
Why I Gave Up A Million Dollar Consultancy - bdunn
http://planscope.io/blog/giving-up-a-million-dollar-consultancy/
======
jere
I'm a really big fan of Brennan, Patrick, and Amy. But there's a pattern here
that makes me very nervous:

* Huge success with consulting and it seems quite reliable

* Huge success on information products, which are sold exclusively to developers/freelancers

* Impressive, but somewhat less success on actual apps (often sold to developers/freelancers)

So the disturbing part is products seem really fricking hard, unless you
include information products in which case they are gold. I've been following
(and rooting for) some of these people for a while and even after years it's a
bit depressing that they couldn't make a decent salary off their best web
applications. And what's worse is it feels like the only people we hear about
finding success are those that are selling _to us_.

~~~
amix
Their business model isn't creating software - it's selling "get rich fast
schemes" and other information for high margins. You are the target of their
sales channel. You can just see it in the financial Brennan posts: 12% comes
from selling software, 88% comes from selling to you -- and he earned most
from selling a $1199! course on how to build your own multi-million dollar
consultancy. It should ring bells as it's a very common theme in most other
markets (where you have a lot of people selling "how to get rich quick" - -
and the only people that get rich by these schemes are the people that are
selling them).

~~~
gavingmiller
"the only people that get rich by these schemes are the people that are
selling them"

Counter point: <http://news.ycombinator.com/item?id=4986168>

My company is making money with Brennan's Consultancy Class and it paid for
itself literally within a week. Brennan's advice has significantly impacted my
company's revenue in 2012, and will continue to do so in 2013.

~~~
amix
I am sure there will be people that make money on the advice that's given. And
I am sure most of the advice is valid. The question is: is it really worth
$1000? Maybe you could have saved that $1000 and done these optimizations
yourself (they seem pretty straightforward and you can find thousands of
articles about retainer fees and fixed bids if you just search Google). I.e.
maybe he is not selling anything extraordinary or "secret", it's just common
sense packaged at a ridiculous price?

~~~
gavingmiller
Is it really worth $1000? Yes it is.

Here's some simple math for you. It would have taken my business partner (he
took the course, not me) more than 10 hours to find all of the advice Brennan
shared. He can bill out 10 hours to a client for $1000. Therefore is it worth
it to pay someone to gather all this advice and package it in a way that
allows him to apply it? Absolutely.

It took me a long time to realize many businesses are looking to exchange
money for time. They have more money than they do time. It's a hard notion to
understand when you don't have more money than time. I suspect you can't truly
know it until you reach the point of being able to make that decision
yourself.

------
charlieirish
There have been lots of negative comments on 'year in review' or 'launch
result' posts like this (see [1], [2] and [3]). However there are a few
reasons why I believe HN should respect these as valid, interesting and "On
Topic" : 'Anything that good hackers would find interesting'.

\- Of Interest. It's hard to disagree that posts like this are of interest to
hackers and HN readers. The four posts mentioned (linked, [1], [2] and [3])
are scientific and analytical. They go in to detail about how four
technically/graphically minded gentlemen have failed or succeeded in their
various startups and ideas. They offer an honest appraisal of their own
decisions.

\- Honesty not Arrogance. Many self-absorbed posts are arrogant in their
success stories. I see each of these as being honest and humble. This is
certainly subjective but I believe them to be modest in their writings.

\- Education. HN can certainly learn from all three of these posts. I think
patio11 put it well when he said: "I would hope that the six-thousand odd
words of narrative in the post and copious linked material contains non-
obvious useful tidbits such as "You can increase the sales of a mature, six-
year old software company by over 60% solely by A/B testing while keeping all
other factors constant."

\- Democratic(ish) Voting. Let's not forget that HN is largely driven by its
readers.

\- Inspirational. I know that many people have taken great inspiration from
these posts, particularly those wishing to move in to their own products or to
write eBooks. One of those is <http://brianfran.co/wroteabook/> who dedicated
his book to Sacha Greif (sgdesign). If HN serves as an inspiration resource to
encourage creativity and success, isn't that enough.

Whilst not all agree, I would like to say A Very Well Done bdunn, patio11,
sgdesign and nathanbarry and thank you for being honest, humble, educational
and inspirational.

[1] <http://news.ycombinator.com/item?id=4982416>

[2] <http://news.ycombinator.com/item?id=4982649>

[3] <http://news.ycombinator.com/item?id=4974121>

~~~
nikcub
The negative reaction is more to do with the old community being invaded by
these new types of posts - a lot of which focus on money (how I made $x in y
days doing z), some sort of secret to being wealthy (top x tips on quitting
your job and making your first million) or some sort of life shortcut.

There are many sub communities within the broader startups and entrepreneurial
fields, but what HN used to be was a group of people who were hackers first
with interests in stories about other startups, new technology, implementing
technology etc.

There is an entire other subculture around working from home, the 4 hour work
week, SEO, affiliate marketing, how to ship product online, how to write an
ebook that can sell for $40 in 24 hours, the micro-ISV space etc.

That later group, who would prefer to talk about how they sold $50k worth of
software or ebooks, is much larger than the group of hacker entrepreneurs who
would much rather read about the latest Javascript library, security exploit
or scientific breakthrough.

Business of Software, the forum that Joel Spolsky ran for micro-ISV's shut
down and it seems everybody came flooding over to HN (or were coming over
steadily over the past few years). This means more of that type of content.

There can't be more than a few thousand technical (or want to be technical)
entrepreneurs, while the group who are interested in breaking away from their
career and becoming an ebook affiliate likely numbers in the millions.

A lot of those negative comments are, I feel, from frustrated hacker
entrepreneurs who _know_ you can make $100k a year online and who don't want
to hear that story again. I didn't click on any of those links when I saw the
headlines (no offense to the authors, but it just doesn't interest me) and the
only reason I clicked on this thread is because I couldn't believe that
_another_ thread that mentions an amount of money in the title had again made
it to the top of HN.

I have gone from clicking on 60-80% of HN headlines to now hitting 10%, on a
good day. I bet that if I did click on one of those headlines, that I too
would have left a smart-ass cynical comment as well, but i'm passed that stage
of protesting submissions that I feel don't belong here and now just move on
(except this thread).

edit: I realize that I made some sweeping generalizations, I don't mean that
people interested in SEO aren't hacker entrepreneurs, I just needed a way to
define what are different groups of people in the audience here.

~~~
tptacek
You think the HN community has a problem with these posts because it's filled
with people who can already execute on the "million dollar consultancy" or
"make 100k online" business models? That the backlash is coming from the
"thousands" of "hacker entrepreneurs" resenting the "millions" of "microISV"
people taking over the site?

Give me a break. The backlash is from people who are so intensely jealous that
they find the idea of making any money outside a job unseemly and would get
back to bitching about how evil Valley VC is.

~~~
larrys
"The backlash is from people who are so intensely jealous"

Behaviorally, I'm wondering if some of the jealousy is coming from the "aw
shucks" tone of these posts.

After all, in high school, nobody was ever jealous of the cliche kid with horn
rimmed glasses that studied all the time, never partied, went to medical
school (or became a rocket scientist) and ended up making lots of money (and
actually married a beautiful nurse). He worked hard he deserved his success.
(Or the athlete who made it into the pros or pick your own example). I think
it's human nature for people to see someone who appears to be naive/lucky and
things just worked out.

A relative of mind recently commented that his college roommate "who had a
lower GPA than I did" made it big on wall street and was living the life with
a beach house and all the trimmings (while the relative was working for a bank
doing just "ok"). It was clear he was jealous and that he felt he was smarter
and had worked harder than this individual.

Just a hypothesis.

Edit: Emphasis on _appears to be_.

~~~
tptacek
This is the same mentality that suggests that 37signals is supercar-successful
because they lucked out and got a popular blog. As if blogs were harvested
from comet shrapnel instead of simply being the result of posting regularly
about your work.

There is nothing Patrick is doing that most people on HN couldn't do. That is,
in fact, _his whole damn story_ ; it is literally his thesis. "I spent 5 hours
a week building 'hello world' and hooking it up to a random number generator
and then refining ways to sell it to teachers; here's what happened". LUCKY
DUCKY! cries HN.

~~~
larrys
"There is nothing Patrick is doing that most people on HN couldn't do"

Sure if they applied themselves and put the effort in. Big "if" there though.

In any case I don't think Patrick falls into the "aw shucks" category at all.
The post he did was long and detailed and I don't remember much (just
rescanned quickly maybe I missed) about how he did it all and managed to still
travel and have fun (he might have but I didn't see that). The sheer amount of
detail in that post is great. I don't even have time to read it fully I can
only imagine the effort that went into writing and editing.

There is also this sentence at the end:

"I think that, aspirationally, career/job/business/etc was never supposed to
be my #1 priority, but be that as it may it sucked up a disproportionate
amount of my twenties."

So Patrick did what he had to do to make it happen, this is no "boating
accident" (it's a shark) and his success is the result of hard work. Not
everyone has what it takes to do that. (I'm reminded of the Karate tournament
that I was in when I was younger where I was absolutely blown away by opponent
who clearly had put way more effort into preparing than I did.)

I'm not sure all, or even that most, HN'ers could achieve that because while
they may be smart and they may read and learn everything they can they might
not actually be good at applying that information, taking chances, having
other things in their life suffer etc. or just plugging away.

------
senthilnayagam
I know how stressful working for clients can be.

Good story for a year of transition, good for you.

But not everybody can be a author or a trainer/instructor. but what I feel is,
it is more like celebrities making more money by endorsement. Every president
who leaves office can get a multi million dollar book deal not the other way
round.

I converted my niche consultancy into an outsourced product development
company, after 6 1/2 years I employ over 150 people, and still believe there
is lot of scope for growth in my line of business.

If I were you I would spend more time with the product, if needed would create
variants or complimentary products.

if your company or the product is the brand your business is scalable, but if
it is "YOU" then potentially it is a bottleneck.

All the best.

------
gavingmiller
To counter some of the negative sentiment around "selling to developers" I'd
like to share a bit of what Brennan's advice has done for my consultancy
business. One of my partners took Brennan's Consultancy Masterclass and here
are some of the outcomes:

* Took two of our "do work once a year" clients into a monthly retainer relationships which will bring in an additional $20,000+ revenue annually.

* Changed our estimating process to value-based, fixed bids. Projects previously estimated at $5,000ish are now closer to $8,000ish, and prospect clients are biting just as hard... harder actually.

* Hard data: two new clients are in the door grossing an additional $6,200 above what we originally would have grossed... and are both interested in ongoing retainers :)

Brennan knows his stuff. His advice has moved the needle on my business. And
we've only implemented a fraction of that advice.

~~~
lscott3
Those are some good numbers! It's key to have an open mind about learning new
things to help improve your business or anything else for that matter.

I think what happens to most people following advice from others is that they
are not "dumb enough" to go with it. They just look for reasons on why tactics
can't work instead of really giving them a shot.

~~~
ky3
_I think what happens to most people following advice from others is that they
are not "dumb enough" to go with it._

That or "suckers don't value what they don't pay for" (attributed to PT
Barnum).

~~~
lscott3
True. Good point.

------
nathanbarry
Such a great story. Glad to see you making these changes. My favorite part of
the article is your income graph (though it needs a legend). Two things are
completely fascinating to me about your story:

\- The consistent, predictable growth of Planscope month over month. Even when
you have roller coaster revenue from other projects, Planscope provides a
solid base.

\- How you are using multiple products to feed off of each other. Selling the
book to Planscope customers, then using the book as a gateway drug to get more
Planscope customers and finally selling the class. Very well done.

Thanks for teaching me so much!

~~~
bdunn
Duh!

* Blue line - Planscope * Yellow line - Books * Green line - Workshop

Thanks Nathan!

~~~
adambenayoun
Out of all the lines you have there - the blue line is the more interesting
(hopefully you'll be able to accelerate that growth).

~~~
nathanbarry
If growth continues at those percentages revenue will start to look more like
a hockey stick.

------
a1n1o1n
When discussing this recent HN phenomenon, consider this:

Seniors in high school often have to be very conscientious when posting their
college acceptances. In the age of Facebook, Twitter, and Tumblr, students
have developed a tacit moral code. That is, anyone who posts "I got into
Princeton!" comes off as inconsiderate and oblivious to other peoples'
rejections. That is not to say that they are those things; just that they
_appear_ that way.

Fortunately, I've seen a promising trend where students will refrain from
posting these self-lauding statuses. If anything, they'll wait it out before
announcing their college decision.

With HN, the situation is more difficult. Entrepreneurs are _constantly_
failing. The holidays are an especially difficult time for many of us, as we
reflect on the previous year and everything that went wrong.

HN needs to develop some sort of a moral code. Many of us are incredibly
sensitive to subject matters like these. I'm not suggesting that people
refrain entirely from posting their 'year in review.' Rather, I suggest people
deeply consider the others on HN before they go ahead posting their earnings
_to the penny_ or submitting their _own_ blog posts to HN, boasting their
_million dollars_.

Evidently, it comes off as rude to many users. Rather than complaining that
people are so _intensely jealous_ , maybe we should find a way to convey the
same messages without evoking such jealousy. Believe it or not, it is
possible.

------
smallegan
When someone says Million Dollar Consultancy I'm guessing that means over 1
Million Gross? If that is the case I'd be more interested in how profitable
the consultancy was. 10 employees alone could eat up most of $1 million.

~~~
lostlogin
Good point - your answer is what I was looking for. I was wondering how on
earth he could have little in the way of savings when earning a million a
year. This might be how.

------
DennisP
I recently got the book _Million Dollar Consulting_ and it takes a somewhat
different approach to it, starting with "charge weekly for business value
delivered, not by the hour." Weiss puts a strong emphasis on having plenty of
free time, and is skeptical of hiring employees at all.

Probably doesn't work for all types of consultancy though.

~~~
krmmalik
I have that book on my reading list. Would you mind giving me an exec summary
in the interim?

I would be very grateful.

~~~
nthj
Basically, charge for the value you provide, not for your time. There's a lot
of other interesting tips & strategies in there, but that was my main
takeaway.

~~~
krmmalik
Thank you. I'm covering the base on that. just had a read on the contents
list. I think i should get round to it sooner than i had planned.

------
antidaily
Kudos! To clarify, you still have the consultancy but someone else runs it?
Because that should be every consultant's goal. Read the E-Myth.

~~~
bdunn
Correct. We're no longer as large as we once were, but I've taken myself out
of operations and get a phone call once a week with a status update.

~~~
krmmalik
i don't understand why decent comments are being downvoted.

------
cityzen
As many others have stated, I appreciate the honesty and am inspired by the
success. My question is how much of these revenues from products (info and
SAAS) are paid out to affiliates? I would guess the numbers are significant.

~~~
bdunn
$0 - unless AppSumo counts.

~~~
cityzen
Wow, that is impressive and thanks for the quick reply. Also, how did appsumo
work out? Lots of sales?

------
photorized
What struck me is that $1M in revenue from 10 people is low.

~~~
bdunn
It was closer to 2 million, but it could have been much higher. It helps to
also be in a lower cost of living area, and included in that count were
support people.

~~~
photorized
Thanks for clarifying. With 2M, and if support folks were included, you were
getting nice output, actually.

What turned me off consulting eventually (even though the money was good), was
the concept of wasting my life bringing other people's ideas to fruition,
while neglecting my own. From the moment I realized that, it became an easy
decision for me.

------
lucian303
Thank you for writing such an honest post. Your courage is great and your view
of work to live rather than live to work which has obviously changed quickly
is inspiring. I too had this revelation a couple of years ago, but have always
thought it too risky. Which is funny. Riskier than a 4 person startup at 1/3
of my rate? Hardly.

I wish you the best for this upcoming new year and look forward to reading
more about personal achievements.

