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Ask YC: how to best make money on the side?
23 points by Tichy 3409 days ago | hide | past | web | 42 comments | favorite
The need to earn money is once again weighing down on me. Realistically I don't see any of my projects support me financially in the near future. The obvious choice seemks to do consulting, but my experiences were not so good. I usually don't manage to work on my own projects in parallel with consulting jobs. Typical contracts for me took several months, and afterwards felt like a waste of time (except for my bank account being happy). Small web design contracts usually don't pay very well, and don't require much programming. I am not a designer, so I would have to share the deal with a designer, which makes it economically uninteresting.

What kind of arrangements have worked for you?

Consulting can be a rewarding experience. You have pointed out all the bad parts, and I agree. But where else can you see how so many businesses are run? Every company that is paying you to do technical work has already provided enough value to their users that they can afford to pay you. That means they must be doing something right. Learning how they provide value, how they decide to fund or de-fund IT projects, learning how it's easy to hack a small system but not so easy when you've got 12 thousand coders and a huge legacy base -- these are all lessons that you'll need to know if you want to start a business that is going to grow.

Plus the money is good, no?

I learned a lot through my consulting work, and I met interesting people and some new friends. It is just that it is taking up too much time. Even 3 months, which might be a kind of a minimum contract, is almost 1% of the productive time I might have left in my life, if I consider another 30 years in the workforce. I hope to be productive longer than that, but who knows.

I wish I could find more interesting contracts, but I am pretty much pigeonholed into Java Web Applications.

Today I finally received the "Collective Intelligence" book in the mail, it is so much fun (I always wanted to do things like that). Perhaps if I focus my projects on doing stuff like that, I could acquire different kinds of contracts. So far most of my own projects are also just "normal" web applications, because I try to make money. Mistake? I believe in the "do what you love and you will be successful" mantra, but in reality I still tend to make compromises with the projects I choose (because of the money scare).

I'm a married guy, so I feel a little better about "selling out" and doing some consulting. I've also moved up the food chain from development into strategic technology management consulting, so when I say "consulting", it's probably a little different than when you say it.

It all has to do with risk profile -- how much risk are you comfortable with? You always hear these stories about founders who made it work just running on credit cards and family loans until they took off. But what happens if you don't take off? You can only max out your cards and family loans every so often. So there's short-term risk like "let's live on noodles and saltines for the next six months" and then there's long-term risk like "I'm going to go bankrupt, lose my house, and my wife is going to leave me". If you're single without a lot of commitments, go for more risk and chase your dream. But remember that even if you get your dream, life is always about compromise.

But if you decide to go to some kind of hourly-rate consulting for a while, take my advice and stretch your skills some. Instead of just Java Web apps, be a team lead for project, or an architect. I think as nerd we focus on the technical aspects of a project, but there are all kinds of good business lessons in there that can help you with your startup, if you go looking for them. YMMV

I don't want to demean consulting at all, I guess I just haven't managed to get into the fun consulting jobs yet. But I also feel the "family pressure", I am certainly not the "gamble away your family" kind of risk person.

I've had consulting gigs that basically made me team leader of a 5-person startup team.

Now how is that different than being a cofounder? I got paid more, and I was able to move on to other contracts without a lot of fuss.

But most of the time, selling yourself by the hour (or day or project) sucks. You're always making somebody else's dream come true instead of your own. Having said that, money is a good thing! And over time you can get better and better at your skills. I guess there is a difference between honing your skills doing stuff for other people and honing your skills doing stuff for yourself. Sure, I'd much rather work for myself, but there's no reason to throw the baby out with the bath water.

selling yourself by the hour (or day or project) sucks. You're always making somebody else's dream come true instead of your own.

Another (potentially big) problem is IP ownership, if your paying client tries to claim that the work on your own project is really theirs.

That's a really good point. If you're moving back and forth between startups and consulting, be sure you know where all o the IP landmines are. I know I have a three-page IP disclosure sheet I include with all of my consulting projects, plus I make sure that my continuing work on my startup is noted. Even then, it can get tricky. I couldn't take a consulting gig in the same industry that the startup was in unless we had a lot of legal input. And that gets expensive.

The problem is that if you're writing Web 2.0 apps then really _anything_ could be considered close to anything else. Writing a 3-D chat program for E-Bayers? Any business with a web site might could use a chat program, and if you have access to their site and their plans, who's to say what parts of your ideas you're getting from them and what parts you're coming up with yourself?

Your comment about the IP disclosure sheet is good. I'd like to see more discussion on this board about how to handle IP disclosure before taking on consulting projects. I don't have the answers but the question is very relevant to me and, I suspect, a lot of other people here.

I have a sweet deal now, where I choose my own consulting hours. The company I work for puts up with it because they feel like, because of my start up, I can keep them on the edge of cool and now. If I did not have that freedom, then I would not be able to keep in tune.

On the flip side I am always telling my self that each hour I spend on consulting, is one that I am not spending on my company.

For now, we are trying to think of ways to increase our day one revenue for our company so that we can stop consulting sooner.

We have considered other options too like offering a sliding pay rate depending on the number of hours per week we are consulting. At less than 20 hours per week, we might charge 50$ per hour, where hours over 20, we might charge 150$ for those impatient customers. Hours would be pre-booked. We have yet to try it, but WE ARE STRONGLY considering it.

Something else we have thought about, is having a consulting division to manage our time, our rate, and to increase our marketability as a group. As a company we might be able to bill out of the gate at 150$ an hour, vs. as an individual we might be able to bill at 50-75$ per hour. This would also give us a way to charge for custom features.

Some thoughts on our side, now that we did not get into YC, we need to figure out how to stick around long enough to turn a profit.

We also got an offer from a local marketing company, that is interested in what we have, but we do not yet know how to productize what we have for them and licence it.

The only way I have figured out how to do both is by dedicating each day to one or the other. For now: Monday and Wednesday: consulting. All day Tues, Thurs, Fri, Sat, Sunday: my startup. I don't even bother trying to work on my startup on Monday or Wednesday night. Any user requests from my clients are held until Monday and Wednesday. I even have them trained to email me: no more interruptions.

This way I get the best of both worlds. Try it.

What kind of consulting work do you do? It sounds as if you can work from home? I usually work on site. There were some projects where I could work from home, and I liked it, but they tended to be the smaller ones that yielded less money.

Edit: anyway, good advice, I will try it ;-)

I do contracting programming for local small businesses on their legacy systems. Has nothing to do with my startup, but is great experience anyway. Things come up that I could never envision, but I'll remember, so my software won't ever have these problems. I can dial up from home or work at their office. One client even gave me my own cubicle. I usually work at their site for several reasons: makes up for the loneliness of the other days, some projects have to be done on site (printers, phones, network, etc.), and, most of all, I want to see and hear their employees all day long. Can't get that from any book.

I had side projects and consulting opportunities on the go but I shelved them all to concentrate 100% on my startup. Luckily, I live at home so I dont have the pressures of some people but I think outside "consulting" is not sustainable in the long run.

I have noticed since I have been 100% on my startup I have not only worked harder, Ive worked smarter. Save up from consulting and hit the startup....

Full Time

My question is this: where do you find your consulting gigs? Do they come to you entirely word of mouth, or do you actively pursue postings online and in papers and such?

The big ones all come through "anonymous" recruiters. It started with Jobserve and Gulp, but now so many recruiters seem to have me on file that I don't have to do anything. That is maybe also a problem: I don't really know how to actively look for interesting projects. Even my personal homepage has been offline for three years now. I think I'll to relaunch it, start a blog about things that interest me, and try to find some more interesting contracts.

Smaller projects also come through recommendations, but not the big fish - most of them also have a policy to not work with individuals.

I was going to ask this same question. I'd love to do consulting but I don't know anyone. What do I do exactly to find gigs?

I started by working through the temp services. Usually they have some general-purpose programming gigs. Once I got a few projects under my belt (and did some freelance programming work in the area) I went online and started spamming all the resume sites. Then the gigs come to you. Ideally you want to move into a word-of-mouth situation, but sometimes it takes a bit to work up to that.

What kind of resume sites? Like monster.com, or special ones for freelancing?

Special ones for freelancing. I had good results with Jobserve, but I am not sure how popular they are in the US? I did not upload my resume on Jobserve, only contacted a few agents who were searching. They took me on file and that was it. I uploaded my CV on Gulp.de, and got one contract from there, but it took a while.

the current consulting job i have, was via word of mouth, and it was because i was instramental in getting our local barcamps going.

i have always found bennifit in having a lot of things going on, especially in community building. people tend to want to help those that are generally fairly selfless.

I always did IT consulting, when I needed some spare cash.

Serious Linux nerds are in high demand and low availability almost everywhere I've ever lived. But, if you're not well-equipped for IT, that might not be the way to go. Tech support is also the highest stress technical career (there was a study about it a couple of years ago, and if I weren't lazy I'd look it up), so you don't want to do it for long if you haven't the patience of Job. But billing $100/hour is not at all difficult, so you only have to work three or four days a month to scrape by...don't underestimate the time spent on paperwork and such, though...some companies make you work an extra day for every couple of days you work, in dealing with expense forms and other assorted crap. I much preferred working for small companies, where one person made the decisions and when he or she said to the accountant, "Write Joe a check", it would be in my hand before I walked out the door.

But, IT has the advantage that you're generally working on small jobs--things that can be fixed in a few days, or a couple of weeks, tops. They are well-defined, like, "We need to move our web servers to a new data center", or "our mail server isn't filtering spam and it's letting viruses through". You know when you're done with this kind of project, generally.

That said, startups are kinda like a marriage. Having a little something on the side isn't likely to turn out good for the startup. Have you considered raising a little money to get you to launch and revenues?

Could you elaborate on what you mean by "serious Linux nerds" in this case? Do you mean someone who uses Linux every day or a system administrator in a former life?

There is no "system administrator" college degree...so you pretty much get to decide when you're equipped to be an IT consultant, and what your time is worth. Of course, repeat business is the only way you'll make decent money, so you'd not want to exaggerate your accomplishments. But, "serious Linux nerds" means people who are capable of setting up mail, DNS, web, users, LDAP/NIS/Samba, NFS/CIFS, and hooking it all up in such a way that it can operate without you present (I always used Webmin for this aspect--it has great ACLs so you can give as much or as little privilege as your customer needs to be able to create/manage users without breaking anything, for example).

Even if you're not an expert at all of these things, if you know what they're for and can read the documentation and make all of them work in an afternoon, then you're well-equipped (better equipped than many Microsoft "certified" techs) for the job. Most small businesses don't even know what they need, much less how to set it all up. So, when you go in, you'll find that they have no idea what you're doing, why you're doing it, or how it all fits together. How you explain it is more important than how you implement it when it comes to whether you're called back or recommended to other businesses. It has to work, of course, but as long as you're explaining the job clearly and in simple terms, the customer will remain happy (try to look busy, as well...sometimes you'll be waiting for installs and such...do something else during that time, even if it's busy work).

Note that I'm not necessarily recommending this path. IT support sucks. It's a very stressful field, where the only time you hear from people is when there's a problem. In fact, the only time you hear from people is when there is a problem so severe that they can't get work done (people are so afraid of computers, and of thinking about technology, that they'll ignore trouble signs until the breakage is complete). Thus, your customers are almost always stressed out. I frequently worked for a company that had a quarter million in daily revenues, and so a day with all of their people off-line cost them significant sums of money. I have great respect for the fellow who built and owned the place, as he kept his cool like a champ, no matter how tight the downtime schedules were...but some of his employees (and share holders) did not.

Oh, yeah, you'll also work a lot of nights and weekends, because that's when companies can afford to be completely off-line.

I was actually considering looking for a front desk job in a SF condo. The guy in my building has a desk with a comfy chair and just sits at the front desk every day from 9 to 5 and surfs the net with his laptop, and occasionally accepts packages from time to time. Thats time that I could be hacking! I know from the HOA that I pay that he's paid quite decently. So what more can you ask for? A cushy, decently paying job in SF with a desk, chair, and internet. Perfect for hacking.

I've considered the similar approach of getting a job as a late night security guard on an industrial site. I've heard of the unending hours of doing nothing, and I think of the hacking potential.

I wonder if anyone has ever created anything notable while working that sort of job.

There is always Starbucks.... Work 30hrs/week so you get health insurance and other benefits. The job will be like some brainless activity that programmers really need time to time.

Bonus: You get to meet/interface with lots of people, and maybe you can score some hot chicks on the side.

Sucks: Pay. 8/hr or 10/hr is not really much, but I guess enough to buy lots of ramen noodles for a starving programmer.

I would actually be interested in working in a cafe for a while, just for the social experience. But I just can't justify it economically. Except perhaps when thinking it gives me a minimum income for peace of mind. Then again, consulting for the same amount of time would buy much more time.

That's really not "on the side." That's just about full time.

Plus, rigid hours?

Have you tried getting paid ads on your sites, especially the porny (er, "erotic") one?

I'm not being facetious: one of the O.P.'s web sites is "http://3boobs.de/" or, as he himself defines it "erotic games".

Porn-ish sites like that do attract advertisers.

Details or it's not true!

I've found that advertising rarely even pays for your server bills when you're getting started. More often it just annoys your users and gets in the way of doing something more productive with your time.

Traffic attracts advertisers, porn-ish alone doesn't do anything. Or why would advertisers be interested?

It seems that the affiliate ad model for "dating" sites pays well: http://money.cnn.com/magazines/business2/business2_archive/2... (note the paragraph which starts "To expand without investment capital...").

It's also interesting to see that when AdBrite loses an adult advertising partnership, it's an important loss for them: http://valleywag.com/tech/online-advertising/philip-kaplans-...

AdBrite is private, though, so we don't know what percentage of adult ads account for revenues, but they do have an entire other site -- BlackLabelAds.com - dedicated to adult ads.

Anyway, it was just an obvious suggestion, given the 3boobs site you'd already created.

Best of luck to you, whatever you do.

That site could theoretically make money through the affiliate links. We didn't put other ads on it yet, because we don't want the typical hardcore porn advertisements. Perhaps we can find a suitable advertising agency - I think adwords are out, because they don't do erotica.

don't--you can't do a startup on the side, it won't work.

you have a finite amount of (creative) energy. it's all or nothing.

Way to dodge the question. You provided this guy with no realistic answer.

Full-time effort >> part-time effort. However, there are cases where part time is good enough.

It varies on how much (smart and well funded) competition there is, barriers to entry, your own personal ambitions. In general, larger and stupider the competition, the more likely you can do ok with part-time effort.

Joel's post on being a Ben and Jerry's vs. an Amazon can give some insight on this topic: http://www.joelonsoftware.com/articles/fog0000000056.html

Part-time effort always > no effort

Joshua Schachter would disagree with you

I think that you can leverage your position into the fetish market. Buy a camera. Bootstrapping sells.

check out Paul's early work at pg13bootstrapping.com [nsfw] [login required].

14th and Broad St. $20 for a handjob.


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