Another previous employer is launching a startup and has recently pinged me because they need to build a series of data pipelines and ML models for their product.
I've to talk to them about specifics but I don't see myselft having enough available time to make it work.
I've been thinking about starting my own data/ml services company for a while but I don't really know when to make the jump. I think (is a guess for the time being) that the income from this new job, in addition to the income of my current client, could be enough for my living expenses of this year, so I'm thinking if this is a good time to make the jump or not.
The problem that I see is that this new lead is from a previous partner of my current client, so both jobs are related to my previous employer, I don't have a pipeline of possible prospects for my service, so I'm not sure if I'll be able to generate a pool of prospects while doing the work for this customers.
My guess is that I should wait until there is a sign that I could probably get a stream of clients to keep the wheel going, and try to find the time to take this new job, maybe negotiating terms to make it possible.
What do you think?
Edit: I've savings already as I plan to buy a new home (I'm in Argentina, we buy it cash, no mortgage). I need three more months of salary to accomplish the home budget.
I was laid off from my job as a software engineer about 5 years ago. I had previously worked in software consulting and knew the operating model and had a handful of potential clients. I had some savings and my wife works full time so I decided to give it a go for 6 months to see how it would go. I partnered with a colleague who was also laid off and had same appetite for risk as I did.
* The first year was a grind, especially doing the non-technical tasks like networking/business development/invoicing/etc.
* We ended up being profitable on year 1, I made less than my previous gig as a lead engineer. We grew from 2 of us to having 1 FTE and 3-4 dev contractors in year 1.
* Keep in touch with engineers you liked working with, hiring is WAY harder than I expected. If you decide to grow, you will need a team for larger contracts.
* Business development is largely a numbers game, you have to get out of your comfort zone and talk to a lot of people/companies and get on their radar.
* One of our first non-technical hires was business development. We did this when we hit $1mm/yr rev.
* Being in a niche can be helpful if you are able to explain your value prop AND to differentiate yourself.
* Don't view other consulting firms as competition. We've formed some great relationships with other companies that align with our engineering process and refer work when we have too much and get work when they have too much.
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This is a significant last-minute edit. There's a lot of good advice throughout this thread, but I would suggest waiting until you've completed the home purchase and settled in before considering the jumping to freelance. It's only a few more months and you'll have a much better understanding of any issues and unexpected expenses of the new home.
Beyond that, you need to make sure that you can do the process of networking, selling your services, cultivating a pipeline of clients, and collecting from clients who don't pay on time. Doing the work is only half of the battle when you're a freelancer. If you don't excel at the business side, you might not enjoy it after you run out of immediate contacts with work for you to do.
I have 10+ years experience in the field and I was working for a consultation company. But on the same time I would always get messages on Linkedin from recruiters and at some point I thought I should give it a go and try to work on the projects during the nights and weekends.
Did that for like 6 months and felt I could do it full time and then I just kinda did it and will be doing it in the future.
First I want to say, the risk might not be as big as you might think it is. You've a pretty in-demand skill set right now, more so than most SWEs. If things don't pan out as you expect, you can always get another full-time position despite the 'looming recession'.
That said, here is some unsolicited advice. Rebuttal as necessary :)
Regarding leads/prospects, if you do decide to make the jump, chances are you'll be tapping your professional network for leads, or pitching strangers if you happen to get on a call with them via cold email. This can work for a while, maybe get your first recurring clients, but I don't recommend working with a matchmaker like Toptal, Fiverr, Upwork, or an agency.
The platforms tend to have poor pay and bad clients. Agencies will limit your ability to build a direct relationship with the clients. I know people have built successful businesses using both of them, but for me having a direct relationship with high-value clients seems to have paid off doubly as I can set my own terms (fixed rate / value based) rather than the typical hourly model. If you can/want to build such a relationship, you should *get on the phone with a decision maker* (a huge unlock for closing work). Regular dev/engineer interview channels will yield regular dev work, pay, and circumstances (maybe that's a feature for you).
After a few sales calls for clients, You may realize getting leads to come to you is best, or at minimum people should have a reason to answer your emails like having some kind of branding or marketing, so start writing, coding, tweeting, or whatever regularly to get attention. Keep at it. It's hard work.
On top of everything, you will fuck up, and that's okay, so give yourself some breathing room financially and mentally.
Many people love the idea of being their own boss but the reality can be quite different and they return to perm roles.
However... What happens if both clients back out and you suddenly get no work for a year? Do you have 1 year of savings runway? Will your family and living situation survive no income for a year? You need at least a year of runway because it's perfectly normal to go for 2 months with no income and if you've only got 3 months of savings then you'll start panicking.
Also getting a mortgage as a freelancer is more complicated. Have you bought all of the houses you want for the next 2 years? (Freelancer mortgages require 2 years of company accounts, so you won't be able to get a mortgage for the next 2 years)
I was in a similar situation like you (FTE + consultant) where I was looking for prospects and not able to find enough. It's a full-time job in itself... I vastly expanded my opportunities by tapping into a bigger talent network with Toptal.
Please reach out and I'd be happy to share more
Never needed to network. Don't have to market myself. Never had or needed a full time position and never been short of work.
Get to know good recruiters who have streams of contract work with goal based outcomes.
Learn how the contracts are managed by middle men and understand why consultants and contractors are needed and what risk profiles they serve.
I'm used when times are tough, deadlines are tight or goals absolutely have to be hit.
My day rate is higher than my peers.
I'd say do it, find your niche and be ome the goto person for a specific kind of work.
It sounds like the question for you is whether you can find new clients at a rate fast enough to replace old ones. This is a question you'll never be able to answer fully as an employee, because employers generally don't like you putting out an "open for business" sign. So in your shoes I'd put together a marketing/sales plan, take the new customer, and devote some time over the next N months to seeing if you can build up enough interest and leads that you will have plenty of work down the road.
It sounds like the worst case here is that you get to the end of your contracts and have to go get another job again. Which is not a terrible outcome as long as you don't burn your bridges. And it's worth noting that after a period of freelancing you may decide you'd rather have a job anyhow, so you can look at the next months/years as an experiment not just on prospects, but on whether or not you will be happy with it.
Work on building your pipeline, and having customers from launch day on.
I have two big pieces of advice:
1. What other comments here say about money and runway is definitely true. It can be common to go a bit without clients - and even once you find a new one it might take 30 days for the project to start, then maybe you bill after the first 30 days, then it takes them 30 days to pay - that's 3 months from the time you found them to when you get the first money coming in! So make sure you account for that.
2. Have something you can point to which says "this is what I do, and why I'm good at it". In my case it was an ebook, but it could be a white paper, or sample projects, etc - but you need something that "tells a story" to the clients that you can do the job.
And good luck! It's scary to take the jump, but also very rewarding :)
As others have stated in the comments also, a lot of consultants never have to do marketing or sales, they just get it word of mouth through their networks as they continue to do good work. I think doing that first job well, but in a way that's not as scary as jumping away from your full-time job is a good choice if you have it.
1. Yes, better to start own business when favorable environment, for example, when see macroeconomic grow (now recession, and high probability of crisis), or when You have some money accumulation.
2. But business is by definition, PRACTICE of make stakes and earn profits on success.
- You will not practice if not try. And best practice at crisis.
Exist good solution of this contradiction. If You could afford it, look out at nearest to You business community (offline), and find experienced mentor, to mentor You and You'll pay him from Your current payment.
Any way, early start business is much better then late. Mostly, because when You younger, You have more health, and could do things faster.
Spend an afternoon to setup some branding for you data/ml company and when dealing with customers, mention you're a company and that they're not just hiring one guy but that one of the team will handle it.
I'm in a similar position. I'm saving money to build my house, I don't want to quit my main gig just yet and I'm trying to ramp up an agency doing mostly web development and I had good results offloading part of the work to other people. Learning to rely on external resources is crucial if you want to scale your business.
Best of luck!
Without that kind of savings (and being comfortable with watching them meld away for a while, taking the risk that you might not recover them), I would suggest to try to find a safe way to experiment with this. For example reducing your hours, or taking on a new main job with less hours, and taking on part time freelance work. Maybe there are things you can do for your potential clients with less hours than what you/they think is needed.
I never really wanted to do consulting and freelance work, but through my network I got to a point, where more projects are lined up than I have time to do.
Also, one thing that helps me a lot is to just live frugally. Even though I charge a bit below market value I still could build up a financial cushion, so I do not have to work for the next 15 years or so, if something should happen.
I figured - I'm 40, I've always wanted to do my own thing, I've got runway... Why not? So I formed a company[0], started planning out a B2B product and networking like crazy; I'm fortunate to have a wide diaspora of former colleagues.
As I want to bootstrap my own SaaS app, I needed to get revenue coming in, so I began to offer my services on a consultancy basis. I got my first small customer at the end of November - a charity needing hosting and maintenance - and then landed my first major consulting gig at the end of December 2022.
Who knows what I'll be doing in a month's time, but I know that I can build a track record of helping others, and it's so varied! Every business or organization I talk to gives me more ideas for my app, so it's also a great way to collect more knowledge about the wants and needs of my potential customers.
If you have the opportunity and runway to give it a shot, I'd recommend trying it - put a plan together for how you'll achieve it, how long you can last without a gig and what you'll offer others. And then execute on it.
You'll never know unless you try.
[0] https://xarma.co
The number 1 thing you need to be successful as an independent is A CUSTOMER.
Make sure you have work lined up in advance of leaving your employment.
Seems simple, but often overlooked. Especially when a person has a S/W project they've been working on, and plan to launch it into a business.
I am going through the grind of prepping for the tech interview all over again, and it just occurred to me that I might be approaching this from the wrong angle. If instead of spending all these hours every day solving leetcode problems or trying to "grok" the system design interview, I spent them networking and building a portfolio, it might result in a much better ROI.
But alas, my visa status doesn't allow me to do anything either way. Maybe one day.
[1] https://www.kalzumeus.com/2012/09/17/ramit-sethi-and-patrick...
So my somewhat tangential advice is: figure out your rate, and start with a rate that doesn't require you to constantly hustle for clients to make your nut. It's easier to figure out the right (high) rate when you've still got a salary to fall back on, and much harder when you're grinding it out as a full time contractor.
Cheers and good luck!
Really, it should be a slow transition - you work full time, you take up 1-2 freelance clients on the side. As you start to get more clients on the side, and you see a clear path to replacing your income, then you can make that jump.
If you just make the jump as a clear break, it totally can work, it does all the time. But it's just a bit riskier, and it adds a lot more weight and pressure to get deals, which can lead to a situation where you charge less than you are actually worth.
Btw, in my profile, the site I run is for freelancers to basically share their hourly rates. It's essentially levels.fyi for for consultants. May or may not be helpful to you at this stage of your journey
TLDR: - Keep your job, start taking clients on the side - Once you have enough clients and you see a clear path to replacing your FT income, quit and take the leap
What I mean is working for a consulting firm is substantially different than what you do as a freelancer.