Consulting is like selling crack (go work for a startup)

It is hard to go from solo consultant to software business.<p>That's why people don't do that. They build a solid pipeline of consulting work, <i>then they hire people</i>.<p>It is straightforward to build a software business with 1-3 people paid near-market wages by another 1-2 people doing hardcore consulting.<p>I could go on and on and on and on about how much better this model is than the "eat ramen and hope for VC" model, but the nut of the rebuttal to this particular post is so simple that I'll spare you.

I strongly disagree with you James. Virtually all of the drawbacks you mention are choices. They are not implicit to acting as a consultant. I used my earning potential as a consultant to build a significant savings. I lived on about half of my income, which wasn't all that uncomfortable, and sacked away the rest. Within three years, I had enough money to make cash loans to my own startup and work for a year without pay.<p>The fact that I was a consultant prior to bootstrapping wasn't all that relevant. I could have done the same with a salary, but I would have been forced to quit when my start-up's time requirements encroached on my job. With my consulting gig, I was able to sell the work to a couple of trusted consultants and collect a trailing commission on work I wasn't even doing. I couldn't have done that with a job.<p>Transitioning to a start-up will be whatever you make of it. Yes, one should be aware of the pitfalls you outline. If your trajectory is that of a founder, having three kids and moving in to an expensive house is probably not going to make things easy, but there's nothing about being a consultant that implicitly requires these things.

Epic linkbait.<p>"Consulting is like selling crack, if you want to be a founder of a startup - so go work for a startup."<p>should be the title. As an independent consultant I can only laugh at fallacies ridden in this article as if it applies to consulting in general.<p>"You get used to spending whatever you want on hardware, furniture, tools, and being fairly loose with your money...You get used to making that much money personally...bad habits, blah blah"<p>Give me a break. Proper personal finance is almost always relative to your income. If you make $250k/year or $50k/year it is still your responsibility to be <i>responsible</i> with your money. If you buy a $1M condo on a $250k/year salary and drive a Maserati, yes, you may have issues as a FOUNDER of a startup with no $$, but maybe you should have thought about <i>investing</i> or even <i>saving</i> (gasp) your money for padding when you started your startup. Common sense.

Because the lifestyle is too good? I guess if you get used to that much money it could create a motivational problem, but that could happen regardless of what you're doing. Don't forget the valuable things that consulting teaches you:<p>* How to maximize billable hours. This translates well to finding your minimum viable product and staying focused.<p>* How to hustle. I guess it depends on what kind of contracts you are getting, but the client relationship has parallels both to the customer relationship and b2b relationships. You often have to sell your ideas to your clients.<p>* How to build a lot of different things. If it's software you're doing, you'll get more under your belt by contracting than working at one company for a long time.<p>* How to run a business. You will learn a reasonable amount about the boring accounting, tax and legal issues of running a business. May not be super-applicable, but on the other hand it's a lot more useful than the distorted edicts that make their way down the corporate pipeline ostensibly because of some business or legal requirement way outside the view of the rank and file.<p>I guess when it comes to entrepreneurship I'm a glass half-full kind of guy. Pretty much any job you have can lead to experience that helps you succeed as an entrepreneur. Even a burger flipper may see things on the inside of the fast food world that could form the seed of a startup idea. If there's one thing that good entrepreneurs have in common, it's a relentless pursuit of success using the tools they have available.

This is pretty interesting in light of a post that was on here a couple days ago: <a href="http://joel.is/post/6687368692/startup-bootstrapping" rel="nofollow">http://joel.is/post/6687368692/startup-bootstrapping</a><p>It seems that if you look at full or part time consulting as simply a way to pay the bills while you work on getting a startup off the ground (or working for free as a super early employee at a startup), to the point that its ramen profitable, then consulting can be quite beneficial. In fact I believe I read somewhere that Chris Wanstrath and PJ Hyett were both doing freelance work when they first were bootstrapping github. Remaining extremely frugal despite a six figure salary also seems key here.<p>This seems like a "it depends on the individual" sort of thing.

It's probably true that starting a startup is the only thing that can prepare you for starting a startup. But consulting is still a lot better for experience than a typical full-time jobs. What FT job will teach you about provisioning equipment or anything about accounting?<p>I believe it was Joel Spolsky that said the success of a software company was based on how well it turned developer hours into money. What better place to do this than somewhere where you trade your own hours into your own money?<p>It's obviously not a seamless transition from consultant to startup founder, as the author has indicated. But in general you'll learn a lot more about running a business as a consultant than you otherwise would as an FTE anywhere.

Well, if you want to use this provoking analogy, then I disagree. Recruiting for a company (whether that be a startup or any other) is like selling crack - you hope to make massive profits by taking advantage (long hours, low pay) of other peoples' dependency on you (not enough savings/skills/personal commitments/psychological barriers to move elsewhere).

So what's the disadvantage? That you get too much money?<p>Can anybody mention the disadvantage of being a consultant over having a startup? Or could it be that consulting is better than starting a startup, at least sometimes?<p>Edit: what about consulting only for interesting projects, for example?

Yes, it's easy to get comfortable on a $200k income. But it's easy to do that at almost any moderate level. It's very easy to spend all you earn and then some. Consulting and building up savings (burn rate, runway, etc) is a choice some make (I'm in that boat right now).<p>If someone was really earning $250k a year (and living in a moderate cost-of-living area) with plans to start a company, I'd certainly have no sympathy if they hadn't managed to accumulate some significant savings to get started with. There may be situations where more than one person's savings is required - you may need hundreds of thousands or even millions to attack certain markets, but I can't think of too many, and can think of many more markets where it takes but a small fraction of that to get started.<p>Also, FWIW, good luck with adzerk! Been meaning to swing by DU lately to see how things are going with all the great companies going on in the area.

Wasn't Jason Fried of 37Signals a consultant before he partnered with DHH to do Basecamp?<p>Isn't their success a blueprint for doing what this article says cannot be done?

You don't need to spend all the money you earn. If you save - that money will stand you in good stead when you're living on close to no income running a start-up.

I mostly agree with this, however one good thing about consulting is that you get to see a lot of different realities in a relatively brief period of time, which might be a good way to generate some product ideas, and also sort out what you like and don't like about how different places are run.

The biggest advantage the freelancer has is that he can leverage his pipeline to establish relationships with potential co-founders. By subcontracting them to work on specific components of projects. Enabling a team to form organically.

I don't know if I felt like a dealer as a consultant as much as I did a user. Kicking ass for a month or so and getting big pay days is a rush on its own. I don't even spend money and it is fun just to see the big numbers come in. I just recently stopped consulting and I think it was more like giving up a drug than selling drugs.<p>I quickly realized though as others already know there are only so many waking hours I can work. I did some napkin math and saw my top end was low. What I really wanted was to have more time and more money which requires a business that makes money while I'm not looking so I'm off consulting and focusing on other ideas.

Could someone explain what the difference between a independent consultant and a contractor is in the software industry?

Consulting is the opposite of selling crack.

Do you get to know about the coffee business by working at Starbucks? I dunno, seems like a strange route.

How would one start as a consultant? Is it based on having industry connections and relationships or can it be achived some other way?

So how many people sold crack here, or at least bought?