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Ask HN: What is your experience in tech consulting?

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Re: Ask HN: What is your experience in tech consulting?

#111

Post by ensemblehq »

Lutger wrote: post #46
tptacek wrote: post #40

Earlier quoted context omitted.

I mean that some of your most lucrative clients will take forever to pay out invoices.

This is often deliberate. Postponing payment of invoices means you have at any given time a larger warchest to invest and gain an edge, or conversely have to pay more interest. CFOs often set a target and push back on swift payments. Some companies even risk lawsuits to be able to not pay the bill just yet, though it obviously depends on context what you can get away with and what harms your reputation too much.

This is just how large enterprises work. Nothing deliberate. They operate in longer cycles.

Re: Ask HN: What is your experience in tech consulting?

#112

Post by ggwp99 »

tptacek wrote: post #19
cik wrote: post #16

Just a few random thoughts from ~10+ years of doing this. These are not ordered, as I've been out of this for the past few years. - Contracts, contracts, contracts - Immediately stop all work when any customer doesn't pay an amount owed. There's a natural inclination to keep going, but this is a firm of pathetic cost fallacy. - Work with an escrow provider and eat the fees. You'll generally have a 10% non-collectable…

I would push back on a lot of this. These seem like strategies to avoid getting ripped off by shitty clients, and I'm sure they work, but they're also a strategy to avoid closing business with great clients. Try to focus on the kinds of customers you won't ask for down-payments and up-fronts --- the kinds of customers who will routinely delay a full quarter or two on payables, and you'll put up with it, because they'…

100% agree with the utilized part. 100% utilized means you can't focus on growing your business and everything else which is not consulting work.

Re: Ask HN: What is your experience in tech consulting?

#113

Post by ggwp99 »

arcturus17 wrote: post #51
JamesBarney wrote: post #47

Earlier quoted context omitted.

100% agree, if you're 100% utilized than you're working for your business not on your business. I have three other pieces of advice. One you need to decide whether you want to run a consultancy or be a consultant. The first means scaling by hiring more people the second means scaling by increasing your rate. You can make more money doing the first but your job will eventually be 100% account management and sales. The…

This is all real, down-to-earth advice that corresponds with my observations after three years doing this. > A good first step is pick a specific problem and/or a specific industry To add, I prefer thinking of three levels of specialization: 1. By vertical or industry (oil and gas) 2. By problem or technical domain (user interfaces, data pipelines, etc.) 3. By platform (Salesforce, React, etc) 2 and 3 could be confla…

I agree specification is better, but the issue is that I am afraid that would limit my clients especially that the first client is the hardest to find. I am working though on trying to be a "general" consulting company with a short term focus on one niche.

Re: Ask HN: What is your experience in tech consulting?

#114

Post by ggwp99 »

michaelt wrote: post #70
tptacek wrote: post #19

Earlier quoted context omitted.

I would push back on a lot of this. These seem like strategies to avoid getting ripped off by shitty clients, and I'm sure they work, but they're also a strategy to avoid closing business with great clients. Try to focus on the kinds of customers you won't ask for down-payments and up-fronts --- the kinds of customers who will routinely delay a full quarter or two on payables, and you'll put up with it, because they'…

> Try to focus on the kinds of customers you won't ask for down-payments and up-fronts --- the kinds of customers who will routinely delay a full quarter or two on payables, and you'll put up with it, because they're paying for several people's salaries, Must be nice to have so much money in the bank that not only can you pay 6 months of several people's salaries, but you can also tolerate the risk of the client not…

Agreed, if scaling with full-time employees (which I am avoiding to do in and working on subcontracting) no advance would be hassle.

Re: Ask HN: What is your experience in tech consulting?

#115

Post by ggwp99 »

pjmorris wrote: post #57
cik wrote: post #16

Just a few random thoughts from ~10+ years of doing this. These are not ordered, as I've been out of this for the past few years. - Contracts, contracts, contracts - Immediately stop all work when any customer doesn't pay an amount owed. There's a natural inclination to keep going, but this is a firm of pathetic cost fallacy. - Work with an escrow provider and eat the fees. You'll generally have a 10% non-collectable…

> - Never price at the top of the market. It's better to be 100% busy at 80% of the fee structure, than it is to be 50% busy, at 125% of the base rate. I tend to favor this line of thinking most of the time. But sometimes I'd rather be 50% busy, and pricing is one way to influence that. It is worth understanding the power and purpose of pricing. My favorite discussion of pricing for consulting is a chapter in 'Secret…

Thank you for this book will look into it.

Re: Ask HN: What is your experience in tech consulting?

#116

Post by ggwp99 »

boring_twenties wrote: post #102
cik wrote: post #16

Just a few random thoughts from ~10+ years of doing this. These are not ordered, as I've been out of this for the past few years. - Contracts, contracts, contracts - Immediately stop all work when any customer doesn't pay an amount owed. There's a natural inclination to keep going, but this is a firm of pathetic cost fallacy. - Work with an escrow provider and eat the fees. You'll generally have a 10% non-collectable…

> - Never price at the top of the market. It's better to be 100% busy at 80% of the fee structure, than it is to be 50% busy, at 125% of the base rate. Wait, what? I'm an FTE, never been a consultant. But personally, I would be ecstatic to give up 50% of my income in exchange for 6 months off per year. Your numbers imply giving up only 21.875% of potential income, unless I'm mistaken. That seems like the mother of al…

To be honest i think that at first 80% is better in order to grow a portfolio and credibility in the industry, then the 50% is great. I don't think anyone would take the highest base rate at the beginning anyway.

Re: Ask HN: What is your experience in tech consulting?

#117

Post by ggwp99 »

danieljacksonno wrote: post #69
homeslike wrote: post #49

Earlier quoted context omitted.

couple of questions to that: > * You can win by getting every contract reviewed, or by just signing them blindly could you elaborate on that? not sure i understand > * Keep your SOWs vague that can help you or hurt you, right? i'm working at a big consulting firm and our motto is to write the SOWs as explicitly as possible to prevent scope creep. > * Don’t do conferences/conventions why? isn't that a perfect way to s…

For SOWs, I find that it helps to keep them very explicit about the larger goals and the "why" of the project, but vague on details, and then enter into an agreement where the customer pays you to keep scope at a level where the larger goal and "why" can be accomplished within budget, not into an agreement where the customer controls the scope and you just balloon the budget if they increase it.

I read that Alan Weiss preferred to keep SOW detailed so that the client cannot give you extra work during the scope that was not the initial focus due to the vagueness.

Re: Ask HN: What is your experience in tech consulting?

#118

Post by ggwp99 »

bitwize wrote: post #39
keithwarren wrote: post #17

20+ years since I started my firm, we are very successful and I love our team and our work. Few points… Word of mouth is best advertising. Prove yourself trustworthy and honorable, there are still assholes who will try to take advantage of you but on balance, this will pay off over time. Don’t work for free. If companies want you to work because it will look good for referrals or something- run. Don’t work for equity…

> Don’t work for free. If companies want you to work because it will look good for referrals or something- run. Obligatory The Oatmeal: https://theoatmeal.com/comics/exposure

I proposed to companies to work one week for free with my team (we do not have paid clients yet) for testimonials that I can add later on to my website.

Re: Ask HN: What is your experience in tech consulting?

#119

Post by ggwp99 »

bergie wrote: post #45

I ran a consultancy for 15 years before selling it. Was at times fun, and certainly educational, but would I do it again? Unlikely. Anyway, couple of things that worked for us: * Try to get retainer contracts: we would offer one when we had delivered a project. This is great for you as it makes income more predictable. And it is great for the client as they know they have certain capacity from you, and don't have to…

Thanks for those points. Really insightful. Wanted to ask 2 questions: 1. Would you mind saying what was your multiplier for the valuation when you sold the business? 2. How can I limit a retainer so that a client does not abuse it.

Re: Ask HN: What is your experience in tech consulting?

#120

Post by ggwp99 »

stuckkeys wrote: post #7

Do not do free work for "testimonials" rather do it for a discount. I do not give sh-t who it is, I am not devoting my time for free to anyone. Your sidekick should be ChatGPT or any AI assistance you can get your hands on (if you are starting solo) It will help you tremendously. Do not be scared to reach out to organization. Buy some add space on google and target regions. You are going to kill it. I believe in you…

Haha that's really nice thanks for the advice.
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