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Ask HN: How do I start my own consulting firm?

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Re: Ask HN: How do I start my own consulting firm?

#91

Do you want to create your own product or do you want to consult? My customers are sick of consultants who are really just pitch men for products, products they probably do not need. When i consult i openly say that i am not tied to any product, that while i do suggest and evaluate products i never accept comissions. That's pure consulting. The client comes first. The other type of consulting is to offer consulting s…

That is one of the big challenges to consulting these days - trying to be "independent". In every IT space there are consultants that represent products. They get a lot of consulting leads from the product companies, and in return they are always looking for opportunities to plug a product. I'm not saying there is anything wrong with that - IT consulting doesn't happen in a technology vacuum. In fact for a new consul…

Much depends on the type of consulting. I do legal stuff, mostly compliance and privacy issues. Hypothetically, if someone asked me which cloud service best complied with a new EU data directive I would recommend one. I might be wrong. Maybe that cloud wasn't the best. Everyone makes mistakes. But if i make that mistake and my client finds out I was taking a kickback from the cloud I recommended, then it doesn't look like a simple mistake. Now it is negligence. That sort of consulting is different than more technical work where the real issue is whether a recommended service or product functions as expected.

A common request of me is to recommend a pen-testing or scanning service (pci, iso, dfars and such). I often write out requirements and even negotiate pricing for such clients. Any kickback whatsoever would be a disservice.

Re: Ask HN: How do I start my own consulting firm?

#92
Almost all of your questions come down to relationships, so the answer from WhitneyLand is important, but I'll be specific:

>> How do I identify that a company might be in need...?

By having connections and a solid reputation, they may actually start coming to you. For now talk to people you know to see if they have a need you can fill.

>> Should I partner up with firms like ours? ....

Yes. But they will need to know your reputation before they are willing to do so. So it's connections again.

>>Should I hire a salesperson?

Probably not. You will be your own best salesperson and will start with your own network.

Re: Ask HN: How do I start my own consulting firm?

#93

Earlier quoted context omitted.

Don't work for cheap unless you have to. Word of mouth matters and cheaper customers are in a totally different market segment. It is very tempting, and easy to do as a one man shop, but it dramatically undervalues what you produce and you can end up trapped in that lower tier of work and pricing model and have a hard time escaping. (opportunity cost, etc) patio11 has written openly about his efforts here and I think…

Mandatory reading: win without pitching manifesto I was skeptical for too long about this kind of advice and I've paid my fair share in lost opportunities. It really, really works. http://www.winwithoutpitching.com/the-manifesto/

Here's the link you get after they try to harvest your email: https://www.winwithoutpitching.com/manifesto/read-it-online/...

Re: Ask HN: How do I start my own consulting firm?

#95
IMHO - 2 thoughts...

1) The way to find out if this is a pipe dream is to see if you can get a first client. Get a first client for yourself. If you can't, nothing else matters.

2) There is a huge fight in consulting companies between investing in "products" versus serving existing clients. This is why it's so rare for consulting companies to create products of their own. The best people wind up serving clients, and the internal products get sidelined. It only works if you're 100% explicit from Day 1 that the consulting exists purely to bootstrap the product. That's admirable, but if you're really into products, why not just get VC money?

Re: Ask HN: How do I start my own consulting firm?

#97
If your ultimate goal is to build your own product, then starting a consulting business is a distraction. Maybe it helps to just focus on the goal? How you make money while you pursue the goal is not important. So keep your day job and work on the product as your side project. I'm almost certain your day job is MUCH easier than starting a consulting firm, so you'd have more time to devote to the goal. It's also much more stable and predictable in terms of income.

Good luck!

Re: Ask HN: How do I start my own consulting firm?

#98
post #69

Did this before (Matasano). Doing it now (Latacora). Answers: - The two most important words in your business plan are "segmentation" and "qualification". While being open to lots of different kinds of projects, try to pick 1 or 2 kinds of projects that you can standardize and package. It's easier to succeed selling a couple things well than it is to succeed selling everything just adequately. - Pick a kind of custom…

Can you elaborate on these two bits? > It should feel producty, and the way in which you turn your team into a product should communicate something interesting about your worldview. > Bill weekly, or at worst daily. Never bill hourly. Do you mean bill hourly but only working in full-day blocks? Or that your clients agree to pay you on a daily / weekly rate without a number of hours defined. This seems like a tough pr…

Hourly/weekly billing are entirely standard in industry, and most good clients will not balk at them. The business does not want your butt in a seat for 480 minutes a day; they want increased revenue or reduced costs. They will not micromanaged the distance between your butt and your seat at one minute increments unless you structure your affairs such that they're required to.

Note that all of your professional analogies doing the same work for the same clients in a W-2 fashion are salaried, not hourly. They don't fill out timecards or send a report to their boss every week saying "64 minutes for project planning meeting" either.

As to how much work actually gets done in a day, part of the deal is that the business is buying an adult professional who is committed to delivering efficiently on the stated objectives in the SoW. That bounces around a little bit; most days it resembles a standard work day at the client's site (at least in my business).

Re: Ask HN: How do I start my own consulting firm?

#99
I hope this isn't read as a off color comment,

but from reading cosmorocket's statement of inquiry,

I would say that he has to loose referring to anything as "stuff" right out the gate, from this morning's coffee on, and forever.

I mean to illustrate a more valid, less snarky, point, however:

When people hire consultants,

very often, if not prototypically, it is because they want to understand something that is outside their domain or their immediate efficient use of time, or to learn about something they are unsure whether it may meet their needs.

Hand waving and calling anything, "back end stuff"...

well, it rather blows as a pitch.

Certainly it fails at making a impression of confidence in our own knowledge, whether that is unfair doesn't much matter, if you don;t get the chance to expatiate further.

Knowledge != knowing what something is, and how it works. at least not in any consulting gig I think worth the name.

Knowledge is, very definitely, the breadth and depth of understanding a domain specialty sufficiently to relate and connect that to as yet undefined but potentially complimentary scenarios.

I want to be very very harsh, here, towards cosmorocket,

and this is intended well,

but all cosmorocket's questions are about the mechanics,

and it is utterly transparent to the reader that the absent component is appreciation for what it is that cosmorocket can bring to the table.

At least in the above question for HN, the reality of the quantity for sale is sorely absent.

I think this is why we've got a busy discussion full of anecdotes about corporate life, but nothing much at first glance that answers, "sure, you can do this, so you put it like that, and take home that". Hmm, in a roundabout way, some answers are a bit like that. But to really work, a proposition has to be simple enough at its core to be a one liner. The most sophisticated product in existence, can still be sold as "solves all your storage deployment problems whilst making IOPs a commodity you control, and compliance facility and data discovery and data loss guarantees a fixed affordable price".

Many people admire the sophistication of big sales outfits.

Corporate sales is not something many actually encounter, in life. Being pitched by EMC on a roll, eager to sell you dozens if not hundreds of TB or mainframe class storage in the nineties is a spectacular memory, like going to a grand opera. But it does all boil down to people who can cut through the chaff in a instant, so that what is too easily dismissed as frippery and trappings, are really aides and props for detailed discussions, not valueless glossy blurb. Great salespeople use their tools in ways not immediately obvious, and with skills akin almost to artistry. I may gush a bit much for your taste, but having been pitched by full on gung-ho teams, and felt at times overwhelmed by the sheer onslaught of energy and attrition of new supporting roles that a major enterprise sales effort fields to win your PO, i developed a real respect for the orchestration. I'm saying this by way of a analogy, that the casual onlooker might see glossy brochures that are terrible at defining anything, but their purpose is more discussion prompts, than hard data points.

I'd like to take cosmorocket aside, grab a empty conference room, and brain dump a whole 30 years of stories.

But the one thing I hope cosmorocket might get from my putative one on one, is the one i can give right now, just it won't seem like a hill of beans: If you want to be a consultant, and the adjective successful is a condition, because a unsuccessful consultant doesn't exist any more, or never did, you need one fundamental skill: to be able to relate to people by understandng hw they understand the technology you are discussing, so that you can get into their minds how they see their use, and whilst adding a core skillset and experience base, and maybe some tech sauce you might have rolled yourself, such as tools for cloud deployments you scripted, read back to your customer a interpretation of both what you can add, and what they might be missing, evaluated against as hard data as you can find, so that they understand the value to them of the next step they take with the technology you discuss.

Consulting is about making people understand the values of technlogy that matter to them, and educating them about tools that leverage technology to aide their needs, which needs you have to understand both from their appreciation of their needs, as well as what that adds up to in reality in practical as well as technical terms (i.e. sanity check, and eval whether they are risking expensive or dangerous poor assessments or make bad assumptions...) and explaining this in a way they can accept with the least impact for the biggest result your bill plus any extra dollars spent, can get your customer.

Selling to the next customer (i do prefer that word, even if people would say I got clients, not customers, because saying "customer" makes you focus on a product delivery, not wishy washy relationships, that frankly are strong only when you deliver as if you were shipping product) you get the next sale by opening up how you got the last, not by detail, but by example, and that is your pitch, then: "I did x for Z Corp, by this method, and they got a, b, and c, and i can give you this ROI for my work, and this customer reference."

Bu the first customer youwill get, probably you will best emphasize that you have a command directly of tech, that you have extensive domain experience in, where you see a edge that youlearned through your work, that is not widely enough deployed or accepted to be able to offer exceptional returns, and with a very low (relative, but do not ever sell yourself low, that is fatal, you must charge a market rate, even if you think big consultant rates are ridiculous for the customer you pitch, you need to be relatively in the same order as that, or else offer a discount plus earn out / bonus on other results that can add a big multiplier, if not a zero, to your contract payout) initial cost. As one man, you almost guaranteed got the low initial cost (another reason to watch tonor pitch yourself low) so you must move fast top the steak of your offer: which is "I do this with that, and it rocks your ___blank___ to the next level, and we can measure that, and we can do thisby performance in next to no time." To get a start, you must optimize time as a component. Your hours get multiplied by everyone you touch with the work you do hours. Your $400 hourly rate (not ridiculous a number) can touch and cause cost at $4,000 /hr moment you interact with any significant team in any operation.

I started very down / skeptical, but you have to.

Biggest and only advice I would ever personally offer:

there is nothing like the wrath (and bad PR effect) of a upset client for your consulting. Everybody will dump on your head.

cosmorocket, i've been harsh, sorry, but i mean well, i got not stacks but enough time to kick about, if you wanted to email me, i'll shoot at explaining better why I am right down on how you pitched this question, but also why that, and maybe the answers that arose from that, are not end of world is negative, or foreboding. But i would not encourage you to be optimistic for enthusiasm's sake. Consulting has fewer pom pom girls than startups. And far less of that, directly or indirectly, is allowed around any scenario i reckon you might find yourself in. Anyhow, I' be happy to traduce any optimistic cynicism I can, if you shout me. Good luck!

Re: Ask HN: How do I start my own consulting firm?

#100
I see a lot of good answers here already... but understand the reason you want your own firm... and the reason why it sucks to be a developer at most agencies... is the same as why it's really hard to be a developer out on your own. It's not talent that matters, it's the ability to sell. The sales guys have all the power because, without them, there is no viable firm.

Now... you can say, "Oh without delivery talent there isn't a firm either..." and you're not wrong. But, a firm can always fake it until they make it -- many do. Then scramble to hire devs once they get a sale. It's not a discussion around what comes first -- the chicken or the egg... it's sales that comes first.

If you're just looking to freelance, find a "cash cow" client or two. Bend over backwards to keep them happy. You'll make an OK living billing out at your hourly for them. If you have time, try and grow... but at some point you'll have to make the call if you want to do sales or delivery work -- and if it's the later you'll never have time to do the former correctly.

So to keep a client happy... you have to talk to the project manager on their side, the VP on their side, the C-level folks on their side... all the lunches and emails and gifts and crap that you never see because the sales / accounts team handled it for you. And if you don't do it... rest assured someone else is, and you'll end up losing your contract to someone who is willing to waste a day playing golf and building multi-layer relationships.

Having done my own business for a number of years... it's empowering to be your own boss, but even getting all my clients through reputation / word of mouth... it's a never-ending struggle to keep up with sales / accounts and it takes a lot more of my time than I ever thought it would.

It takes a lot more than just doing the job right for them. Let's face it... most of the higher up folks making the decisions about budgets... they aren't perfectly in tune with delivery anyway, so when someone comes along who tells them they can do it cheaper, faster, better, whatever... and turns on the charm... your relationship with the client's project manager isn't going to mean all that much.

It's exhausting having to be so aggressively inquisitive about my clients' businesses so I can get out ahead of them before they send out an RFP or invite another contractor in that could be trying to vie for my job. At the end of the day... is it worth it? Sure -- for me -- for the freedom. But I'd probably have more money, and a lot more free time, if I just worked for someone else.

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