Scaling consulting / Contracting

[sleepymonster]

Currently I am a contractor in the Data Science space. It was a great move and I more than doubled my salary overnight switching from being employed.

I had no problem finding gigs so far but the actual work is really getting to me and it it basically just sort of a "midlane" approach. In my gigs so far I am basically hired help since tech companies can't find enough experienced staff and work as a normal employee just less affected by office politics. The gigs also tend to be long, at least 6 months, and often extended.

It is good but I am not creating any lasting value beyond getting paid per hour I work and I would rather build a real business that in the end would not be dependent on me.

As for now I can see I have two ways to scale this.

1) Try to find other people that are qualified enough, hire them and try to find gigs for them. A lot of risk since I would have a payroll if I can't sell enough and I suspect it also would be hard for recruit people good enough without offering them equity which I absolutely not want to do.

2) Try to become a real "consultancy" in that I try to sell in more defined projects. I have really no idea on what that could be since all work I do seems to be pretty different dependent on the type of business my client is in. It is kind of hard to sell if I am not sure what the client needs. A plus however is that it might be easier to get talent to work for me since their pedigree will matter less.

Anyone has other ideas on how to practically scale this into a real fast lane business? Any book suggestions? Your own story?

 

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[AndrewNC]

Currently I am a contractor in the Data Science space. It was a great move and I more than doubled my salary overnight switching from being employed.

I had no problem finding gigs so far but the actual work is really getting to me and it it basically just sort of a "midlane" approach. In my gigs so far I am basically hired help since tech companies can't find enough experienced staff and work as a normal employee just less affected by office politics. The gigs also tend to be long, at least 6 months, and often extended.

It is good but I am not creating any lasting value beyond getting paid per hour I work and I would rather build a real business that in the end would not be dependent on me.

As for now I can see I have two ways to scale this.

1) Try to find other people that are qualified enough, hire them and try to find gigs for them. A lot of risk since I would have a payroll if I can't sell enough and I suspect it also would be hard for recruit people good enough without offering them equity which I absolutely not want to do.

2) Try to become a real "consultancy" in that I try to sell in more defined projects. I have really no idea on what that could be since all work I do seems to be pretty different dependent on the type of business my client is in. It is kind of hard to sell if I am not sure what the client needs. A plus however is that it might be easier to get talent to work for me since their pedigree will matter less.

Anyone has other ideas on how to practically scale this into a real fast lane business? Any book suggestions? Your own story?

Part of my business is offering service per hour/multi-month contract (one session per week).

What I'm doing is training people from the ground up through a training curriculum I created. I teach them the skills, I teach them how to get their own clients, and it's framed up in the sense of helping them start their own business (the main purpose of it).

When I am unable to work with a client, for whatever reasons (schedule, client budget, etc.), I now have a few people who I am comfortable handing the session over to, not as employees, but as contractors. So by training them to the level I'm at with the skillset and structuring it this way, there's no formal payroll or anything.

I've only done this for a few sessions so far...so it's not scaled out into an agency where I'll make it more formal.

Could you build up a pool of qualified people, close the sales yourself, and when you're time is full - send off work to them while you take a portion for yourself for closing the sale? And when this takes off, you can work into doing it more formally with payroll/stuff in the future?

 

[sleepymonster]

It's not a bad idea but I am afraid the gigs are too diverse to train people for. Basically what clients want is someone that is part software developer, part statistician, has a quantitative degree and preferably worked at a reasonably well known tech company. Data science is such a new concept so most clients actually do not know what they want except that they want to do it.

I could be that I am too used to tech companies though. It might be worth trying to go a bit more downmarket.

On the other hand I guess this is the most natural way to build a consultancy though. You start by taking in subcontractors and when you reach a certain scale it makes sense to hire. I think it is a good thing but it would also mean giving away the client contact to someone else. I would rather own the client myself.

Also I must add that the standard rate for this arrangement by contracting brokers is 10% which is nice but not a huge margin.

 

[Andy Black]

Currently I am a contractor in the Data Science space. It was a great move and I more than doubled my salary overnight switching from being employed.

I had no problem finding gigs so far but the actual work is really getting to me and it it basically just sort of a "midlane" approach. In my gigs so far I am basically hired help since tech companies can't find enough experienced staff and work as a normal employee just less affected by office politics. The gigs also tend to be long, at least 6 months, and often extended.

It is good but I am not creating any lasting value beyond getting paid per hour I work and I would rather build a real business that in the end would not be dependent on me.

As for now I can see I have two ways to scale this.

1) Try to find other people that are qualified enough, hire them and try to find gigs for them. A lot of risk since I would have a payroll if I can't sell enough and I suspect it also would be hard for recruit people good enough without offering them equity which I absolutely not want to do.

2) Try to become a real "consultancy" in that I try to sell in more defined projects. I have really no idea on what that could be since all work I do seems to be pretty different dependent on the type of business my client is in. It is kind of hard to sell if I am not sure what the client needs. A plus however is that it might be easier to get talent to work for me since their pedigree will matter less.

Anyone has other ideas on how to practically scale this into a real fast lane business? Any book suggestions? Your own story?

Ooo... Sounds a lot like my story.

I was an IT contractor for 10 years (Production Oracle DBA on UNIX systems), then was an AdWords Contractor for a few more years.

• I had to go onto client sites.
• I was paid daily.
• When I didn't turn up (sickness or holiday) I didn't get paid.

I'm now a freelancer/agency owner.

• I don't go onto client sites anymore.
• I have lots of clients around the world.
• I speak to them on Skype a lot, and/or communicate via Basecamp.
• I charge them a flat monthly fee.
• I plan to scale by getting more clients in the verticals I'm doing the best work in.
• I plan to own the assets I build, instead of building assets for other companies.

I'm moving through this sliding scale:

1. Employee
2. Contractor
3. Freelancer
4. Agency Owner (bespoke services)
5. Agency Owner (productised services)
6. Platform Owner

Maybe listen to:

• www.tropicalmba.com/services
• www.tropicalmba.com/consulting
• AndyTalks with @Nicoknowsbest about Goal-Setting and moving from Freelancer through Agency

(Welcome to the forum and thanks for your intro.)

 

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[Sean Kaye]

In the time for money game, especially in the IT world, Data Science is like the really top shelf cocaine - it's an awesome high without any of the nasty side effects but you're still taking illegal drugs.

How about you use your lucrative data science gig to invest in other unrelated ventures that have more "fastlane" potential?

A few years back I did a bunch of side hustle gigs for people where I took small equity stakes in their business in exchange for my time. I've cashed out on a couple of those over the years. That's another potential avenue for you.

The problem with Data Science is that it's very bespoke unless you're creating Cloudera, HortonWorks or SAS.

 

[Tim Allen Jr.]

Currently I am a contractor in the Data Science space. It was a great move and I more than doubled my salary overnight switching from being employed.

I had no problem finding gigs so far but the actual work is really getting to me and it it basically just sort of a "midlane" approach. In my gigs so far I am basically hired help since tech companies can't find enough experienced staff and work as a normal employee just less affected by office politics. The gigs also tend to be long, at least 6 months, and often extended.

It is good but I am not creating any lasting value beyond getting paid per hour I work and I would rather build a real business that in the end would not be dependent on me.

As for now I can see I have two ways to scale this.

1) Try to find other people that are qualified enough, hire them and try to find gigs for them. A lot of risk since I would have a payroll if I can't sell enough and I suspect it also would be hard for recruit people good enough without offering them equity which I absolutely not want to do.

2) Try to become a real "consultancy" in that I try to sell in more defined projects. I have really no idea on what that could be since all work I do seems to be pretty different dependent on the type of business my client is in. It is kind of hard to sell if I am not sure what the client needs. A plus however is that it might be easier to get talent to work for me since their pedigree will matter less.

Anyone has other ideas on how to practically scale this into a real fast lane business? Any book suggestions? Your own story?

Disclosure: I've never done what you are speaking about, but i'm a business owner who has a couple of off-shore engineering resources, thought i'd provide thoughts from a different perspective.

I have a engineer that i've worked with for the last year, but havn't given him continuous work. However, i pay him out a bonus every month because of the MISSION CRITICAL work he's done for me. I continually bonus him for work he doesn't do because he knows my what my complex mission critical items, creates/updates/manages these critical items, knows what they are, and can deal with it if anything comes up. The cost of explaining those mission critical things to someone else and getting those things developed would be a pain in my arse and would cause me to explain.... mission critical items....

TD:LR - if you can find something that is critical to their business but easy for you automate/monitor, that's an huge opportunity. If they are anything like me, they'd gladly pay a fee to make sure stuff does not 'f' up, and would pay even more if things were effing up. This way you not only provide value for the now, but the work you do now, provides value for the future.

Hope this helps in any way.

 

[sleepymonster]

Ooo... Sounds a lot like my story.

I was an IT contractor for 10 years (Production Oracle DBA on UNIX systems), then was an AdWords Contractor for a few more years.

• I had to go onto client sites.
• I was paid daily.
• When I didn't turn up (sickness or holiday) I didn't get paid.

I'm now a freelancer/agency owner.

• I don't go onto client sites anymore.
• I have lots of clients around the world.
• I speak to them on Skype a lot, and/or communicate via Basecamp.
• I charge them a flat monthly fee.
• I plan to scale by getting more clients in the verticals I'm doing the best work in.
• I plan to own the assets I build, instead of building assets for other companies.

I'm moving through this sliding scale:

1. Employee
2. Contractor
3. Freelancer
4. Agency Owner (bespoke services)
5. Agency Owner (productised services)
6. Platform Owner

Thanks for a great reply!

Funnily first real job was actually working as a campaign manager at an Adwords consulting company.

I am listening to your Soundcloud recording and I think your point of trying to take on small projects and see if any patterns come up make perfect sense.

 

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[sleepymonster]

In the time for money game, especially in the IT world, Data Science is like the really top shelf cocaine - it's an awesome high without any of the nasty side effects but you're still taking illegal drugs.

How about you use your lucrative data science gig to invest in other unrelated ventures that have more "fastlane" potential?

A few years back I did a bunch of side hustle gigs for people where I took small equity stakes in their business in exchange for my time. I've cashed out on a couple of those over the years. That's another potential avenue for you.

The problem with Data Science is that it's very bespoke unless you're creating Cloudera, HortonWorks or SAS.

You really hit the nail on the head here.

I do invest the company's money in the public markets mostly because tax reasons but I am happy if that beats inflation and give me a bit extra.

For investing in another venture I think it would be foolish to try to run two companies at the same time and I know no one at the moment I would feel confident in investing in.

I haven't looked in to startups much as a type of client but I am somewhat skeptical since the foundation of what I do is having a massive database with user data and few startups have that scale. If they would have it, it is to late to get equity anyway.

 

[sleepymonster]

I have a engineer that i've worked with for the last year, but havn't given him continuous work. However, i pay him out a bonus every month because of the MISSION CRITICAL work he's done for me. I continually bonus him for work he doesn't do because he knows my what my complex mission critical items, creates/updates/manages these critical items, knows what they are, and can deal with it if anything comes up. The cost of explaining those mission critical things to someone else and getting those things developed would be a pain in my arse and would cause me to explain.... mission critical items....

I used to work in a place that had a contractor that built a web interface for showing data in a database that was updated twice a year. He got a decent monthly fee for basically uploading an excel file to the database twice a year and be available to fix anything in 24 hours if it broke. Absolutely a nice deal if you can get it.

 

[Andy Black]

I used to work in a place that had a contractor that built a web interface for showing data in a database that was updated twice a year. He got a decent monthly fee for basically uploading an excel file to the database twice a year and be available to fix anything in 24 hours if it broke. Absolutely a nice deal if you can get it.

What's worked for me to get closer to doing similar at scale is to keep solving problems for as many clients as possible. Instead of a few big bespoke projects, we're doing many smaller off the shelf pieces of work.

I'm not going to lie, revenue has been a bit of a roller coaster journey weaning myself off the bigger "consulting" gigs.

Weaning myself off the bigger companies was easy - I prefer dealing with business owners rather than managers/employees.

In that call I had with @Nicoknowsbest... we can't imagine how people can miss steps in that sliding scale.

Doing things that don't scale first and engaging the market in high-friction work gives you insights I don't believe you can get if you try to "run to SaaS" (as the guys on that Tropical MBA podcast chuckle about).


Data science etc is great. I was moving that way with my database and Maths background.

I had thought of creating a DBA and BI consultancy, but came to the conclusion I'd be dealing with the bigger corporate clients that I am fed up of working with. Plus you produce reports for other people to take no action on. Plus it's hard to convince a business to let you analyse their precious data.

It's very refreshing to analyse keywords that could drive more sales for a business - without asking for their permission.

I was the analyst for a team spending €120k a day on AdWords. I worked in another team with data scientists building models to analyse AdWords data. There's a LOT of data floating around in AdWords campaigns, and a lot of businesses who would benefit from that data being analysed so they can generate more revenue from the same spend.

It might be interesting to see how you can stack all your experiences and knowledge on top of each other to create a higher ground and "unfair advantage" for yourself.

My unfair advantage as an AdWords guy is my 15 years of IT and Database work.

What can you apply your data science skills to and be head and shoulders above your competitors?

 

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[RedKiteKid]

How timely, I keep going round in circles in my head on this; how do you grow a contracting business? When and how do I take on staff? How do I position myself and the business to make it a viable and fool(employee)proof scalable model? Am I good enough to actually train and manage others? Do I want to? And so on and so on?...

I like the suggestions in this thread about taking on lots of smaller projects and picking apart the similar themes to grow something from there.

 

[Andy Black]

@eliquid?

 

[eliquid]

Thanks @Andy Black

Data Science is kinda the new gold rush in our realm right now.

I mean, it's always been around and "hot" to those in the know... but by gold rush I mean it is starting to get "noticed" by mainstream lower end people in our industry.

How do I know?

I see ads all the time about how people in data science start off at $125k a year. Granted, that might not be entirely true for everyone, but it's what is being spouted off to the masses right now and the masses will want a chunk of that just like when MBA degrees got spouted off and Programming/Web degrees got spouted off, etc.

With that said, what shovel can you provide to these gold diggers?

I see these courses popping up on uDemy as well, so I know it's going to get saturated REAL quick if someone doesn't jump in.

Right now, I can't name a "top dog" guru in this space. If I can't name someone, that means others can't either.

Can you fill that void? It's currently open and ripe for someone to fall right into it.

That's how I would Fastlane this if I were you. Selling the shovel is almost always Fastlane.

Don't like bespoke scare you off. You can offer a shovel to fit several different people that want that $125k a year chunk that is getting advertised to them.

.

 

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[Andy Black]

Thanks @Andy Black

Data Science is kinda the new gold rush in our realm right now.

I mean, it's always been around and "hot" to those in the know... but by gold rush I mean it is starting to get "noticed" by mainstream lower end people in our industry.

How do I know?

I see ads all the time about how people in data science start off at $125k a year. Granted, that might not be entirely true for everyone, but it's what is being spouted off to the masses right now and the masses will want a chunk of that just like when MBA degrees got spouted off and Programming/Web degrees got spouted off, etc.

With that said, what shovel can you provide to these gold diggers?

I see these courses popping up on uDemy as well, so I know it's going to get saturated REAL quick if someone doesn't jump in.

Right now, I can't name a "top dog" guru in this space. If I can't name someone, that means others can't either.

Can you fill that void? It's currently open and ripe for someone to fall right into it.

That's how I would Fastlane this if I were you. Selling the shovel is almost always Fastlane.

Don't like bespoke scare you off. You can offer a shovel to fit several different people that want that $125k a year chunk that is getting advertised to them.

.

I hadn't thought of that. Interesting angle @eliquid...

...

What if @sleepymonster was to move from selling his skill on an hourly basis to building something multiple businesses can avail of that is detached from his time? (I ask because I know you have a SaaS.)

 

[eliquid]

I hadn't thought of that. Interesting angle @eliquid...

...

What if @sleepymonster was to move from selling his skill on an hourly basis to building something multiple businesses can avail of that is detached from his time? (I ask because I know you have a SaaS.)

Yes, this is what I meant by selling shovels like his own course/book, etc.

When it comes to SaaS though, I am not sure what he could make since he mentioned his customers needs are so different. The same could be said about a course or book, but I think when it comes to Data Science there are certain basics that can be taught and then sample more advanced outcomes that can be shared to give thought and learning material.

With a SaaS, he is going to need to identity a certain type of market and stick to that, instead of a general overview of Data Science as such with a course/book which could be niched down as well if he wanted.

Can he specialize in Data Science for ecommerce and develop a recommendation engine SaaS?

Maybe he can specialize in Data Science for Higher Education lead generation and build a SaaS around that.

These are all questions and thoughts he needs to think over and decide on.

I think a good opportunity could be in big data sectors. For example, companies with lots of data that currently use it in 1 primary way and showing them the hidden gems and relationships in the data they never knew/thought of so they can use it in new multiple ways.

It would be part Data Science and part Machine Learning Ai with unsupervised learning models.

The hitch would be, instead of him getting hired by companies.. he make these apps/SaaS for specific industries like Higher Education where possibly the SaaS works on enrollment data to be able to predict who is actually a good lead that an enrollment manager should work with, or what types of demos actually sign up for certain degrees.

It could also help with various other issues too.

 

[maverick]

The most successful consultants have an inept ability to productize a solution to a problem. This solution can be anything, from a framework/approach/toolkit to a full blown SaaS offering.

The way I would approach this is to understand the problems that the companies you're consulting for are facing. These are not necessarily the problems that you're brought in to solve as companies need to be able to define the problem before hiring in consultants. This usually means that the problem you're brought into solve, is merely a symptom and not the root cause of the problem. That's where the value lies - solving the root cause.

As an example, checkout the story of MOZ.com:
How Rand Fishkin Created An SEO Empire: The Story Of Moz.com

Like @eliquid mentions above, sell the shovel.

 

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[sleepymonster]

Thanks you all for many great ideas!

I never really thought about about education before. There is this site called datacamp.com that do sell instruction videos in data science I subscribe to through my company. Their instructors are top notch people, often the creators of the tech they instruct in but I could see an angle in that they are mostly focused on technical problems instead of actual business problems.

Moz is a great inspiration to look at too. The only trouble I see going down this path is that I am not an native English speaker or writer which might make my content a bit amateurish but I could just hire an editor.

My other idea for a product was to build a dashboard system for monitoring trends in business data like product sales automatically. Today most companies has some kind of qlikview or tableu dashboard but getting any idea on what trends are happening requires a lot of manual clicking around. However this is very risky since I don't know if my approach will work well enough, it will take a long time to build even a proof of concept and even if it works I am not sure if I could sell it. On the other hand, this has potential to become a real company.

I do have to make a call soon on what to focus on next and its not easy. Right now it stands between.

- Trying to come up with more specific consulting packages. Like I come to you, do X, it takes Y amount of time and costs Z.
- Just find a new gig that has higher hourly earnings potential but is not to long and hopefully get exposed to some new interesting business problems.
- Doing the udemy thing or building my own site and do the teaching thing.
- Build a proof of concept of my product idea and try to find someone that likes the concept enough to give it a try.

Obvious there is a huge synergy between the first three so that is something to keep in mind.

 

[Andy Black]

Here's a thread I started btw... but forgot to add to:

• 10+ Years IT Contracting at €300-900/day (Learnings)