Ask YC: Part-time consulting while working on a startup, good idea?

Not if you can help it, unless the consulting directly feeds into your product. I find it's better, mentally, to focus on something 100%, rather than worrying about both your product and your clients problems, unless the latter is really something you can do on autopilot.

Two little stories: A friend of mine has been trying since 10 years to transform his consulting company into a product company - without success. The projects he has implemented were too expensive in terms of development and maintenance to have enough time apart. And none of the projects was general enough to produce a code-base that could serve as a product for several customers. Another friend implemented a little access-based niche-domain tool during an internship for a big enterprise that he was able to resell to several competitors and even several times within the same enterprise. He is working around 5 hours per week and makes a confort living. Honestly, I think the first story gives the more likely scenario.

It's a decision you have to make depending on your finances.

If you can work for 3 months on the startup without feeling any financial burden I'd go with that but if these 10 hours of work a week translate into a good chunk of money it may be worthwhile to do it.

A few questions to ask yourself:

1. Could the 3 months potentially turn into more?

2. Can you set the hours you will be working to accrue the 10 hours or will the client be calling you whenever they have issues? The first scenario is more preferable.

3. If you do the 10 hour option you can try to do it the same day as your partner so then you have more time together.

Just my thoughts..

I can only think of two good reasons to do consulting while you're working on your startup:

1) You don't have enough money to survive without the income from consulting. 2) Your consulting gig will help with sales in your startup (specifically, you think the company you're consulting for will buy your product once it is built).

Even if reasons 1 and/or 2 are at play, it still is a distraction. I do consulting for reason 1, but I plan to outmode that with an upcoming angel round. I am not doing all that much consulting these days anyway, but I still feel like it is a hindrance. See a semi-recent blog post about it here:

http://blog.jabbik.com/2008/03/momentum.html

Q1) Do you have the resources to survive if it takes 6 to 8 months instead of 3 months? Being done with a product in month 3 doesn't mean sales will start rolling on month 3, day 1. Think revenue date, not launch date.

Q2) Do you have the mental self-discipline to focus on one thing at time... even when you have two things on your plate or are you more productive when you only have one thing on your plate?

Q3) Have you started talking with your future customers yet? If not, talk to them first. Confirm they need what you're building. Do they need it bad and now? Assumptions can hurt.

10 hours per week is not that much, stick with the current project, plus, its good to have some cash flow for ramen :-).

So, this is exactly what we've done. Briefly:

(1) The comments saying that it's hard-to-impossible to transition from consulting to product are correct. Two problems: (a) it takes more than just discipline to walk away from money --- it takes reckless speculation, and that's painful; (b) consulting hours don't bucket neatly, and don't schedule neatly, and so you're constantly being disrupted.

(2) That said, we now have multiple full-time people working on product, which we're launching soon. The classic consulting model is a pyramid scheme, where people claw their way to "partner" and get fat off profit sharing. In the product-consulting model, instead of setting aside money for partners, you pay full-time devs. This appears to work.

If I had to choose between VC and consulting, and my consulting practice was lucrative (ours is: software security billable hours are expensive), I'd do consulting again, even though it cost us a year. Reasons:

* I'll trade a year for control over my own destiny.

* The year is a false economy, since, for most companies, getting funding takes many speculative months.

* There are things about running a consultancy as a business that translate to running a product business, and running a business is a valuable skill.

* The networking and customer face time you get from consulting is hugely valuable.

* Time to market is simply overrated.

Contract work can be a great way to bootstrap the business if you're careful about it. I chose projects that we're high paying and easy to walk away from (corporate training, wrote a second edition of a book, strange enterprise documentation gigs).

Once we had a product we could sell there was a temptation to push it on any person with money. The problem with taking those kinds of customers is that it ties down your product. Keeping an independent stream of income would have given us more flexibility after we'd launched the product.

Also, some people say that having side projects makes it hard to focus on your main project. I found the opposite, having a main project that I loved made it very hard to focus on the side projects.

Its easy to get consumed by consulting and not make much progress on your own products. With contracting, you must spend time finding new contracts, accounting, and sometimes even legal issues.

I wasted years contracting instead of working on my own projects full time. All my energy was drained by the clients I had.

I would recommend putting 100% on the startup for 3 months. I find that I can get a lot done if I put 100% of my time into anything for 3 months. You'll probably get enough done that people will be able to get an idea about what the product could become. By that time you'll either be able to find investors or realize that it's time to move on (or go back to full time consulting).

There is a reason the yc session is 3 months long. That's probably about all you'll need to prove your concept. Save up the bare minimum you need to survive and go. Good luck either way!

Thanks for everyone's input. To answer some questions and comments being posted: 1. I do have enough funds to last 6 to 8 months on my own if I had to.

2. I'm not sure if I'm going to learn much on the project I am on because now my role is more advisory, but I will interact with potential service providers for my startup.

3. I do think that I have issues focusing on two projects at the same time because I like to do a good job on whatever I'm doing. This also means that there is a good possibility of me spending more than 10 hours a week on the project.

4. We have been talking to a small set of our future customers, and they can't wait for it to launch. And it needs to launch now.

I've made the decision to go 100% on my startup, and not worry about consulting. Someone reminded me how I worked through college and have always regretted it, wishing I would've have just taken a loan and paid more attention, had fun, etc. I don't want to look back at this and say "If I just did it 100%"

Thanks for all your advice and opinions, it really did help.