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Ask HN: Consulting in tech. How to start?

44 points by artembugara ↗ HN
So, I've been thinking about starting consulting (not freelancing).

I am working on my own company that sells a news API. We've launched a month ago, it's fully bootstrapped. I have money for a few more months but at some time might search for a "job".

Does anyone here works as a "self-employed" consultant?

How do you find your clients?

21 comments

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gregjor
What distinction do you mean to make between freelancing and consulting? Those terms usually describe the same thing.

http://typicalprogrammer.com/how-to-start-freelancing-and-ge...

elric
Not OP, but in my book consultant and freelancer are orthogonal terms. You can be both at the same time. Consultants are brought in to address specific problems -- often on a freelance basis. I believe what OP is trying to avoid is being "expensive furniture", "body shopping", essentially being a long term employee without any of the benefits, that sort of thing.
artembugara
IMO, freelancer is someone who resolves a well-defined problem. Consultant is someone who finds a solution (then, usually, resolves it).

So, hiring a freelancer when you do not understand what a solution should be is usually a misstep.

emerged
Consulting to me carries connotations of much higher skill and much higher pay by orders of magnitude.
Chris2048
Then call yourself a consultant and raise your prices ;-)
emerged
Pretty much, although with high paying consulting jobs you usually are hired because you're trusted for some reason. Either through friends / friend of friends and/or industry fame.
luckylion
Multiple orders of magnitude? Work for a month, relax for a decade?

It's funny how people understand terms differently. To me, consultant says mostly "working for a large-ish consultant company on large projects for large companies", while freelance is "self-employed", working on your own.

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jacquesm
I aim for 3:1 or so when working alone, work real hard for three months then have the rest of the year to pursue my own projects.
luckylion
Don't you get tempted to just work the whole year (and the next two or three) and just retire?
jacquesm
Too many side projects... I get tempted not to work at all and cut my expenses even further. Also, I'd rather just cherry pick the good jobs instead of lowering the price to be busy all the time.
gregjor
The terms have nothing to do with skill or pay.

Freelance means working for different companies as an independent resource or expert, as opposed to an employee.

Consultant means someone who offers advice professionally.

One can do both at the same time. Orthogonal, as someone else wrote.

People who get jobbed out by “body shops” to fill chairs or boxes in an org chart are called temps, or contractors. Contractor can also refer to anyone who works according to a contract rather than an employment relationship.

In the real world the terms get used interchangeably.

Spearchucker
The distinction between freelancer and consultant is irrelevant. What is relevant is what consulting is.

Consulting typically means solving problems for clients. Often that starts by assessing the client's environment to gain insight into the client's stated problem, then defining an appropriate solution which the consultant may or may not lead/drive or be involved in implementing.

That of course comes with a lot of additional skills such as strategy, managing stakeholders, risks and so on.

Best book I can recommend is "Designing Solutions for you Business Problems" by Betty Vandenbosch. Because great consulting is not just about efficient problem solving. It's just as much creative problem finding and building relationships to make a solution happen.

As for finding customer 1 - I did it by demonstrating the inefficiencies of the software development practices at a civil service I was contracted (freelance, I guess) by. That was 14 years ago. After that it's been word of mouth.

[dead] potatohedz
You should focus 100% on your news product. Hustle, do whatever it takes to get sufficent clients signed up that you break even. You cannot afford distractions, first and foremost you need to SELL. You are pretty much guaranteed to fail otherwise.

And FWIW I like the product, and I'm a potential customer. The news that the founder(?) lacks faith in it is less than ideal.

I was tempted at times to do consulting when we were in the early days of the business. If I had, we wouldn't still be here 11 years later, I'm sure.

Good luck!

brudgers
How do you find your clients?

Always one at a time and usually painfully if you have to ask. Clients are generally a lemon market. Good clients (well paying with realistic expectations — born of professional experience —and regular work flow) already have a list of consultants who meet their needs and with whom they have working relationships. By default almost any client you encounter as a new consultant will be lacking in some or all of wherewithal to pay, realistic expectations, and experience. Sure sometimes they have lots of work but it will tend to be bad projects.

To put it another way there is not a lot of unmet demand for consulting and building a client list takes many years of relationship building, sufficient capitalization and luck.

Luck because clients come one by one. And the world is full of buses. Most people didn’t appreciate Charlie. Because we had this in common we understood each other in a particular way and could cut out a metric ton of bullshit and just work together. Charlie ran a growing retail company and had several decades experience. There were lots of viable future projects of the type I was cut out for. A really good fit.

A few months in Charlie abruptly retired to his farm with an aggressive brain cancer. Dead six months later. That was my luck. It wasn’t good just better than Charlie’s.

wayneftw
You can contact one of the big recruiting agencies like Robert Half and they will negotiate contracts for you. They will also take some unknown percentage above whatever hourly rate you negotiate with them.

However, if a client likes you they can hire out outside of the recruiter (usually by paying off the recruiter for the option.) I've gotten hired for a few jobs like this and then I had a network of clients in my niche who got me more work by word of mouth, without any recruiter involvment.

Other jobs I've gotten by simply being prepared for pure luck to happen, like the time when my landscaper said that his full-time employer needed an app. I already had my LLC setup, I had contract document templates ready to be filled in and signed. I had business cards. A single page static website to describe my capabilities. After taking some notes and spending a weekend building it - I walked into their office with a rough prototype of what I heard that they needed and after a second meeting I locked them in for a year contract at $90/hour. (The recruiters were giving me $50/$60 per hour and probably collecting $90-$150! (they don't really tell you).)

kthejoker2
Margin is typically 35% (less if the contract is longer or if you're part of some bundle) so yeah, you bill at 90, that's client billed at 90 / .65 = 140 or so.