May 28, 2019

What to consider when you want to go from consulting to building a product?

Pandabob

Dear Indie Hackers, I've got a question about how to to go from consulting to building your own product and how feasible is it in the first place?

First, some context: Myself and a couple of college friends have been thinking of starting our own business for quite a few years now. Most of us work in dev shops doing client work and one of us is in a startup. We're also all technical and all studied either math or physics.

We're most likely going to set up our own shop in the fall and I've already had meetings with prospective clients who seem to have development needs, so I'm relatively confident that we can sell ourselves. Our ultimate ambition, though, is to go from consulting to building a product. At the end of the day, we want to sell software, not hours.

Our current reasoning is that we'll aim to do consulting in industries where we can get exposure to interesting problems which we could then convert into building a product. Does that sound sensible? Are there some obvious pitfalls we're not thinking about?

How hard is it, in general, to go from consulting to building a product? Will we always be beholden to the hamster wheel of selling hours to keep the lights on?

  1. 9

    I'm a full-time consultant and launched 3 products as side projects. I'll tell you about my experience. It's not a recipe for success but can give you an idea on what to do.

    My consulting business is currently my main source of income. I run a small digital marketing agency with my wife. It pays our bills. Period.

    Two of the products I've launched was built primarily to meet our customers' need. Eventually, they became commercial products. But shipping is only the beginning. You need to acquire and retain customers, provide support, handle payments (and refunds)... It's a lot of work!

    How hard is it, in general, to go from consulting to building a product?

    For me, the hardest thing is that 100% of my income is from consulting. And I spend almost my entire day doing consulting work. My challenge is to figure out how to generate revenue from my products so that I can work full-time on it (and quit consulting).

  2. 3

    If the product is supposed to be a SaaS, consider that building and growing a SaaS takes years (I'd say at least two years to see reasonable revenue). If you decide to go down that path, be prepared for the financial implications.

  3. 3

    I've been a part of three different startups who tried to make this transition. Two of the three went out of business, the third couldn't make the switch and is essentially a contract shop only.

    It's hard because the finances don't line up. Can you make enough margin on your services to afford paying for a small team to build a product without needing them bill a customer?

    It's hard because client needs are always more important than your own product. Can you afford making a paying client unhappy because you are keeping good people focused on a product that isn't their engagement?

    It's also hard because internal politics can tend to create resentment among team members. This obviously depends on how you rotate the team and allocate work, but in all three of the companies I've tried to do this at, there ended up being two divisions of the company, and neither liked each other very much.

    Is it possible? Sure. Is it the most likely outcome to make this transition successfully? No. You have to be extremely intentional about all your decisions.

  4. 2

    Here is my article about my own journey of switching from 3-people dev-team to product for developers called QuickAdminPanel: https://medium.com/successful-it-projects/moving-from-services-to-product-7-business-lessons-learned-from-1000-first-customers-83fa1fea2897

    Lessons written 1.5 years ago, and still haven't made full jump since then.

    The main issue with product is that it's REALLY LONG way from zero to income which would fully replace consulting full-time, especially for a few people and their families.

    And it's not about product, developers can create products. It's about business side - marketing, selling, promotions, cold calling/emailing, customer support etc.

    Especially since it seems that you don't even know what your product would be. I would advise to start on the product ONLY when you're passionate enough about that niche that you would work hard for a few years on the product without burnout. Also make a deep research of the market whether people you're targeting would actually be willing to pay for that product.

  5. 2

    Since you already know the drill of how to create a product, I would say just single thing:

    Be where users are. Never lose sight of your users - be it newer ones, or the ones who have already invested into you.

    In your consulting life you already did it - so you know how important it is.

  6. 2

    I'm going from teaching children to building a completely unrelated product. Your way sounds easier.

    It's only unfeasible to build a product when you decide it is. Your idea sounds like a good one and even if it was too risky for my taste, it would still be entirely as possible as long as you keep working at it.

    Best of luck!

  7. 1

    It's quite possible as long as you're patient while consulting and keep your eyes open for opportunities and trends that could be turned into a product. I've personally had pretty decent success doing precisely that with my current product.

    In the interest of not being redundant, I'll post a link to my interview here on IH where I also describe how the transition happened for me: https://www.indiehackers.com/interview/editionguard-67518b8a3d

    Good luck!

  8. 1

    Thanks for all the replies, these have been very helpful!