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I highly recommend considering consulting/freelancing when looking at starting a company. Hourly rates generally price in an expectation of not having work full-time, so you work less than 40 hours/week to begin with. Drop an hour or two of commute every day on top of that and it's a big win in terms of time that can be spent on a startup or side-project.

Of course consulting requires more in terms of people skills - you're basically "interviewing" every time you find a new client. But I think in some sense that's a hump to get over either way - there aren't many startups that don't benefit from founders having soft skills.

Sort of an orthogonal point to the article, of course.




I've done freelancing for last 5 years. Don't under estimate time it take to run your freelancing business. e.g finding clients.


In addition to the time and flexibility advantages, consulting will also give you some transferrable business skills and practice with the basics. You get experience with things like accounting, sales, and marketing which are all essential for your startup.

If you cannot even run a single-person consultancy successfully, you probably shouldn't try a startup.


Thanks for reading / commenting on the post. Just wanted to say I massively agree with you; it's exactly how we got started, and could afford to test these various business ideas and our agency business is what funds our tech. Everyone else has already mentioned the issues with focus, maker/manager schedule, etc, which are all valid in my experience.

However I have one more for you: the businesses that buy from you as a consultant are very unlikely to buy your product.

Why? Because if they need a freelancer / consultant / agency to do the work for them, they don't understand the work enough to do it themselves (or don't have enough time). Therefore any self-serve solution tends to be met with blank stares and confusion. Likewise, the people who use our product on a self-serve basis are typically not a good fit for our agency.


Been doing it for 2 years. Funnily enough I just had a discussion on this topic with my current CTO/co-founder (I'm the business guy).

Pros:

- indeed you bill much more per hour, so in theory spend less hours.

- your work actually gets implemented, because you bill much more per hour. Generally "project management" is much better because they are buying a product and are incentivised to get a return on their investment.

- you deal with CEOs/managers as a peer, and learn (faster) from successful CEOs as a result.

- you will rapidly learn to sell. How do you differentiate yourself from the other 1,000 consulting outfits out there? How do you justify charging 5x what that Bangalore outsourcer is charging?

- it's a series of small successes that give you a boost psychologically when the product is so far away and the startup side seems not to be progressing.

- you think you're different because you're not taking money from "these risk-averse people" who "don't understand" your product. You'll get there the hard way but own everything at the end! Once this feeling becomes less important to you, you are ready for seed investment.

Cons:

- by far the biggest is the time suck, and focus suck. You're context switching constantly. My first CTO quit in part because he was consulting as well, and the product got nowhere for months because we invested too much time in our main client. This time around I'm the only one consulting, CTO is full time on the product. It's still exhausting and inefficient, and he's justifiably annoyed when I'm unable to do startup stuff because I'm focusing on clients. Client takes precedence because you cannot screw up with them, you're delivering a professional product at certain standards. The business stuff is very important, more than it looks, and so the product launches later, sales happen later, marketing happens later, etc. which hurts the company because time is also a currency, arguably your most precious. The dynamics are well depicted in the movie Primer, where one of the group is working full time to pay for the others to build their time machine experiment. Watch the group dynamics when he returns home late at night.

- at some point you'll have to cut off clients, when your startup takes off. When this happens, if you were actually good at consulting, it's going to suck for them. If you are professional and ethical, this hurts you as much if not more as it hurts them, you grow to like a good client.

- Clients quit without notice. In my case, one sold to a larger group, another ran out of money. Then you're scrambling to fill the gap and spending time doing consulting sales instead of startup sales, because cash is king.

- should probably point out: what you bill and what you do is not exactly the same. If my client wants me on site for a 1h meeting, I'll probably commute half an hour there, then have lunch with the PM afterwards, then commute back to my office - total 3 hours for 1 billable. On top of which you are now on the Manager's Schedule [1] and have important opportunity costs from not having blocks of time to yourself.

A nice parallel is when I was a student and many of my colleagues had this idea in their head that they could be "everything" - have a phenomenal career, be a helicopter parent always there for the kids, retain a cool and active social life with Facebook worthy trips. After a few years they all ended up picking one of the three, because there's only so many hours in the day, and sleep deprivation actively harms your ability to think, which is a prerequisite to making progress in at least two of the above. You can't be an MD at Goldman and know what your kid was up to at school today.

Money buys you the time to focus on the startup and that's much more valuable than it looks. Of course this comes up on HN all the time, I just wanted to add a bit of flavour and an extra data point.

[1] http://www.paulgraham.com/makersschedule.html


I was given the exact advice few years back. If I could go back in time, I would have given myself a couple of years more at the job while trying to carve out a earning-product on the side.

I followed the consulting path, but now I would caution against the consulting/freelancing path, unless one was building a consulting-agency. Theoretically everything sounds good, but has many problems in practice.

1. If you are successful at consulting, it means money (and potentially a lot of it). It takes stupidity, insanity and courage to leave the money on the table when work keeps pouring in. For last 6 months, I have halved my work hours to 20-25 per week to work on developing products. That was not an easy decision ( I still work total of 50-60 hrs per week). I had a few ideas that fizzled out quickly and now I can't say what exactly I'll be working on - I still have a few good ideas that I need to try. But last 6 months part-time consulting did make me miss out on the money and opportunity cost. And the pressure mounts every day because I gave myself 1-1.5 years to try out. I might be trapped too because if I fail at products it makes sense to start a consulting agency instead of searching for a job.

2. You might think - "I'll earn from consulting and invest in products". Really! That did not work for me. Bad hires, management-stress, and lack of focus was pretty evident. Not saying it won't work for others - but less likely to work if you don't invest focused time in products. I just let many go(in a nice way) and decided to start afresh.

3. I worry constantly and this also pushes me hard to do more work. I haven't made a successful cut into products, I am losing out my years and the opportunity cost is way too high compared to being an employee. My life is much better as a consultant-freelancer in absolute material terms, but this is not what I headed out for.

4. Hard to do justice to consulting project and product both. When I was doing multiple consulting projects, it was easy to switch between those. But now for some reason, its hard not to think about my product when I am also developing someone else's product. On one hand you want your customers to be successful and on the other hand you envy them and crucify self because you made the product work for them but haven't done it for self. That is just a feeling, but it hurts!

There are positive points for consulting - One gets exposed to the world of business, paces up, upgrades self, learns stuff like selling and negotiating. These can be done as an employee too (but slower).

If one starts on the side as an employee, there is only one issue to take - Getting out of the comfort zone and focusing on one thing. Employee is very comfortable in that setting and finds it easier to blame others/circumstances for failures. As far as that attitude can be avoided, starting up while being an employee is still a better thing.

P.S: Freelancing/Consulting is not a bad path - its wonderful, just check priorities.


hey man, can you give some advice about how to start consulting? My day job is a hardware engineer for a semicon company. I write software models for HW devices so we can estimate their performance before fabricating them. Mostly involves C++ and analyzing data. I am not sure most companies would hire some consultant as opposed to just hiring them in-house. Can you elaborate your field of expertise and how you got started? thanks


How did you get started in freelancing on the side? I've always wanted to do this but struggle to find clients.


I like that because your clients common problems can become the business idea.




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