Leave FAANG for consulting?
Hi I’m curious if anyone has left a FAANG eng role to pursue starting your own consulting business. It seems challenging to build up a consulting business to match Job TC, but could be potentially more rewarding, exciting and give more work location and schedule flexibility. Has anyone considered doing this or actually done it? If so, how did it work out for you? 520k TC / 10 YOE
Wow!! 520K. What do you do to get that kind of money? I would love to get TC like that, my YOE is same as yours. I am still not in a position to start my venture. Would be nice to have enough financial security.
I’m a line manager at a large, but pre-ipo company. TC is calculated from salary+bonus+RSUs priced based on last fundraising valuation.
Uber
Yes that makes sense. Specialization seems critical and it would definitely take quite some time to build up steady business.
I can see significant effort on sales/marketing would be required. And I think it would take at least 1-2 years before I could approach the same TC I have now. I’m considering whether long term I could make a higher income if I could get it off the ground. Luckily, I have no mortgage and few financial commitments, so I am fortunate to be in a position where I am able to withstand medium-high risk.
Paid off house?
Do you have a list of people willing to pay you for your business? Unless you provide specialized services, ICCs will eat you alive by competing based on the cost. I know consultants in industry charging 300 an hour on highly specialized services and they work 4 or 5 months in the year. If you are going this route personally, then you need to be well connected with people to find work for you for that year. These types of people generally have companies calling them for a few months to help accelerate a project.
I’ve done consulting in the past as a side gig while working full time. It seems charging hourly is a losing battle, no matter what the rate. Everything I’ve read on consulting as a business suggests moving to a fixed cost model where you charge for a project and frame it as a product you are providing. Perhaps easier said than done.
Considered the risk adjusted returns. You'd need to make much more high risk consulting dollars to equal your current low risk salary dollars
Agreed
Exactly. You need to maximize the expected utility, which is a concave function. Let’s play a game. You either a) get $25M or b) have a 25% chance of getting $100M and 75% chance of getting $0. The expected payoff is the same for a) and b), which is $25M
Why not build a product startup? It has more VC support, more startup community feel, tons of more growth potential, chances of being acquired, more quality work, don’t have to do other people’s shit, u define ur own product and problems, similar marketing challenges, and much more cool. I can go on.
Agree with all your points. Challenge is that I do not have a strong idea for a product based startup. I feel I need a good idea which is also something I believe is really worthwhile to build. I’ve been thinking about leaving corporate life for a while, and building a high value consulting business seems like the next best thing to a product startup.
I have a ton of ideas for product startups. PM me if you’d like to chat.
As a consultant, I’m going to agree here with BookEng. Scaling up a consulting biz is hard to do. A good consultant will get to six figures, but it takes a team to get to $1M. However, there are trade offs as always. Consulting = cash now; startup = cash later. (An employee is stuck in the middle somewhere.) Regarding fees, at 10YOE you should charge median rates for the region you’re in. I base my rates on the annual IEEE Consultants Survey. Ultimately, what I’ve learned is that the money is great but it’s a roller coaster and you’ll have the same level of burnout that you would with a startup but you’ll be left with no value outside of yourself. With fixed pricing, you’ll be on the hook to deliver and all the risk has been shifted to you. Bad idea. Charge hourly until completion. If they don’t trust you, move on. A tidbit is if the client complains early about the rates, they’ll be complaining the entire time. That’s a bad client. Be prepared to seek contract gigs when in between consulting jobs if you slow down with no reserves. Shoot, I could go on and on. PM if anyone wants more insight...
Thanks for the insightful reply. I will follow up on PM :)
I’ve never considered FAANG due to location issues. I go with companies that provide more flexibility, every time. I imagine some have left for similar reasons.
Don’t do it. Consulting is 65% sleazy sales crap and the rest of the job involves obsequious posturing too. Lousy quality of life, boring work, and you’re nearly always working for incompetent clients who think they are the best in the industry when they actually can’t build anything for shit which is why they’re hiring you.
Apparently, you weren’t very good at business but great at gagging
I’ve never been an independent consultant but I have a few friends and colleagues who have and that is how they describe it.
Highly considering it. But a lot of work to get started