

Ask HN: left the consulting company I started, what now? - koevet

Two years ago I started a consulting company with a colleague. We initially focused on Java&#x2F;Scala development for the enterprise and moved to infrastructure automation (CI, DevOps and so on). Business was good but not so great.<p>We did many mistakes, starting from working in two different countries and targeting Europe as our market.<p>Last Monday I have decided to pull the plug and sold my 50% share of the company to my colleague and decided to go back into freelance consulting, mainly for financial reasons (I live in a very expensive city, I have a family).<p>I already miss running my company and I want to start something new as soon as possible. Consulting is a bitch, especially in Europe and especially with this harsh economical situation. I&#x27;m looking into creating some product: I strongly believe that automation (DevOps but also software life cycle automation) has huge potential in the enterprise world. What do you guys think? How do you cope with the entrepreneur bug?
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yurylifshits
What's your runway? Do you have money for 3 months? 6 months? 9 months?

If you have personal runway for 1 year (around 40-60k euros, I guess), you can
start a product company.

If you have less, I recommend to look for a "special client". Some company
that will pay you 20-50K euro for custom solution and allow you to retain full
IP ownership. You can turn it into a general product after delivery to your
initial client.

Good starting point: [http://earlydays.io/guide/](http://earlydays.io/guide/)

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gexla
> I already miss running my company

You are freelancing now. You are already running your own company.

You were doing consulting before, and now you are consulting in the same
space. This is the same space your company was operating in but you left for
financial reasons. Now you find consulting is a bitch, but apparently
consulting was a bitch with the company you left.

It does sound like something needs to change.

I'm not sure anyone here can give you advice that you don't already know given
you have been working in this space with your old company and now as a
consultant. Maybe your partner was holding you back. Maybe you will find new
inspiration by going solo. Maybe you need to move to a different area of
consulting.

Products is probably a good direction to go. The big difference between
products and consulting is that you can build a product and sell that product
multiple times. With consulting you are limited to the time that you have in
one day. If you max out your time and you still aren't where you want to be,
then you have nowhere else to go but raise your rates or higher more people.
If your customers will bolt when you raise your rates and you can't find more
work for your new hires, then you are pretty much stuck. Maybe that was the
problem with the old company?

~~~
koevet
Freelancing in Europe is most of the time very similar to be a full time
employee. You have to show up at your customer's premises and work for 8/9
hours with the other employees. No way to deal with more than one client at
the time, unless you start working 16 hours a day - which I'm not afraid of -
but it's not a sustainable model on the long run. So, no, I don't think that
being a freelance is equivalent to running my own company.

We had multiple problems in my company. The main one, I think, was new clients
acquisition. It is a very time consuming process that often results in lot of
(paper) work and meetings and no contract signed. Another mistake, as I
mentioned, was not focusing on one or two specific geographical markets.
Flying people around Europe, paying them hotel/food and daily allowances it is
costly and reduces the margins greatly. Not to mention the language problem:
very often, if you want to work in Germany (just an example) you got to speak
the language.

~~~
thibaut_barrere
I switched to "5 hours sessions" per day and I'm focusing on 2 clients, so
that I have time for my SaaS, for my family, and as well a bit of margin to
handle emergencies.

(but I definitely agree that freelancing and running a SaaS or product-
oriented company is absolutely not the same...)

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toumhi
Which country are you located in? Why was targeting Europe as your market a
mistake? What are you freelancing on? I'm a freelancer getting started in
France after a few years of web dev experience and thinking of targeting the
European startups so am really interested in your experience :-)

Personally after having been employed for many years and tried to build
products full-time, I'm currently working on getting freelance clients and
thinking of building a product later, to serve these same clients. That way
you got plenty of validation for your product.

You could do the same: consult on devops for your niche, and later on or at
the same time build a product out of the biggest pains you observed. Note: a
product could be software but also an education product (ebook or course).

This would help with getting even more insight into the problems of your
customers while buying you some time to build your software product(with the
money earned from your education product) since it takes much more time to
validate and build a business on.

~~~
koevet
Hi there, I'm currently located in Zurich, Switzerland.

Targeting Europe as a small consulting company is, IMO, a big mistake for the
following reasons:

\- Language: even though I'm fluent in 3 languages and my biz partner in 2
other languages, still there are certain countries where speaking the local
language makes all the difference in getting a contract. I'm thinking of
Germany, France or Italy. Scandinavian countries are way more relaxed in that
regards but it is still cumbersome sometime to attend meetings with older
folks.

\- Hidden costs: when you start having clients all over Europe you need people
to show up once in a while. So you hire these people (and you have to be sure
they are happy to fly around Europe), pay them daily allowances, hotel, plane
tickets, insurance. These costs, along with the Europe high labor cost, kind
of shrink the margins.

\- Hard to get new clients: unless you are a very big consulting company, you
need to convince your clients that you are not going to sit with them 5 days a
week for, say, 6 months. This is often a show stopper because clients don't
know you - they only know you are small - and simply don't trust you, at least
at the beginning.

\- Big clients are slow: we tried to target large enterprises and this was
another mistake. Large companies are very slow in deciding if they like you or
not. The process to go from first contact to a signed contract can take over
one year.

Feel free to drop me an email at luciano[ ]fiandes.io if you need more
information.

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thibaut_barrere
(disclaimer: I run [https://www.wisecashhq.com](https://www.wisecashhq.com) \-
cash flow forecasting tool)

I do not cope with that bug because it wouldn't go away - and product building
is just so much fun :-) I agree that freelancing is hard, on the long run at
least.

My current solution to this is to mix consulting and product building.

If you can project your cash flow, you can figure out how many days of
consulting are required, and at which rate, to still keep one day or two to
bootstrap your product.

Then you have to find clients that will accept to keep you around for a
limited number of days per week, as well.

It usually comes with raising your rates too, because if you need to freelance
full-time to support your family, then you won't be able to make spare time.

This is a topic I like to discuss a lot, so feel free to ping me anytime
(thibaut.barrere@gmail.com) if you want to exchange a bit!

~~~
koevet
> Then you have to find clients that will accept to keep you around for a
> limited number of days per week, as well.

This is the hardest bit, at least in Europe and according to my experience.
Cheers for the link, I'll look into it.

~~~
thibaut_barrere
The trick is to have enough "time-wealth" (eg: independence, in days) to be
able to turn down contracts because they do not match what you want.

I'm doing this from Europe :-)

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contextual
Get busy my friend. Start with a small project you can finish in a few days.
Launch and give it a little marketing love. Rinse and repeat until you have
some revenue streams coming in. Good luck!

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kfk
_I strongly believe that automation (DevOps but also software life cycle
automation) has huge potential in the enterprise world._

Can you be more specific on what you mean by automation?

~~~
koevet
By automation I mean:

\- Server provisioning (Puppet, Chef, Pallet and so on)

\- Software life cycle automation (Continuous Integration and deployment,
automated testing, scaling testing to virtualized environments, static code
analysis)

\- Cloud-based automation - same as server provisioning but on the cloud and
with different providers

Lots of enterprises don't invest much time and effort in automating their
infrastructure. That leads to convoluted deployment procedures and horrible
problems in production: I guess you guys know exactly what I'm talking about.

~~~
swissnamir
Were you able to do any consulting around continuos deployment - integration
etc. i'm curious to know if any of your existing client would buy a short
workshop that covers topics such as automated provisioning, TDD ... etc. it
could be a lean way to start building your frameworks , tailor specific things
that create value for your client

~~~
itstripe
You can always buy a software intended to provide some service. A good example
is telecommunications - it's always needed and provides continuous cash flow.
A good example is VoIP or SMS sending software. You can check such software
here: [http://www.itstripe.com/smpp-server/](http://www.itstripe.com/smpp-
server/)

