Why I Gave Up A Million Dollar Consultancy
planscope.io
planscope.io
* Huge success with consulting and it seems quite reliable
* Huge success on information products, which are sold exclusively to developers/freelancers
* Impressive, but somewhat less success on actual apps (often sold to developers/freelancers)
So the disturbing part is products seem really fricking hard, unless you include information products in which case they are gold. I've been following (and rooting for) some of these people for a while and even after years it's a bit depressing that they couldn't make a decent salary off their best web applications. And what's worse is it feels like the only people we hear about finding success are those that are selling to us.
RE: Less success on actual apps
Planscope's revenue is fairly small right now, but trust me when I say Freckle could give Amy and Thomas a very comfortable life if that's all they were working on.
Subscription products can take a while to build up in monthly recurring revenue. Product's like Freckle have been around for 4+ years.
RE: Selling to developers/designers
I'm a developer, so it'd naturally be a lot easier for me to make a product for my peers than it would for, say, construction managers.
There are a lot of people doing very well selling information products to non-developers.
RE: Consulting is reliable
It is. I could have made a lot more money this year had I focused on just that, but the long term equity isn't comparable. I'm fairly certain I could maintain a comparable growth rate with Planscope if I were to do absolutely nothing with it right now. Given enough time, the work I put into it this year will pay off.
* Launch an app
* Quit my day job the next day
* Live life on the fast lane forever more.
This is simply not true of apps. From what I'm seeing in those who have shared their revenue openly (Brennan, Patrick, Amy, Nathan), it takes about 2 years (+/- 1 year) to get to the place where an app is providing a living income.
Software is a long game. I've only been able to have the attention span of 3-6 months. So I lost that game. Here's to 2013 and changing my attention span! :D
and then again mass market sales apps require significant marketing campaigns to get the plane in the air.
It's my impression that it's freelancers, small businesses, people that are Internet savvy "creatives". Certainly that has been your initial crowd, right ?
> that we have problems making sales, or that people play with us and switch easily
Wot ? Yo, chill. I am describing the market segment of early adopters. It's a classic description of the pre chasm phase, a term I am sure you are well aware of. I guess you assume everybody in the thread is jumping on you ? My comment was noting that you have had success in a limited, not mass market. Good job. It's not fucking guitar hero, okay ? 6 year old girls don't scream out your product name, get a grip.
Right, with the assumption that A) developers are my audience and B) developers behave like early adopters. Now you fan out your description from "developers" to "creatives."
Do creatives behave like early adopters? Is there evidence for that?
> 6 year old girls don't scream out your product name, get a grip.
I think you're misinterpreting my tone, because I'm just pointing out that your comment was full of ungrounded conjecture. It doesn't bother me personally, since I have over 400,000 reasons not to worry what somebody on the internet says about Freckle as a business.
What does bug me is the unquestioning perpetuation of the myth that developers don't pay for things, which is a truthy "fact" that scares people away from serving a varied, diverse, and incredibly valuable market who needs things.
Same boat as far as I'm concerned. I made an inexact description of the market segment in my initial comment, but I'm talking about the same herd of people.
"freelancers, consultants & and small teams" - your website
They aren't Postmen or Choir directors. They are not 6 year old girls.
> Do creatives behave like early adopters? Is there evidence for that?
Sure, I think they do. They seem like people who watch for new things and try them out. They aren't usually late to the party.
> I think you're misinterpreting my tone, because I'm just pointing out that your comment was full of ungrounded conjecture. It doesn't bother me personally, since I have over 400,000 reasons not to worry what somebody on the internet says about Freckle as a business.
Well your tone seems to suggest that you think I was criticizing something.
Once again - the description of early adopter markets has NOTHING to do with you or your business. Its a description of the general nature of that market segment and noting how you have SUCCEEDED in that area.
"400,00 reasons" seems to be a reference to your stated yearly income.
I see no reason for you to take anything I have said whatsoever as adversarial or critical. My analysis of the market segment was quite the opposite. You have the wrong end of the horse. If you make that money in a limited market then you are doing quite well and that makes me happy because I nearly walked away from that market thinking it was too limited.
> I think they do.
You are making all kinds of pronouncements based on your opinion, which isn't based on data. Imagine if people who read it are discouraged from taking action because they think you are working based on facts or experience, instead of speculation.
FTR, based on the experience that my friends & I have running businesses which target "creatives" and yes "developers," your pronouncements don't reflect reality.
I don't know why, but there's something rather uncomfortable about people selling books/courses telling you "how to make more money doing X" and then 6 months later writing a blog post saying "how I made $Y selling a book/course on how to make more money doing X".
I also think these ebooks/courses people are producing probably contain tons of useful information to the folks that buy them.
There's just something that makes me feel weird about the way these information products are being bandied about to the audience on HN.
This has been done for many many years in many different industries. Notable are people who give seminars on how to make money in real estate. The truth is making money in real estate is much harder then getting a bunch of noobies into a room at the Holiday Inn and selling them information on how to make money in real estate. Not to say though that one of two people who you enlighten in those seminars might make out ok and the rest might have felt they received a days worth of knowledge and entertainment.
I'm in a position where I've been getting (unsolicited) consulting work helping people buy domain names (startups). I enjoy doing it even though the pay makes no sense (for the hours spent) compared to what I can make with what I know doing the same thing on my own account.
That said there is value in these offerings (just like there is value in a "franchise" system that you pay for that tells you what you need to know to open a yogurt store). It took years by the traditional method to learn what I have learned over the years. It would have been much easier if there were books ebooks or otherwise that you could have triangulated the information needed from.
Take a look here:
It's also slightly contradictory with the hacker culture, where unlike say 'make money online bloggers,' hackers tend to share for free. That isn't to say that selling information is wrong or harmful, it's just different than it used to be.
To me it'd be most interesting to learn about step 2, or "how to build a community willing to pay you to follow in your footsteps". I've tried it before but couldn't find the right balance between helpful and sales-y.
Now suppose a guy named Jack flew to the moon. He writes a book "How I flew to the moon." It makes millions. He blogs about "How I made millions selling a book about how I flew to the moon."
See the difference?
[1] Especially pernicious in stock market pump-and-dumps.
> "how to make more money doing X" and then 6 months later writing a blog post saying "how I made $Y selling a book/course on how to make more money doing X".
Which is not what Brennan is doing or has done, as the previous commenter so clearly explained out.
> Which is not what Brennan is doing or has done, as the previous commenter so clearly explained out.
If we fill in the blanks in that line: he wrote a book telling you "how to make more money freelancing" and then a few months later wrote a blog post saying "I made $33,024 selling a book on how to make more money freelancing". It seems to me that he did exactly what I stated.
As someone who comes from the traditional old school world where you had to do traditional marketing to gain business (pre-internet and obviously pre-social media) one theme I see (which I highlighted in a comment on patio11's post yesterday) is the lack of traditional marketing to move the product.
Specifically I'm wondering what type of outreach Brennan or Patrick have done to gain business? Patrick was thinking about flying to industry conferences which was a step in the right direction although I thought the payback for such a low revenue product wouldn't make it worthwhile and I suggested a few traditional ways to test out (that had worked for me in the past).
http://news.ycombinator.com/item?id=4982785
One thing that I see happening is people thinking that the way to build a business is strictly by WOM online by low or no cost methods while there are a host of things out there that work and have worked for years (that people aren't using to push their apps). They cost money for sure but after you are established and have some cash flow the are possible.
Surprisingly, about a quarter of my growth comes in organically. People find me through a blog post, research the product, and then buy. Can't beat that :-)
.001% of your market (arbitrary to prove a point) reads blog posts. So you have to get to the others who are a virgin market (with no competition by the way) for the same product.
Off the top I'm thinking airports or places where consultants spend time or publications which consultants read where you could write some articles and get mention that way. (As a start anyway). Card packs are good (if they are offered and I don't know they are in that biz.) Maybe even advertise in the inflight magazine (for ads that is) which I did at one time. Back in the 90's I did ads in The Economist, the WSJ (marketplace) and Business Week. (Not saying they are good today I don't know but they did work then I picked up customers who are still with me today..)
Feel free to email me and bounce any ideas/costs and I will give you my opinion.
One last thing. You need a .com name if you are advertising to the traditional world. They are thrown a loop by anything that isn't .com . You can still use .io just get another one under .com.
You might also want to put up consultant specific sites for planscope that cater to specific industries (more targeted) "engineering consultant" "city planning consultant" (with templating) it will go a long way toward getting you businesses in specific areas and making you the go to resource.
It sounds like you've had experience and success but not necessarily with this market or maybe you are still stuck in the 1990's.
I've had vastly superior results with content marketing and education than the advertising we've tried.
However, it can be disheartening when I see Product X owner posting "I made 6 figures this year!", only to open the post and see 10% of their income is from Product X, and the other 90% is selling information to people on how to create their own product X (often accompanied by doing consulting gigs for other people). I know the info products are high quality, but it still feels a little 'spammy'.
One of the reasons I'm getting into SaaS and not employment/consulting is because I want to work on my own schedule, on my own products, while traveling the world, without having to answer to anybody else, while still making more money than I could working as a developer in the Valley.
Regardless of this, I still fully believe it can be done. As a quick back-of-the-envelope calculation, if Planscope's growth stays on the exact same linear growth path for 2013, it will make over $110k for the year. But I predict it will make a whole lot more than that as Brennan increases marketing and develops reliable customer acquisition channels resulting in exponential growth.
Looking forward to the end of 2013 reports!
Also, hate to disappoint you again, but when it comes to a paying product, "exponential growth" is a unicorn. Just cuz Github can make it work doesn't mean anyone else can.
But self-publishing? Owning everything? There seems to be more upside potential there (and yes, it's harder up front, because you have to market yourself too).
That's a pretty serious accusation. Do you have any evidence to back that up?
If you actually ready any of the things we wrote, I think you're going to find it really hard to find any suggestion that "getting rich" is easy, fast, or common.
To my eyes, this "accusation" is more like stating the plain facts of the matter. There's often more reliable money in selling people advice or tools, that they use to do something, than there is in actually doing that thing. When people are trying to sell you advice, or tools, or what have you, it's worth bearing in mind that their interests are not automatically aligned with yours.
This is general-purpose advice, given apropos of very little.
If I help 10 students build $100k/yr+ businesses, that's a $1 m/year impact I've made… which will continue to improve their lives, have an impact on their families and their communities and naturally themselves, and anyone they tutor, too. And the first of my students are reaching that goalpost, 2-3 years later.
Freckle, too, is designed to help my customers earn more & build a better business. And I have over a thousand paying customers there.
How's that less valuable or less honorable than creating some kind of social startup I hope to sell for a couple million dollars? (Or investing in somebody who does?)
There aren't a lot of gold miners who have created lasting wealth, or lasting impact.
Counter point: http://news.ycombinator.com/item?id=4986168
My company is making money with Brennan's Consultancy Class and it paid for itself literally within a week. Brennan's advice has significantly impacted my company's revenue in 2012, and will continue to do so in 2013.
Here's some simple math for you. It would have taken my business partner (he took the course, not me) more than 10 hours to find all of the advice Brennan shared. He can bill out 10 hours to a client for $1000. Therefore is it worth it to pay someone to gather all this advice and package it in a way that allows him to apply it? Absolutely.
It took me a long time to realize many businesses are looking to exchange money for time. They have more money than they do time. It's a hard notion to understand when you don't have more money than time. I suspect you can't truly know it until you reach the point of being able to make that decision yourself.
Infoproducts are no less hard than software products, by the by… not if you put in the effort to make good ones. They're faster, yes, but not easier. It's not merely "sitting down and writing words" any more than creating good software is merely "sitting down and typing code."
Also, developers are not my audience (for Freckle). I doubt there are very many of "us" (Hacker News types) who use Freckle.
[1] (And the neglect of Freckle was due to focus on Charm, not my infoproduct biz. Which, on the balance, was a mistake, but boy did I learn from it!)
EDIT:
> And what's worse is it feels like the only people we hear about finding success are those that are selling to us.
That's because you don't venture out of your comfort zone. Naturally, the people you hang out with are the people you'll hear from. I, otoh, belong a lot of different, even weird communities, and I know people making a fantastic living off Wordpress plugins, design themes, social media how-to videos, healthy & super simple cooking classes, etc. I recently met a lady who grosses 7 figures a year on dog agility training products. (She's a respected industry expert; we're not talking Teach Your Parrot to Talk here.)
Get out of your comfort zone / fishbowl and it won't be so "weird."
Here's the way I look at infoproducts (other than from a love of teaching, which I obviously have): http://unicornfree.com/2012/be-your-own-angel-how-to-make-mo...
I got to leave consulting twice as fast because I decided that teaching was a much better way to spend my time. And it was. Teaching pays dividends that you can't imagine, beyond the simple revenue.
As for Freckle, $400k/yr is amazing? Not hardly. If we hadn't made the mistakes we have made, I bet it'd be a $1 m/yr biz already. All my semi-major competitors must be making at least 5x-10x that per year (at least!). I've met some of them at confs; the Harvest guys I met a couple years before I ever did anything with Freckle, and I suspect they were making more then than we did now.
There are tons of popular, quiet SaaS successes, all around you. (Also people selling UI kits, themes, plugins, resource kits, and dev libraries. I have a friend making $10-15k/mo on an iOS component, last I heard. Not to mention live workshops, which are both impactful and very profitable.)
I have a lot of friends who don't write, who don't usually speak, etc., who write about business in general but don't share numbers… who run successful SaaS businesses in the $300k-3 million/year range.
Here's the thing: those friends don't share like I do -- because they don't have "preach the good news" as a personal mission (as I do, as Brennan, Patrick, etc. do) -- and so you assume they're not there. Your whole argument is predicated on the 10% of the "big picture" that somebody has come to you and handed to you, pre-chewed and spelled out.
I mean this kindly so please take it in the manner it's intended: I see this kind of attitude a lot. "But I don't WANT to do xyz [which nobody ever said I had to do, but about which they merely said 'here's what I do']. SOMETHING IS FISHY/unfair/sketchy/dishonest/a rip-off." Assuming nobody is saying "You have to do it this way," this is a kind of ego-freak-out that your subconscious designed to give you an excuse to maintain your status quo. The ego is a slippery, slippery creature.
Many an entrepreneur, when their products failed to get the traction they expected became: - social media consultants - lean canvas experts - marketing experts for startups
I would like to hear from them how they are different from the late night infomercials who teach you to become rich from real estate and government grants.
- Of Interest. It's hard to disagree that posts like this are of interest to hackers and HN readers. The four posts mentioned (linked, [1], [2] and [3]) are scientific and analytical. They go in to detail about how four technically/graphically minded gentlemen have failed or succeeded in their various startups and ideas. They offer an honest appraisal of their own decisions.
- Honesty not Arrogance. Many self-absorbed posts are arrogant in their success stories. I see each of these as being honest and humble. This is certainly subjective but I believe them to be modest in their writings.
- Education. HN can certainly learn from all three of these posts. I think patio11 put it well when he said: "I would hope that the six-thousand odd words of narrative in the post and copious linked material contains non-obvious useful tidbits such as "You can increase the sales of a mature, six-year old software company by over 60% solely by A/B testing while keeping all other factors constant."
- Democratic(ish) Voting. Let's not forget that HN is largely driven by its readers.
- Inspirational. I know that many people have taken great inspiration from these posts, particularly those wishing to move in to their own products or to write eBooks. One of those is http://brianfran.co/wroteabook/ who dedicated his book to Sacha Greif (sgdesign). If HN serves as an inspiration resource to encourage creativity and success, isn't that enough.
Whilst not all agree, I would like to say A Very Well Done bdunn, patio11, sgdesign and nathanbarry and thank you for being honest, humble, educational and inspirational.
[1] http://news.ycombinator.com/item?id=4982416
There are many sub communities within the broader startups and entrepreneurial fields, but what HN used to be was a group of people who were hackers first with interests in stories about other startups, new technology, implementing technology etc.
There is an entire other subculture around working from home, the 4 hour work week, SEO, affiliate marketing, how to ship product online, how to write an ebook that can sell for $40 in 24 hours, the micro-ISV space etc.
That later group, who would prefer to talk about how they sold $50k worth of software or ebooks, is much larger than the group of hacker entrepreneurs who would much rather read about the latest Javascript library, security exploit or scientific breakthrough.
Business of Software, the forum that Joel Spolsky ran for micro-ISV's shut down and it seems everybody came flooding over to HN (or were coming over steadily over the past few years). This means more of that type of content.
There can't be more than a few thousand technical (or want to be technical) entrepreneurs, while the group who are interested in breaking away from their career and becoming an ebook affiliate likely numbers in the millions.
A lot of those negative comments are, I feel, from frustrated hacker entrepreneurs who know you can make $100k a year online and who don't want to hear that story again. I didn't click on any of those links when I saw the headlines (no offense to the authors, but it just doesn't interest me) and the only reason I clicked on this thread is because I couldn't believe that another thread that mentions an amount of money in the title had again made it to the top of HN.
I have gone from clicking on 60-80% of HN headlines to now hitting 10%, on a good day. I bet that if I did click on one of those headlines, that I too would have left a smart-ass cynical comment as well, but i'm passed that stage of protesting submissions that I feel don't belong here and now just move on (except this thread).
edit: I realize that I made some sweeping generalizations, I don't mean that people interested in SEO aren't hacker entrepreneurs, I just needed a way to define what are different groups of people in the audience here.
However, because I'm bootstrapped, things like SEO and marketing are pretty important if I want to be able to keep making my house payments, so they interest me.
I think marketing and engineering are completely complimentary. You can't have one without the other in this space. I need to know how to make money selling software or whatever else if I want to keep going, but I also am curious about the latest JS lib or whatever else to help build a sellable product.
My goal with this and other posts has been to always show "hackers" that building software and running a business aren't mutually exclusive. Stories and inspiration from others helped me get to where I am today; and I hope that my story can help others. That's all :-)
Stories about other startup you listed. So what's wrong with stories of how this startups made money. You mentioned implementing new technology. But any technology or opensource software not actively used in money making ventures starts to lag and eventually dies.
Why are we being hypocritical.
I will agree, the post could have been titled better. What's relevant here is not the money but the OP's change of attitude from live to work to work to live.
That's something I hardly ever see on HN. And it belongs here on HN.
Give me a break. The backlash is from people who are so intensely jealous that they find the idea of making any money outside a job unseemly and would get back to bitching about how evil Valley VC is.
Behaviorally, I'm wondering if some of the jealousy is coming from the "aw shucks" tone of these posts.
After all, in high school, nobody was ever jealous of the cliche kid with horn rimmed glasses that studied all the time, never partied, went to medical school (or became a rocket scientist) and ended up making lots of money (and actually married a beautiful nurse). He worked hard he deserved his success. (Or the athlete who made it into the pros or pick your own example). I think it's human nature for people to see someone who appears to be naive/lucky and things just worked out.
A relative of mind recently commented that his college roommate "who had a lower GPA than I did" made it big on wall street and was living the life with a beach house and all the trimmings (while the relative was working for a bank doing just "ok"). It was clear he was jealous and that he felt he was smarter and had worked harder than this individual.
Just a hypothesis.
Edit: Emphasis on appears to be.
There is nothing Patrick is doing that most people on HN couldn't do. That is, in fact, his whole damn story; it is literally his thesis. "I spent 5 hours a week building 'hello world' and hooking it up to a random number generator and then refining ways to sell it to teachers; here's what happened". LUCKY DUCKY! cries HN.
Sure if they applied themselves and put the effort in. Big "if" there though.
In any case I don't think Patrick falls into the "aw shucks" category at all. The post he did was long and detailed and I don't remember much (just rescanned quickly maybe I missed) about how he did it all and managed to still travel and have fun (he might have but I didn't see that). The sheer amount of detail in that post is great. I don't even have time to read it fully I can only imagine the effort that went into writing and editing.
There is also this sentence at the end:
"I think that, aspirationally, career/job/business/etc was never supposed to be my #1 priority, but be that as it may it sucked up a disproportionate amount of my twenties."
So Patrick did what he had to do to make it happen, this is no "boating accident" (it's a shark) and his success is the result of hard work. Not everyone has what it takes to do that. (I'm reminded of the Karate tournament that I was in when I was younger where I was absolutely blown away by opponent who clearly had put way more effort into preparing than I did.)
I'm not sure all, or even that most, HN'ers could achieve that because while they may be smart and they may read and learn everything they can they might not actually be good at applying that information, taking chances, having other things in their life suffer etc. or just plugging away.
Fuck the haters. So to speak.
Period.
I would add that HN is also driven by the admins. The admins can decide what gets on the front page and what stays there. They are the gatekeeper to being able to gain votes to stay on that page (unless an admin decides to remove something?).
Good story for a year of transition, good for you.
But not everybody can be a author or a trainer/instructor. but what I feel is, it is more like celebrities making more money by endorsement. Every president who leaves office can get a multi million dollar book deal not the other way round.
I converted my niche consultancy into an outsourced product development company, after 6 1/2 years I employ over 150 people, and still believe there is lot of scope for growth in my line of business.
If I were you I would spend more time with the product, if needed would create variants or complimentary products.
if your company or the product is the brand your business is scalable, but if it is "YOU" then potentially it is a bottleneck.
All the best.
* Took two of our "do work once a year" clients into a monthly retainer relationships which will bring in an additional $20,000+ revenue annually.
* Changed our estimating process to value-based, fixed bids. Projects previously estimated at $5,000ish are now closer to $8,000ish, and prospect clients are biting just as hard... harder actually.
* Hard data: two new clients are in the door grossing an additional $6,200 above what we originally would have grossed... and are both interested in ongoing retainers :)
Brennan knows his stuff. His advice has moved the needle on my business. And we've only implemented a fraction of that advice.
We also bundled in some additional value added services to that retainer.
I think what happens to most people following advice from others is that they are not "dumb enough" to go with it. They just look for reasons on why tactics can't work instead of really giving them a shot.
That or "suckers don't value what they don't pay for" (attributed to PT Barnum).
- The consistent, predictable growth of Planscope month over month. Even when you have roller coaster revenue from other projects, Planscope provides a solid base.
- How you are using multiple products to feed off of each other. Selling the book to Planscope customers, then using the book as a gateway drug to get more Planscope customers and finally selling the class. Very well done.
Thanks for teaching me so much!
* Blue line - Planscope * Yellow line - Books * Green line - Workshop
Thanks Nathan!
Seniors in high school often have to be very conscientious when posting their college acceptances. In the age of Facebook, Twitter, and Tumblr, students have developed a tacit moral code. That is, anyone who posts "I got into Princeton!" comes off as inconsiderate and oblivious to other peoples' rejections. That is not to say that they are those things; just that they appear that way.
Fortunately, I've seen a promising trend where students will refrain from posting these self-lauding statuses. If anything, they'll wait it out before announcing their college decision.
With HN, the situation is more difficult. Entrepreneurs are constantly failing. The holidays are an especially difficult time for many of us, as we reflect on the previous year and everything that went wrong.
HN needs to develop some sort of a moral code. Many of us are incredibly sensitive to subject matters like these. I'm not suggesting that people refrain entirely from posting their 'year in review.' Rather, I suggest people deeply consider the others on HN before they go ahead posting their earnings to the penny or submitting their own blog posts to HN, boasting their million dollars.
Evidently, it comes off as rude to many users. Rather than complaining that people are so intensely jealous, maybe we should find a way to convey the same messages without evoking such jealousy. Believe it or not, it is possible.
So with a Million Dollar Consultancy, the value unlocked is upside of a million dollars.
All that value goes into a global account called Civilizational Progress.
Probably doesn't work for all types of consultancy though.
I would be very grateful.
I heartily agree with the idea of charging based on value provided, but I think it's harder for many providing software services to know, often because the people you're talking to don't really know - you may have to go a few levels up to get someone who sees the bigger value picture. In my experience, people will just skip over you to find someone more malleable to do the work, and until you get a name for yourself, and/or have people seeking you out based on reputation and past projects, you won't be in a position to do true 'value-based' consulting. It's certainly valuable, but it's also something I don't think many people can start off doing on day one.
What turned me off consulting eventually (even though the money was good), was the concept of wasting my life bringing other people's ideas to fruition, while neglecting my own. From the moment I realized that, it became an easy decision for me.
I wish you the best for this upcoming new year and look forward to reading more about personal achievements.