The Summer of 2010 I spent working out of my home office, with a steady stream of work from my ex-employer. It's not uncommon for those striking off on their own to be contacted by the last employer to perform some emergency work. It's a short term win-win situation. If you have a huge depth of experience and knowledge on a product, your former employer can hire you temporarily (for a larger sum) while they try to staff and train a replacement or two. They key word there is: temporarily. Naturally, you should be charging more for your services as you no longer enjoy any benefits. The employer wins by getting the job done quicker than hiring and training a new staff.
While contracting, I continued with the sales and marketing process for my new firm. Primarily, this involved seeking out connections I made from my last job on LinkedIn and attending and speaking at trade shows. I can't imagined how well I would fare in a pre-Internet world where I would have to locate business cards and cold call people. I received a lot of encouragement over LinkedIn and other means, but to find a committed client remained elusive. I dabbled in developing a product, but wanted to refrain from all out coding without a proven market for it. I started to learn that no matter how good a lead felt, the odds of it leading to a paying gig was about 1 in 100. I also had one eye on my "Non-compete" contract, even thought I wasn't violating a thing.
Being based in Massachussets, my state heavily favors corporations when it comes to Intellectual Property (IP). I'm stunned when I read about how people in California will freely walk between Google and Facebook with little fear. Here in MA, the going timeframe is 1 year: Don't talk to our clients/employees, stay away from our competitors, and don't work on what you worked on here. What a way to stifle innovation and entrepreneurship!! I don't condone the outright theft of ideas, but there are already laws protecting that. In no way was I looking to infringe on my ex-employer, but those documents are design to make you so scared you won't attempt a thing.
So I kept working on contracts. Then I got some welcomed and life changing news. My wife was pregnant with our first child! We were both happy and typically nervous as to how our lives would change. He was to be born in March 2011. I had better start planning on the personal budget being increased. Oh yeah, my wife's healthcare from her teaching job would expire too. Hmm. I better look for a family plan that ...OH MY GOD IT'S HOW MUCH PER MONTH?!?!. Ok. We'll ride that train when the insurance actually runs out.
Contracting treated me well, and then it suddenly stopped. In reality it wasn't "suddenly" or a surprise, but when it happens....it's still a shock. No more work was need by me. By October I was back to full time searching for the next big thing. Lots and lots of leads, but no income. Not so fun to see months of bank transactions all going one way with expenses soon to be on the rise.
With a little one on the way, and no sure jobs on the horizon, I started to get nervous. But somehow I tried to remain optimistic. In order to survive in this game, you need a heart of steel.
Wednesday, August 24, 2011
Tuesday, August 9, 2011
Let's get started...on what?
After a brush with validating my ideas with a panel of outsiders, I decided to focus more on development and communications within my contact list. Ever been to a family gathering or a party and someone inquires into exactly the business you are in? It can be difficult to explain and not take an hour to do so and bore them to death. This is totally understandable. There are a lot more areas of employment since we've evolved from butcher, baker, or candlestick maker. Trying to explain to those judges about opportunities deep in the institutional trading market was not possible in a 5 minute pitch. They were looking for young companies that claimed to make the world's first combustible engine based on dishwater. This is something an investor could understand quickly and would be interested in. They could brag to their friends about their investments at dinner parties with an immediate understanding. If they were looking at software, it had to be "Cloud" or "Mobile" or "Social Networking".
Now that I was employer free, where to start? While I had ideas for various products/improvements, I also needed to think about revenue. I could not afford for my wife and I to live long without myself bringing in some income. There's always that struggle to "build before you sell." Do you hole up and code for months and hope to bring a product to market? I found that extremely dangerous and personally witnessed another entrepreneur struggle with this. Developers typically think this way, especially when they are employed by a firm with an R&D budget and they're not worried about the next paycheck. Building the best product does not predict the winner. To make a successful business, there's more to it than a killer product.
I spent a few weeks prototyping an idea I had. It was so refreshing to be able to focus on exactly what I wanted to work on, however my bank account predictably kept going down. A saving grace for income came from consulting opportunities. I was asked to help out on a product I used to work on from the old employer. It was steady work, but knew it wouldn't last long. If you haven't consulted before, you might be surprised by how high a rate you need. Remember, no benefits, sick/vacation...you need a lot more than you think. Once I negotiated a fair rate it felt refreshing to receive an occasional check. And that's the seduction of consulting...
Consulting can be very rewarding. If you manage to land a good client or two and they are willing to fund you for long periods, financially it can be stabilizing. Typically, all the work you do for them is theirs. When you are done, you own nothing. If you have plans to create a product and move forward, consulting can also lure you into a comfort zone that you will never get out of. I have tried to keep that balance of consulting income but also invest in a productized solution. I try to question myself occasionally "Am I moving the company forward, or just reaping some consulting revenue?" It's a balancing act.
Even if I had a production ready product, enterprise sales cycles are so incredibly long. So here it was the end June and I was 2 months into it. I made some sales calls that mostly fell flat. Around this time I received a call to inquire about my products/services. This was almost July and it wouldn't be until January before anything came of it. In the meantime I consulted and tried to learn how to work salesforce, quickbooks, and learn about healthcare plans. I could no longer just code, there was way more non-developer stuff to learn. And hovering over everything was the floating date where money would run out.
Now that I was employer free, where to start? While I had ideas for various products/improvements, I also needed to think about revenue. I could not afford for my wife and I to live long without myself bringing in some income. There's always that struggle to "build before you sell." Do you hole up and code for months and hope to bring a product to market? I found that extremely dangerous and personally witnessed another entrepreneur struggle with this. Developers typically think this way, especially when they are employed by a firm with an R&D budget and they're not worried about the next paycheck. Building the best product does not predict the winner. To make a successful business, there's more to it than a killer product.
I spent a few weeks prototyping an idea I had. It was so refreshing to be able to focus on exactly what I wanted to work on, however my bank account predictably kept going down. A saving grace for income came from consulting opportunities. I was asked to help out on a product I used to work on from the old employer. It was steady work, but knew it wouldn't last long. If you haven't consulted before, you might be surprised by how high a rate you need. Remember, no benefits, sick/vacation...you need a lot more than you think. Once I negotiated a fair rate it felt refreshing to receive an occasional check. And that's the seduction of consulting...
Consulting can be very rewarding. If you manage to land a good client or two and they are willing to fund you for long periods, financially it can be stabilizing. Typically, all the work you do for them is theirs. When you are done, you own nothing. If you have plans to create a product and move forward, consulting can also lure you into a comfort zone that you will never get out of. I have tried to keep that balance of consulting income but also invest in a productized solution. I try to question myself occasionally "Am I moving the company forward, or just reaping some consulting revenue?" It's a balancing act.
Even if I had a production ready product, enterprise sales cycles are so incredibly long. So here it was the end June and I was 2 months into it. I made some sales calls that mostly fell flat. Around this time I received a call to inquire about my products/services. This was almost July and it wouldn't be until January before anything came of it. In the meantime I consulted and tried to learn how to work salesforce, quickbooks, and learn about healthcare plans. I could no longer just code, there was way more non-developer stuff to learn. And hovering over everything was the floating date where money would run out.
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