Seven tough lessons from ten years in bootstrapped business

So I've had basically the opposite experience this person has with consulting. The problem with all these retrospective analyses (positive and negative, I concede!) is that they're situational. Scaling up a consultancy is both its own skill and also idiosyncratic to the field you're trying to work in. Maybe IP telephony is especially hard to consult in! Maybe security is especially easy!

So, just some general shotgun-blast responses:

* Whether you're trying to scale out or just keep a steady income for yourself, if you're not specializing, you're going to have a bad time. If you're trying to sell basic IT services on a piecemeal basis, consulting is going to be a drag (but: if you can reliably deliver IT services for 20-60 person organizations, you're I think actually in a pretty good place right now, since a lot of our clients are auditioning firms for just that, and there aren't many good ones!).

* There's a whole spectrum of aptitude and experience to hire in between "entry level" and "fully billable" and part of the basic challenge of running a consultancy is figuring out how to ramp up talent and where on that spectrum to hire people. The basic job of a specialized consultancy is finding sharp people and rapidly conferring on them the tools to get billable work done, and then structuring projects so that everyone cal be billable. The analysis of "you can hire entry level people but then it takes months for them to be billable" is pretty superficial; every serious consultancy has strategies for dealing with that problem (some better than others, but all better than "hire and then wait a year and hope").

* The bit about how scaling consultancies is a matter of creating a big binder of methodology so that an English major can execute your projects is lifted straight from Joel Spolsky, and Spolsky is just as wrong as this person is, at least at the scale consultancies started by HN'ers (for all I know it's actually true at Accenture scale, but it's definitely not true at for-hire DBA or security or IT or distributed systems or iOS development scale).

* The idea that consulting work will sap your ability to build product is a bit of a head-scratcher, or, at least, the explanation this article gives is. The "reliable" way to do a product/consultancy is to use consulting headcount to fund development headcount. Developers aren't billable, full stop. When you've reached the point where you can fund 3-4 full time developers, you've run out of "consulting made this hard" excuses. The simpler reality is: building and launching products is hard, and, by a wide margin, most startups (consulting or otherwise) that attempt it fail.

I'm in a pretty similar situation, but it's actually working really well for me because of some important things.

1. Having a healthy amount of savings before embarking on a bootstrapping business. There has been never a point where I have had trouble paying bills. I have 5-6 years of expenses saved up.

2. Doing the research in terms of how to run a business. I have an accountant, I did tax planning from the beginning and I make sure to evolve on the business operating side constantly. (use software that makes the process easier, such as automatic invoicing, working with an accountant, working with a lawyer.)

3. Working in a start-up environment and learning how to prioritize work.

4. Reading The Great CEO Within from Matt Mochary, there's so many tips in there that have been amazing and helpful

I'm definitely struggling with the scaling issue of consulting tho. It's great and all, but I find it a struggle to add people to the company because of how specialized and good I am at my work. I'm generally the selling point.

I am working on 2-3 products on the side of the consulting work with the hope that the products eventually become the focus. I do understand the downfall of the consulting taking a lot of my time and not spending enough on product work, but somehow I've been able to keep up.

The great part about doing this is that you work with a lot of different companies and you actually get to learn a bunch of of things that work and do not work. You get to see how different business models work and scale and it's very enlightening on your own company.

For example, I'm averse to starting any sort of agency in terms of web development, since I've seen multiple of my clients have issues with scaling the business model and retaining customers.

Overall, consulting has been a pretty positive experience. I've only been doing it for 2 years, so we'll see how it works in the long term. But my side product is generating $800 / mo in income and I hope to scale it to cover all my expenses and then I'm more able to work on products and do less consulting.

I’m 29. I’ve been self-employed since I left high school. I’ve gone through virtually all the emotions and experiences described – the struggle between maintaining a consulting practice and building a product, the loneliness of self-employment, and the mishaps caused by poor tax planning.

I don’t think I’ve quite figured out the solutions to these problems, but I can say that 10+ years of self-employment have instilled a hard sense of discipline. I’ve tried out more routines than you can imagine; the only one that seems to work is waking up very early (5-6AM) to get 2-4 hours of product work in before heading off to consulting responsibilities

Another key learning from these 10 years is the importance of organization. It’s so easy to miss everything from project deliverables to tax dates when you’re working on your own. I’ve taken to maintaining copious notes and spreadsheets that keep everything neatly organized. This didn’t come easy to me; I’m not an organized person by nature.

If I had to do it all over again, I’m not sure if I’d recommend people to take the same path. You’re likely better off in a good traditional job. There is the upside of making a lot of money IF the product hits big (or in my case, even bring in a substantial passive income), but that upside might not be worth the long hours, discipline, and loneliness of this line of work

I’m out to help promote a new, brutally honest way of writing about life in the trenches.

Thank you. This is superbly well-written and incisive. Accurate too.

As someone with a decade plus of continuous self-employment, one other challenging (demoralizing? LOL) aspect is never being able to really, completely, and truly take time off.

When you get sick, your money comes to a grinding halt, but your bills and client support tickets keep piling up.

When you're on "vacation" you keep your laptop charged and ready to go in case your phone lights up with notifications that a server is down.

Your brain is constantly adding up the next invoice, making the next sale, coding the next method, etc, etc. It can be unrelenting.

You can make excellent money consulting, but to make a ton you either need to scale a team, be absolutely world-class at a specific technology, or go the cult of personality write-a-book/hit-the-speaking-circuit route. Otherwise you're going to max out in the same range you could fairly easily get working a 9-5, but with way more volatility, risk, and stress.

If anybody considering consulting happens to read this, specialize as soon as possible, charge way more than you're comfortable asking, live below your means, and build some sort of redundancy by way of an employee or 1099 partner.

Another self-funded business founder here. One thing which rarely gets mentioned is the incredible feeling of loneliness which you have to be able to cope with. It’s not just that solo entrepreneurs usually work from home. On top of that they have problems that none of their peers have, and often also use technologies that are not common at larger companies (you have to use newer/better tech to gain an edge).

As a result, there is no one to talk to. No watercooler, no peers that understand you.

There is a certain subgroup of self-funded businesses that are strongly marketing-oriented that has organized itself around Microconf. There might even be a community of sorts. But not everyone is that strongly marketing-focused and not everyone is even at a stage when they have the means to attend a conference like that.

The article resonated deeply with me: I went through many similar issues as the author did. Perhaps it is time to form a community of sorts?