Building an Open Source Consulting Company

•

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Lessons learned from a successful open source consulting company. This talk is geared towards the open source developer who is considering starting his/her own business, and the entrepreneur who wants to grow the business by leveraging open source development methodologies.

Negócios Tecnologia Notícias e política

Building an open source
consulting company
Nate Aune
www.jazkarta.com

Open Source Bridge Conference
Portland, OR
June 17, 2009

1

/me

• First experience with Linux in 1994
• Founded Jazkarta in 2004 in Boston
• Now 3 full-time staff and 10 subcontractors
• Specialize in Plone and Python

2

Topics for exploration

• Marketing • Recruiting
• Pricing • Finances
• Contracts • Open Source citizen
• Project Management • your topics?
• Services

3

Marketing & getting work

• Speaking
• Blogging
• Sponsoring
• User group / consultants group
• Networking

5

Pricing / rates

• How much do you want to make?
• What are your costs?
• What will the market bear?

7

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

8

Costs of doing business
(overhead)
• Self-employment tax
• Legal fees
• Accounting / bookkeeping
• Ofﬁce space
• Hardware
• Subcontractors
• Telephone
9

Market rates

• What are your competitors charging?
• How much will your customers pay?
• How does the economy affect your bill rate?

10

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

11

Contracts

• Get legal advice - don't do it by yourself
• Optional scope contracts
• Tools: EchoSign for digital signatures

13

Traditional vs. Timeboxed

Optional scope contracts:

14

Project management

• Agile is aligned with open source development
• 2 week iterations
• 3 person teams (PM, dev, design)
• Tools: ClueMapper, Google Docs, Dropbox

16

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)
• Version control (Subversion/Bazaar)

19

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
20

Services

• Development
• Training
• Support Recurring revenue
• Hosting

22

Training

• Private onsite training
• Public training
• Training as part of a conference
• Online training

23

Support

• Open source = no guarantees
• Retainer = insurance policy
• Keeps the conversation going
• Upsell support before the project is complete

24

Hosting

• Easier to support if on servers you control
• Distribute beneﬁts across all customers
• Upselling opportunities
• Steady source of recurring revenue

25

Recruiting

• Read blogs
• Attend sprints
• Elastic staff
• User groups
• Internships

27

Finances

• Get a good bookkeeper
• Seek next project while still on ﬁrst project
• Find sponsors to fund open source dev
• Tools: Quickbooks

29

Open source citizen

• writing documentation
• contributing code
• serving on board
• sponsoring sprints
• organizing user group

31

Stay in touch

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

• Twitter: twitter.com/natea
• Blog: blog.jazkarta.com
• IRC: irc.freenode.net/natea

33

Books & Resources
• e-Myth Revisited by Michael Gerber
• Manage It! by Johanna Rothman
• Ship It! by Richardson/Gwaltney
• Art of Agile Development by Shore & Walden
• Making Things Happen by Scott Berkun
• Computer Consultant's Guide by Janet Ruhl
34

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Building an Open Source Consulting Company

1. Building an open source consulting company Nate Aune www.jazkarta.com Open Source Bridge Conference Portland, OR June 17, 2009 1

2. /me • First experience with Linux in 1994 • Founded Jazkarta in 2004 in Boston • Now 3 full-time staff and 10 subcontractors • Specialize in Plone and Python 2

3. Topics for exploration • Marketing • Recruiting • Pricing • Finances • Contracts • Open Source citizen • Project Management • your topics? • Services 3

4. Marketing 4

5. Marketing & getting work • Speaking • Blogging • Sponsoring • User group / consultants group • Networking 5

6. Pricing 6

7. Pricing / rates • How much do you want to make? • What are your costs? • What will the market bear? 7

8. $100,000 / yr $100,000/yr % 50 wks/yr % 20 hrs/wk = $100/hr 8

9. Costs of doing business (overhead) • Self-employment tax • Legal fees • Accounting / bookkeeping • Ofﬁce space • Hardware • Subcontractors • Telephone 9

10. Market rates • What are your competitors charging? • How much will your customers pay? • How does the economy affect your bill rate? 10

11. 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 11

12. Contracts 12

13. Contracts • Get legal advice - don't do it by yourself • Optional scope contracts • Tools: EchoSign for digital signatures 13

14. Traditional vs. Timeboxed Optional scope contracts: 14

15. Project management 15

16. Project management • Agile is aligned with open source development • 2 week iterations • 3 person teams (PM, dev, design) • Tools: ClueMapper, Google Docs, Dropbox 16

17. Resource planning 17

18. Global Team 18

19. 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) • Version control (Subversion/Bazaar) 19

20. 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 20

21. Services 21

22. Services • Development • Training • Support Recurring revenue • Hosting 22

23. Training • Private onsite training • Public training • Training as part of a conference • Online training 23

24. Support • Open source = no guarantees • Retainer = insurance policy • Keeps the conversation going • Upsell support before the project is complete 24

25. Hosting • Easier to support if on servers you control • Distribute beneﬁts across all customers • Upselling opportunities • Steady source of recurring revenue 25

26. Recruiting 26

27. Recruiting • Read blogs • Attend sprints • Elastic staff • User groups • Internships 27

28. Finances 28

29. Finances • Get a good bookkeeper • Seek next project while still on ﬁrst project • Find sponsors to fund open source dev • Tools: Quickbooks 29

30. Open source citizen 30

31. Open source citizen • writing documentation • contributing code • serving on board • sponsoring sprints • organizing user group 31

32. Thanks! Questions? 32

33. Stay in touch • Email: natea (at) jazkarta (dot) com • Twitter: twitter.com/natea • Blog: blog.jazkarta.com • IRC: irc.freenode.net/natea 33

34. Books & Resources • e-Myth Revisited by Michael Gerber • Manage It! by Johanna Rothman • Ship It! by Richardson/Gwaltney • Art of Agile Development by Shore & Walden • Making Things Happen by Scott Berkun • Computer Consultant's Guide by Janet Ruhl 34

Building an Open Source Consulting Company

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