Consulting Partnerships

Today's Lean Coffee Toronto features an interesting case study from Big Bang Technology. As usual, I took a few notes:

• They are a conservative company
• Diverse team with very different, non-overlapping skill sets
• Started doing consulting work with hobby projects on the side
• Found a partner that:
• Had many years experience and successful offline business
• Had a strong need for technical expertise
• Visionary
• Great with sales
• They don't own the product, but they have a revenue sharing agreement
• They do own 100% of their company
• Goals are aligned
• They put 100% of their passion into their client's product
• Advice: Don't go cheap on lawyers -- good agreements are gold
• What might they do different next time?
• Take an equity stake? (Additional potential reward for taking on more risk)

And a few of my thoughts:

• They have a really great agreement that seems to work very well aligning goals
• A partner like this is probably exceedingly difficult to find
• This arrangement came out of a failed project
• Should you chase failed projects for opportunities like this?
• What do you do if the client is a control freak?

Great job guys, and looking forward to the next case study!

Developing a product within a service company

For this week's Lean Coffee Toronto, we discussed the ins and outs of developing a product inside of a service company.

A few interesting discussion points from my notes:

• Products often come from satisfying an internal need
• Working on products have many intangible benefits, including:
• Increased motivation
• "Bragging rights" for developers
• How do you know when to "unbind" the product from the service company? No clear answers:
• When the product needs investment in marketing, support, enhancements, etc.?
• When the market is established?
• How do you know when to "kill" the idea?
• Treat it the same way as you would any investment
• If it is being used and generating value internally, this question isn't relevant
• Ask yourself: Is the product a hobby, or a business?

I found this discussion extremely valuable as we begin to productize our own internal system: http://softwarepms.com/

Thanks to everyone who attended, and especially to Andrew for facilitating, and Jet Cooper for hosting.