5 ms·

Pardon my ignorance. What does a consultant do?

by chanux 14y ago

pdog 14y ago
Full-time programmers can be had for $50 to $100 per hour, but they can create millions of dollars of value, far in excess of what they're paid. Consultants are one of several groups of people who take a share of the difference.
- loceng 14y ago
  This is why I work for myself, am building my own company(ies). I knew I would never get paid the value I can bring to the table, and I would never be motivated to do my best in that scenario.
  - loboman 14y ago
    If you do it right, you are never getting paid the value you provide. The model is always: generate value, get a slice of that, repeat. Think of a very rich person; if this person is so rich, it is because s/he provided much more value to others than the value it captured for him or herself. (Except for conmen)
    - pebb 14y ago
      Or banks
  - tptacek 14y ago
    You think you could never get paid the value you bring to the table because you are imagining delivering services to the kinds of companies who would think to look at freelance markets to find the going rate for building code in the platforms you work in. But the world is full of businesses with absolutely no technical competence at all, and so much operational competence in their own field (health services, benefits consulting, reinsurance, whole animal butchering, whatever) that they could take over the world if someone anywhere would just notice the opportunity to scale their processes (lead gen, customer retention, supply chain, market expansion, franchising, customer service) with basic technology. To many, maybe most of those businesses, just being able to throw together a Bootstrap/Rails app makes you some kind of terrifying Wizard. If you can get over the urge to talk like a Wizard, and apply the customer service aptitude taught to every new employee at Nordstroms, you would probably find it's nowhere nearly as hard to capture the value of your work as you think it is. I'd also note: if you're incapable of convincing a tech-impaired local business to consider a value-priced engagement that will make or save them millions of dollars, you may have a hard time building your own company(ies). Maybe not, though! Totally possible to skip that step.
    - loceng 14y ago
      I agree with all that you say. Not sure about something though. I'm not sure you'd have access to the information that would allow you to discover/see the possibility of changes that could allow millions of dollars in positive changes. Also, I'm thinking in ranges of $10-$100 million+ per year ranges; Larger ecosystems, etc.. and to have such an influence in an existing company, where they'd be willing to pay you out anything other than bonus or work you're way up to a million-dollar salary, would require many many years working at said time, with lots of risk that you wouldn't be rewarded adequately.
patio11 14y ago
In broad strokes, make businesses money. In a little more detail, I (personally) work mostly for B2B SaaS businesses and know a few things which tend to work for generating incremental growth in revenue. If you've followed my blog or HN posts they won't sound all that impressively new: write drip email campaigns, do A/B yet, redo pricing tiers, optimize conversion funnels, etc etc. There are many other consulting specialties out there, obviously, but that seems to be a mutually happy place for my abilities and clients' businesses.
- enjo 14y ago
  Just to be clear: This is different than "freelancing" or "contract development". This is more traditional business consulting. You're going in and changing processes and structures more than anything else. It might be around a specific goal like "make our signups more effective", but you're not just writing some code. You are going in an helping them to change their mindset by incorporating feedback (A/B testing) and new methodologies to run their business better. You get paid so much because the results don't just result in better signups, but in a transformed company at the end. To do this type of consulting you need extreme credibility. Either a big business win, an ivy league education, or something equally as impressive.
  - tptacek 14y ago
    This meme about there being "contractors/freelancers" and then "consultants" is toxic. In the markets that Patrick and Jason Cohen and Brennan Dunn are talking about, almost the entire difference between "freelancer" and "consultant" is "how you price engagements". It is true that consultants value-price engagements, so that they collect a percentage of the revenue or cost-savings derived from their code instead of a scaled hourly rate. And it's true that to do this, consultants have to think about the actual business context of their code, and be able to confidently propose the value of that code to a real business. But that's where the differences end! Patrick is writing code on his engagements. He's using the same problem-solving methods you're using. On a day-to-day basis actually delivering for clients, he's writing code to generic metrics and then optimize them. The only thing he does differently from you is that he chooses to work on metrics where he knows he can make a case for revenue directly attributable to the metric. It does not take a "big business win" or an Ivy education (WAT?) to "consult" for clients as opposed to "contracting" for them. You don't even have to be particularly attentive to your clients businesses, because so many people have built and written up methodologies for using code to make money for businesses; you can literally start by reading up on those, and offering them to clients who don't already do them. How many of your freelance gigs were for clients with sophisticated email marketing systems? How hard do you think it is to send triggered email updates to clients? Start there.

Pardon my ignorance. What does a consultant do?

by chanux 14y ago

Pardon my ignorance. What does a consultant do?

pdog 14y ago

Full-time programmers can be had for $50 to $100 per hour, but they can create millions of dollars of value, far in excess of what they're paid. Consultants are one of several groups of people who take a share of the difference.

loceng 14y ago
This is why I work for myself, am building my own company(ies). I knew I would never get paid the value I can bring to the table, and I would never be motivated to do my best in that scenario.
- loboman 14y ago
  If you do it right, you are never getting paid the value you provide. The model is always: generate value, get a slice of that, repeat. Think of a very rich person; if this person is so rich, it is because s/he provided much more value to others than the value it captured for him or herself. (Except for conmen)
  - pebb 14y ago
    Or banks
- tptacek 14y ago
  You think you could never get paid the value you bring to the table because you are imagining delivering services to the kinds of companies who would think to look at freelance markets to find the going rate for building code in the platforms you work in. But the world is full of businesses with absolutely no technical competence at all, and so much operational competence in their own field (health services, benefits consulting, reinsurance, whole animal butchering, whatever) that they could take over the world if someone anywhere would just notice the opportunity to scale their processes (lead gen, customer retention, supply chain, market expansion, franchising, customer service) with basic technology. To many, maybe most of those businesses, just being able to throw together a Bootstrap/Rails app makes you some kind of terrifying Wizard. If you can get over the urge to talk like a Wizard, and apply the customer service aptitude taught to every new employee at Nordstroms, you would probably find it's nowhere nearly as hard to capture the value of your work as you think it is. I'd also note: if you're incapable of convincing a tech-impaired local business to consider a value-priced engagement that will make or save them millions of dollars, you may have a hard time building your own company(ies). Maybe not, though! Totally possible to skip that step.
  - loceng 14y ago
    I agree with all that you say. Not sure about something though. I'm not sure you'd have access to the information that would allow you to discover/see the possibility of changes that could allow millions of dollars in positive changes. Also, I'm thinking in ranges of $10-$100 million+ per year ranges; Larger ecosystems, etc.. and to have such an influence in an existing company, where they'd be willing to pay you out anything other than bonus or work you're way up to a million-dollar salary, would require many many years working at said time, with lots of risk that you wouldn't be rewarded adequately.

patio11 14y ago

In broad strokes, make businesses money. In a little more detail, I (personally) work mostly for B2B SaaS businesses and know a few things which tend to work for generating incremental growth in revenue. If you've followed my blog or HN posts they won't sound all that impressively new: write drip email campaigns, do A/B yet, redo pricing tiers, optimize conversion funnels, etc etc. There are many other consulting specialties out there, obviously, but that seems to be a mutually happy place for my abilities and clients' businesses.

enjo 14y ago
Just to be clear: This is different than "freelancing" or "contract development". This is more traditional business consulting. You're going in and changing processes and structures more than anything else. It might be around a specific goal like "make our signups more effective", but you're not just writing some code. You are going in an helping them to change their mindset by incorporating feedback (A/B testing) and new methodologies to run their business better. You get paid so much because the results don't just result in better signups, but in a transformed company at the end. To do this type of consulting you need extreme credibility. Either a big business win, an ivy league education, or something equally as impressive.
- tptacek 14y ago
  This meme about there being "contractors/freelancers" and then "consultants" is toxic. In the markets that Patrick and Jason Cohen and Brennan Dunn are talking about, almost the entire difference between "freelancer" and "consultant" is "how you price engagements". It is true that consultants value-price engagements, so that they collect a percentage of the revenue or cost-savings derived from their code instead of a scaled hourly rate. And it's true that to do this, consultants have to think about the actual business context of their code, and be able to confidently propose the value of that code to a real business. But that's where the differences end! Patrick is writing code on his engagements. He's using the same problem-solving methods you're using. On a day-to-day basis actually delivering for clients, he's writing code to generic metrics and then optimize them. The only thing he does differently from you is that he chooses to work on metrics where he knows he can make a case for revenue directly attributable to the metric. It does not take a "big business win" or an Ivy education (WAT?) to "consult" for clients as opposed to "contracting" for them. You don't even have to be particularly attentive to your clients businesses, because so many people have built and written up methodologies for using code to make money for businesses; you can literally start by reading up on those, and offering them to clients who don't already do them. How many of your freelance gigs were for clients with sophisticated email marketing systems? How hard do you think it is to send triggered email updates to clients? Start there.