12 years ago I founded my first startup. Everything was impossible. I literally had to invent every piece of it myself. The only thing we got free back then was a copy of Linux. Everything else we had to pay for or basically invent on our own. Just hosting a simple video clip about our server appliance was going to cost us a fortune if more than 1000 people watched it. And since we had to develop everything ourselves it took several months to get the smallest idea off the ground.
Today I can have an enterprise ready application with a distribution channel, online/mobile multi-media broadcasting capabilities, unlimited space and bandwidth, with all the social bells and whistles ready over a weekend. And it's all free, or almost free.
Between the Amazon AWS, Google Applications, WordPress, Facebook APIs, Google Maps, and YouTube alone I am probably saving millions of dollars in infrastructure. Think about it! Ten years ago in order to put together a video streaming application, I would have to build a huge server farm, buy some ridiculous amount of bandwidth and space, and then pay a few dozen developers to develop an application for me. Today I just embed a piece of code from a 3rd party API and I'm on my way. These applications have also reduced the launch time required for new ideas from months to days. There is really no excuse for not trying to execute a new idea these days.
The challenge has gone from creating something, to creating something that's earth-shattering enough to garner the attention of a few hundred thousand people. The nice thing now is that you can try your idea right away, if it doesn't work, then you can move on to the next idea. This level of agility is increasing in a break-neck pace and the number of products on the market has exponentially increased over the past three years.
As an investor, when startups tell me that they need millions of dollars to develop their app nowadays I turn and run for the hills. There is absolutely nothing that should cost that much to do a real proof of concept. Recently, with DishClips, I realized that most of what we were working the hardest on was available for free from FourSquare. I have since realized that there are very few things that we need to develop on our own. Information is freely available all around us. It's the ingenuity it takes to turn that information into actionable decisions that adds value. And doing that, often costs very little.
Wednesday, December 19, 2012
How to start your own consulting business
I've been a consultant for 15 years now and every so often people ask me how they can do the same. The question is somewhat annoying because it suggests that what I do is easy enough that there's just a formula to it. But nonetheless there is some wisdom that applies across the board to any area of consulting that you may get into. The basic question always becomes: How do I get customers?
The answer depends on the type of consulting you're looking to do of course...
But the old fashioned ways are still best. Forming relationships with customers is the only great way to get new clients. Word of mouth is basically your best tool.
Here are some general ideas that have helped me put my consulting business together over the years (and some things I would still love to do):
1) Attend user groups and seminars in your related industry and meet people. Make sure you listen to what they're doing so you can spot trends and understand where the needs are.
2) Get to know your competitor - And offer to subcontract work through them at a reasonable rate so they're still meeting their margins. These are typically larger outfits that have been in business several years and have an established client base. It goes without saying, NEVER try and steal a client from anyone who is open to giving you work.
3) Contribute on related forums online until you're viewed as an expert and make sure your contact information is visible in your signature
4) Contribute to existing blogs in your area of expertise. Most bloggers will welcome contributors who are contributing actual information.
5) Look for full time job postings in your area and offer your services as a temporary solution until they have found someone to fill the role.
6) Simplify and target your offering so that you're not viewed as the jack of all trades. You want to have a focused niche as much as you can so that clients can believe you're an expert in the area.
7) Use your LinkedIn network (and others) to reach out to people that may do the hiring and share your work with them.
8) Project based consulting is by far the best way to get your foot in the door. Try and understand the capital planning process at potential clients, this will help you with your timing. There are several services online that list RFPs online. Some are fee based and some are free.
9) Don't discount yourself. You're only worth what you say you are. And if you're saying you charge 25% of your competitor then you're 25% as good in the eyes of those who don't know your work well.
10) Keep up with trends in your industry and use them in your writing. Don't bombard your potential customers (even if it's a very small list) with e-mails. Wait until you have something that can contribute and then send an email to them. Write about upcoming events and what they should do to prepare (year-end, new regulatory events...)
11) Offer training webinars online in areas that you're an expert and give away 20% of the solution in 30 minutes. Then, even if poorly attended, make them available online for later viewing. Make sure your contact information is always easy to find.
12) Get to know all the other consultants in your niche. This is perhaps the most important. Form a relationship with them. As a consultant in the IT industry, I often come across work that I cannot take on and I refer that work to others that I know well and trust. Don't look at anyone as a competitor, they're your referral network, nothing else. Share with them what you're doing and listen to what they're up to. Offer to help whenever you can and become part of their trusted network of people they can reach out to when opportunities arise.
This of course applies both ways. Be sure to go out of your way to forward opportunities to others when you come across them.
And lastly...
13) When you get new clients, never lose them. This means going out of your way to make projects successful. You must become the reason and the possibility for project success if you want the benefit of referrals. Get to know everyone you can at the client site and be respectful and courteous to everyone you meet. Don't involve yourself in politics at your client's company. Get the job done. Keep up with people at old clients ESPECIALLY when they change jobs. This is a new opportunity for your to use the same contacts to get new clients.
The answer depends on the type of consulting you're looking to do of course...
But the old fashioned ways are still best. Forming relationships with customers is the only great way to get new clients. Word of mouth is basically your best tool.
Here are some general ideas that have helped me put my consulting business together over the years (and some things I would still love to do):
1) Attend user groups and seminars in your related industry and meet people. Make sure you listen to what they're doing so you can spot trends and understand where the needs are.
2) Get to know your competitor - And offer to subcontract work through them at a reasonable rate so they're still meeting their margins. These are typically larger outfits that have been in business several years and have an established client base. It goes without saying, NEVER try and steal a client from anyone who is open to giving you work.
3) Contribute on related forums online until you're viewed as an expert and make sure your contact information is visible in your signature
4) Contribute to existing blogs in your area of expertise. Most bloggers will welcome contributors who are contributing actual information.
5) Look for full time job postings in your area and offer your services as a temporary solution until they have found someone to fill the role.
6) Simplify and target your offering so that you're not viewed as the jack of all trades. You want to have a focused niche as much as you can so that clients can believe you're an expert in the area.
7) Use your LinkedIn network (and others) to reach out to people that may do the hiring and share your work with them.
8) Project based consulting is by far the best way to get your foot in the door. Try and understand the capital planning process at potential clients, this will help you with your timing. There are several services online that list RFPs online. Some are fee based and some are free.
9) Don't discount yourself. You're only worth what you say you are. And if you're saying you charge 25% of your competitor then you're 25% as good in the eyes of those who don't know your work well.
10) Keep up with trends in your industry and use them in your writing. Don't bombard your potential customers (even if it's a very small list) with e-mails. Wait until you have something that can contribute and then send an email to them. Write about upcoming events and what they should do to prepare (year-end, new regulatory events...)
11) Offer training webinars online in areas that you're an expert and give away 20% of the solution in 30 minutes. Then, even if poorly attended, make them available online for later viewing. Make sure your contact information is always easy to find.
12) Get to know all the other consultants in your niche. This is perhaps the most important. Form a relationship with them. As a consultant in the IT industry, I often come across work that I cannot take on and I refer that work to others that I know well and trust. Don't look at anyone as a competitor, they're your referral network, nothing else. Share with them what you're doing and listen to what they're up to. Offer to help whenever you can and become part of their trusted network of people they can reach out to when opportunities arise.
This of course applies both ways. Be sure to go out of your way to forward opportunities to others when you come across them.
And lastly...
13) When you get new clients, never lose them. This means going out of your way to make projects successful. You must become the reason and the possibility for project success if you want the benefit of referrals. Get to know everyone you can at the client site and be respectful and courteous to everyone you meet. Don't involve yourself in politics at your client's company. Get the job done. Keep up with people at old clients ESPECIALLY when they change jobs. This is a new opportunity for your to use the same contacts to get new clients.
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