Brent Ozar Unlimited

Refocusing My 2019 Plans: Letting Go of Consulting

January 3, 2019

When last we met, dear reader, I was super excited that I’d broken $500K in Black Friday sales – a goal that I’d been working on for a while. I was really proud of that.

That moment triggered a lot of introspection, though.

In my post about year 6 of the company, I wrote about how the business was a stool with 4 legs: training, consulting, online services, and community. At that time, I didn’t have the skills to make the consulting leg of the business consistently profitable, so I laid off Angie, Doug, and Jessica. However, I kept Erik & Tara on board because we had enough business to keep them pretty consistently busy.

However, that also ended up keeping me busier, too: dealing with sales, contracts, customer relationship management, it all added up. It took up Erika’s time, too: herding clients to get their homework and checks paid, dealing with insurance, taxes, etc. I’d never formally tracked how much of my time was spent on each part of the business, but I had a pretty good feeling of where the stress was coming from. It wasn’t Erik and Tara, mind you – they have always been completely awesome – but the surrounding business involves a lot of stress and gotta-handle-it-right-now issues.

Taken from the iPad as I started writing this (on holiday, naturally)

I’m not a fan of stress.

I don’t live to work – I work to ~~live~~ vacation.

Erika and I frequently sing each other the lyrics of Franz Ferdinand’s Jacqueline:

It’s always better on holiday

So much better on holiday

That’s why we only work when

We need the money

So after Black Friday finished, I asked myself a lot of tough questions.

I use Dr. Walling’s framework for decisions like this.

Every year, I get away at least once to do a planning retreat with Dr. Walling’s book. Each time, I learn a lot about myself, re-evaluate things I’m doing, and ask tough questions about why and how I’m doing them. For me, one of the most powerful techniques from the book has been to come up with 10-20 alternatives for each thing I’m doing. It helps me step back and think about whether what I’m doing still makes sense, or whether I should do a wildly different approach.

For example, I thought about GroupBy.org and came up with 10 ways I could approach it. Here are my exact notes from the retreat:

Keep it as-is
Hire a virtual assistant to manage it:
1. Write posts & Mailchimps for call for speakers, call for speakers ending, voting starting, voting closing, speaker thank you and denied, cohost invites
2. Edit posts, put in screenshots, headers
3. Republish posts with date/time that the podcast goes out
4. Put the content into the Mailchimp newsletter
Train Erika to manage it (doing those same above tasks – she doesn’t have the free time to do it now, but maybe I could clear out other things on her calendar to make room for it)
Open source it – hire a web developer to write WordPress plugins to manage processes, like count down to voting starting, run the voting, close the voting and do announcements, push the right content to MailChimp, etc.
Discontinue it – pick my battles and my expenses. I’m already investing ~$3K/quarter, and I’m looking at investing more. At the end of the day, I’m not sure I’m providing a really valuable service that user groups and virtual chapters couldn’t provide if they wanted to.
Do it more often (monthly?)
Do it less often (2x/year?)
Give it to a vendor
Give it to PASS
Make it a standalone entity – start a non-profit corporation, invite a round of board members, recruit the first round of sponsors, and then let it fly on its own

The first 4 ideas came right out of me in the first few minutes, but the rest came hours later as I was considering other projects, or when I came back to the questions after sleeping on ‘em, or reading additional books.

I looked at everything I do – SQLServerUpdates.com, the blog, the First Responder Kit, SQL ConstantCare®, the Office Hours podcast, you name it – even the consulting business – with a fresh set of eyes. I think about scaling each thing up, scaling it down, tackling it differently, merging it with something else, or abandoning it entirely. I always have more ideas than I have time or money, so I have to figure out where to place my bets.

I used Tim Ferriss’s priorities to figure out where to cut back.

As part of the retreats, I also read business books. This year, I’ve been reading (and re-reading) Tim Ferriss’s classic, The Four Hour Work Week. It’s every bit as spammy as the title suggests, but at the core, it’s about work-life balance. It’s about figuring out how to stop doing the busy work that doesn’t pay off so that you can either do more of the work that DOES pay off, or split – and go spend time with the ones you love. For the remaining work that you gotta do, it’s about automating as much of that as possible to reduce the time it consumes.

Ferriss talks a lot about the 80/20 rule, saying things like:

Focus on the 20% of your customers/products that produce 80% of your income.
Ditch the 20% of your customers/products that produce 80% of the problems.
With the time you free up, invest it more wisely.

I read a lot of management books this year, but that one really resonated with me and challenged some assumptions I’d made.

So what if I didn’t have consultant employees? What if I still offered consulting if people really wanted it, but I took the tools we’d built for consulting, and I used those in the training business instead?

There’s a saying in business: in a gold rush, sell shovels. For years, I’ve been trying to do both: have gold miners (data consultants) on staff, plus sell shovels (training and SQL ConstantCare) to other miners. I wasn’t losing money mining gold, mind you, but…I wasn’t making all that much, either, and I could be building even better shovels. And what if I took our shovels and started selling them to you as part of our training?

That was it – I realized I had to close the consulting line of business. I had to stop thinking about the business as a multi-legged stool. It was the wrong analogy. I had found a successful strategy in the online services business, and I needed to focus on that.

So is consulting bad, or am I bad?

Does that mean consulting is a bad business? Not at all! Any business can be a good business – that just doesn’t mean it’s the right business for me. I want to get out of the trading-money-for-time business, and get into more scalable forms of income. I did consulting for a long time to pay the bills, but…it’s not the only way to pay the bills. I used to do web site development, too. Times just come in your life when you need to hit F5 and get a fresh set of results.

Does this mean I failed at consulting? Yeah, I think so, in the same way I failed at web development – it’s something I did for a while for money, and I enjoyed it, but over time, I found other sources of income that I liked more, and paid better. I still bust out the PHP and MySQL from time to time, but it’s not where I focus my personal growth.

Like I wrote in the post a couple of years ago about the first round of layoffs – I really admire folks who can grow a consulting company to 10-15 employees. It’s one hell of a lot of work, stress, and risk. It pays off when you get there, but the journey is Herculean, and I just found a different route to success that feels like it fits better with my Jacqueline mentality.

Time to edit and re-focus for 2019.

For 2019, I’m making several course corrections:

I gave Erik & Tara great severance packages and let them go yesterday. They’re fantastic employees and coworkers, and it’s not their fault, but I need to focus and do things differently.
Getting rid of consulting meant I didn’t need Erika full time anymore, either. (There are still time-sensitive admin tasks in the business for sure, like customer login support, but I’m going to transition those over to a virtual assistant firm.)
I’m going to take some of our consulting tools and sell them as part of our training. For example, we’ve got a data gathering utility that makes life way easier for independent consultants.
I’m going to pivot SQL ConstantCare® to being an entry-level monitoring tool. I’m going to remove the mentoring component entirely, and just give you a low-cost way to know if your servers are doing alright.
I’m pausing GroupBy.org and the weekly Office Hours podcasts for now. I love both of these, but in 2019, I want to find more ways to give back that don’t involve me being connected to the Internet at specific dates/times. I want to get more creative with my calendar and taking longer periods off.

These changes will give me more time to focus on the training and SQL ConstantCare®, hopefully working less while simultaneously doing more profitable work.

I’m really excited about these changes. Years ago, when I laid off Angie, Doug, and Jessica, I was mentally exhausted and burned out, frustrated that I couldn’t make the business work in the exact way I wanted. Today, I’m in a much better place, happy and content. I’m not happy to let go of Erik and Tara, mind you – they’re phenomenal people that I loved working with – but I’ve found my calling in a way that I can’t afford to ignore. I wanna spend less time working, more time with my family, and I think I’m going to be able to do it.

Let’s see how it goes.

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Brent Ozar Unlimited, early 2016 at Cliff Lede in Napa

How the Company-Startup Thing Worked Out For Me, Year 6

March 28, 2018

Blog Posts

It’s time for my annual update on the wild ride. A brief recap of what’s happened so far:

April 2011 – we started the company.
April 2012 – year one finished, but I didn’t blog about it right away. I wanted to get it into the rear view mirror for perspective before blogging.
April 2013 – year two finished, so I blogged about year one.
April 2014 – year three finished, so I blogged about year two.
April 2015 – year four finished, so I blogged about year three.
April 2016 – year five finished, so I blogged about year four.
April 2017 – year six finished, so I blogged about year five.
April 2018 – year seven finished, I’m blogging about year six – April 2016 to April 2017.

When last we met, finishing up year five, I was excited because we’d finally assembled a profitable product fulfilled by a fun, knowledgable team, sold by a super-savvy salesperson. It was time to hit the gas and really start scaling the consulting business.

Brent Ozar Unlimited, early 2016 at Cliff Lede in Napa

We hit the gas –
and nothing happened.

It seems obvious now in retrospect, but emergency rooms can’t drum up more business by themselves.

Once you scale up large enough to handle the incoming emergencies, you’re kinda done. Even a great salesperson couldn’t go out and find new emergencies for us to handle, at least not without violating some kind of laws. We realized that our widespread reputation & marketing efforts meant that people already called us when they had expensive emergencies – new leads weren’t the problem.

Oh, sure, we could have lowered our billable rates – we were effectively $300/hour – and started to handle non-emergencies. Our clients would have loved to be able to pay, say, $150/hour and have us tackle larger ongoing projects – just as they’d love to have a trauma surgeon take care of their sore throat.

But we weren’t cheap amateurs.

We had a team of trauma surgeons – top-notch people who got 6 weeks paid vacation per year, 10 federal holidays, health insurance, training, home office funds, time to tackle fun projects, and a swank annual retreat. If we wanted to lower our prices, we would need to lower our benefits, lower our staffing quality, and/or make our staff work longer hours on crappy projects. Those just weren’t interesting options to me. I didn’t wanna build that kind of company. (Nothing against those who do – gotta pay the bills – but I wanted to continue to build the best company to work for.)

Without enough business coming in to keep all the trauma surgeons busy, the consulting employee side of the business started losing about $5k per week. When we hit our normal summer slump, it got worse, and I didn’t see any signs of being able to turn that around. Jessica (our sales pro) and I had tried everything we could think of to bring in more emergency room business, and it just didn’t work.

If I continued to try to make that dream happen, I ran the risk of running the business completely out of money.

I couldn’t care less about me personally running out of money – if the business doesn’t work, I can just throw in the towel, go back to being a full time DBA, and I’ll be fine. But I absolutely, positively couldn’t run the business out of money and run the risk of the employees, Jeremiah, and Kendra not getting paid. I’ve worked for companies that skipped paychecks, and I’ve always sworn I would never let that happen to my own employees.

So in July, it was time to hit the brakes.

I had to lay off 3 of my best friends to save the rest. Letting go of Angie, Doug, and Jessica was tough because they were perfect employees. I couldn’t have asked for better teammates and friends. It’s really hard to tell people, “This has nothing to do with you, and is solely due to my inability to make this new business model work.”

I told the team members, then I posted a blog about what’d happened. Being transparent about it made the whole thing much easier because we got a lot of support from the community. My #1 mission was helping my friends find great jobs fast, and of course they did.

I wanted to make sure the remaining team members knew exactly where we stood as a company, so in team meetings, I shared the P&L statements with ’em. I didn’t want them losing sleep over how the company was doing. We’d taken corrective action early enough that we were still okay financially.

Erik, Richie, and Tara made it clear that they’d do whatever it took to make sure the company stayed on positive ground. They were a huge help getting through some tough times.

I re-calculated my personal & business goals.

The 2016 business was like a stool with 4 legs – 3 of which were losing money:

Training – which had always been the strongest leg of the stool, a profitable business that funded everything else (but that meant I was teaching classes without getting paid for it)
Consulting – which we’d been trying to grow, but were losing money in the process.
Online Services – we hired Richie to build stuff, and I knew that stuff would take a long term investment and vision. This leg of the stool wouldn’t make money until at least 2018-2019, and I was fine with that.
Community – no incoming revenue here, just giving back in the form of webcasts, blogging, scripts, and podcasts, with the hope that folks will remember us when they need SQL Server help. This leg of the stool would never be profitable, but spending money & time here was just something that mattered a lot to me.

I needed to reprioritize to get back to 2 profitable legs of the stool (training AND consulting) – still not stable by any means, but a little more doable than 1 profitable leg. I didn’t want to close the consulting altogether – it was perfectly profitable with just 2 trauma surgeons – and I definitely didn’t want to close the services leg. We had enough incoming work to keep Erik & Tara comfortably busy at good billable rates.

(Yes, that means 2 stable legs out of 4: community & online services would still lose money for the near future. There would still be one hell of a lot of risk. That’s life when you start a company – the more reward you want, the more risks you have to be comfortable taking. Either take less risks, or get more comfortable managing risk.)

I did some soul-searching to figure out what I needed to let go of, and what I needed to embrace.

One of my last classes in 2017, San Diego

Training changes:

I tried teaching live 3-4-day classes online – I love teaching, but in-person classes are expensive and the travel sucks. I ran experiments to see if I could run the same classes online, and they worked. They worked so well that in Year 7, I gave up in-person classes altogether to spend more time with my wife Erika, and my dog Ernie. (When Ernie was later diagnosed with cancer and given about six months to live, I was so grateful that I’d cleared out my schedule.)
I changed our online training to a subscription model – aiming to further tune my passive income. (This didn’t work as well as I’d like, but I spent less time running experiments on that as the live online training did so well, and I focused on that instead.)

Community changes:

I open sourced sp_Blitz and friends – I’ve always admired the open source community, and figured it was time to start an MIT-licensed open source project in the SQL Server space.
I started GroupBy.org – I wanted to figure out how I could bring an open source mindset to the database training community. Open source works because ideas and execution succeed on their own merits, with less hidden politics. I figured I could make that work in online events, too.
I turned in my Microsoft MVP award – there are a very limited number of spots, and a lot of people who want to enjoy the experience. I’d been blessed to have it for several years, had a lot of fun, but I felt that someone else would probably get more value out of it than I was getting. I slipped out the side door quietly.

(Briefly) My Audi RS6

Personal changes:

We downsized, moving from a gorgeous downtown penthouse into a much smaller mid-rise, and cut some planned vacations.
I sold my beloved Audi RS6 after only a short ownership. That taught me a lot, though: I couldn’t justify a $300/mo parking spot for a car I drove so rarely that the battery was dead whenever I went to go have some fun. I resolved not to buy another fun car until I either retired, or had to start driving back into an office for work again. I really, really miss that car, but I still wouldn’t drive it more than once every couple of months.

Overall, the changes worked. We were smaller, but we were profitable and I had way less stress again.

The business turned around in fall 2016
and I could invest again.

We signed some really fun clients – the public highlight being a series of projects with Google. I was really proud of the work we did, and we kept increasing the quality of our consulting and our open source scripts.

Black Friday 2016

In November 2016, during our Black Friday sales, I made more in one month than I’d ever made in a year as a DBA. That made me feel a lot better, although I still wasn’t able to take all of that money off the table – it kept getting plowed back into building a future leg of the business, services.

Time for a quick history lesson of my scripts/tools/services:

Version 1, late 2000s: My Blitz script was a big long script (think Glenn Berry’s diagnostic scripts) that told you all kinds of things about your SQL Server. The idea was that you’d highlight each query, run it, and then interpret the results.

One of the queries was a database mail test, and the comment said, “Make sure to change the below email address to be yours so you know if email is working.”

You can guess what happened: I got test emails every day.

I could tell by the server names & metadata that database professionals all over the world at big companies and small were all just banging F5 on the entire Blitz script, and hoping that it would somehow tell them what was wrong with their servers. They just wanted a simple answer.

Version 2, 2011: With that lesson learned, I built sp_Blitz: a stored procedure that you could just run, and it would give you a prioritized list of what was wrong with your server. That became massively popular.

Version 3, 2013: Jeremiah built a Windows app that would run sp_Blitz and give you a PDF report. We ended up abandoning it because the support was painful, and we couldn’t get it into the Windows Store easily. But something strange happened here too: we kept getting requests for it, and requests for updates. At least once a month, I got emails from people asking when we would update it. That never left my mind.

I had a vision of something a lot bigger that I wanted to build, but first, I wanted a proof of concept of the architecture I was dying to use.

First, Richie built PasteThePlan.

In Year 6, Richie built & launched PasteThePlan, a page where users could copy/paste in execution plans, get a shareable link, and post those plans on Q&A sites. PasteThePlan represented the first publicly visible fruit of Richie’s labor.

PasteThePlan

PasteThePlan let us dip our toes into serverless application design. I wanted to build something in serverless that didn’t represent a mission-critical app: if it went down, or if somebody lost some of their data, life would go on. We used AWS Lambda because it was the most complete product when we started work in mid-2016.

By the end of 2016, I was a huge, huge fan of serverless. @Cloud_Opinion sometimes writes parody, but their Feb 2017 article on the upcoming SaaSocalypse rang really true for me. I believed that with the right product, the right architect (and Richie definitely was), and easy scalability in the form of serverless design, I could start a really meaningful application with a very low capital cost of entry.

Next, he started work on SQL ConstantCare®.

There’s a lot of people out there that don’t really want a monitoring tool. Monitoring tools have dashboards that devolve into a constant @Swear_Trek alarm, and continuously send out non-actionable alert emails. PAGE LIFE EXPECTANCY IS LOW! DISK QUEUE LENGTH IS HIGH!

A lot – not all, but a lot – of admins don’t want dials and charts. They just want to know what to do.

So I wanted to build something that:

Polled your SQL Servers and gathered data you were comfortable sharing
Sent that data up to our servers in the cloud
Let us run analytics to generate recommendations – no artificial intelligence, just plain ol’ real intelligence
Later, sent you just one email with a prioritized list of actions to take (and if you don’t need to do anything urgent, tell you that, and let you get on with your job)

Richie busted his hump on that for the second half of Year 6. It didn’t end up launching for quite a while, but you can hop over to my SQL ConstantCare® posts on BrentOzar.com to see how that launch is going.

Alaska with Dad, Aug 2016

Year 6 was a big turning point for me personally.

I like writing these posts with a good year of distance between me and what happened. It helps me look back with a lot more perspective and think about what were the most important moments.

The biggest moment by far was coming to the realization that I personally didn’t have the talent to build the 10-15-employee consulting division that I wanted to build.

At the moment it hit me, I put at the top of my to-do list, “I am overcommitted and under-equipped.” It’s still there right now:

What I see when I try to add a new task for myself

That’s proven to be the most valuable realization of year 6, if not my entire adult life. I still want to accomplish a bajillion things, but I’m no Elon Musk, nor do I have that level of work ethic. I love taking several vacations a year with my friends and family. I have to balance the tasks I add against the time I have. Focus means saying no.

<sigh>

I don’t like saying no. I like saying sure, I can do that, why yes, I’d love to tackle that problem, indeed, yes, that looks like a possible mission.

It’s a lesson I keep learning, and it’s timed perfectly with the emptying-out of my blog post queue here. I started this site to say things that didn’t feel like a good fit at the company blog, and for the last several years, I’ve published a post here every week.

This week marks the end of that streak.

I still have a ton of things I love writing about, but I’m juggling my focus a little. On my last personal career-planning retreat, I realized that while I love doing this, I need to take some of this time and allocate it to something else. I’ll still do my annual updates in this series, and I’ll keep my Epic Life Quest up to date. I’m just going to try to discipline myself into not writing here for the rest of 2018, and rebalance that time elsewhere.

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How the Company-Startup Thing Worked Out For Me, Year 5

April 4, 2017

Blog Posts

Every year, I stop to look back at what happened a couple of years ago. This post covers April 2015-April 2016.

My cofounders and I were all ready to try something new.

Jeremiah, Kendra, and I had the same vision for where the business was going next (on-premises software), what the next steps were, and the speed at which we’d make the journey. We didn’t want to kill consulting and training, mind you, just wanted to build up a third profitable leg for the business.

At the company retreat in Oregon, mid-2015

But in year five, both Jeremiah and I had the same thought individually: “The company should continue on as it is, but just without me.”

For me, it was the software work that was just over the horizon. I’ve worked for small and big software companies before, and I know the infrastructure is way, way bigger than it looks from the outside. I didn’t want anything to do with building a support team, managing groups of developers, QA processes, etc. I didn’t have any skills to bring to those tasks. I knew it’d be a Herculean amount of work over the next few years, just as the first 4 years were huge to get the consulting and training off the ground. I knew the company would succeed with Jeremiah and Kendra at the helm, and that I wouldn’t add anything to that success. (I wouldn’t hold it back, I just wouldn’t be able to contribute to those tasks.)

I took some time off by myself to think – I’m a big fan of doing structured solo retreats every year – and I sketched out a few ideas. I figured I’d walk away, then start a remote DBA services company or an e-discovery consulting company, because neither of those would compete with Brent Ozar Unlimited. (Neither of options had a particularly easy route forward, but I didn’t want to do anything competitive – I wanted Jeremiah and Kendra to succeed, period.) I talked it over with Erika, and we agreed that it was the right time.

I told them, “I’m walking away, but I fully believe in where you guys (Jeremiah & Kendra) are going to go with the company, and I’m totally okay with you using my name.” I was even willing to change my name to something else entirely just to make it easier to keep the existing company going. (I’d be Brent Valencia, if you’re wondering – I’d take my wife’s last name.)

But that company name made things awkward.

Jeremiah and Kendra didn’t want to keep the company without me involved because they would want to rebrand the company as something else. I don’t blame them – all throughout the company’s history, tons of readers/customers kept saying stuff like, “Great post, Brent” even when the blog post was written by somebody else. We had clients refer to our consultants as “Brent” no matter who was on the call. Jeremiah, Kendra, and I were always equal partners, and I know the constant “Brent” references had to be frustrating. If I was gone, they wanted the name to be gone too.

Rebranding – changing a company’s name – sounds easy, but it’s HORRIBLE work. We went through the rebranding process when Tim left – the change from Brent Ozar PLF, LLC to Brent Ozar Unlimited was a pain in the ass. I totally understand why they didn’t want the company if it came with that kind of baggage.

Company lineup, summer 2015

This is probably my biggest regret in founding the company – I wish when we started it, we’d have added another domain and started migrating our company stuff over to it. Something independent, like Data Bass Hatchery or whatever. It would have given us more flexibility around ownership. (When you start a blog, I still believe it should be under your own name, though.)

So in fall 2015, the company bought out Jeremiah and Kendra.

We brainstormed a bunch of options and came up with this:

Jeremiah and Kendra would each get a cash payout, plus money over the next several years
They would leave their intellectual property for training inside the company (which meant we could sell their classes, thereby helping pay them out)
They could do anything they wanted, even take clients with ’em, but not hire the company’s employees for several months (because if the company lost J&K and all the employees, it’d be too hard to bring in revenue and pay down the loan)
If the company defaulted on payments, Jeremiah and Kendra would get their ownership back

We came up with numbers that worked for everybody, worked through a bunch of legal paperwork, and then told the team.

I always say “the company bought out Jeremiah and Kendra” because I wanna make it really clear that I didn’t whip out my wallet and start slappin’ down hundos. I wouldn’t have been able to finance that big of a move. Instead, the company bought back their shares, which indirectly makes my shares worth more, but the company was the one taking on the debt and the risk. This move wouldn’t have been possible if it wasn’t for the incredible work that Jeremiah and Kendra put into the company, building up its earning potential over the years.

Since then, it’s been really cool to see Jeremiah go back to college and watch Kendra build up SQLworkbooks.com. I think the biggest lesson we learned over the years of working together was that each of us – and each of you, dear reader – can define what personal success looks like, and build a path to get there. I love watching them do their thing.

When the company ownership shifted, I had to pause to think about what success would look like to me, too. We were just hitting the $2mm/year revenue mark with a successful consulting and training business. I decided that over the next 2-3 years, if I owned the company, success meant growing the company to 10-15 consultants. (I didn’t choose to hire trainers.)

The first six months were really hard on me.

There’s probably never a great time to do stuff like this, but my first ~6 months of ownership (winter 2015-spring 2016) were rough. I knew it would all be fine if I could just get to May 2016, but until then, I was a little unhealthily stressed out because:

I had to do all partner duties. Jeremiah and Kendra hadn’t exactly been sitting idle playing Solitaire – they were managing the staff, building tools, and designing the new software. I found myself working seven days a week trying to tread water. Thank God we had really smart, self-starter people who could manage themselves, because I didn’t do jack for management.

I had to rehearse and teach week-long classes by myself. We’d already signed hotel contracts for our 2016 training classes, and we’d just announced our week-long class lineups. However, I didn’t have co-presenters anymore, and I was up by myself starting January. While Jeremiah & Kendra left their training material in the company in order to increase its value, I wasn’t necessarily familiar with all of their modules. Teaching a week-long class solo is exhausting, let alone two of them, as I wrote last week.

I was on the road most of the time. I’d already booked my own 2016 travel calendar, and between taking over classes, plus my existing training/client commitments, and new clients that would only take in-person work, I was on the road for 14 out of 16 weeks. That sucked. I wish I could have canceled some of that, but the company needed the cash flow early on because…

We had to backfill consulting capacity, fast. We’d just hired Angie, but that wouldn’t be enough to replace both Jeremiah and Kendra. I hired Tara before the company changes were even done because I had to get consultants up to speed really quickly. Doug & Erik had to do double duty – consulting, plus getting their new coworkers trained.

We had to go underground

We were temporarily unprofitable. While Angie & Tara got trained on how we do the SQL Critical Care® process, we were way heavy on payroll – but way light on revenue. The first quarter of 2016 scared me more than any quarter we’d had – the consulting side of the business lost over $100k in those 3 months alone. We were never in a position where we wouldn’t make employee payroll, but I did a lot of training & consulting that I never got paid for, even to this day.

There were also some big expenses I couldn’t avoid:

We needed a company retreat to get the new team together to build camaraderie
My first solo class, a January 2016 class in Newark, bombed with only 5 tickets sold (losing a bunch of money, but we don’t cancel classes – lesson learned, nobody wants to go to Newark in January)
Doug wasn’t billable because he started recording Jeremiah & Kendra’s advanced querying & indexing training material, because we needed to start bringing in more passive income
I had the opportunity to hire Richie – but as a developer, he wasn’t directly bringing in revenue

“Wait – why hire Richie if you didn’t want to build software?”

Visiting Cliff Lede in Napa

If Jeremiah, Kendra, and I were all building Brent Ozar Unlimited, the right way to go forward was to add software to the company’s offerings.

If I left, and Jeremiah and Kendra ran the company, I thought software still made sense for them. I am absolutely positive that they would have succeeded wildly.

But if Jeremiah and Kendra left, and I was the only remaining partner, then I would have failed. It’s not that I don’t have the experience or the drive – it’s just that being a solo founder, running a consulting and training company, and trying to build an app – that’s stretching one person too thin. In the first year, there just simply wouldn’t be enough time for me to devote to designing a new app and building the staff infrastructure necessary to bring it to life.

However, I did see an opportunity to build something different than the SQL Server industry had seen before: free online services. (The first result which has since gone live: PasteThePlan.com.) I wasn’t really in a rush to build them, but when Richie became available, I wanted to snap him up fast because the personality fit would be so good for the team, plus he had the right architecture and project management skills that could hit the ground running with minimal oversight from me. (I really do suck as a manager – I just point at a dot on the horizon and yell, “Run that way! Let me know what you find.”)

Plus, I could have Richie build a tool to rapidly improve the SQL Critical Care® process, making it easier for us to onboard new staff that could produce a better product faster, and for less money. I gave him a general spec and two months to build it, and he totally delivered. His CriticalCareCollector app dramatically changed the way we do consulting.

By the end of year five, I thought could breathe again.

Breathing easier

I remember laughing in April when a commenter called me arrogant – at that point, I was about the farthest thing from arrogant. I had spent months really stressed out, paranoid that I would have to ask my team to make compromises, work more hours, take less time off, work crappy engagements, cut bonuses, or stop investing in our future. I was willing to do whatever it took to make sure that didn’t happen, including making a lot of personal financial compromises.

Thankfully, by the end of April 2016, it looked like we were firing on all cylinders. The consulting business was kicking ass: we had a trained, profitable team, using new consulting and sales tools do to their jobs better/faster/cheaper. The training business was on track as well: my 2016 classes were all written and working fine, we had a successful (profitable!) class in Newark, we had new video classes coming into the sales pipeline, and the rest of the year’s classes were in a profitable state.

Sadly, I was wrong about of half of that, but that’ll have to wait until next year’s retrospective.

If you wanna read the past updates:

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Epic Life Quest: Another million dollars.

March 28, 2017

Blog Posts

Teaching in Portland, 2016

In my Epic Life Quest, sometimes I post [Redacted] achievements. It’s stuff that I’m really proud of, but I’m not quite ready to talk about publicly yet. The last one was hitting the $1mm/year total revenue mark.

A while back in Level 7, I wrote:

[Redacted] – I set a revenue goal for our company’s online sales (training classes & videos), and we crossed it. I’m not sharing the goal publicly yet, but I’ll circle back in a couple/few years and blog about it in my Life Quest category. Completed September 2015.

It’s been a while now, so let’s un-redact that and discuss it. We hit:

$1mm/year in training revenue (including both live & recorded classes), and
$2mm/year in combined revenue (training and consulting)

For numbers geeks, I’m measuring on a rolling 12 months basis – for young, growing businesses, you don’t wanna wait for calendar years to measure stuff. (Also, at the risk of stating the obvious: these numbers are revenue, not profit.)

How we got there: steadily building training

When we started the company, Jeremiah, Kendra, and I had a limited amount of presentations built. Since our day job was teaching customers what was broken in their SQL Server, we found ourselves continuously writing new training. That customer training material was designed to be super-concise, and it used real examples from their environments. Writing public training material is much harder.

We started with some online 1-day events, then gradually expanded to a 2-day in-person class. Over the course of a few years, we ended up with a huge library of online stuff plus three 4-day live classes: The Senior DBA Class, Advanced Querying & Indexing, and SQL Server Performance Troubleshooting.

Steadily building a tolerance for risk, too

Selling live training class seats means:

Paying a large deposit to a training class venue, typically in a hotel
Committing to a minimum spend for food, A/V, and hotel rooms
Buying your own travel to the event
And if enough students don’t show up, you eat some of the food/A/V/hotel costs

As an extreme example, I had a January class in Newark, NJ (SHUT UP I KNOW NOW) where only 5 students showed up. I lost something like $15k that week on hotel fees, and that’s not even including the money I could have earned doing consulting or something instead.

If you have one or two of those bombs every now and then, it’s no big deal – but as a small company starting up, those are big eye-opening events. We started with just a little risk, and then gradually added more and more risk, signing several contracts for class dates throughout the year, and forking out tens of thousands of dollars in hotel deposits at once.

We also faced risk in that there were only three of us, and we didn’t have complete topic overlap. All of us had written modules that no one else knew well enough to teach: I couldn’t teach Jeremiah’s dynamic SQL module or Kendra’s THREADPOOL module, for example. If one of us broke our arm right before class, we had to put our game face on and keep going.

But with risk comes reward, thus this blog post.

Training powered the company buyouts.

When the company bought out Jeremiah & Kendra, this trove of training material was key to making it work:

Jeremiah & Kendra chose to leave their intellectual property (training classes) in the company
This meant I could deliver those modules, generating cash flow to pay them off over time
But this also meant I had to learn to deliver the live in-person modules all by myself (the self-paced online recorded classes weren’t an issue, obviously)

Teaching a class is more than just reading stuff off a slide. (Well, that’s all you get in a lot of crappy vendor classes, material taught by people who’ve never actually done it in real life, but I won’t settle for that kind of garbage.) I had to dig deeply into the material and be prepared to answer tough attendee questions on it.

This also meant a spectacularly high level of risk. One instructor teaching a series of 4-day live classes, all by himself? No missed travel allowed. No sore throats acceptable. No off/downer/slow days. No second instructor to turn to for questions. Those initial 4-day classes were really challenging. (But also rewarding! I’ve been able to sustain and grow those training revenue numbers, and they powered the company through the really dark times – more about those in next week’s installment of my annual How the Company-Startup Thing Worked Out for Me series.)

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How the Company-Startup Thing Worked Out For Me, Year 4

April 19, 2016

Blog Posts

It’s time for my annual update on the wild ride. A brief recap of what’s happened so far:

Typical partner meeting in year four, Vegas

April 2011 – started the company.
April 2012 – year one finished, but I didn’t blog about it right away. I wanted to get it into the rear view mirror for perspective before blogging.
April 2013 – year two finished, so I blogged about year one.
April 2014 – year three finished, so I blogged about year two.
April 2015 – year four finished, so I blogged about year three.
April 2016 – year five finished, so I’m blogging about year four – April 2014 to April 2015.

In April 2014, we had two full time employees, a part time admin assistant, a successful consulting business, and a growing training business. It felt like things were going like gangbusters at work, but…

My personal blog went very anti-PASS.

I was so pissed off about how PASS handled one thing after another, and how they’d ignored private feedback. I decided to go public, and the results weren’t pretty:

As a community journalist, I was proud of those posts.

I cared (and still care) a lot about repeated privacy violations, clearly misleading/wrong vendor spam masquerading as education, wasted money, and a disregard for a quality product.

But it’s not all that different from the ongoing Uber controversies – many consumers (myself included) are willing to overlook that kind of thing when they like the business’s product, and the PASS product is the best SQL Server conference product in the US right now. (I’d argue that the SQLbits UK product is better and cheaper, but that’s for another day.)

March 2014 – suddenly, my new favorite restaurant

Looking back, I can really clearly see that I burned a lot of bridges that year. I caught a lot of flak for saying bad things in public – as if I hadn’t been complaining privately to PASS Board members for years. I don’t think my complaints made anything better, and I was a fool for standing on the street corner, yelling for faster changes. PASS is changing (and improving) at the rate that big, bureaucratic institutions change, and it is what it is. Today, in the rear-view mirror, it’s easy to see that the technique didn’t help, and instead hurt the community. Today, I understand that I don’t know how to affect the changes I want to see in PASS, but I also recognize that it’s my own shortcoming, not that of the organization.

Thankfully, the company kept right on trucking just fine despite my distractions. PASS had never been a revenue source for the company, but I wager that we lost a few potential employees due to my rants. I bet there’s good people out there who would have been interested in working for us before, but weren’t after the rants. That’s a bummer, and that’s entirely my fault. And probably unrelated (but you never know)…

Employee #1 left for greener pastures.

As Doug Lane (employee #2) was getting up to speed, we lost Jes Schultz-Borland, our very first employee. Going forward, as I write more about the company’s successes and failures, I won’t talk about individual employees leaving (PLEASE GOD DO NOT LEAVE, ANGIE, DOUG, ERIK, ERIKA, JESSICA, RICHIE, AND TARA) because it’s just not appropriate. I do think it’s appropriate to talk in generalities about employee retention, though.

Here’s some of what’s hard about hiring employee #1:

Accounting – holy paperwork, Batman – taxes, payroll, retirement planning, insurance, states
Management – planning a successful path for their career, training, and evaluation
Communication – letting them know where we’re going, and how they can help

It’s tempting for me to say that as long as you’re hiring one person, you might as well hire 2-3 to spread your risk around, but that first employee is going to have a really chaotic ride. The #1 trait you should look for in employee #1 is a sunny, upbeat outlook despite strange obstacles. We never would have known to look for that, but Jes’s disposition made all the difference as we conquered one startup obstacle after another.

The holiday card lineup

Jes was with us for three very tumultuous startup years. She had to put up with a complete lack of HR functionality as we learned how to set up insurance, payroll, taxes, procedures, expenses, you name it. Kendra worked her tail off to set the company up, putting in infrastructure as fast as we could. It’s hard to overstate how hard Jes and Kendra both had it for the first couple of years. It took two very special people to pull that off, and they did it with impeccable awesomeness. I don’t think any two people could have done the startup process any better than those two did.

As a result, I totally understood when she switched gears and went to work for Concurrency, a larger, more traditional consulting company. There’s a limit as to how much transparency I can have here on the blog, especially when other peoples’ careers are involved, so I would totally understand if you read the rest of this as, “He’s just being polite to be good to Jes.” No, seriously – believe me when I say I really do wish Jes the best success in the world. She’s awesome. We want our employees to learn, grow, and succeed, full stop, and I was actually excited to see what Jes did next. She’s going to be in the SQL Server community for the rest of her life, and she’s going to be successful. I’m proud that we’re on her resume.

When you only have two employees, losing one of them is hard.

I’m not talking emotionally – which of course is hard too – but it’s hard on your client calendar. We’re lucky enough to focus on short-term engagements, so we didn’t have to worry about replacing Jes on a large project, but we had enough client demand that we really needed to add more people, stat.

Our business model made it challenging because we were focused on a single, repeatable process – but we didn’t have any training material built up to teach people how to do that process. We were teaching it like some kind of ancient tribe passing down our traditions verbally.

Since we were under the gun, time-wise, we made the decision to hire someone very senior with a lot of performance tuning experience. We put out a call for resumes, and we grabbed Erik Darling in an entirely work-appropriate way. (Both Doug and Erik had to deal with our very haphazard way of training new people because our product methods were iterating as fast as our hiring.)

When we originally started the company, we aimed to hire one person per year, but year four was pretty wild because…

We also finally hired a salesperson.

I really should have recognized earlier how much of my time sales was taking. I wasn’t doing outreach or cold calls – I was simply answering the contact emails, scheduling introduction calls, signing contracts, and scheduling consultants. It doesn’t sound like hard work, but it was sucking up more and more of my own time. I should have been using that time to write training material, do consulting, and blog, but I enjoyed the sales process too much.

Jeremiah and Kendra saw this problem long, long before I did, and they suggested we should hire a salesperson. The single biggest mistake I made during the startup process was not listening to that suggestion. The simple fact that they even made the suggestion should have been my clue to let go. They were amazing cofounders, and they had faith in me when I said I could keep running with the sales duties.

In summer 2015, I had a Eureka moment when I realized that I was the bottleneck holding back the business from growing faster. We started looking for a salesperson, and it was the toughest position we’d ever hired for. We know a ton of data professionals, but we don’t really have a solid network of salespeople. I happened to ask a friend of mine what he’d look for in a salesperson, and one thing led to another, and I met Jessica Connors for dinner. By the end of the dinner, I was thinking, “PLEASE GOD, LET HER BE INTERESTED IN THIS JOB,” and whaddya know, she joined the company.

Seriously, when I look back, this is the one thing we should have done long ago (only assuming that Jessica was the salesperson we’d have hired.) Hire people who are really good at the stuff you’re only passable at.

This was important because something else in year four was really kicking my ass.

Our training class inventory kept growing.

In summer 2014, Jeremiah, Kendra, and I took a deep breath and increased our commitment again: we’d up our 2015 training lineup from a couple of shorter 2-3 day classes all the way to three week-long classes. Even tougher, we ran pairs of them back-to-back in the same cities in order to cut our expenses.

It’s funny – I clearly remember when I left SQLskills, I told Paul and Kim that I had absolutely no interest in running week-long classes – and that was true then. Teaching is pretty hard work, and a week-long class means being on the road away from home longer and longer stretches. But the siren song of profit was too good to resist, and we really liked training, so we took the leap. Plus, our customers had been telling us, “As long as I’m away from the office for a 2-3 day class, I might as well be gone the entire week.” So we structured week-long classes around three imaginary people: Sandra the Senior DBA, Paula the Performance Tuner, and Danny the Developer. (I’m reading these profiles and giggling – they were fun to write.)

The back of the class in Chicago

Selling these kinds of classes is a huge financial gamble for a small startup. You have to pay huge deposits to the hotels where you host the training (we’re talking tens of thousands of dollars), and hope like hell that people actually show up. You have to guess what people want to learn, how much they’ll pay, and what cities they want to visit. We got lucky that year, and things worked out okay, but the stress was definitely there.

We booked the hotels, then announced the lineup in July 2014, and ran our Black Friday sale in November. We breathed a huge sigh of relief when all the classes finally looked like they’d be profitable.

Along the way, I was working way, way the hell too hard (along with Jeremiah and Kendra). I had to work my ass off in order to get the new training material ready, and then after each class, I had to keep working to iterate over the material and make it even better. It paid off, don’t get me wrong – we made money doing training, and we built up a valuable inventory of training materials, but I don’t think we paid enough attention to work/life balance that year.

We tried a lot of fun experiments.

No, really, a lot, and I’ll only mention a few:

A spiffy explanation video on the home page of BrentOzar.com
A week-long partnership training experiment with Dell (it didn’t pan out in year four, but it later ended up being Dell DBA Days)
Online training classes – like a hybrid of recorded + live video training classes so people could do homework, and then ask questions live, plus an Extended Events training class
Setting up conference profit & loss statements – so we could see how much we were spending on each conference
More ambitious video/training sales pages on BrentOzar.com – put some decent money into PHP development here
User group video night – where user groups could get one-day access to our video library to show recorded presentations
Moved the company to Nevada in preparation for me moving to California (since we didn’t have a reason to be incorporated in Illinois anymore)
Started planning our 2015 FreeCon, a professional development event at the PASS Summit
Changed the weekly presentation-based webcast into a totally Q&A Office Hours approach

Looking back, I’m really proud of how hard we worked to figure out the maximum possible that we could give back to the community without going broke as a company. I’m super-competitive in an odd way: I wanted to help every SQL Server professional more than anybody else in the industry, for free. Tools, scripts, blog posts, videos, live webcasts, in-person events, you name it – I want to make a real, meaningful, permanent difference in peoples’ jobs and lives.

One thing we didn’t experiment on was the product: we had really focused on the SQL Critical Care® process, and at this point, it was the only product we offered. (We still do additional services for companies who find disturbing things inside their servers during the SQL Critical Care®, though.)

Was year four successful?

Oh yeah. Looking back at my original personal goals for the company:

0-1 year – consult 16-32 hours per week – which might sound like I was being lazy, but the reality of a small business is that you have a lot of unpaid work to get the business moving down the runway.
1-3 years – consult 16-24 hours per week – a dropped ceiling from 32 to 24 due to the admin overhead of a growing business, and wanting to do less paid work and more R&D/presenting/training-writing.
4-6 years – hire people to offload the non-technical work – maybe a business manager, salesperson, and/or accountant so we can stay focused on the technical stuff we love.

Technically, we were on track, but I didn’t realize how much work sales would be, and I should have had that hire-non-technical-people goal up in year three. Not bad though. And now we’ve checked off the stuff through year 6. What’s next?

It’s time to recalculate goals for years 6-10.

Jeremiah, Kendra, and I originally wrote up goals further out, but since the company’s purchased their shares, I get to make my own vision.

2016 is basically a stabilization year – it’s my first year managing the company on my own, teaching the training classes by myself, and making sure we’re financially stable enough to pay off Jeremiah & Kendra over time. As time goes on, though:

Years 6-7 (April 2016-2018):

Grow to around 10 consultants – which I think we can do without too much infrastructure investment or the company losing its fun vibe.
Take the community’s available tools to the next level again – I think we’ve made a huge difference with our sp_Blitz® tools, but we can do better. I want to give the community something even easier to use, yet more scalable and more actionable.

Years 8-9 (April 2018-2020):

Be a vital, valuable part of every SQL Server database administrator’s daily routine.

Yeah, it’s grandiose, but you don’t get big stuff by dreaming small, and we’re building a team that can do it. This is gonna be so much fun sharing the next steps with you.

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A million dollars.

January 19, 2016

Blog Posts

In my Epic Life Quest, sometimes I post [Redacted] achievements. It’s stuff that I’m really proud of, but I’m not quite ready to talk about publicly yet.

Back in level 4 in 2013, I wrote:

[Redacted] – I set a 2013 revenue goal for Brent Ozar Unlimited this year, and we made it! I’m not sharing the goal publicly yet, but I’ll circle back in a couple/few years and blog about it in my Life Quest category. Completed 2013.

It’s been a few years now, so let’s un-redact that: the company hit one million dollars per year of revenue.

To be specific, this wasn’t for the calendar year of 2013 – when managing a quickly growing company, you watch revenues over a running 12-month period. We did indeed have >$1mm for calendar year 2013, but we hit this achievement earlier than 12/31/2013. We hit it earlier in the year when there were only four of us doing consulting – me, Jeremiah, Jes, and Kendra.

How do consulting companies hit a million dollars of revenue?

The Brent Ozar Unlimited team, circa 2013

For consulting companies, there’s three common ways to increase revenue:

1. Increase inventory – hire more consultants, minimize the amount of non-billable stuff they do, and make them work more hours. You, dear reader, know that our company philosophy focuses on a good work-life balance, so that last option wasn’t going to happen. We started by hiring Jes, and then after hitting the $1mm mark, we added inventory with employee #2, Doug Lane.

2. Increase the effective billing rate – sell time in blocks of days rather than hours, focus on adding as much value for clients as possible, and sell productized services: fixed-price packages rather than hourly work. For the first few years of the company, we experimented with several different kinds of services – project work, architecture, data warehousing, cloud, Hadoop, and even Oracle. Within a year of hitting the $1mm mark, we focused our offerings down to just one: our SQL Critical Care®. We made a profit on that product by giving clients a huge amount of value relative to what they paid, but it wasn’t like we could charge $1,000 per hour for this product. If we wanted to scale revenue higher, we needed a different route.

3. Sell things not tied to hours – non-consulting products like books, videos, training classes, applications. This looked like a pretty good growth route for us (in addition to scaling up the staff quantity), so in 2013, we started selling online SQL Server training. The idea is that you put in time to build and record the training videos, and then over time, they keep selling and providing you with income that isn’t tied to the number of hours you spend at the keyboard.

What we did isn’t the only right way – there’s lots of consulting companies that make different choices along the way and do a great job of scaling. I’m proud of the way that Jeremiah, Kendra, Jes and I took our route together, though.

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How the Company-Startup Thing Worked Out For Me, Year 3

April 28, 2015

Blog Posts

It’s time for my annual update on the wild ride. A brief recap of what’s happened so far:

April 2011 – started the company.
April 2012 – year one finished, but I didn’t blog about it right away. I wanted to get it into the rear view mirror for perspective before blogging.
April 2013 – year two finished, so I blogged about year one.
April 2014 – year three finished, so I blogged about year two.
April 2015 – year four just finished, so I’m blogging about year three – April 2013 to April 2014.

When last we met

The company logo evolved to something we could actually trademark

As we finished up year 2, we started hitting our stride. Our new site made consulting sales much easier, we’d focused on a single consulting product, and we’d run our first training class.

In year 3, we wanted to focus on growing our in-person training class business. We’d decided to amp up to two class agendas held in three different cities, growing from 3 class-days total up to 15 class-days. That was a huge jump, and we had no idea if we’d be able to fill the seats.

We’d also planned on hiring one consultant per year, so we were already on the lookout for America’s Next Top Consultant.

So how’d it go? Well, aside from breaking my arm while carrying a monitor?

To make long term investments, I had to change my own consulting.

Oct 2013 Vegas – keeping up with the Joneses at é by josé andres

The way we set up the company, I didn’t take a salary – I just got a percentage of the income that I produced. If I billed $10k worth of revenue, I got a cut of that. (That isn’t how we treat employees, just to be clear.)

Therefore, if I was gonna do unpaid work to build out a future training income, one or more of these things had to happen:

Cut personal expenses to match the income drop (think like 50% or more)
Pay personal expenses by depleting my savings account
Work longer hours (like do the unpaid work on evenings and weekends)
Focus on higher-value engagements (so I’d make the same money in less time)

Any of these answers are legit, but I went for the last one. I focused on doing high-value work like onsite training. In-person training is one of my biggest strengths – I enjoy it, and I seem to do a pretty good job of it – so I was able to charge a premium for that.

I still made time for blogging.

I published a lot of stuff that I’m proud of from that year, but two posts stand out:

SQL Server 2014 Standard Edition Sucks, and It’s All Your Fault – sometimes, you just gotta step out in the limelight and say the obvious in blunt language. I got a lot of off-the-record talks from Microsoft folks who thought I’d lose my MVP status for sure, and I even got attacked publicly with gems like “My only hope is that … you end up losing that income that supplies you with your fancy toys and vacations.” As it turned out, the memory limit for Standard Edition was raised, and I heard from more than a handful of Microsoft employees that the change was driven by my blog post. Awww yeah.

Did Microsoft Stop Releasing SQL Server Service Packs? – no, but maybe they should have.

I don’t regret those posts – they were popular, and I think they achieved the objectives I’d set out to accomplish – but then as year four started, things took a serious turn for the negative. More on that next year.

I had to let go of some clients.

2013 Oct – as close as it gets to a serious picture of me and Paul

The downside is that I had to let go of some long-term customers who’d been working with me for a couple of years. Thanks to the advice in a couple of consulting books, I was able to have good, fair conversations with them that basically went like this:

Client: “We’d like to bring you in for another project.”
Me: “Great! This year my rates have changed from $X per hour to $Y per day, and I’m only booking in whole-day increments from here on out.”
Client: “Uhhh, we only really want to spend about $2,000 on this project.”
Me: “Totally understood. I’m not a good fit then, and I’ll refer you to a couple of other consultants who would be very interested in the work.”
Client: “But we want to work with you.”
Me: “That’s awesome! I’m glad to hear it. I’m not going to ask for specifics, but have you gotten a raise since 2010?”
Client: “I see what you did there.”
Me: “And I bet your job description has changed over the years, too? You’re probably tackling bigger and tougher job duties?”
Client: “Damn, you are some kind of wizard.”

No, I didn’t win those clients over – and I didn’t expect to. They wanted to hire 2010 Brent, and I’m not 2010 Brent anymore. It was kinda tough because they were fun clients doing cool things with SQL Server, but looking at my task list, my personal budget, my family commitments, and my goals, I just couldn’t keep my $150/hour, a-couple-hour-per-week clients.

And it sounds odd to say we had to let go of clients when at the same time…

We expanded the consulting by hiring Doug Lane.

Feb 2014, Cabo – the company retreat, watching whales

Kendra announced our open position in the form of a Missed Connection: Employer Seeks Employee ad, and we had another killer turnout with dozens and dozens of really, really good responses. I know a lot of companies struggle to hire great SQL Server talent, but the combination of telecommuting and great benefits really opens up a company’s choices. Again this year, I wish we could have hired more than one person.

We hired @TheDougLane, a SQL Server professional in the Denver area who happened to have a passion for filmmaking. Before we hired Doug, I remember sitting in the very back row of his absolutely packed PASS Summit session about tuning SSRS. At one point, he got an audience question, and he prefixed the answer by saying, “Well, I know Brent Ozar is in the audience, and he isn’t going to like my answer, but I’m going to say it anyway.” First off, I don’t know how he even noticed I was in the room (it was a really big room), but I was so impressed with his answer AND his explanation of my viewpoint as well. (Not to mention how he handled a demo problem too.)

Even though we hired a new consultant, I still had to let go of my past clients because we wanted Doug to exclusively focus on our SQL Critical Care® process.

We focused the consulting big time.

At this point of our company history, the process had gotten decently refined, and it was selling really well with clients. We kept experimenting with slightly different ways of selling it (2/3/4 days, with videos or without, with labs or without) but the core product was pretty stable. We were proud of it.

I’m a huge believer in two Steve Jobs quotes: focus is about saying no, and get rid of the crappy stuff.

We had one awesome product – SQL Critical Care® – and we needed to build an awesome training product. To clear out enough time, we decided to let go of our not-so-awesome products, so we stopped offering Amazon cloud migrations, Hadoop projects, SAN design & implementation, and VMware implementations. We also steered clear of the remote DBA business – I still think there’s room for an attractive product there, but I haven’t seen a successful implementation where the customer, the remote DBA firm owner, and the remote DBA employees are all wildly happy. Yet.

We designed our training offerings.

April 2013 – Jeremiah and I swapping rental cars outside Vegas

We’d been invited to sell our training through a few companies, but we wanted to control our own distribution platform. We envisioned some long-term benefits:

Our own look/feel – we’re huge believers in having our faces and gestures built into our training videos
Quality guarantees – our training wouldn’t be sitting next to something questionable
Bundling with client services – when companies hire us, we could give them customized video training as part of their consulting
Bundling with training classes – when learners sign up for our in-person classes, we could give them video prerequisite homework, plus extra resources for continued learning after the class finished
Easier deep linking – in an email to a client or attendee, we could link directly to a module in their training course
Sales price control – we could run Black Friday sales, new-class launches, and secret sales
Single e-commerce platform – so we could sell in-person training classes, one-on-one mentoring, or even consulting followups through it

However, there’s a big drawback to running your own online training delivery system: you actually have to pick it and run it. We had to make decisions about what features we wanted and what vendor could best deliver those features. We spent weeks researching, and settled on one. It wasn’t perfect, and it wasn’t cheap – we spent something like $50k USD on it the first year – but it had powerful features that justified the cost.

When it came time to launch our training, we looked at the market and saw:

$50 – in-depth books that take weeks or months to absorb
$500 – one-day pre-conference sessions, or one year’s worth of access to videos
$2,000 – one-week classes with non-expert instructors reading from a book
$4,000 – one-week classes with hands-on experts

We launched with two tiers of videos:

$29 for ~90 minutes of video. We weren’t really aiming at books per se, but aiming to hit an underserved $10-$100 market. If you wanted focused relief for one specific SQL Server pain, and you wanted it fast, the $29 market seemed like a tempting price point. There just wasn’t anything else in this market.

April 2013 – taking my favorite Stack Exchange guys through the now-closed WD-50 kitchen

$299 for 6 hours of in-depth video. These focused on a tougher pain point that takes longer to solve, like learning to manage SQL Server indexes. You got 18 months of access to the video, so you could continue to revisit it over time without worrying about a credit card charge every month.

Altogether, our training tiers were:

Free – blog posts, webcasts, YouTube
$30 – videos
$300 – videos
$3,000 – classes

Implementing the store, recording videos, building training material for in-person classes – it was all a ton of work. Unpaid work, initially – a build-it-and-they-will-come gamble.

The training gamble paid off.

Oct 2013 – held a record-setting pre-con at the PASS Summit

In June 2013, we launched our online training video system and the passive income started up. The awesome thing about passive income is that it just comes in – it pays your bills while you focus on building more passive income sources, and it becomes a snowball that just propels your business forward.

In November 2013, we held our first Black Friday Sale just because we could – one of the fun benefits of running your own training sales platform. We learned that people love discount sales.

In February 2014, we held our first expanded one-week training classes in San Diego, and they were successfully profitable. Not wildly profitable – if you look at the unpaid work to integrate the e-commerce platform, market the classes, and build the training material, we probably only made minimum wage, hahaha – but most of that work was a one-time investment that we could repeatedly reuse over 2014.

As year 3 came to a close in April 2014, and we prepped for our nearly-sold-out (~40 students) training classes in Chicago in May, we were really sold on the whole training & passive income thing.

What I (not we) screwed up in year three

At the end of year two, I’d reviewed my year and realized I’d done too much travel and not balanced work/life time appropriately. I think I fixed that pretty well in year three. I had some great times with my friends and family, spent less time on the road, and unlocked levels 3 and 4 on my Epic Life Quest. However, while work/life was balanced, I didn’t do a good job of allocating my work time to the right tasks.

Sept 2013 - watched the America's Cup from a support boat

Sept 2013 – watched the America’s Cup races from a support boat

In years 1-3, I should have tracked and categorized my time so that I could recognize trends. As we built the company, I didn’t notice that some unpaid admin duties had crept up to being nearly full-time jobs. In October 2013, we hired Erika (my now-wife) part time as our admin assistant, and that certainly helped offload work, but there were still a large number of duties that each of us partners held on to.

I failed to recognize that the sales duties of keeping 4-5 consultants busy had become a significant job in and of itself, and I should have recommended that we hire a salesperson earlier. Jeremiah and Kendra were totally interested in hiring a salesperson, but I thought we didn’t need it because I really enjoyed the sales work. (It was really order-taking more than sales at that point, so it was fun.) Whether or not I enjoyed it shouldn’t have mattered – I should have recognized the amount of time it was taking, and that it wasn’t the right use of my time.

Was year three successful?

When Jeremiah, Kendra, and I first laid out our manifesto for the company, my own high-level goals looked like:

0-1 year – consult 16-32 hours per week – which might sound like I was being lazy, but the reality of a small business is that you have a lot of unpaid work to get the business moving down the runway.
1-3 years – consult 16-24 hours per week – a dropped ceiling from 32 to 24 due to the admin overhead of a growing business, and wanting to do less paid work and more R&D/presenting/training-writing.
4-6 years – hire people to offload the non-technical work – maybe a business manager, salesperson, and/or accountant so we can stay focused on the technical stuff we love.

And yowza, we were actually on track! That’s kinda awesome.

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How the Company-Startup Thing Worked Out For Me, Year 2

April 22, 2014

Blog Posts

About a year ago, I shared the first post in what will hopefully be a long series about starting and growing a company. The timeline went something like this:

April 2011 – started the company.
April 2012 – year one finished, but I didn’t blog about it right away. I wanted to get it into the rear view mirror for perspective before blogging.
April 2013 – year two finished, so I blogged about year one.
April 2014 – year three finished, so I’m blogging about year two now.

When Last We Met

As we finished up year 1, we had just brought Employee #1, Jes Schultz Borland, on board. Jeremiah, Kendra, and I were doing different variations of our health check process, and we had to get things to be more standardized.

We invested big, pouring five figures of cash into rebranding our web site, implementing SalesForce.com, and becoming an Amazon partner. We didn’t want to be a big, faceless corporation, but we wanted to start growing our product range and our presence online.

So how’d year two go?

The New Web Site: Amazing.

The new(est) company logo

We hired PixelSpoke to design our brand – our logo, our web site, our font, etc. They started by asking us (and some of our clients) all kinds of interesting questions. They built a profile of how we saw ourselves, how our customers saw us, and how we wanted to be seen.

Three words: loving commando nurses.

I am not making this up.

Before PixelSpoke, BrentOzar.com was an off-the-shelf WordPress theme that felt like a personal blog, not a consulting company that supported three people full time. We didn’t want to masquerade as Global Megacorp Consulting – we wanted something that felt really hand-crafted and personal with as few straight lines as practical. They nailed it.

PixelSpoke introduced us to Eric Larsen, the artist who drew our portraits for the site, and continues to draw portraits for our slide decks and promotional materials.

We had some bumps along the way – for example, our first logo contained a red cross, the only logo protected by the Geneva Convention. Oops. We discovered this stuff while working with our (awesome) lawyers to protect our brand name, our logo, and our scripts.

The Legal Stuff: Covering Our Butts

We embarked on a mission to trademark and copyright the stuff that we were working really hard to build. At first I felt kind of guilty – after all, I love giving away stuff to the community – but we had to make sure it didn’t get abused.

For example, during year 2, I got an email from a software company giving me a polite heads-up that they were including sp_Blitz® in the next version of their product. They thought they were doing us a favor by getting it more publicity, but that immediately freaked me out. I had visions of “Powered by Brent Ozar’s sp_Blitz” in their marketing material, and I politely asked them to hold off.

Recording webcasts from Cabo

To protect ourselves, we trademarked and copyrighted stuff, built an End User License Agreement, and forced users to agree to the EULA before downloading scripts like sp_Blitz® and sp_BlitzIndex®.

A little part of me died inside when we did that, but it was the right thing to do. Our babies were growing up. (Even now, in spring 2014, our admin is still adding ® marks to our trademarked terms scattered around the web and in our documents.)

We also stopped hosting community bloggers on our internet host. For years, I’d personally picked up the tab to host dozens of community blogs including Kevin Kline, Jorge Segarra, Erin Stellato, Ryan Adams, Tim Ford, and Michael Swart. I’d originally started doing that because I was maniacally dedicated to fostering new blogger voices in the SQL Server community, and I didn’t want anything to stand in their way – even a $10/mo hosting bill. Many of these bloggers had grown up to MVP status, publishing books, and even going to work for competing consulting companies. With us moving our hosting into Amazon EC2, it just seemed like the right time to encourage those bloggers to leave the nest and get their own hosting. It broke my heart a little, but those folks were grown up too, and I’m so proud to see them continuing to blog today.

The Web Site Made Sales Way Easier

The single toughest thing about year one of our company was the sales process. Oh, wow, did it suck. We had no idea how to communicate with new clients who kept saying the same thing over and over: “We want to work with Brent.”

We tried communicating the strengths of the other team members. We tried keeping me out of the sales calls. We tried raising my rates above the rest of the staff. We tried pushing my availability farther out into the future. We tried saying I wasn’t accepting new clients. Nothing seemed to work.

Ben Block and I running the Disney Half Marathon

At some point in year 2, the problem simply disappeared. I can’t pinpoint exactly when, but I think it was due to a few different factors:

The new web site felt much more like a company, not a lone guy blogging about stuff.
Each post had clear bylines with pictures of the authors
Jeremiah and Kendra had built up a solid history of blog posts, and they were bringing in search results for things that I’d never blogged about
The contact page made it clear that multiple people were involved in the company
We made a new pitch deck for sales calls that emphasized our process

The end result: new clients stopped demanding that I work on their project, and started happily working with any of us.

This change came with a wonderful byproduct – each of us had distinct roles in the company that fit our personalities really well. I do sales and marketing, Kendra manages people and processes, and Jeremiah is research & development.

Became an Amazon Web Services Partner

In mid-2012, we believed that Amazon Web Services held a lot of promise for us. I believed (and still do) that businesses would rather pay by the hour for flexible IT infrastructure than make huge capital outlays. After all, we’re a small business and we don’t own a single server either.

To join the Amazon Web Services Partner Network, we had to shell out some cash, pass a few tests, and two of us had to attend Amazon’s architecture training classes. Jeremiah and I went, and I enjoyed it a lot. We set up our Amazon Partner Network profile page, set up pages on our own site advertising our AWS consulting, and blogged about some of the work we’d done. We hosted our web site in a load-balanced, somewhat-geographically-redundant EC2 setup.

This experiment cost us in the neighborhood of $30k-$50k.

And nearly no business came in. (Certainly not $30k-$50k worth.)

We learned a funny lesson that seems obvious in retrospect; you don’t need a consultant to get SQL Server into Amazon Web Services, just as you don’t need a consultant to get it installed in on-premises bare metal. You need a consultant after you’ve already gone live and the performance or reliability isn’t what you expect.

We’re not a VMware, NetApp, EMC, or Dell partner either, but our blog posts about running SQL Server on those platforms mean that people call us for slow SQL Server performance. We realized that Amazon Web Services isn’t the central part of our offering, but our expertise on the subject is just one of the reasons people call us. We don’t need to be an official partner in order to get that business.

People don’t find us by searching vendor partnership directories.

People find us by searching Google.

Later on in year 3, this realization helped us crystallize our product offerings down to just one product: our SQL Critical Care®.

Other Year Two Bets

The $30k-$50k AWS bet didn’t feel stressful or wasted – it seemed like the right bet at the time, and I don’t think any of us ever second-guessed it. I’m telling the story here to illustrate what it’s like starting a small business: some (many? most?) of your bets will not pay off, and that’s okay.

2013 company retreat in Cabo

Some of the bets we made in year two included:

Investing in SalesForce.com to track downloads and client leads (total failure because we didn’t have enough manpower to follow up on the leads, and we didn’t want to pester them)
Hiring Lori Edwards to make improvements to sp_Blitz® (success because we didn’t have enough time to make a lot of necessary fixes ourselves)
Hiring a contractor to build an sp_Blitz® app (success, because people continue to use it to this day, but kind of a pain to keep up to date)
Hosting our second company retreat, this time in Cabo, Mexico (success, because chilaquiles and donkeys)

Refocused My Speaking Efforts

I was honored to be invited to present Building the Fastest SQL Servers at both Microsoft TechEd North America and in Europe. You can watch the screencasts of the Orlando session and the Amsterdam one, and they were both a ton of fun.

I was flabbergasted when the live attendees voted me into the top 5 sessions at both conferences (out of hundreds of sessions), up alongside incredible speakers like Mark Russinovich and Mark Minasi. That was a real gut-check moment. For years, I’ve been accustomed to having really high ratings in the SQL Server community, but to be rated one of the best sessions across Windows, development, and SharePoint tracks? Wow, okay, maybe I’d gotten good at this stuff.

Despite the rush of really good feedback, I decided not to speak at TechEd again. The way the conference was set up, attendees all thought I was a Microsoft employee, and that wasn’t good for my branding. Presenters actually lose money at these types of events, and the only way to break even is to gain consulting or training business. That doesn’t work when attendees think you’re a blue badge. (If I’m going to give away training and lose money, I’m going to do it for a community-driven conference, not a vendor event.)

I came to the same conclusion about company internal training events, too. I was really excited to be invited to speak at a Fortune 100 company’s annual learning conference, and I thought it’d get my foot in the door for additional revenue. Nope – even though the employees had a great time at the talks, it didn’t turn into consulting work because big companies already have preferred vendor relationships with big consulting companies.

Conference badges from a single road trip

It’s really cool to be invited to these big events – but if they don’t produce revenue for the company, is it really good for me (and the company)? I love helping people, but in year 2, I learned that I need to focus on a couple of simple questions:

Are we going to get revenue (consulting or training) enough to offset the trip?
If not, how can we maximize the number of people we help at the lowest cost to everyone involved?
How can we control the quality of the event?

We wanted to make as many successful bets as possible, which brought us to a big milestone:

Ran Our First Training Class

When I attended conferences as an employee, I thought to myself, “I really need a guided list of sessions that I should attend. I only want to attend the best stuff for people like me.” I didn’t want to sift through a bunch of really crappy unrelated sessions. I didn’t want to wonder who the good speakers were and who was going to just read off their slides. I wanted a clear progression of sessions that built upon each other and taught me real-world useful stuff. I wanted a summary module that drove it all home, connected the dots, and told me what to do when I got back to the office.

Except I didn’t know I wanted all that until Jeremiah, Kendra, and I sat down and talked about what sucked about conferences, and how we could build something different.

Kendra teaching in Atlanta

We started with a 2-day developer training class in Atlanta in spring 2013. We were already used to doing 1-day pre-conference sessions at major conferences, and we figured a 2-day class was the next logical step up.

At the time, it felt like a huuuuge risk. We were committed to running the class even if just a couple of attendees showed up. We had to shell out tens of thousands of dollars for travel, hotel, banquet room fees, and advertising. We blocked out weeks on our calendar to build, test, and rehearse the class material.

Sure, our training-class-at-sea SQLcruise idea had panned out, but similar efforts from other community members didn’t catch on. What if the cruise thing was just luck? And sure, my online training sales were going fairly well – I was running live virtualization and tuning classes at $200-$300/pop with pretty good turnout, but many of those sales were international attendees. Would people actually fly to a class in Atlanta?

Thankfully, it worked out – around 30 people went for it, and the event finished out our year 2 with a success. At least one of our bets paid off.

What I Expected for Year Three

Looking at my calendar and my to-dos as of April 2013, one thing was looming large: training.

Our in-person training at conferences was getting rave reviews. Companies were paying us to bring the training onsite, and companies were willing to fly their employees to a training event in Atlanta. We needed to continue to ramp this up in year three.

Our remote video training was successful too, but was a total nightmare to operate. It involved a hacked-up combination of EventBrite, WebEx, and a WordPress plugin. We wanted to scale this up too, but it had to be higher quality for both the attendee and the organizer.

What I (Not We) Screwed Up in Year Two

In retrospect, there’s one thing I did a really, really crappy job on: accounting. Sure, we had an accounting firm managing the books, and they were all in order, but we weren’t paying much attention to the details. We just kept an eye on the bank balance and made sure it kept going gradually up.

At one point in a partner discussion, I sat bolt upright and realized I had spent the first part of my career closely reviewing budgeting and P&Ls for someone else’s hotels, and I had simply not even glanced at that stuff for our very own business. Hello. What a total lapse of judgment. I couldn’t even begin to tell you how much money we’d spent on a particular conference, what our overall profit rate was on training or consulting, or whether our first employee was profitable. I was a data guy, for crying out loud, and I didn’t even have my finger on the most basic statistics of our business.

I say I screwed this one up because this is something I know how to do, and I’ve done before throughout my career. I know better, and I should have done better. As a company, we made pretty good decisions on when to make additional bets and when to stop putting money down, but we could have been much more informed when we made those bets. That’s my fault, and it’s something I still struggle with today.

Making Decisions About Time Allocation

It’s tough as a founder because I’ve only got so many hours in the day.

At a Jaguar social media event with Erika

Right now, for example, it’s 9:45AM on Saturday morning. I spent about an hour this morning going through emails and putting some infrastructure in place for our 2015 training classes, and then I spent an hour and a half writing this post.

Should I have been reviewing the P&L instead, looking at how our employee profitability is going, and projecting the date when we can hire employee #3? Should I have finished the expense reports for my recent SQLSaturday Lisbon and SQLintersection Orlando trip? Or should I just surf Reddit? I know I’ve only got about another 12 minutes before Erika wakes up, and from that point on, the rest of our Saturday will be spent together. (To be a good partner, I try not to work on weekends when she’s awake.)

I chose to put the time into this post because writing and sharing rejuvenates me. A long time ago, Tom LaRock told me something that really stuck with me: if you want to stay motivated, you’ve gotta spend your true spare time doing the things that energize you, and avoid doing things that drain you. It’s all a tricky balance of doing enough fun stuff to keep you motivated to do the hard work that pays off later.

In year two, time allocation was probably my toughest challenge. Erika and I made a deal that I’d travel no more than one week per month. My quality of life went up after that, I think, and it forced me to think more about video sales and passive income. As much as I love travel and speaking, I had to cut back in order to keep making progress on all of my Epic Life Quest goals and not just focus on a single area.

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Consulting: Startup or Lifestyle Business?

April 15, 2014

Blog Posts

In the startup world, these two terms mean very different things.

A startup is a company designed for growth. It has to scale far beyond the founders’ skills and time – and that means rapidly taking on additional staff and risk. Startup founders live a compromise: they work their tails off night and day, trying to deliver value as quickly as possible, with the end goal of selling their company. To deliver on everything, they have to hire staff quickly too, and the founders ask their staff to hustle just as hard.

A lifestyle business helps the founders live a particular lifestyle with a base level of income. This business is all about compromise too – its founders aren’t going to build something that sells out to Facebook for a billion Bitcoins. They have to keep working in order to keep the lifestyle going.

Corporate Retreat 2014

These two businesses have different levels of:

Income
Work hours
Family time
Travel
Stress
Fame
Debt
Risk

When you decide to quit your day job and become a consultant, make a conscious decision about which type of business you want to build, and what kind of founder you want to be.

That one initial decision helps guide the rest.

Neither decision is wrong – they both work – but this isn’t a mark-all-that-apply question.

Why Hybrids Rarely Work

You could theoretically start a lifestyle business, work at it a long time, and eventually build up enough value that it can be sold without you staying involved.

But if other folks see you being successful at your lifestyle business, they’re going to start up similar businesses to solve the same problem. Rather than building a lifestyle business, though, they’re going to build startups. They’ll put the gas pedal to the floor, burn the midnight oil, and ramp up their business value as fast as possible. They’ll be the ones who get acquired, and then they’ll have the resources to build an even larger base.

You could also theoretically start a startup, and then eventually coast down into a lifestyle business. That rarely works because startups require such aggressive risk and debt – it’s hard to coast them into a relaxed cruising speed.

My Own Career Choices

I’ve done the small startup employee thing. I remember the excitement of funding coming in, moving up to nicer offices, and acquiring other companies. I also remember my startup employer skipping a paycheck at the exact time I was trying to buy a house. I remember the incredible stress of walking into the mortgage company’s offices with my prior 3 paychecks and playing dumb, pretending I just hadn’t received the paper copy of this week’s, and hoping like hell they didn’t ask for one.

Later, when I worked at Quest Software, I saw life at a much larger quasi-startup. I still got to be around a lot of startup employees – but it was because we acquired them, hahaha. Those small startup founders made good money, but, well, at the end of the day, they were right back at a big company, sitting through meetings, working long hours. They’d sacrificed some of the best years of their lives, and I wasn’t sure the returns made sense.

This time around, when Jeremiah, Kendra, and I wrote a big manifesto about Brent Ozar Unlimited‘s company’s goals, we focused on lifestyles. We wanted to be financially comfortable enough, but we didn’t want to sacrifice our family lives to get there.

How Our Decision Drives Our Consulting Company

That decision drives how we hire employees. We don’t grow aggressively – we want to be able to cover months and months of salaries even if the economy hits another bump. That means even though we get lots of calls for consulting help, we don’t hire willy-nilly. We aimed for growing by one employee a year for the first few years.

That decision drives how we treat employees. We know we could sell a DBA-on-call product and instantly boost our bottom line, but it would come at the expense of our employees’ home lives. (Well, that and we’d probably have to hire different employees, and probably even different founders, because none of us are fond of pager duty.)

That decision drives – heck, it even drives what we drive. I’ve got a 6-year-old car that I’m quite content with. Sure, I drool over the new Porsche 911 Targa – what an incredibly trick folding roof – but I’d rather relax this week at a conference in Orlando and catch up with friends.

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What Kind of Consulting Company Would You Build?

September 24, 2013

Blog Posts

Companies are like Dungeons and Dragons characters. While it’d be awesome roll perfect 18s for all of your attributes, but the reality is that you’re not going to be strong AND wise AND charismatic.

You’re going to have to make some tough decisions. You’ve only got so many hours in the day, and only so much resources at your disposal.

What’s your product? When I first got started consulting, I thought the product was just me, full stop. I’m here – I’m a smart fella – what do you need done? That doesn’t scale well, though – it’s hard to describe yourself to new customers over and over, and it’s hard to know when a product is “done.” Businesses like finish lines and milestones because they don’t like to pay until after they cross one.

What pains does your product solve? People buy things to make pains go away. For example, someone might be struggling to make a query go fast, and their business users are beating them about the head. They want the pain to stop as quickly as possible. This helps define the product – your product starts when they hand you the query, and stops when the query runs X% faster, and the business users raise their hands in joy.

Who’s signing on the dotted line? The more you know your customer, the more specific you can get with their pain points. “A manager” or “a developer” isn’t going to cut it. One of my customer profiles is a software vendor that uses SQL Server as a repository. I can tell you all about ISV developer architects – what pains they face, what business pressures they’re under, what their developers are complaining about, you name it. When one of them calls me, the deal is done by the end of the call because I know them so well already. However, there’s not a lot of them, which leads to the next question.

How many do you need to sell to break even? In consulting, I consider “breaking even” to be making the same as you’d make as a full time employee somewhere. Do you need to sign one client per week, per month, or per quarter?

Is your product small or large? When someone signs on the dotted line, is the average bill $50, $500, $5k, $50k, or $500k? For any given transaction, there’s a certain amount of bookkeeping overhead, so small products absolutely require automation. You can’t deal with manual contracts, invoices, and payments at the $50-$500 level. As the transactions get larger, people expect more personal hand-holding, and the sales cycle also gets longer. $50-$500 purchases are impulse buys, but $50k-$500k purchases require multiple in-person meetings leading up to the sale, and they’re not going to be billable.

How are you going to get people to contact you? Whether you’re dealing with a lot of small product sales or one big sale per quarter, you’re going to need leads. This is by far the toughest thing in independent consulting.

In the beginning, you can reach out to your network – everyone you’ve ever worked for or with – and drum up enough business to pay the rent. (If you can’t name at least five people in your network who would hire you as a consultant, then independent consulting isn’t for you.)

While you’re working with them on projects, though, you have to be generating leads for your next round of gigs. This is where blogging, presenting, and marketing come in. You can subcontract that stuff out, but you can never ever stop.

Well, rather, you CAN stop marketing yourself, and you’ll be okay short term – but you’ll be screwed in a year, and you’ll be right back to taking a full time employment gig with a company.

There’s absolutely nothing wrong with being a full time employee. Every day, Jeremiah, Kendra, and I put in a ton of unpaid hours, juggling a bunch of balls in the air, trying to keep the business flying along. If we juggle hard enough, we’ll do well financially later – but there’s a ton of risk, and there’s no guarantees.

If you don’t like this kind of juggling, find the kind of company that will let you stay technical, and keep doing the things you love. We see that as the biggest service we can provide our employees – I don’t ever want Jes to have to deal with closing a sale or negotiating a customer contract. We want her to be able to show up, slap her hands together, and say, “Alright, where’s this boisterous SQL Server?” And then when her day is done, we want her to close the computer down, walk away, and not answer emails or worry about anything until the next morning.

We know we make less money doing that. We’d make more if we worked our employees like horses, whipping them on faster and faster to bill more hours. That’s a conscious decision we made while building the company, and it’s what keeps us excited. We’ll keep playing with the other business knobs, but we won’t touch the one marked “Employee Hours Per Week.” There’s too many other fun variables to play with.

Oh, and by the way – we’re hiring again.

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Brent Ozar Unlimited

I use Dr. Walling’s framework for decisions like this.

I used Tim Ferriss’s priorities to figure out where to cut back.

So is consulting bad, or am I bad?

Time to edit and re-focus for 2019.

We hit the gas – and nothing happened.

So in July, it was time to hit the brakes.

I re-calculated my personal & business goals.

The business turned around in fall 2016 and I could invest again.

First, Richie built PasteThePlan.

Next, he started work on SQL ConstantCare®.

Year 6 was a big turning point for me personally.

My cofounders and I were all ready to try something new.

But that company name made things awkward.

So in fall 2015, the company bought out Jeremiah and Kendra.

The first six months were really hard on me.

“Wait – why hire Richie if you didn’t want to build software?”

By the end of year five, I thought could breathe again.

How we got there: steadily building training

Steadily building a tolerance for risk, too

Training powered the company buyouts.

My personal blog went very anti-PASS.

Employee #1 left for greener pastures.

When you only have two employees, losing one of them is hard.

We also finally hired a salesperson.

Our training class inventory kept growing.

We tried a lot of fun experiments.

Was year four successful?

It’s time to recalculate goals for years 6-10.

How do consulting companies hit a million dollars of revenue?

When last we met

To make long term investments, I had to change my own consulting.

I still made time for blogging.

I had to let go of some clients.

We expanded the consulting by hiring Doug Lane.

We focused the consulting big time.

We designed our training offerings.

The training gamble paid off.

What I (not we) screwed up in year three

Was year three successful?

When Last We Met

The New Web Site: Amazing.

The Legal Stuff: Covering Our Butts

The Web Site Made Sales Way Easier

Became an Amazon Web Services Partner

Other Year Two Bets

Refocused My Speaking Efforts

Ran Our First Training Class

What I Expected for Year Three

What I (Not We) Screwed Up in Year Two

Making Decisions About Time Allocation

Why Hybrids Rarely Work

My Own Career Choices

How Our Decision Drives Our Consulting Company

We hit the gas –
and nothing happened.

The business turned around in fall 2016
and I could invest again.