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To be honest, I went through a ton of trail and error over ~15 years. So it'd take a lot to fill in those blanks. What I can say in a more short form is that

To be honest, I went through a ton of trail and error over ~15 years. So it'd take a lot to fill in those blanks. What I can say in a more short form is that I started out thinking it was best to be a generalist and work on any software project I could get hired for. Not sure if I was ignorant, arrogant or maybe a little of both, but that is a quick way to fail. In the end what I found worked best was to specialize in a niche area that is large enough to grow but specific enough you can find ways to stand out. Part of what made us successful over time was we defined our ideal clients, our threshold clients, set up minimum project values, moved away from hourly billing, and focused as "generalist" within the niche. The final key for us was we were selling our services to bring a product to market, not only write source code for a project. There is a huge difference in value to clients and profit to the company. Happy to be more specific if there is something I can share my experience from that might be more helpful even if it was a failure for me. FWIW -- my primary niche areas when I exited consulting was marketing automation and distributed systems to solve large data problems (ecommerce, healthcare, ads and direct marketing were the "industries" we played in).

blackrock 6y ago
Great reply! Thanks. You learn the most from your failures. And this is how you succeed. How did you find your clients? Was it mostly by your networks? I’ve been wanting to start my own consultancy, in a niche that I understand, but the question was always whether I could find those right clients. And any company that is big and profitable enough, would just build an internal department to handle such services themselves. Hence, the problem. The clients that can pay for it, can handle it internally themselves.
- davismwfl 6y ago
  Most larger companies are the first to outsource work if it isn't a core competency or a core strategic need. This is even where you can find great product ideas to solve problems for other companies while getting paid to build a solution. So I wouldn't say just because they can afford it they will bring it in house, generally I found that not to be true. Of course there are exceptions, one is large tech companies which have a tendency to bring lots of stuff in house even if they really shouldn't. As for finding my first clients, I turned to companies I had worked for prior, turned to friends who still worked at other companies to get my foot in the door. I started meeting as many people as possible and started speaking at local and regional events as often as I could. I'd sign up at the chamber of commerce and see what new companies were coming in, opening facilities, plants etc and see if there was a vendor list I could get on etc. A hint I learned, being on the vendor list for a large company even if you have never delivered anything to them can give you assumed credibility. When I couldn't afford trade shows I'd volunteer for companies and go work their booth, do setup or whatever I could in exchange for getting me through the door and allowing me time to explore and network. Also, networking outside your defined niche is still good as you build your network. I used to joke it was like the 6 degrees of Kevin Bacon, I didn't have to meet my exact client but I needed to meet someone who could introduce me to another company and keep that going. Along the way you pay the kindness back with your own referrals, help etc. It is way easier to type this out than to do it, but the only way to do it is just to do it.
  - blackrock 6y ago
    Yes, I also find this to be true. Large companies have sometimes long and arduous procurement processes. Oftentimes, it works best when you can get on their preferred vendors list, as they will refer to those known vendors first. How did you bill for your projects? Did you do fixed bids? Or did you do time and materials?
    - davismwfl 6y ago
      I did a few fixed bid, but tried to avoid them since so much is outside your control and a larger company can easily take advantage of you (even unintentionally). 2 ways typically (most all models are a form of one of these two): 1. Per resource type/experience etc, per week (per day for < week of effort) -- typical for software dev jobs where the change requests and evolution can destroy you otherwise. 2. Results based billing -- Used when we were handling more of the process, e.g. helping to bring product to market, marketing, content, ads, campaign management, product placements etc We mostly used a combination of the two as we matured and wanted to start make more than just a percentage on time, which to be honest is a hard way to make money and doesn't scale nicely. Results (revenue) based billing is awesome but can also leave you hanging a little sometimes, so structure and terms are really important. Results/revenue billing is the way to make much better margins and not be tied to a persons time, but recognize it isn't without risks. Terms are critical and I generally only did these with U.S. based companies because of legal & tax complexities.

blackrock 6y ago

Great reply! Thanks. You learn the most from your failures. And this is how you succeed. How did you find your clients? Was it mostly by your networks? I’ve been wanting to start my own consultancy, in a niche that I understand, but the question was always whether I could find those right clients. And any company that is big and profitable enough, would just build an internal department to handle such services themselves. Hence, the problem. The clients that can pay for it, can handle it internally themselves.

davismwfl 6y ago
Most larger companies are the first to outsource work if it isn't a core competency or a core strategic need. This is even where you can find great product ideas to solve problems for other companies while getting paid to build a solution. So I wouldn't say just because they can afford it they will bring it in house, generally I found that not to be true. Of course there are exceptions, one is large tech companies which have a tendency to bring lots of stuff in house even if they really shouldn't. As for finding my first clients, I turned to companies I had worked for prior, turned to friends who still worked at other companies to get my foot in the door. I started meeting as many people as possible and started speaking at local and regional events as often as I could. I'd sign up at the chamber of commerce and see what new companies were coming in, opening facilities, plants etc and see if there was a vendor list I could get on etc. A hint I learned, being on the vendor list for a large company even if you have never delivered anything to them can give you assumed credibility. When I couldn't afford trade shows I'd volunteer for companies and go work their booth, do setup or whatever I could in exchange for getting me through the door and allowing me time to explore and network. Also, networking outside your defined niche is still good as you build your network. I used to joke it was like the 6 degrees of Kevin Bacon, I didn't have to meet my exact client but I needed to meet someone who could introduce me to another company and keep that going. Along the way you pay the kindness back with your own referrals, help etc. It is way easier to type this out than to do it, but the only way to do it is just to do it.
- blackrock 6y ago
  Yes, I also find this to be true. Large companies have sometimes long and arduous procurement processes. Oftentimes, it works best when you can get on their preferred vendors list, as they will refer to those known vendors first. How did you bill for your projects? Did you do fixed bids? Or did you do time and materials?
  - davismwfl 6y ago
    I did a few fixed bid, but tried to avoid them since so much is outside your control and a larger company can easily take advantage of you (even unintentionally). 2 ways typically (most all models are a form of one of these two): 1. Per resource type/experience etc, per week (per day for < week of effort) -- typical for software dev jobs where the change requests and evolution can destroy you otherwise. 2. Results based billing -- Used when we were handling more of the process, e.g. helping to bring product to market, marketing, content, ads, campaign management, product placements etc We mostly used a combination of the two as we matured and wanted to start make more than just a percentage on time, which to be honest is a hard way to make money and doesn't scale nicely. Results (revenue) based billing is awesome but can also leave you hanging a little sometimes, so structure and terms are really important. Results/revenue billing is the way to make much better margins and not be tied to a persons time, but recognize it isn't without risks. Terms are critical and I generally only did these with U.S. based companies because of legal & tax complexities.