Show Notes
In this episode, Rick seeks Tyler’s advice on how to approach consulting on the side to fund
LegUp Ventures. Here are some of the takeaways:
- If you need the money, you’ve got to consult or get a job
- Consulting can be preferable as you have way more flexibility
- It's way easier to bootstrap with consulting as your source of money versus a full time job
- You hourly rate as a consultant might be higher also
- Be proactive about consulting.(Don’t want until you need the money)
- View consulting as protection for your business —> it will help you sustain your startup while you’re searching for a repeatable business model
- Consulting helps avoid putting negative pressure on your startup to generate cash when you should be focused on learning
- Figure out how much you need to make consulting for the year so you can focus on a specific number
- This number is totally dependent on your personal goals and constraints
- Then, decide how to approach projects
- There are two core approaches:
- 1) big project chunks, and
- 2) smaller, consistent retainer work
- Consider getting a job or consulting project in an area that will help you learn or hone stuff related to your startup(e.g. skills, know-how, etc.)
- I.e. Get paid to learn
- Note that there's probably an inverse correlation between how much you get paid and how much you're learning
- If you're learning, it means you're not already an expert at it and they're probably not going to be willing to pay you as much
What else would you add to this list?
Context
Rick: Yeah. So, I think this is a question that a lot of people probably face when they're trying to bootstrap. Obviously, if you're ... maybe not obviously, but if you're trying to build a venture backed business, this may not be an issue because you're going to go raise money so that you have runway to deal with things, but when you set a constraint on, hey, I'm not going to raise money or I'm not going to raise ... I'm not going to raise money ever or I'm not going to raise money until a certain milestone is hit, like I've set, which is, I don't want to raise money until after product-market fit is reached, which I consider to be a pretty high revenue base, hundreds of thousands of recurring dollars per month.
Tyler: Per month?
Rick: Per month, yeah. It's a very high bar for me.
Tyler: So, you're saying like where
Less Annoying CRM is right now, you want to bootstrap to that point?
Rick: Yeah. I think you have product market fit.
Tyler: We've had product market fit for like nine years.
Rick: Not by my definition.
Tyler: Okay, I got you.
Rick: Yeah. But, maybe like you've had it for a couple of years, maybe not nine years, somewhere in between there. There was some level where you hit it probably and you've been slowly increasing on top of that. You and I are different, I would probably say, somewhere in the last four or five years I probably would've said, hey, let's go raise some money.
Tyler: What's the reason to wait that long? Well, sorry, why don't you intro it and then I'll get to my questions.
Rick: Yeah. This is a whole mentality. So, this is my weirdness. I'll hold off on why that's the case. So, one constraint is, I'm not going to let myself raise money until I reach a pretty high proof of real business threshold. So, that means that in order to fund things, I've got to have cash available. I also have a constraint on my own personal life where I'm not going cash flow negative on this. So, that's a big thing where it's like, I have a pretty nice life style, I'm not going to let that life ... I'm not going to downgrade the lifestyle and I'm not going to allow that lifestyle to be a negative cash flow, personally. Okay? So, this means a couple of things. One, it means LegUp has to pay me money, right? From the get go. Two, it means that leg up has to make money in order for me to pay that. So, it's not like I can go raise money and then start paying myself money. LegUp's actually got to produce revenue. The quickest way for me to produce money is to sell my time. I have some expertise that allows me to sell time at a pretty high ... the metric I talk about in this case is return on time. I have a pretty good return on time invested, but it comes at a cost to me working on some of the early stage ventures I have going on in terms of focus and energy that I have to go after them. So, when I do take on a consulting project, it's generally a larger project and it takes a good bit of my focus and energy which means a lot of my other initiatives slow down. But, they're very lucrative and they give me a lot of runway when they happen. So, context, when I started Leg Up this year in June, May or June, I actually started it for a couple of consulting clients I had and then added a third and basically those consulting clients have been enough to pay my salary that I've been paying myself from Leg Up for this year and I haven't consulted in a few months and it's allowed me to have pure focus on the ventures that I've created. Now, I've gotten spoiled. Okay? So, I've really enjoyed having basically being able to set my week every week on what I want to focus on, but as I plan ahead, I'm realizing every time I put pressure on a venture to make money faster than it will just naturally happening by just continuous improvement processes, it gets less fun and it also leads to, I think, bad long term decision making. So, while I want to focus on these things and maybe move faster, if I do my constraints, it's going to put pressure on these ventures producing cash faster than maybe that is good for them and could lead to worse longer term outcomes and then on the other side, if I go consult, it takes all the pressure off of cash, but slows down progress and if I had to make a decision today just to give you an idea of where I am, I know I should go probably plan on consulting and then it becomes a question of like, okay, I'm going to go consult, how much do I need to consult? Do I front load it for the year and just work my, pardon me, ass off for like three or four months?
Tyler: How offensive.
Tyler: You're trying not to use naughty words? Okay.
Should I consult?
Rick: Yeah. Bad words. So, anyway, summarizing, should I consult? If not, tell me why. I would love to hear your perspective. If so, how much. I'd love to brainstorm I guess. If we decide yes, I should consult, I'd like to just go into how best to structure that, is it small projects that kind of continue throughout the year? Is it a couple big projects front loaded at the beginning? Like I did this year. I'm interested in your thoughts.
Tyler: Yeah. Okay. So, I'll start with I totally agree with your conclusion that you have to consult, given your constraints. I think in the same way that over the last few weeks, I've questioned some built in assumptions I've had about pricing. It doesn't seem like out of the question that six months from now you say, screw it, I'm going to go raise some money. But, if you're not going to do that and you're not going to go cash flow negative, what other choice do you have? Right?
Rick: I either have to change my constraints ... well, I guess I could bet on ... I could bet on the ventures, but I think that puts a negative outcome pressure ... ventures pre-product-market fit shouldn't be measured on cash flow, they should be measured on what you're trying to learn and iterate on and I just feel in my heart of hearts that it's a bad decision to bet on early stage ventures making cash because it's not good for your long term ... it's not actually accomplishing what I want to accomplish over a long term which is sustainable, long lasting, profitable businesses.
Tyler: Yeah, because maybe when your business is faced with an opportunity that is totally inconsistent with your vision, like I think a common version is you have one big client that comes along and is like, I'll pay you five times as much if you build this exactly the way I want it and then at that point, you've totally lost your product road map.
Rick: Yep.
Tyler: That type of thing. Okay. So, you're going to consult. Or maybe six months from now, twelve months from now, you decide to change your constraints, but until then, you're consulting.
Rick: I think so. Would you challenge that at all?
Tyler: No. I should say my bias here is I am very anti-runway. I would even say I'm ... by that I mean I think every business should be default alive rather than default dead forever, even after you go raise money. One reason I like the idea of waiting until you have product market fit is that money is towards growth, you can run the business in a way where even if everything, all of that money just disappears, you could still be default alive potentially. So, no, I totally support anything that causes the business to be sustainable and I think that it sucks. I've been there. It's hard, even if you love the consulting gig, like I did, working for you, that was a great opportunity for me, but you want to work on your main thing full time, but I absolutely think what I did was the right decision for me and I think it's right for most people.
Should I consult or get a job?
Rick: That's what I felt coming in here. I don't think we should spend more time on that. I think that's one of the theses behind this podcast is if you want to build a sustainable, profitable business, you can't force yourself to make bad decisions for the long term based on cash flow. So, I guess before we say I do need to go consult, I guess, consulting is one way to solve the problem of cash flow outside of my focus on Leg Up, do you think ... should I consider going back full time and getting a job?
Tyler: No.
Rick: Okay.
Tyler: Absolutely not.
Rick: Is there anything worth brainstorming other than consulting that maybe I should be considering?
Tyler: I don't think so, but for the generic listener out there who may be in a different situation from you, I think starting a business while working a full time job is totally viable, but it's preferable to consult partially because your probably hourly rate as a consultant is going to be higher, but more importantly because you have way more flexibility, you can ramp it down without totally killing it, you get to set your own hours. I think it's way easier to bootstrap with consulting as your source of money rather than a full time job. Not everyone is in your position where it sounds like you can snap your fingers and have consulting clients-
Rick: I wouldn't say that either. I do think that uniquely am able due to my experience at my previous company. I can solve a lot of different problems of different value and scope and so ... and I'm willing to guarantee it, basically.
Tyler: Yeah. Another factor here I guess is like your skill set aligns well with getting consulting clients, whereas, if you were just like hardcore programmer, no people skills at all now, questionable if you can start a business at all, but there might be a lot more work for you to go get consulting clients and maybe it's not worth it. But, in your case, yeah, I think it's definitely the right fit.
Rick: Cool.
How much money do you need to make consulting?
Tyler: Now, can I ask maybe some of these details you don't want to share, but how much money can you make consulting and how hard is it for you to go get clients?
Rick: So, I believe one could make hundreds of thousands of dollars to millions of dollars consulting depending on how much time you're willing to put in and how much you're willing ... how big of promises you're willing to make. So, I guess I don't know how-
Tyler: Let me ask it differently. Are we allowed to say in the notes you say what your financial constraints are, like what you need to make?
Rick: Yeah. So, I guess what could I make is different than what do I need to make. I would say that ... what I want to pay myself is basically I have a scale of 50k, going to 100k, going to 200k, going to 400k over the next four years, or is it three years? So, I launched pay myself 50k, doubling my salary to 100k this coming July.
Tyler: Starting July 2020 through July 2021 you want to make 100k?
Rick: Yes. Let's see. And then I want to double that the next July and then double that again.
Tyler: It's good to be Rick. Wow.
Rick: Well, these are goals. Right?
Tyler: Yeah, okay.
Rick: I don't have to do that, but these are like the ... these are the things that ... I wrote down where did this come from? And this is going to be different for everyone, where did this come from? Well, it's the thing ... these are the goals that I want to hit in order to know that I could run LegUp Ventures for the rest of my life. Okay? So, I know that if I can do that in that timeframe, then I'm going to be great. Now, will it play out like that? I know and you know that there's no way of knowing, but that's how I'm planning backwards. Okay?
Tyler: Yeah.
Rick: So, all that matters right now for purposes of this conversation is continuing to pay myself 50k through July and then being in a position to double that and sustain it through the end of the year.
Tyler: Yeah. For simplicity, let's just say 100k is what you need to make and what's coming later is coming later. Let me just sidebar real quick here because someone else might be listening to this and be like, I've had friends who thought they were going to start companies and grow their salaries really quickly, you have experience with this, you have a great track record, I'm not doubting you here, but just so people don't think that's the norm, I'm running what would normally be considered a pretty successful software company. We have $2.6 million in annual revenue. I make 140k a year and I'm ten years in. I'm happy with that. So, just so people can set expectations like it's not normally growing revenue that fast, but okay.
Rick: Just be clear, that's not ... Listen, people have different financial goals. People have different financial lifestyles, some people have kids, some people don't have kids. When you set goals, you've got to be realistic based on what you want, what you need and what your situation is and that's a very personal decision. We're sharing our situations for context. There is no right way to do this. There's only the way that works for you.
Tyler: Yeah, absolutely. Okay. So, the goal is for a while to make 100k a year. How much consulting work do you ... let's say it's not being done in spurts, like you're just going to do it, spread it evenly throughout the year, how many hours per week do you need to put towards consulting to make that kind of money?
Rick: It's about a half time for a quarter. So, call it 20 hours a week for three months straight, five days a week.
Tyler: Okay.
Rick: Kind of like a half-day every day for three months.
Tyler: A half day every day for three months pays for the whole year?
Rick: Yeah, that's a pretty safe assumption.
Tyler: Okay. So, you're in a great position here, you're able to make the money you need with a very, very small amount of time.
Rick: But, I want to be clear. I don't need to do that, because
GroupCurrent is generating cash, I know that my health insurance venture is going to generate cash. So, I don't actually need to do that for 2020. So, let's call it ... let's say I want to go make ... I need to bring in 50k for 2020.
Tyler: Okay. So, a half day a week for a month and a half or a full day a week for we're talking about five weeks or something like that.
Rick: Yeah. Now, the catch here is-
Tyler: Sorry, not five weeks, three weeks.
Rick: Yeah. Now, the catch here is, most of this is situation based. So, there are a couple of different ways to consult. One is on a retainer basis, on a smaller item which could be anywhere from 5k to 10k a month and it's a couple of days ... it's like maybe a day a week or a day and a half a week and you're just there to help solve problems as they come up and it's maybe like a three month project to start and then renews monthly after that. Those are typically smaller projects. The bigger projects are, hey, this is a three to four month project, you're solving a specific problem, the project fee is 120k and we expect you to deliver ABCD and you price it based on some multiple of what your time is that you think that's going to do that.
Is it hard to find consulting clients?
Tyler: Yep. Okay. A couple more questions here. How hard is it for you to secure one of these? The tough thing about being for example a full time consultant, people hear, oh, a consultant makes $100, $150 an hour, but not every hour is billable, they have to go out and get clients and stuff like that which they don't get paid for. How much overhead is there for you?
Rick: I don't know. I was spoiled last year. I was like three for four in terms of pitching on consulting. So, I pitched three, four projects, got three.
Tyler: What did you have to do even get to the point of pitching? Were these all just like they fell in your lap kind of?
Rick: Two were referred, one was a network relationship.
Tyler: Have you had other referrals coming in since then that you're turning down?
Rick: Yes.
Tyler: Okay. And then final question here, do you feel like you lose momentum on consulting if you take a very long break? Is it easier either to do the work or more importantly to secure the gig if you're in the game all the time?
Rick: Well, yeah. Kind of. It's hard to answer that question. Just to put this in perspective, in September, I don't know if I covered this on the podcast, I don't know if we'd started that point, but I actually turned down hundreds of thousands of dollars in consulting to focus on what I'm focusing on right now, but that was a result of ... that opportunity was created from doing a smaller project. So, there is definitely a snowball effect that happens by ... there's kind of one phase of you go out there and you start saying, hey, I'm available. I was talking to someone yesterday and they were saying it's kind of like dipping your toe in a couple of different ponds. You dip your toe in a couple of different ponds, you see how it feels, you talk to some people and you develop some opportunities. Generally these opportunities don't ... they don't turn into long term engagements or big contract engagements. You might get a three month 5k or 10k per month contract or a one month or 30 day 25k, 30k contract that's more of a diagnosis and so, it's probably like a 30 to 60 to 90 day to be really conservative, lead time on closing one of those and then you succeed at that, if it's kind of like that retainer thing, they keep you on and you continue this 5-10k recurring per month relationship on many problems or that 20k, 30k diagnosis turns into a multiple of that in a larger project over a couple of months.
Tyler: Okay. So, it sounds like if your goal were to be a full time consultant, there is momentum that builds because each project can turn into another project. But, it doesn't sound like you're particularly worried about, if you went a year without doing a single consulting gig, that like your ability to do it would atrophy, that all your connections would dry up or anything like that.
Rick: Ability to do it, no; it would not atrophy, especially in the line of work that I'm focused on, specifically like I think that's different if you're in a very technical realm. If you're technical consulting, I think if you stop consulting and you get out of practice, and you're out of date, that's a whole nother thing, but in general problem solving consulting, I think that that's not an issue, but what I am realizing is, I did a lot of work to create that opportunity that I had and creating that opportunity ... it's much harder to find the energy and desire to create that opportunity again. You just want to cut right to it, but if you skip steps in this consulting process, you lose a lot of trust and you don't end up getting those opportunities. So, there's like a discipline type thing, I can't really explain that it is a cost of taking time off.
Tyler: Okay. So, something gets harder about it in that kind of intangible way.
Rick: Yeah.
Are you worried consulting could get in the way of your startup?
Tyler: So, I've heard people talk before. If you listen to other podcasts like this, like
Startups For The Rest Of Us is one where they've talked about this I know is, kind of this hedonic treadmill. Are you familiar with that term?
Rick: What was the word you just used?
Tyler: Hedonic, which I believe has the same root as hedonism, but it's this idea-
Rick: What's hedonism?
Tyler: Hedonism is normally used as like kind of glutenous and self indulging in every desire you have. The idea being as you make more money and you get more used to it, you spend that money and you get ... especially a lot of people struggle going from consulting to starting their own business because when you're consulting every hour ... if you're lucky enough to have enough business that you're turning stuff down, every time you turn something down, you're like, is an hour or what's called 10 hours towards my start up really worth passing up however many thousands of dollars that's worth as a consulting gig and it's really hard to ever justify putting the time in. I've heard about many people on podcasts and stuff like that talk about this, which it sounds like is sort of what you're worried about here, that you need to jump in and make the product start up company your thing, but you also have to fund it.
Rick: Yeah, I don't think I'm having that problem. I think this is really just ... I would prefer ... at the end of the day, this is a preference thing. I don't really ... do I enjoy consulting? I enjoy the problem solving, but it comes at the expense of something I enjoy more which is working on my business. So, that's the reality So, yeah, one approach is just rip the band aid off, hurt myself, beat myself up and just kind of set a goal of what the number is, fund the bank account and then be done. That's one approach. The one challenge I have with that approach and why I want to discuss maybe an alternate approach, is I do think that there is a negative consequence of ... I think building routines is a really important ... sustainable routines are really important to long term success, whether that's personal success, business success, relationship success, and what I don't like about the front loading and why I'm hesitant to actually pursue that is it leads to some bad habits being developed during that time that you have to reset when it's over. So, maybe it's not micro context switching like what you're talking about, but it's massive habit changing over the course of quarters. So, part of me ... if I could wave a magic wand what I kind of feel like is my perfect ... now that I'm accepting that I have to do something to consult or something like consulting. I'm kind of realizing, if I broke that money into like a monthly number, what I really need to do is figure out how to have a consistent monthly number and just build that into my monthly routines, weekly routines. I think that that's better for me because it may mean I have to be really thoughtful about how I schedule weeks to avoid the micro context switching, but it doesn't force a major habit change on a macro scale.
Tyler: Yeah. Okay, that's fair. Yeah, everyone's different here. Let me explore why I said what I said which is I am not routine-based the way you are. I'm the type of person ... if you made me a nine to five employee somewhere, on a typical nine to five, maybe I'm super productive and then the next day I get nothing done. I need to kind of flow with ... when I'm feeling in the zone, I go with it and I don't stop until I get out of the zone. I can't force it. I think you can force it. You can say I'm sitting down in front of my computer and I'm going to get work done right now.
Rick: I wouldn't go that far. I do definitely have these ... today is actually a bad day for me. I went to Texas Roadhouse last night for a nephew's birthday and I love Texas Roadhouse. It's one of those places where you have all these great steaks and ribs and then you have the peanuts that you can throw on the floor. You know what I'm talking about?
Tyler: One of those places? No-
Rick: It's like a cowboy-place. But I always loved it as a kid because you get to eat the peanuts and then throw them on the floor and no one could say anything because that's what you're supposed to do there. Yeah. Anyway. But, I've been sick today because something ... I just have not felt well and it's definitely affected my work and I had a bunch of things I needed to do that I was planning on doing, but I'm having to shift those because ... so, I'm flexible, but I thrive on consistency.
How should you structure consulting projects?
Tyler: Yeah. Everyone has their off days, but if you say from this hour to this hour I'm going to write a blog post, that blog post is going to be done at the end, whereas for me, I'll go on Reddit and then write the blog post at 11:00PM.
Rick: Yeah, I would say that structure is probably a better word than routine. I like more structure to my days and weeks than you do. You actually don't like structure.
Tyler: I don't like it at all. Yeah. Okay. Having said that, let me push back a little bit that structure's good, but context switching still costs something and it's not just the switching cost, but it's also like your brain is still churning on everything else you did today, right? You never get 100% focus on something if you keep switching around. I wonder if there's a way to disrupt ... if we think about normal human life style, everybody has a certain amount of routine and everybody has moments where they break out of that routine for a while and those are vacations. I wonder if you can almost take consulting vacations and say, what's the longest amount of time I can go real hard on consulting and then go back to normal life without having lost the routine of normal life. Do you know what I'm getting at here?
Rick: Yeah. This doesn't work for me. It might work for other people because what I'm actually trying to do right now is I'm actually going to vacation next week, right? I'm heading to Myrtle Beach, have you ever been to Myrtle Beach, South Carolina?
Tyler: No.
Rick: It's like party central. Okay? So, family vacation, we're going to do ... we travel around for Thanksgiving, it's my side of the family; Sable is coming with me, but one of my biggest challenges when I go on vacation, I don't workout in the morning. I wake up at a different time and I'm actually like trying on vacation to maintain my daily routine.
Tyler: Okay. So, you want zero ... out of 52 weeks out of the year, you want every single week to be routine?
Rick: I would say it's more of a daily thing. There's a set day that I want to have of where there's a beginning and then end and on the outsides there's a kind of book cover and those book covers don't change, but what's in the pages are custom to what I want to get done at that given time.
Tyler: Okay.
Rick: It's like how I'd describe it.
Tyler: The thing that was obvious to me is the exact wrong thing for you. Okay. So, let's talk about the other extreme. Why not get one of these retainer things that pays you whatever 100 divided by 12 is, and just get that?
Rick: I think that's the solution I'm realizing. Part of me wants to go the route you're suggesting. So, I came in here thinking, yes, I need to consult and I want to be able to just knock it out in the beginning of the year like I did last year and have freedom for the rest of the year, but there was a huge health cost to me of doing that. It was hard. Okay? I'm realizing that while maybe that would be better for the future part of the year, consulting upfront, it might be better to consult upfront in order to, like hey, I get focused in the end of the year, the cost to my health of doing that I don't think it's worth it is where I'm getting. So, yeah, I guess I'm just going to have to accept that I'm going to have a lack of focus maybe for ... maybe it's just until my businesses get to a point where they're cash flowing and can replace the consulting and I just level down the consulting as I can. I just need to accept that there's a monthly consulting piece to what I'm doing.
Tyler: Given how much you like structure and you like routine or how much it helps you, I think that absolutely sounds right. This is what I did. I didn't do it by choice. I was making $60 an hour when I was in this position, which is ... I haven't done the math on exactly what you must be making, but you're making a whole hell of a lot more than that. I had no choice but to say, yeah, I need this, it was a 20 hour a week thing for me and that's not my nature at all and it still worked out totally fine. The great thing about that is there's no end. The problem with what I originally suggested is you do that stuff and then you're kind of saying, well, when's the next time I have to do that again? With this, it's just steady in the background until you say I don't need to do that anymore. I think that's a very ... probably for most people, if you can get that situation, that's a great way to do it.
Rick: Yeah. I'm actually realizing that's exactly what I need to go do and I've got to figure out what services ... the services you offer in that type of arrangement are totally different than the services you offer for a big project arrangement. It's a totally different approach, and different client.
Tyler: I mean, if we're talking about something like six weeks out of the year spread out over the whole year, I mean, how many hours are we talking about? Okay, a day a week? Even less than that I would think.
Rick: That's what it will average out to.
Tyler: Okay.
Rick: Some weeks it'll be like three days and some weeks it'll be nothing.
Tyler: Yeah. I think that makes sense. That's, by the way, how I did, I had more than a day a week, but I would say I'm doing my consulting work for like ... I'm squeezing in as many hours as I can all at once and then I'm going to get back to it, versus like an hour a day or something like that.
Rick: Yeah, I call it stacking. If you can stack contextual things ... items in the same context, it's so much more efficient than context switching. Every week I schedule my week based on what are the most related things ... what are the things I want to do this week and the next week and then how can I group those things by week, by day, by hour block to reduce the amount of context switching I have to do.
Should you pause your startup and focus on consulting?
Tyler: That's so interesting though, because you can take that in the other direction and go back to well then, why don't you lump all of this into the same one month? This is kind of circular.
Rick: What do you mean?
Tyler: Well, if you're trying to lump similar things together to avoid context switching, now we're heading back in the other direction.
Rick: Well, I guess what I'm trying to say is, let's just say one of my consulting assignments for the week is do a financial model for company ABC. I also need to build a financial model this month for GroupCurrent. Let's outline both financial models on Monday. Do you see what I'm saying?
Tyler: I exactly see what you're saying, but I'm saying if someone missed the whole first part of this conversation, they'd come in and hear that and be like, oh well, what you should do is figure out ... spend a whole month on financial modeling.
Rick: Yeah, but then you don't make any progress on these other ventures. So, I want to make weekly, monthly progress on Leg Up. I don't want to like pause Leg Up. I don't want to pause GroupCurrent, I don't want to pause this podcast.
Tyler: Okay. I think that's a little different than the reasoning that led us here originally. Originally it was you need routine and you need ... you don't want to switch from one thing to the next, but grouping contextually similar things together is a form of ... it's just a smaller version of the same thing.
Rick: Well, I think there's a difference. In the context we were talking about, we were talking about it as in I heard I'm going to continue doing the same things I'm doing to Leg Up, but I'm going to kill myself in order to front load.
Tyler: I was saying put Leg Up on hold entirely.
Rick: Oh yeah, I wasn't catching that. So, I was assuming that I was going to steady on with Leg Up and then add this extra which would cause unsustainability for me.
Tyler: I'm saying just put all your consulting into one month or however long it takes.
Rick: And then not make any progress with ... I have to do the podcast, I've got to do some thing on GroupCurrent. Yeah. But, maybe I stop making progress on the other things. I'm not willing to do that. Yeah, that's why.
Tyler: Cool. Well, I feel like we're probably ... I mean, it sounds like you kind of had the moment of clarity you need here. Is there anything else you want to add to, here?
Should I try to get a project relevant to my startup?
Rick: I guess I want to throw one thing out there and get your thoughts. One thing I'm considering is I'm an okay sales person and I actually ... what I thought about is partnering potentially with someone who has a software development company and selling their services instead of consulting being a salesman and just getting like a commission on placed contracts. It's almost like a B2B enterprise contracted sales person. What do you think about that?
Tyler: My initial reaction is not positive.
Rick: Why?
Tyler: Two reasons. One, I think to be a good sales person, you need to have a pretty deep knowledge of what it is you're selling and the industry and all that. I believe you could get that, but I think you'd probably have to make more of an investment in something you wouldn't really get paid back for. The bigger thing is, it sounds like you've got amazing consulting gigs that sales people, very, very few sales people get paid what you're getting paid consulting.
Rick: Let me explain why I think I could get the payback. So, one of my goals is I want to learn how to code. I want to develop software. Learning the outsourced software development business through sales would solve the consulting cash flow problem and potentially keep me going down the path of coding. So, I guess what I'm pointing out is, consulting is maybe this thing that is ... it's a different thing that's a cash producer, but it may be a relation producer, but it isn't really helping me move other things for it other than an injection of cash, but if I could find a project, whether it's a consulting project or some sort of role, that allows me to spend the same amount of time or more time even and make the same amount of money, but it contributes to one of my goals for Leg Up. That's kind of an interesting thing. I don't think we should go into it, but I'm thinking I might want to explore that a little bit as a way.
Takeaways
Rick: But, here are my takeaways. My takeaways are, one, there's no question. I should not focus ... there's a question of should I focus on my ventures and ignore this problem until it actually hits me in the face, or should I protect my business, my ventures by generating cash and making sure I have runway through 2020. I clearly need to go generate cash without putting pressure on my ventures and make sure that I've got runway for Leg Up. I'm not sold on doing it via consulting, but I know that my first thing is I need to figure out what the amount is I need to go get. I need to figure out how I'm going to go get that, whether that's consulting or a part time job or a contracted sales rep. I want to figure that out, but I know for sure that I need to plan on it being a full year gig, not a once a quarter thing. So, I need to find something that I think could be a recurring thing for a year and if I can make it ... where I'm going now, if I can make it relate back to my goals for 2020 that are related to ventures, that's a multiplying effect that maybe would even be reduce context switching and be a better return on time.
Tyler: Yeah. There's probably an inverse correlation though between how much you get paid and how much you're learning, because if you're learning it means you're not already an expert at it and they're probably not going to be willing to pay you as much.
Rick: Yeah, that's exactly what I'm saying is basically get paid to learn what I need to learn to run Leg Up, but you're right, the debt negative of that is absolutely ... my payment per hour in cash is going to be lower, but my return on time might be higher because I'm getting paid in knowledge and skills.
Tyler: Yeah. So, whether you do that or not, I think that's a very interesting idea for anyone else listening, getting paid to learn is ... even if you're not ... your goal is not to start your own company, but if you can get paid to apprentice or something like that, that's way better than being a bagger at a grocery store and trying to learn to code on the side.
Rick: Yep.
Tyler: The only other thing ... I think your takeaways sound good. I don't think it's important necessarily that one consulting gig lasts the whole year. That'd be great if you can find it, but you could do a three month one followed by another three month one. I think the point is, you want to have a slow boil, always splitting time between consulting and your main thing rather than having to upend your life to go earn a big chunk of cash and then upend it again to go back into the start up mode.
Rick: Totally agree.
Tyler: Yeah.
Rick: This is helpful man, I appreciate it. Do you want to sign us off?
Tyler: Sure, yeah. Anyone who made it this far, thank you for listening. We do appreciate it. You can go to
startuptolast.com to find show notes, leave a comment, submit a contact form, try to sell us something, anything like that. We are in
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Rick: See ya.