[eigilsagafos]

Me and my two co-founders are asking ourselves this all the time, and in retrospect every strategic change could have happened sooner if we had learnt faster and kept “doing things that don’t scale” as PG famously wrote years ago. The funny thing is that we think we are doing great in that regard only to realize again and again that we have to iterate faster and stop the urge to prematurely optimize for scale.

Our latest learning that we retrospectively should have seen earlier is to get rid of our fear of becoming consultants. We come from a consultancy background and have seen to many startups around us wanting to build products, but taking on consultancy assignments leaving them no time to build their product. We have been so determined not to fall into that trap, realizing now that we have missed out on some great opportunities when selling to enterprises.

[antoniuschan99]

Are you saying to take on the consultancy contracts? I fall into that trap as the consultancy contracts are essentially my day job.

Also the contracts and my product don’t have anything related to each other :(

[hvidgaard]

Until your startup is a full on company with multiple hires, consultancy work is revenue and can be a source of other business ideas that you might hire people for and make into another reliable revenue stream.

I know a handful of people who started with creating websites, then took some consultancy work and now have an entire different software company. They used those two things as a bootstrap to get going with opportunities that presented.

[berkes]

We've recently come across this conundrum too.

But we chose to forego the "consultancy" jobs. Reason is that we optimize for learning (we're at that stage). And while consultancy may look like a good opportunity for learning, that it allows you to get paid for investigating the real problem domain of your customers it is not optimised for that.

Far from it. My decades of consultancy and freelancing experience has told me that it always takes longer to implement the solution than to identify the problem. Implementing is a great opportunity for learning the details of the problem, sure. But Implementing also eats vast amounts of time to "Horizontally center that Div on the Dashboard": any non-trivial, time-consuming but utterly uninteresting for our startup.

I really don't want to spend two weeks implementing another authz/authn integration and login flow for a consulting customer. When in those two weeks I can interview at least three other customers. Esp. because authn/authz is but a detail to our startup, and has nothing to do with our domain.

[hvidgaard]

The main driver of consultancy is revenue. If you can survive without that, don't do it if it isn't core to your business, just like you wouldn't do in an established company anyway.

[berkes]

Yup.

I've worked at a startup which, bootstrapped, was struggling with income flow. So off-and-on we, the programmers, would be outsourced to gigs that would generate some income. I've always found this the worst of all options and decided to never get into this with my own startup.

It takes away the most valuable resources. It's a negative investment. It advertises the "panic-mode" you are in, to all stakeholders and most to the engineers involved. It lands your engineers (me, in that case) in crappy jobs, which they did not sign up to at all (a few engineers left because of this). It creates misaligned relations in the team.

The last was for me the most frustrating. At one point, I was bringing in ~60% of all revenue, alone, by doing crap work, in stressfull projects, and commuting for hours a day. While at least two of my co-workers, whose wages I was subsidising, turned up at 11:30 to drink coffee and play some FIFA on the company x-box.

What I learned from this, is that hiring too early is a thing too. That, especially when bootstrapping, the income stream must be certain enough to warrant paying another wage for years.

[hvidgaard]

From your example the consultancy work wasn't the problem, it was mismanagement of the of the startup.

The only alternative to consultancy should be to close. If you can let go of 1-2 unproductive employees, that should happen before taking on consultancy work. It should happen in any circumstance anyway, but taking on work to pay for other peoples wage and not getting value for that is a recipe for failure. If on the other hand it was high performance developers that really made progress on the core focus on the business it's probably okay.

[tone]

Might be a weird question, but what sort of consultancy opportunities do you get? I have worked for a long time in a design and development agency and I (think) I saw very little opportunity or demand for consultancy.

To the point where I legitimately don't know who or in what situation all these businesses are that are spending so much money on 'consultancy'. When do these businesses seek consultants and what for? I know that might be a far reaching question, so any examples would be appreciated.

[djrobstep]

In my experience this stuff is very cliquey - if you’re friends with the guy who is Chief Innovation Officer at some bank, or a heavy hitter at a government department, it’s easy to get yourself lucrative day rate consulting contracts, and much less easy if you don’t. Gotta know the right people and mix in upper middle class circles with people who have power over purse strings.