One of the more common entrepreneur strategies is to use consulting work to generate cash to then fund product development. In fact, the most successful fast-growing software company in Atlanta, MailChimp, is actually owned by The Rocket Science Group, which for many years was a web design firm. The Rocket Science Group built MailChimp after identifying a need in the market for a simple, easy-to-use email marketing product, and now they have one of the most widely used products in the world.
In thinking about consulting work to fund product development, here are a few things to keep in mind:
- Consultants think in terms of time and materials, which can be limiting when trying to build a successful tech startup
- Try to separate the consulting team from the product team so that the product team isn’t distracted and can focus 100%
- Plan for everything to take three times as long and cost three times as much (it’s incredibly difficult to get past the first two stages of the B2B tech co lifecycle)
- Join a community of like-minded entrepreneurs and find members with successful tech businesses (e.g. Entrepreneurs’ Organization)
Consulting work to fund product development is difficult to pull off but very desirable when it works. Set internal expectations accordingly and settle in for a long adventure.
What else? What are some other thoughts on consulting work to fund product development?