Ask HN: left the consulting company I started, what now?
We did many mistakes, starting from working in two different countries and targeting Europe as our market.
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).
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'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?
14 comments
[ 3.0 ms ] story [ 46.2 ms ] threadIf 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/
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.
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.
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!
This is the hardest bit, at least in Europe and according to my experience. Cheers for the link, I'll look into it.
I'm doing this from Europe :-)
Can you be more specific on what you mean by automation?
- 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.
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?
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.
(but I definitely agree that freelancing and running a SaaS or product-oriented company is absolutely not the same...)