subject to wild
fluctuations in the landscape (or else they wouldn't be high risk) -- the best
you can reasonably plan for is to make a product and release it.

The end of your post does your argument no favors either. Establish a practice
where I can sell my talent for (at maximum) $250k/year, or go work on one of
four me-too ideas? There's a reason why the devs you approached said that they
want to _work on their own idea_ , or in lieu of that, consult.

EDIT: I'm sorry if this reads harshly. I tried to give you honest criticism
without insulting you. I regret using the phrase "me-too ideas".

~~~
javery
My post wasn't trying to convince people they should go start a startup - my
post was aimed at people who already want to do that and for some reason view
consulting as a good step. I agree that starting a startup isn't the smartest
way to make money - we can't always do what is reasonable, sometimes we have
to do what our passion pushes us towards.

I know plenty of people who were happy making their six figures and found
enjoyment in other areas of their life - It wasn't for me and I wanted to
found a startup. Looking back I should have quit consulting and gone to work
at a startup instead of continuing consulting and hoping it would make it
easier to transition to startup life.

~~~
sukuriant
Thank you for clarifying it here, but that's not exactly what I understood
when you wrote it. You may want to adapt/addendum your article to clarify that

------
mgkimsal
Yes, it's easy to get comfortable on a $200k income. But it's easy to do that
at almost any moderate level. It's very easy to spend all you earn and then
some. Consulting and building up savings (burn rate, runway, etc) is a choice
some make (I'm in that boat right now).

If someone was really earning $250k a year (and living in a moderate cost-of-
living area) with plans to start a company, I'd certainly have no sympathy if
they hadn't managed to accumulate some significant savings to get started
with. There may be situations where more than one person's savings is required
- you may need hundreds of thousands or even millions to attack certain
markets, but I can't think of too many, and can think of many more markets
where it takes but a small fraction of that to get started.

Also, FWIW, good luck with adzerk! Been meaning to swing by DU lately to see
how things are going with all the great companies going on in the area.

------
trustfundbaby
Wasn't Jason Fried of 37Signals a consultant before he partnered with DHH to
do Basecamp?

Isn't their success a blueprint for doing what this article says cannot be
done?

~~~
MortenK
37Signals was initially your typical web design / development shop doing
projects for customers.

Consultants can roughly be considered "external, temporary employees", paid by
the hour, usually by one or two clients. The web design shop will typically
have a whole lot of different customers, and charge fixed price for projects.

So there is a not-entirely-insignificant difference between the two.

In the web dev shop, you'll probably learn more about business in general, but
will work less / earn more as a consultant.

I think the authors point is that being a consultant (not service company) is
bad if you want to do a startup, as you get too accustomed to having lots of
money and relatively low hours of work. In that sense, you can't make a direct
comparison with 37Signals as they were the more traditional service company.
At least in case I remember correctly :-)

In any case though, consultants naturally can and do start startups. Often
with less debts due to large savings.

------
lwhi
You don't need to spend all the money you earn. If you save - that money will
stand you in good stead when you're living on close to no income running a
start-up.

------
davidw
I mostly agree with this, however one good thing about consulting is that you
get to see a lot of different realities in a relatively brief period of time,
which might be a good way to generate some product ideas, and also sort out
what you like and don't like about how different places are run.

------
mrschwabe
The biggest advantage the freelancer has is that he can leverage his pipeline
to establish relationships with potential co-founders. By subcontracting them
to work on specific components of projects. Enabling a team to form
organically.

------
sosuke
I don't know if I felt like a dealer as a consultant as much as I did a user.
Kicking ass for a month or so and getting big pay days is a rush on its own. I
don't even spend money and it is fun just to see the big numbers come in. I
just recently stopped consulting and I think it was more like giving up a drug
than selling drugs.

I quickly realized though as others already know there are only so many waking
hours I can work. I did some napkin math and saw my top end was low. What I
really wanted was to have more time and more money which requires a business
that makes money while I'm not looking so I'm off consulting and focusing on
other ideas.

------
powertower
Could someone explain what the difference between a independent consultant and
a contractor is in the software industry?

~~~
abrudtkuhl
Contractors often work onsite for set lengths of contract (3,6,12 months) on
one or more projects.

Consultants often work on a single project they bid on in their own time.

------
jaredmck
Consulting is the opposite of selling crack.

------
skarayan
Do you get to know about the coffee business by working at Starbucks? I dunno,
seems like a strange route.

~~~
clistctrl
If the reason you're working there is to learn about the coffee business...
then yes. If you want to know about the margins, and business side I assume
you would inquire about those things from your Manager. If you're curious
about sourcing etc (things corporate might take care of) I think our analogy
is broken. Working at a startup will let you in on some of the inner workings
of a startup, if you that's what you're looking for.

------
powertower
How would one start as a consultant? Is it based on having industry
connections and relationships or can it be achived some other way?

~~~
rorrr
You just find a company that is ok with hiring 1099s. Call/email a bunch of
recruiters and tell them you want a 1099 work at rate X. These jobs are
usually short term (3, 6 or 12 months). After a few of them you will build
your reputation and you can start charging more.

A few companies these days are willing to hire you remotely, since there's a
shortage of developers. That means you can get NYC level salaries working from
Kansas. That just doesn't happen with full time.

~~~
mattm
Any recruiters you recommend?

~~~
rorrr
To be honest, they all suck roughly equally. They all want to sell your ass as
quickly as possible at the lowest price you will take the job. I worked with a
bunch in NYC, they are all capable of finding you a job - Talener and
JobSpring are pretty big in web development.

One thing I would recommend against is the daily rate. Some recruiters prefer
it for some reason. Hourly only.

If you can get a direct deal with the employer, you can get much more money,
but you must know somebody on the inside to do that.

p.s.

Always, always negotiate the overtime rate. In most places you can get 50%
more for any hours over 40 per week.

------
malkia
So how many people sold crack here, or at least bought?

