Contrary to popular belief, you don't need to be an employee to do some of the most interesting product work in Silicon Valley.
So, if you LOVE product management and product marketing work, but...
* you want to see your family more
* you want to learn more in one year than you have in the past five
* you want to have a bigger impact on the industry, and work with several interesting companies in a year
* you're inherently entrepreneurial and want to control your own destiny
* BUT you want to do all this without sacrificing your pay
... then come learn how to become an independent product management consultant. Someone who's done it, a been-there-done-that PM consultant, will guide you step-by-step through what you need to do to strike out on your own within 2 months.
We'l cover a 12 step process of exactly what you need to do to set up shop, land your first client, do an incredible job for your clients, and manage your business going forward.
Become an Independent Product Management Consultant
1. “GET A LIFE”
HOW TO BECOME AN INDEPENDENT
PRODUCT MANAGEMENT CONSULTANT
Susan Raisty-Egami
sraisty@sureproductconsulting.com
www.sureproductconsulting.com/IndyProductPro
2. This powerpoint is just the beginning…
This powerpoint is just the first of many (webinars, ebooks, online
courses) on how to become a successful Independent Consultant in
Product Management or Product Marketing.
Sign up to be notified when I release new resources:
www.sureproductconsulting.com/IndyProductPro
Help us create content that answers your biggest questions! Tell
me what you want to learn:
www.sureproductconsulting.com/IndyProductPro/survey
2 3/28/2012 Copyright 2012 Sure Product Consulting, Inc.
3. My background
Owner of Sure Product Consulting, Inc.
PM & PMM consultancy, started in 11/2007
Product Focus
Software and online services
B2B
Very technical products. “Big Data”, cloud, virtualization, server
architectures
Areas of Specialty (and Intellectual Property)
Product Definition
Product Feedback / User Experience Analysis
Competitive analysis
Technical marketing collateral
3
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4. Why I’m Giving This Presentation
Make more companies aware of existence of independent
PM & PMM consultants
Indy PM/PMM Pros usually cooperate and don’t compete
Help usher in a “meritocracy era” in product work
Recognition of the “10x PM”
Stop the “brain drain” where talented PMs and PMMs
leave the profession far too early
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5. The Challenge
Copyright 2012 Sure Product Consulting, Inc. 3/28/2012
6. The challenges for many PM & PMMs
Do YOU face these challenges?
Balancing work with family
Learning velocity has leveled out
Lack of career path
Compensation doesn’t reflect your value
Corporate nonsense
Dealing with career blips
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7. My story
Ask me about it in person.
I’m not prepared to put it on the Internet forever.
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8. My wish list
Needed Wanted
Interesting product work Bigger impact on clients &
Situation would allow industry
outstanding performance More learning & challenge
Schedule flexibility Compensation ($$$)
Limited hours & more time commensurate with value
with family No political nonsense
Rarely travel Work primarily from home
Keep my resume current & Control my own destiny
employable
Copyright 2012 Sure Product Consulting, Inc. 3/28/2012
9. Independent Consulting Sounded Good, but How?
How to form a company? What kind of projects should I do?
How to find clients? What about health insurance?
How to land projects with those How to market myself?
clients? How to make sure I don’t run afoul
What should I charge? of the law or IRS?
How to structure projects? How to make sure clients paid the
How to sell? bills?
Would I be any good at this? How to leave my employer
gracefully?
Was there really a market for
independent PM? What about maternity leave?
What would I do without Who did I need to hire?
corporate benefits/perks? Would I get pigeon-holed into
Would I be lonely? boring projects?
Did it make financial sense? How to be “professional”?
…Would I be happy?
Copyright 2012 Sure Product Consulting, Inc.
10. I took the plunge in late 2007. Today…
…Again, ask me about my results in person. I am not prepared to
publish it to the Internet forever.
The Summary:
I got all my Needs and Wants from the previous slide
I am very happy with my decision, my career, and my work life balance.
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11. What I learned
Much of the “common wisdom” about independent
consulting is great.
But a lot of the “common wisdom” is.
incorrect
out of date
not applicable for high tech
not applicable for product work
not applicable if your primary goal is family flexibility
I had to learn the hard way and by learning from others
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12. Consulting Income as Function of
Years in Business
Survey by Women In Consulting shows a dramatic
uptick in consulting income between year 3 and year 7.
There’s a lot of learning, systemizing, and networking
that come together after a few years
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13. Common Struggles You Can Minimize
But not Eliminate
Feast or famine cycles
Economic cycles impact projects
Slow client payment
Intellectual property issues
Prospecting and sales effort that doesn’t pan out
Pricing projects incorrectly
Making bad business deals
Bad tax planning
Drowning in administrative yuk
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14. When should you NOT go independent?
You have no skill or experience in the area you want to consult on
Financial
You want to buy a house soon, and need your income to qualify for the mortgage
You have no emergency fund savings
Health Insurance
You can’t get group health insurance through your partner, and
A “Cobra” policy isn’t possible or is impossibly expensive, and
Someone in your family has a chronic health condition
It doesn’t suit your personality
Your partner is against it
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15. How to Take the Plunge
Become an Independent Product
Consultant within 2 months
… just what you need
… none of the nonsense you don’t
…don’t spend $$ until you must
Copyright 2012 Sure Product Consulting, Inc. 3/28/2012
16. Disclaimer
16
I am not an attorney, tax advisor, or
financial advisor. GET YOUR OWN.
Please consult with real professionals. I’m just telling you what I’ve done and
what many people I know have done and experienced. But because we are all
unique little snowflakes, your situation is PROBABLY vastly, extremely,
incredibly different. So don’t just do what I did. If you do try out the things I
did, and they don’t work or get you into trouble, do not sue me. Get your own
advisors and then sue them instead.
Also, this material is applicable to doing business in CALIFORNIA, specifically
within the laws of San Mateo & Santa Clara County, and within the culture of
Silicon Valley. Please check with your own city, county, state, and country for
the laws that will govern your business.
16 3/28/2012 Copyright 2012 Sure Product Consulting, Inc.
17. Product Folk Make Great Independent
Consultants
Entrepreneurial and passionate by nature
Have broad networks of people across lots of functions
Versed in business and are multi-skilled
Focused on creating value for the customer
Can deal with ambiguity
Smart
Good listeners
Integrity
A touch of ADD
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18. The Quick Start “Lean Consulting” Steps
1. Soul searching
2. Test out concepts for consulting offerings
3. Establish a bare-bones business presence
4. Develop social proof & proof of competence
5. Find leads
6. Identify a project & submit proposal
7. Close the deal
8. Post-close admin stuff
9. Do the project and BE AWESOME
10. Keep selling, for the next project
11. Finish the project, get paid, collect references
12. Pay your taxes & keep your books
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19. Step 1. Soul Searching
Why do you want to go independent?
What are you good at?
What “pieces” of product work are you best at?
Where do you have the potential to be one of the best in the
industry?
What type of work do you really like to do?
(You can change your mind later)
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20. Step 1. What are you good at? What do
you like?
20
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21. Step 1. Your “Golden Intersection”
What you’re
really good
at
What you
like to do What the
market
wants
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22. Step 1. Which model do you prefer?
Independent Independent
Contractor Consultant
Which best fits your wants/needs?
Which best fits the types of work in your “Golden Intersection”?
22 Copyright 2012 Sure Product Consulting, Inc. 3/28/2012
23. Step 1. Example: my golden intersection
Independent Consulting: Fixed price engagements
Tech-heavy products
Favorite projects
Product Definition.
Customer Development
Requirements / user stories
UEx Interaction Design
Product strategy & planning, road-mapping
Product Feedback / User Experience Analysis
Competitive analysis
Technical marketing collateral
…But I’ll do other stuff, really!
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24. A step back….
…How consulting projects are usually sold
Nearly 100% are from personal referrals.
The actual buyer often does not know you personally, but is introduced
by someone who does (“friend of a friend”)
The actual buyer then researches the consultant online to ensure:
1) professionalism
2) competence & knowledge – overall and domain-specific
Sources used: Google, your website, LinkedIn, Facebook, Quora, etc….
Random visitors to your website almost never become clients.
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25. Step 2. Start Testing Your Consulting Concept
Ask your network for advice and informational interviews
Ask for feedback on your strengths
Feedback on your “golden intersection” concepts
Ask for their Market Problems, other problems
Try to HELP THEM
At the very least, feed them
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26. Step 2. Expand that Network
Ask interviewees if they know anyone else you should
talk to for advice & feedback
Don’t talk only to PM / PMM specialists
Connect with other consultants & ask for advice
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27. Step 3. Establish a Bare-Bones Business Presence
When you are getting started, my “advice” is to stick with
the “Sole Proprietorship” type of entity Do NOTHING
TYPES OF BUSINESS ENTITIES
• Sole Proprietorship (the default)
• Partnership
• LLC
• Corporation
o S-Corp
o C-Corp
You can switch later
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28. Step 3. Establish a Bare-Bones Business Presence
Determine Your Business Name
Is anyone else is using the name?
California State Secretary of State. http://kepler.sos.ca.gov/
Fictitious Names lookup for your county
Consider delaying filing Fictitious Name statements until you land a
project ($$)
Register an Internet Domain Name ($)
Consider renting a physical mailbox (not a PO Box) ($$)
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29. Step 3. Do You Need a Fictitious Name Statement
(in California)?
Business Name (assuming Sole P) Needs Fictitious Name Statement?
Susan K. Raisty-Egami No
Susan Raisty-Egami Marketing No
Raisty-Egami User Experience Design No
Raisty-Egami Associates Yes
Raisty-Egami Product Group Yes
The Product Goddess Yes
Sue’s Product Marketing Mavens Yes
Raisty-Egami, Newton, and Darwin • No, if real partnership of Raisty-Egami,
Newton, and Darwin
• Yes, if sole proprietorship
In Santa Clara County, must file a Fictitious Name Statement
within 40 days of first transaction.
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30. Step 4. Develop social proof and proof of
authority
Ask your colleagues for LinkedIn testimonials
Focus on your RESULTS, the before/after
You interview them and then write it up for them
Reciprocate!
Get a website with a blog, and a business email address
Publish testimonials, sample work product, blog posts
Wordpress & Google Mail
Contribute to LinkedIn Groups & Quora
Republish your answers to your blog and LinkedIn Profile
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31. Step 5. Find some leads
Continue with advice gathering & informational interviews
Tell everyone you’re independent now (In-person, Call, Email,
Facebook, LinkedIn)
Ask for connections
Seek out companies looking for PM / PMM full-time hires
Connect with PMM / PM leaders over LinkedIn
Go on interviews for “real” jobs
Lists, Forums, LinkedIn groups: where people ask for referrals to
consultants or contractors
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32. Step 5. Find some leads (cont’d)
Connect with “consulting clearing houses”
Crimson Consulting, Stage 4 Solutions, M-Squared, …
KITlist, KITlistTech, Craigslist, job lists
Speaking at “target-rich” un-conferences
Pitching the booth staff at technical conferences
Cold calling
LinkedIn “IN Mails”
…Later, you’ll do marketing that will mean you won’t have to do
much of this.
But you need to land your first project now…
… and the marketing takes 6+ months to see results
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33. Step 5. Turn Leads Into Prospects
FOLLOW UP!!!
“Eighty percent of success is showing up.”
- Woody Allen
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34. Step 6. Identify a Project
“Project conversation” with the prospect
Outcomes sought, time frames, who/what else are they
considering, the value this project will provide them
Biggest concerns they have, risks they see
Who else they need to approve
DO THEY HAVE BUDGET
LISTEN
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35. Step 6. Give a verbal half-proposal
Your understanding of the situation
The project objectives, results they seek
What you propose doing to help
Time frame, start date, & other considerations
(Price)
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36. Step 6. Follow it up with a Written Proposal
Situation Appraisal
Objectives
Value to <CLIENT NAME>
Methodology & Deliverable Options
Present 3 options!
For each. value provided, intermediate deliverables, timelines, price
Terms & Conditions
“I own my stuff and you license it” vs. “You own it as work-for-hire”
We are an independent contractor, not an employee
Payment terms (e.g.. “net 30”) & payment schedule
Prepayment incentives / discounts
Expenses & subcontractors
Guarantee
Cancellation policy, Late fees, Collection costs,
Right to use logos, publish as client
Acceptance – choose option, plus signatures
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37. Step 6. Pricing
A complicated topic
In general, attempt “Value-based” Pricing and fixed price projects
Other methods for hourly rates.
Method 1. Determine what market will bear, what others are charging
Method 2. Always charge AT LEAST what it would cost client to have an
employee do it
= fully_loaded_compensation $ / 1880 hours/year
“Fully loaded” = salary + payroll taxes + workers comp + insurance benefits + 401K
benefit + stock options + ESOP + office space + equipment + training + ….
Method 3. Take your annual salary, divide by 1000, and use that as a
minimum hourly rate.
$180,000 annual salary $180/hour
Accounts for 88% overhead
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38. Step 6:
Strongly consider offering a 5-10% discount of all project
fees if the client prepays up front.
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39. Step 6. Contract Language in Written Proposal
Consider hiring an attorney to create “standard” contract
language for you.
Guarantees you might offer
Work for hire vs. licensed content
Your NDA
Hire an attorney with.
Background in contracts, NDAs
A focus on small business and independent consultants
Used to contracts with your type of clients
$$$$$
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40. Step 7. Close the deal
Go over the proposal with client in-person or on phone
Feel out their option preferences & why
Revise proposal within hours, if necessary
Get signatures on your proposal
Make sure YOU sign it too
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41. Step 7. Close It
The Secret of
Closing Deals:
Follow Up!
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42. Step 7. Close the deal
(Handle Client’s Paperwork)
Sign NDAs
Provide client with signed W-9, with your SSN
Negotiate & sign the client’s agreement for
consulting / contracting agreement
Watch-out:
Insurance requirements
Worker’s comp proof
Payment terms
Right to cancel without paying
Non-compete clauses
Prohibiting subcontractors
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43. Step 7. Determine Next Steps
Agree on a start date and the structure of the first day
What you need
Meetings that should be set
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44. Step 8. Post-close Admin stuff
NOW… do all that stuff that you delayed while your were selling
Rent a mailbox ($$)
File Fictitious Name with your county ($)
Have 40 days from first transaction in SC County
Publish Fictitious Name notice in “newspaper” for 4 weeks ($)
Secure a “Home Occupation” business license from city ($$$)
Get Business Liability Insurance ($$$)
Maybe get Errors &Omissions insurance ($$$$)
Get business bank account & business credit card
(need proof of business license)
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45. Step 8. Post-Close Admin: Get Geared Up
Get a laptop: as much memory & disk as you can afford
Bare minimum software:
With antivirus & firewall (I use ESET Smart Security)
Dropbox
Microsoft Office (Word, PPT, Excel)
“System Care” program
Remember, you have no IT department anymore!
(Does the Apple Genius Bar count as an IT department?)
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46. Step 9. Do the Project & Be Awesome
Lay out “rules of engagement”
What you need from them
How often to notify of status
If you talk to your client’s customers, how do you represent
yourself?
Over-communicate
Run meetings so client can make decisions quickly
Top quality deliverables
Be uber-professional
Make them happy, make it right.
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47. Step 10. Keep Selling
It often takes 3 weeks to 4 months to close deals.
So you have to keep networking & SELLING at all times
Set aside 20%+ of time
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48. Step 11. Finish Project, Get Paid &
Get Referrals
On the specified invoice dates, create & email invoices to your clients
Clients are VERY OFTEN late to pay. Call promptly!
At project close, get a testimonial from client
Have client talk about selves, their problems, why they sought your help…
Then the results you provided.
Not the HOW
Not character references
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49. Step 12. Taxes & Bookkeeping
Keep ALL your receipts for anything even vaguely business related
Mileage records of any car trip for business purposes, gas, auto repairs
Home office. utility bills, property tax, mortgage interest, home owners
insurance, home repairs, home remodel receipts, housecleaners, …
Cell phone, internet
Hire a Tax Advisor / CPA
Bookkeeping – keep track of invoices, bills, receipts
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50. Step 12. Taxes & Bookkeeping
Pay Your Fed/State Taxes
Pay Estimated Quarterly payments (if sole proprietor) to Fed & State
April 15, June 15, Sept 15, Jan 15
Collect 1099-MISCs from clients at year end
By April 15, file 1040 with Schedule C
Schedule SE – self employment tax calculation
Form 8829 if Home Office Deduction
Form 4562 for Auto deductions
You will likely pay higher taxes: “Payroll Taxes”
Employer’s share of Social Security, Medicare
Up to 7.65% Fed + $437/yr California
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51. Step 12. Taxes & Bookkeeping
Other Taxes
California. File annual “Use Tax” return
San Francisco:
1.5% Payroll Expense tax
Plus an annual tax on business personal property (your desk, your laptop, …)
Business License renewal
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52. 52 Wrap Up
Copyright 2012 Sure Product Consulting, Inc. 3/28/2012
53. Get Started Right Now
1. Make a list of all the types of consulting projects you
1. 53
could do where:
You are very skilled and know what to do
You enjoy the work
You suspect there’s a market
2. Arrange for coffee / lunch with THREE people you
trust
Get their feedback and advice
Ask for introduction to other people you should talk to
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54. Advanced Topics, for another day
Developing “Standard” Offerings Cultivating loyal clients
& Intellectual Property Advanced Marketing
Pricing Taking equity as payment
Value-based Selling Delinquent accounts
Small Business Finance. Taxes, Home Office (or not)
Bookkeeping, Cash flow
Becoming a recognized expert
Hiring sub-contractors
Social Media marketing
Hiring employees
Speaking & evangelism
Clients on retainer
Self-Employed Retirement
Changing to an LLC or Accounts
Corporation
Health & Other Benefits
Developing intellectual property
& products Social media
Copyright 2012 Sure Product Consulting, Inc. 3/28/2012
55. Want more?
This powerpoint is just the first of many (webinars, ebooks, online
courses) on how to become a successful Independent Consultant in
Product Management or Product Marketing.
Sign up to be notified when I release new resources:
www.sureproductconsulting.com/IndyProductPro
Help us create content that answers your biggest questions! Tell
me what you want to learn:
www.sureproductconsulting.com/IndyProductPro/survey
55 3/28/2012 Copyright 2012 Sure Product Consulting, Inc.
56. Copyright 2012 Sure Product Consulting, Inc.
THE END
Thank for listening, and for not throwing tomatoes.
3/28/2012