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.

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