Building a successful open source consulting company

Building an open sourceconsulting company

Nate Aune (@natea)www.jazkarta.com

FISL 2010Porto Alegre, Brazil

Wednesday, July 21, 2010

http://www.jazkarta.com

http://www.jazkarta.com

/me

• Developer turned business owner

• Founded Jazkarta in 2004

• Now 3 full-time staff and 10 subcontractors

• Specialize in Plone and Python


Topics for exploration

• Marketing

• Pricing

• Contracts

• Project Management

• Services

• Recruiting

• Finances

• Open Source citizen

• your topics?


Marketing


Marketing & getting work

• Speaking

• Blogging

• Sponsoring

• User group / consultants group

• Networking / Partnering


Sales


Sales

• Segment into markets (edu, gov, non-profit)

• Do more listening than talking

• Get a good sales automation tool (Salesforce.com)

• Put a lead capture form on your website

• Don’t make it hard for people to contact you


Pricing


Pricing / rates

• How much do you want to make?

• What are your costs?

• What will the market bear?


$100,000 / yr$100,000/yr % 50 wks/yr % 20 hrs/wk

=

$100/hr


Costs of doing business(overhead)

• Self-employment tax

• Legal fees

• Accounting / bookkeeping

• Office space (co-working)

• Telephone / Internet

• Hardware (PCs, monitors)

• Subcontractors


Market rates

• What are your competitors charging?

• How much will your customers pay?

• How does the economy affect your bill rate?


When to raise rates?

• When your customers don't blink an eye when you tell them your rate

• When you have more work than you can handle

• When you have an in-demand skill


Contracts


Contracts

• Get in writing to avoid misunderstandings later

• Get legal advice - don't do it by yourself

• EchoSign saves time with digital signatures

• Optional scope contracts


Traditional vs. Timeboxed

Optional scope contracts:


Project management


Project management

• Agile is aligned with open source development

• 2 week iterations

• 3 person teams (PM, dev, design)

• Tools: ClueMapper, Google Docs, Dropbox


Resource planning


Global Team


Global team strategies

• Group team members in same or close timezones

• Make sure everyone is on IRC and uses it

• Set up a mailing list for each new project

• Skype calls every week to touch base

• Issue tracker (ClueMapper/Trac)


Pros/cons of subcontractors

• Pros

• Only pay them when you have work

• Can find top talent, specialists

• Cons

• More expensive

• Can be difficult to retain if not enough work


Services


Services

• Development

• Training

• Support

• HostingRecurring revenue


Training

• Private onsite training

• Public training

• Training as part of a conference

• Online training


Support

• Open source = no guarantees

• Retainer = insurance policy

• Keeps the conversation going

• Upsell support before the project is complete


Hosting

• Easier to support if on servers you control

• Distribute benefits across all customers

• Upselling opportunities

• Steady source of recurring revenue

• Make sure you have a good sys admin


Recruiting


Recruiting

• Read blogs

• Attend sprints

• Elastic staff

• User groups

• Internships


Finances


Finances

• Get a good bookkeeper

• Watch cash flow carefully (invoice often)

• Seek next project while still on first project

• Find sponsors to fund open source dev

• Tools: Quickbooks, Freshbooks, Xero


Open source citizen


Open source citizen

• writing documentation

• contributing code

• serving on board

• sponsoring sprints

• organizing user group


Thanks! Questions?Wednesday, July 21, 2010

Stay in touch

• Email: natea (at) jazkarta (dot) com

• Twitter: twitter.com/natea

• Blog: blog.jazkarta.com

• IRC: irc.freenode.net/natea


Technology

Building a successful open source consulting company