As you may have heard, I ended my consulting practice to join Moraware on January 1, 2014. I will continue blogging at this site, and all of my contact info still works, so don't hesitate to reach out to me.

What I’ve learned so far

Last week I finished up my first consulting engagement. Or at least I presented my wrap-up summary and final invoice. I probably shouldn’t say I’m “done” until I get that last check.

It’s been an amazing ride so far, and I’m having a blast. I’m learning again. In fact, I’m learning so much that I have that “drinking from the firehose” feeling … there’s a big difference when drinking from the firehose as a consultant, though, because if you mess up you don’t get paid. As an employee, you get a grace period. As a consultant, you don’t.

This is new to me. Before joining Microsoft, I called myself a consultant for more than 14 years, but I really wasn’t one. I was a high-end temporary employee. Good work, but it’s not consulting. I should have called it contracting.

You see, the way you get paid matters. For 14 years, I was paid hourly … actually, for my highest paying gigs, I was paid daily, but I never liked that, because I have a harder time putting in a “full billable day” than most people I know who are similarly useful. I remember being very proud (a bit cocky even) when I crossed over the $1,000/day barrier in the mid 90′s. I used to whisper to myself, “another day, another grand” – that’s pretty obnoxious now that I think about it. But I only felt good about charging for a full day maybe one day out of five, so I ended up essentially translating into hours anyway by charging for half a day here, three fourths of a day there. My standard “billable day” was about 6 hours long, so I preferred billing hourly to avoid any sense of impropriety.

When you charge by the hour, your incentive is to work more hours, to stretch out your value for the customer. I know a little about a lot, so I’m generally handy to have around. I would poke my nose into lots of different situations for a customer, and I would genuinely make myself useful. People would invariably say, “Patrick, could you join us for this meeting? We’d like your perspective on this” or “Patrick, could you investigate xyz while Joe’s out? We need an answer right away.”

In the late 90′s, my friend Linda brought me into a bank in San Francisco, ostensibly to implement column-based security in a custom database app. I was there for more than 2 years doing a little bit of everything, from coding web apps to teaching Java to performing Y2K remediation. Linda called me her “pinch hitter” because she’d bring me into tough situations or put me on projects where she simply didn’t have anybody else who could do the work. She knew I’d figure it out, whatever it was. It was fun and paid well (although San Francisco during the dot com boom was crazy expensive). The only reason I left was that I finally convinced my wife to move to my childhood home of Grand Rapids, MI (you try convincing a Texas girl of that – once you get an opening, you take it). Even then, Linda called me a couple months later and asked me to come back. After all, I was handy – but ultimately, I was just an expensive employee who paid his own benefits and could be fired easily.

Funny detail about that gig – I never actually addressed the security issue that I was brought on to fix! It was kind of a hard problem and there was a lot of low-hanging fruit elsewhere. As a contractor, I was happy to bill hours for anything. Another hour for this customer meant I didn’t have to spend time looking for a new customer. And once there was a way to pay me, my “boss” didn’t really care about justifying my expense for any specific objective. I was useful to her. I solved her problems, so she wanted to keep me around. I made her life easier. That’s nothing to sneeze at – it’s good to be useful, whether you’re a full-time employee or a contractor – but how do you put a dollar value on that kind of usefulness? There was clearly a cap that was intuitively based on the fully-loaded cost of a comparable employee plus a premium for the ability to get rid of me at will.

A new friend recently observed, “You like to do things the hard way, don’t you?” You know what – I do! I already know I can do hourly contracting well, since I did it for 14 years. It’s not interesting to me anymore. Leaving Microsoft, I wanted to do things differently, even as I “returned” to consulting. So here’s the big difference: this time, I’m not charging for my time. I’m following the principles of Alan Weiss and billing based on the value I create for clients. In other words, I’m charging a fixed price for a specific result.

Billing based on value is utterly terrifying – but in a wonderful way. At a deep, philosophical level, I want to go where I can create the most value. I think most people do. Well, if you want to create a lot of value, you have to be pretty specific about it. When I was charging by the hour, I wasn’t specific. My value was always assumed … it was always positive, but it was pretty vague, too. Now I’m talking to customers and attempting to quantify the value I can create for them. Whoa. It’s scary, but it’s also focusing. It forces me to work closely with customers before engaging to find out where I can make the biggest impact. This sales process is real work, hard work – it’s an investment in relationships, not a perfunctory search to fill an opening.

During an engagement, I’m no longer incentivized to poke my nose into any and all issues … instead, I’m necessarily focused on delivering the value I said I’d deliver. That’s a huge change for me, and I’m still adjusting to it. Interestingly, I’m no longer rewarded for being the “smartest guy in the room” (the indispensable consultant, the guy you can’t get rid of) … in many ways I have the opposite incentive. If I collaborate well with employees to accomplish the desired result, I’m actually delivering MORE value than if I did all the work myself (teach a man to fish …). If I make employees look good and inspire them to do more of the work required to generate a result, then I’m increasing my own efficiency and margins. That’s a fascinating change of perspective for me, and I suspect it’s going to teach me a lot.

I have not mastered this form of consulting yet. I have a LOT to learn. For example, the engagement I just finished was supposed to take me 8 weeks, and it took 15. I was off by almost 100%. That’s OK – it was my first engagement, and I was going through a massive transition. There were so many details to figure out. Ultimately, I think I missed on my timing estimates because I rushed the sale – I should have slowed down a bit to get a more precise understanding of scope. I should have invested more upfront time in the sales process. To that end, I’m looking to start a more substantial second engagement with the same customer, but I’m spending a couple of weeks up front to make sure we both understand the scope better before finalizing terms. I assume I’ll get better at estimating as I complete the whole cycle a few times. I’m going to have to.

In the past, I’ve always liked getting to the point in a project where I’m not thinking about money at all, where I’m just focused on the job. It turns out that this might not be in the best interest of my customers. Money is a really useful way to keep score, especially if your goal is to create the most value you can. In the end, the goal of consulting is simple – to improve the client’s condition. My goal is to create so much value for the client that assigning some of that value back to me in the form of compensation is easy and obvious and lucrative.

I haven’t come close to figuring this all out yet, but I think I’m on the right path, so I’m going to keep moving forward. It feels like it’s going to take about three years before I’m an expert in this kind of consulting, and I couldn’t be more excited about the journey.

Of course, it’s not really about me – it’s about my customers. This has been such an intense ride for me that I couldn’t resist writing about my experiences so far. But soon I’ll start writing about the actual problems I’m solving, like migrating a data center to the cloud to improve disaster recovery. That’s pretty fun, too.

Rest

I learned something interesting this past week – I’m not very good at understanding when I need to take some rest. In fact, I’m not very good at understanding the “rhythm” of life that reminds you when it’s time to rest. The good news is that it’s fixable.

Paula (my wife), Gus (our 10-year-old son), and I flew down to Austin to visit Paula’s sisters and our nephews. I had the somewhat deluded idea that I would work much of the time I was there. I actually did at the beginning of the trip (hey, it got me out of painting), but it became impractical as the week wore on.

I noticed a couple of interesting things on my trip. First, I was quite touched by the fact that some very successful friends of mine – people I really look up to – took time out to meet with me. That just made me feel good. But it also made me think … if these guys are even busier than I am (one just added his 50th employee), how could they make time for a visit with me and even seem relaxed and engaged? I suspect they have a better sense of rhythm and priorities than I do.

The second thing I noticed was that after about 3 or 4 nights, I felt really rested, even though I was crashing on a couch and being serenaded in the middle of the night by screaming babies. What was going on?

An analogy popped into my head. Imagine you dropped to the floor and did as many pushups as you can do. Let’s say it’s 20. If you tried again a few minutes later, you could do maybe 1 or 2 more. A few minutes later would be the same. But if you waited until the next day, you could do 20 again. The next day 20 again. A few days later, you’d be able to do 21, then 22, etc. But if you only ever waited a few minutes, you’re never really going to be able to do many more pushups. Just 1 or 2.

I do that a lot with work. I worry a LOT about things I have to do, and then I try to push myself to do more before I’ve really recuperated – and then I flounder. I didn’t use to have this problem as a programmer – I just fell into a rhythm naturally. But now that I’m doing more thinking/analyzing/influencing kinds of activities, I’m much less aware of a natural rhythm.

Noticing that, I think it’s going to be pretty easy to change, because I have several different types of activities that need to be done on a regular basis: communicating with customers, researching, creating architecture documents, selling/marketing, project managing, etc. Those are different activities that require different kinds of energy, kind of like doing pushups, then sit-ups, then cardio, etc. I need to figure out how much of each kind of activity I can do in a day, and then develop a more deliberate “cross-training” pattern that optimizes my time and energy. I’ve been beating myself up about some activities when I’d be better off simply calling it a day on those and moving on to a new activity.

These are somewhat philosophical thoughts that were driven home by the passing of my friend Allen Stern, founder of CloudContacts. I met Allen when I interviewed him for my podcast and then became a customer of his. Over the last couple of months, we had been exploring a business opportunity together. I grew very fond of him and impressed with his kindness and generosity. We were planning to meet when I got to Austin, but he didn’t reply back to my emails and calls while I was there. Fearing the worst, I eventually did an Internet search and discovered that he passed away.

I don’t know how Allen died, but I know he had health issues. Still, his death felt sudden to me, and I really regret not being able to meet with him in person (and run together). He was a good, good man.

Allen’s death reminded me that life’s too short for bullshitting about anything, especially work. Just do what you gotta do, do it well, do it generously … then drop it and enjoy spending time with people you love. When I do that, I seem to wake up more rested and happier, so I’m going to try to get into a better rhythm and live like that every day.

Thanks for your kindness and inspiration, Allen. You will be missed.

New Adventure

In the next few days, I’ll be wrapping up my tenure at Microsoft and jumping into a consulting engagement for the CIO of a major non-profit.

It’s very difficult – painful even – to leave Microsoft. I really do love this company and the people I work with. Microsoft makes great products for billions of people, and it’s taken care of my family very well for the last 6 ½ years. I’ve made some great friends and worked with great people. I learned what it means for a teammate to have your back at Microsoft, and it’s not easy to leave that. I felt very sad when I told my boss I was leaving, partly because I felt as though I was letting down my teammates.

Why am I leaving then? Well … it’s just time. I took the opportunity to work at Microsoft because I realized I had grown stagnant as a consultant after thirteen years. The same is now true in reverse. I had been in approximately the same role for six and a half years, and I didn’t see much room to grow. Don’t get me wrong … there are GREAT opportunities at Microsoft, and I recommend working there to anyone – but at a certain point, I would have had to move to the Seattle area to do my best work at Microsoft, and Seattle isn’t a good fit for my family these days. It’s time to go, but it still hurts.

I’m excited to be returning to consulting, but I’m approaching it quite a bit differently than I did in the past. Before Microsoft, I was more of a contractor – a temporary employee, really – mostly as a programmer, sometimes as a true architect. It was good work, and I enjoyed it. But I tended to bounce around from one gig to the next without building on previous successes.

As I venture into consulting this time, I’m following the specific approach that Alan Weiss describes in Million Dollar Consulting (and 29 other books). I’ve long said that I want to go where I can create the most value, and Weiss’s approach is based on that tenet. I’m using all my experience, creativity, skills, and connections to help companies get more out of IT. Based on my initial leads and first customer, it appears that I’ll mostly be working with CIOs at companies with medium-sized IT organizations. I’ll probably also work directly with CEOs at smaller companies and with directors at really big IT organizations, but clearly my bread-and-butter customers will be CIOs who want to innovate faster.

I was inspired to take this approach by Patrick McKenzie. He’s the most bad-ass consultant I personally know, and he often emphasizes the importance of focusing on the value you create more than your needs or competitive rates. Of course, if you want to make money for yourself, you have to go where money gets made – if you want to be valuable, you have to make an impact on the bottom line. Patrick is also unapologetic about being both a consultant and a “product guy.” They are both just part of his overall business life. He’s simply an entrepreneur.

I’d like to go down that road as well. Consulting is a business that creates immediate revenue, but when you stop working, the revenue stops. Products have the opposite profile – they require lots of up-front investment before you get revenue, but then the revenue continues beyond the initial investment. To me, they’re just two sides of the same coin. I need revenue to feed my family, so consulting is the way to go. I’m taking it very seriously and becoming a student of the profession. Doing it right will force me to learn more about marketing, sales, managing revenue, and prioritizing my time. And frankly, I enjoy it.

After an initial transition period, I intend to reserve some of my time for product work (like Tribbon). For this work, I have an amazing cofounder in Jody Burgess, and we’re going to keep experimenting with product ideas until we find one that works. We WILL succeed at this, but it might take us years. Consulting gives us both an outlet to use our strengths for other companies. We’ll also learn more about successful companies, while we put food on the table. Jody and I thought about joining forces as consultants, but we decided not to for one simple reason: you should only formalize a partnership with someone when 1+1=3. For our product work, Jody and I add up to 3 … but as consultants, we’re 1+1=2. We bring such different skills to such different customers that we don’t make a compelling package deal (at least we haven’t discovered that synergy yet). So we’re separate consultants, but we’ll continue to work on products together.

Moving forward, I’m going to be blogging for a specific audience – CIOs of medium-sized organizations. I won’t be quite as pensive anymore, and I’ll be providing updates of my son’s gymnastics exploits at his own blog (coming soon).

Finally, as I leave Microsoft, I’ve been thinking a lot about what worked and what didn’t. My best work at Microsoft was more “extra credit” than part of my job: the Startup Success Podcast that I did with my friend Bob Walsh. The podcast allowed me to meet many amazing people (both listeners and guests) … one that had a surprisingly deep and lasting impact on me was Seth Godin. Since interviewing Seth three years ago, I’ve been reading his blog every day and every new book he writes. He inspired my first lightning talk, Give More Than You Take. In his blog and recent book, Icarus Deception, he talks about being vulnerable – and while it’s prudent to stay in your “safety zone,” it’s dangerous to stay in your “comfort zone.” You only grow by breaking free from the bounds of your comfort zone and doing new things.

Ultimately, that’s why I’m leaving Microsoft – it’s time to expand my comfort zone and be vulnerable in a new endeavor. Thanks for your support.

Big changes coming

I have a brand new site design up and running at WPEngine. I’m about to change DNS settings for patrickfoley.com to point to the new site, and then I have a big announcement to make … so if you see this in your RSS reader but don’t see the new site by Thursday morning, please send me an email at pf@patrickfoley.com to let me know. Thanks!

Gus’s first gymnastics meet of the new season

Picture by Plauto Da Silva

It’s a new gymnastics season! Gus’s first meet was last weekend, and he did great – 2nd All Around for Level 5 JrB (full scores). As I always tell him, I’m more proud of the work he put in than the results – if you do the work, the results will come. After last season, he bumped up to 11 hours of practice per week! That’s 5 hours more than last year, and he’s embraced it. He loves the sport – he spins on his mushroom at home constantly, often while watching videos of gymnastics champions.

This year, I’m trying to streamline my video production process, so I’m not assembling everything into one video. Instead, I’m uploading each event separately. So here you go:

As a bonus, one of the other dads, Plauto Da Silva (his son, Patrick, is a wonderful level 6 gymnast) took some incredible photos. When those are back up, I’ll send a link.

SSP 134–Professor Steven Blank

Bob and I had a true luminary on our podcast this week – Steve Blank, the founder of the principles of Customer Development. I was a little star struck! Prof. Blank is one of the most important entrepreneurial thinkers of our time … I felt so lucky to have the opportunity to speak with him.

While reviewing his first book and talking with him, I came up with a summary of the most important lesson for a software developer like me who wants to be an entrepreneur – focus on WHO, not WHAT.

I just had dinner with some other programmer/entrepreneur friends, and I saw the same impulse in them … it’s so exciting to focus on the product – the WHAT – that it’s hard to focus on the customer – the WHO. It’s not enough to build a cool product. You have to be able to find the person who will buy it. It’s all about the WHO.

The real pleasure of getting to meet my heroes like Steve Blank is just getting the sense of who they are as people. My impression of Steve Blank is that he is very kind. He really cares about helping entrepreneurs learn and succeed.

I hope you listen to the show. It’s one of my favorites that we’ve done. Also be sure to buy Prof. Blank’s just released book, The Startup Owner’s Manual.

SSP 133 with Sailesh Ramasray of BizFusion

Bob and I released Show #133 of the Startup Success Podcast yesterday, featuring an interview with Sailesh Ramasray of BizFusion, a full-featured accounting system for small businesses.

My favorite insight from the interview is that most businesses should internationalize but do so by taking advantage of English as a common language. It’s not that difficult to add new markets, so you should probably look into it.

Sailesh’s approach to BizFusion reminds me somewhat of Michael Sliwinski’s approach to Nozbe. I’m going to have to figure out how to describe what makes them similar to me <stroking chin> …

How geeky

I’m going to be heading down to South By Southwest in a couple of weeks, and I am stoked … I’m even going to be taking the Startup Bus!

Unfortunately, I’m going to have to miss one of my son’s gymnastics meets. He has ten this year, so making 90% is a decent percentage, but the fact is I HATE missing this.

As I mentioned not too long ago, most problems can be solved with a specific amount of money, and this is such a problem. I could

  • Fly back from the conference for the meet, rent a car (it’s in Detroit) and fly back to the conference. Cost – about $1,200 and it  would cause me to miss 20% of the conference, which is a problem for work.
  • Teach my wife how to use the Flip video camera and have her record everything for me. Cost – nothing.
  • Teach my wife how to set up a laptop with a good video camera and stream the event to me live via Skype. Cost – almost nothing (I might have to borrow a mifi). The real problem here is that I would be expecting my wife to handle A/V issues that I normally handle myself. That’s not going to happen
  • Buy my wife a tablet with a built in video camera so that she can stream the event to me live via Skype. Cost – $300-1000 depending on which tablet I get.
    • I could get a “Windows 8” ready x64 tablet, but that would wind up being a toy for me
    • I could buy Paula an iPad or Android tablet (like the 7” Samsung) – that latter option is pretty tempting
  • I could borrow a tablet. Cost – $0 (plus some sort of favor in return, I suppose)

I’m not exactly sure what I’m going to do at this point. Seeing the video would be cool, but I really want to stream it live.

Next step: checking out the wifi quality at the venue …

Bad ideas

The most common obstacle (excuse?) I hear for someone not creating a startup is, “I don’t have a good idea.” Well … so what? Maybe you should work on a bad idea instead.

Jason Cohen suggests your idea probably is bad, even if you think it’s good – but hey, you have to start somewhere, so you should probably go ahead and pursue it.

I’m beginning to think that it’s better to pursue an idea that you KNOW is bad than to pursue nothing at all. After all, if the goal of Lean Startup is to validate that your idea is good, couldn’t there also be value in validating that your idea is bad? There is a certain amount of learning how to measure that goes into creating a startup these days, and you can learn a lot by proving that your idea doesn’t meet the measurement thresholds you required for a success (most importantly, that revenue > costs). In some ways, your emotional skepticism about your bad idea will help you learn more about the process – it will help you stay objective. I suppose there’s always the possibility that your idea turns out to be good, but it’s more likely that you’ll spot a good idea right next to your bad idea.

If you have no idea at all, then just pick a space you like and start exploring. I’m interested in scheduling, email productivity, educational phone apps, “personal relationship management,” and a lot of other spaces. Pick a space at that scope, then talk to friends about possible ideas. Just pick the first specific idea that comes to mind. Do some basic customer development by talking to customers in that space or follow the process that Rob Walling recommends for a more self-serve product. The process itself should open your mind to more ideas – and as you evaluate them, one of them is bound to be a good one.