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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?

#41

Post by hutzlibu »

osullip wrote: post #11

I run a consulting firm. Get one client. Do an amazing job. Use that to tell other clients what you do. Be specific. Most people outside tech have no idea how it works. Tell them what they will get. Increased sales, reduced costs, better productivity. Whatever it is you do, forget about the tech and talk about the benefits. Get your elevator pitch right. Mine is "I help businesses fix their procedures". People then s…

"Whatever it is you do, forget about the tech and talk about the benefits."

That's a very good point. People who want to get stuff done, don't want to hear about all the tech buzzwords, they want to hear if you can make their life easier or not. And if you throw around tech jargon to impress them, you likely loose them as they don't understand you.

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

#42

Post by scajanus »

bruce343434 wrote: post #30
neilv wrote: post #22

Earlier quoted context omitted.

> 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. Copilot has been found to spit out copies of code it was trained on. You don't want to violate your contract with client, nor expose client to IP theft or GPL taint.

Ignoring technicalities, legalities, ethicalities etc. How would anyone ever find out, assuming their product is closed source?

Whistleblowing or audits, but the chance of that might depend on the client(s).

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

#43

Post by JamesBarney »

8note wrote: post #29
tptacek wrote: post #27

Earlier quoted context omitted.

I don't follow. The companies I'm describing are likely to be your most lucrative clients.

Looking in from geophysics, 3/4 lucrative customers for the 1 non-paying is not sustainable. If you're looking for customers that don't intend to pay, is it 1/5 that end up paying well? 1/100? 9/10?

He's saying large companies that have money will pay you even if it's late. If you're doing work for Johnson and Johnson they are going to pay you. If you're doing work for John the attorney they might.

So look for work for Johnson and Johnson.

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

#44

Post by neilv »

bruce343434 wrote: post #30
neilv wrote: post #22

Earlier quoted context omitted.

> 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. Copilot has been found to spit out copies of code it was trained on. You don't want to violate your contract with client, nor expose client to IP theft or GPL taint.

Ignoring technicalities, legalities, ethicalities etc. How would anyone ever find out, assuming their product is closed source?

In response, I just thought of a potentially very lucrative startup. :)

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

#45

Post by bergie »

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 go to their boss with a new budget request for every small thing they want changed

* Don't let a client grow too large: we had a big client that wanted to buy all capacity we had to offer, and wanted us to hire more for them. We never let them become more than 50% of revenue, so we were able to survive when they went away one day (the "burning platform memo"). Keeping them at 30% would've been even better, but it is hard to say no to money

* Don't try to be fancy: you're not one of the big consultancies, so don't emulate then. If clients wanted that stuff, they'd deal with those companies, not you. Our sales conversion rates improved radically when we switched from tailored suits to jeans and conference t-shirts

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

#46

Post by Lutger »

tptacek wrote: post #40
chaosite wrote: post #36

Earlier quoted context omitted.

When you say "delay on payables", do you mean not paying you for agreed-upon already-completed work, or do you mean not giving you new work right now?

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.

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

#47

Post by JamesBarney »

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, 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 second piece of advice is you need to come up with a business plan. The most important part of this is an actual plan for predictably acquiring new customers.

Third general piece of advice is 98% of the time being a general software consulting company is a shitty business. A good first step is pick a specific problem and/or a specific industry. "We build custom CRMs for enterprise sales organizations.", "we do custom ERP work for Oil & Gas" or "We help startups scale Postgres databases" are all much better businesses than "we write software". This is for two reasons. One you have a specific product you're selling to a specific customer which will help immensely with sales/marketing. Two the margins are much better.

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

#48

Post by JamesBarney »

intelVISA wrote: post #37
solresol wrote: post #6

Niches = riches. You want a super-tight thing that you do (e.g. "I fix performance issues for large NodeJS code bases", or better still "I write tooling to measure performance hotspots in NodeJS code bases".) Despite this sounding like cutting off potential customers, it doesn't work that way. Customers will reach out to you with some generic work that they want done "because I know you know NodeJS" even when you say…

I agree with the niche aspect but I also can't imagine clients using Node would be the types to worry about performance.

Lots of companies don't worry about performance until they have to, and when they do they usually have the money to spend on improving it.

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

#49

Post by homeslike »

tptacek wrote: post #20

Random bullets. * You need to be making 150-200% of your FTE rate to come out ahead in a year * Bill daily, not hourly (you can bill weekly, or quarterly, too.) * Raise your rates. * Count on signing your clients master agreement, not yours * You can win by getting every contract reviewed, or by just signing them blindly * Specialize * Incorporate; it's easy and cheap * Keep your SOWs vague * Don’t waste time on your…

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 stay up to date and network?

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

#50

Post by masalachai »

tptacek wrote: post #20

Random bullets. * You need to be making 150-200% of your FTE rate to come out ahead in a year * Bill daily, not hourly (you can bill weekly, or quarterly, too.) * Raise your rates. * Count on signing your clients master agreement, not yours * You can win by getting every contract reviewed, or by just signing them blindly * Specialize * Incorporate; it's easy and cheap * Keep your SOWs vague * Don’t waste time on your…

Good list but curious why you advise against doing conferences and conventions. The obvious benefit in my mind is advertising, potential clients, and most importantly, advertisable "credibility" on your website in the form of "Speaker at X conf".

I'm not in the consulting business, however, and the list of benefits is speculative.

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