Every startup requires cash. It’s not built on thin air as early stage investors think. Money for paying the lawyer, government fees, hiring developers and more importantly paying your rent, food, fuel, etc. An entrepreneur starts with a calculated risk of investing (or burning through) his savings for that 6 months period with an assumption that either a customer would start paying or an investor would bet on it.
In reality, a startup takes longer than the original time frame in most cases. If you planned for 6 months, you’ll take 12 before anything comes out of it. A PPT or a paper napkin plans writes you cheque when you already have money in the bank or sold two startups in the past.
So what do you do? You start doing consulting gigs! Smart entrepreneurs do it all the time. Some short gigs here and there. A lot of entrepreneurs I have known do it to get started after quitting their job. Paul, Bill & Co. did the same in their formative years. The most famous of the consulting stories is how Evan Williams consulted for a year at HP while building Pyra Labs which eventually got acquired by Google. Muziboo is a good example in India where the founders did consulting to bootstrap it.
As an entrepreneur, how do you manage it; where do you draw the line as to not getting distracted completely. There is a chance that consulting gig’s sweet money just takes over your primary passion.
I have compiled a list. Also, including some interesting nuggets from a thread on Hacker News (yeah, I love reading it. More gyaan than a single post anywhere!).
- Do a high impact consulting where a gig of 3 months can cover you for 9 months. The math is 3x.
- Try to do a gig at a stretch instead of a 2 days in a week stint. It kills the output of your startup but then when you are done, it is easy to just do a complete switchover rather than continuous context switches
- If you are doing consulting, treat your own startup like a client, as there may be other people working on this
- Throttle your rates, depending on the project and desperation for moolah
- Know your deliverable. Pick up hourly rates or visits per month Remember, you have your venture, you do not want to get caught in fixing a bug for days and goes beyond your original estimate.
- If you know something and you want to learn more which may help your startup, maybe charge a little less. A counter thesis is that pick up a gig which you are a rockstar at and you can do in your sleep and get paid as well.
- If you are doing couple of days in a week, then restrict it to only certain days
- Make sure you show up at client’s desk for the work and not really do the consulting gig from your home or wherever your startup is located. This helps you keep it clean and juggle them well
- Keep the IP clean. Good idea to let the recruiting manager know that you have other gigs. Of course, sign an NDA as required
- Do combined gigs with other friends with complimentary skills
- Keep your other team members informed or at least they know that you are not available certain days in a week
- It’s easier to do technology consulting than “strategy consulting”
India is a tough place to raise money for your venture — though it gets better by the day; the number of ‘pre-series A’ venture deals are still in double digits every year. Consulting is one way to bootstrap it.
Have you done consulting gig while bootstrapping your startup? What are the things you did to keep it clean? What else?
Unless you write a manuscript and revise it multiple times and get rejected by at least 5 publishers–how can you write one of India’s best-selling book? Unless 20 VCs label your ideas as stupid, how can the 21st get it funded?
you have an office (or fake it) but must have a land-line at office. If you work from home then you are out of luck! Does not matter how much money you have in bank or a few international credit cards to carry around. I have a debit card which is not accepted by any online portal (Thanks to Hongkong bank).
be done through the phone directly and billed to my monthly statements or debited from my top-up. Banks are too big to be worried about longer tail of small value transactions, operators do not have the teeth, nor the desire to deal with the complexities of 3rd party purchases flowing through them. The laws are falling in place, consumers are ready to make those purchases — missing is the technology piece and a desire to experiment in these areas. This is a space to watch. The potential is beyond imagination when convergence of commerce and owners of mobile & users of internet takes place.
The chart shows four tangible entities which are the main constituents of a business. Each constituent is in it’s own quadrant.The inbound arrow depicts movement or utilization of a resource. As owner/CEO, you create the business. The Team which you hire creates the product or service. This is consumed by a Customer which brings Money to the business. The Money in turn funds the Team. If the Team is weak or inefficient it would impact the product or service. Even more, an incompetent team may consume the money unwisely thus hampering the overall cycle of the business. Though the business revolves around the presence of the Owner/Founder/CEO, the continuum of the business is maintained by the efficiency of the team.
out wherever/whenever possible and making an ass out of myself at other times. From participating in mindless discussions to taking split-second leadership roles; to managing wherever required and at times staying out of the loop sipping beer at the poolside … and of course flirting occasionally (Don’t worry, my better half never reads this blog).
way. The dream could be a INR 100 crore product or something as complex as an ERP on the web to a even more complicated, a Hospital Information Systems (.. search engines? they are easier to build these days).