Real talk from a technical founder building AI-powered businesses
Published October 28, 2025 • Based on Founder Reality Episode 36
Also available on: Apple Podcasts • Spotify • YouTube
I've been getting this question a lot since publishing "The Anti-Unicorn": "George, I've built a successful consulting business from my idea. When do I stop consulting and actually build a product?"
It's a good question. And after spending three years building consulting revenue while almost killing SimpleDirect twice in the process, I have some thoughts.
The $20,000 Debt That Changed Everything
Three years ago, SimpleDirect was dying. We had negative cash flow, $20,000 in business debt, and I was watching our SaaS dream crumble in real time.
We were charging contractors $29/month for financing tools, cold-calling from San Diego through our salesperson Steve, and getting hung up on constantly. Our MRR was stuck at $1,000-$1,200 - not even enough to pay Steve's salary. I was drawing personal money to keep him employed.
Then I tried something different. Instead of selling a $29/month SaaS product, I called a contractor and said: "Hey, we've got this direct mailing service specifically for customers like you. The regular price is $2,500, but I'll give you an early bird discount - $1,800 for the full service."
To my surprise, two customers signed on the spot. Two more signed that week.
That was $8,000/month in consulting revenue. In one week.
Within 90 days, we had made $45,000 total just from this consulting pivot. We could finally pay Steve. We could invest in growth. We had breathing room.
But here's the thing: I knew this wasn't the endgame.
The Basecamp Blueprint
Let me tell you about Basecamp - one of the best examples of the consulting-to-product transition done right.
Basecamp started as a web consulting company. They dealt with difficult clients, complex project management, and all the typical consulting headaches. So they built an internal project management tool to make their own work easier.
Eventually, they realized their internal tool was more valuable than their consulting services. Around 2004, they ditched consulting entirely and went all-in on SaaS.
Today, with just 60 employees, Basecamp makes $200 million annually from their product.
Compare that to KPMG: 128,000 employees, still selling time for money. There's no way KPMG could make $200 million consistently with just 60 people doing consulting.
That's the scaling difference between services and products.
Why Most Founders Get This Transition Wrong
Starting consulting is easy - you just start charging people for your expertise. The hard part is knowing when to stop.
Most founders make one of two mistakes:
Mistake 1: They transition too early They hit their first $10K month and immediately think "time to build the product!" Then they lose their revenue stream while trying to build something nobody wants.
Mistake 2: They never transition at all They get comfortable with consulting revenue and stay there forever, essentially building themselves a high-paying job instead of a scalable business.
I've made both mistakes with SimpleDirect. We went from SaaS to consulting (almost killed us), then from consulting back to SaaS (almost killed us again), and now we're pivoting to B2C.
Expensive lessons.
The Three-Stage Framework That Actually Works
After three years and millions in combined revenue across SimpleDirect and ANC, here's the framework I wish I'd had:
Stage 1: Consulting First (Months 1-12)
Goal: Prove market demand and generate cash flow
- Sell services, not products
- Charge premium prices ($1,800-$2,500+ per engagement)
- Focus on cash flow, not scaling
- Document everything you do for clients
This stage proves people will pay for solutions to the problem you want to solve. If you can't get consulting clients, you probably can't get product customers either.
Stage 2: Hybrid Model (Months 13-24)
Goal: Build product while maintaining revenue
- Keep some high-value consulting clients
- Start automating parts of your service
- Build frameworks and documentation
- Begin developing your SaaS product
- Pitch the product to existing consulting clients
This is where most founders screw up. They try to go from 100% consulting to 100% product overnight. Don't do that. The hybrid model gives you runway while you figure out product-market fit.
Stage 3: Product First (Months 25+)
Goal: Scale beyond your personal time
- Self-service product for most customers
- Consulting only for enterprise clients
- Product revenue consistently beats consulting revenue
- Now you're a product company that does some consulting, not the other way around
The key metric: when your product revenue consistently beats your consulting revenue, you've made the transition.
My Personal Numbers (And Why They Matter)
I live on $48,000 annually post-tax (about $63,000 pre-tax). That's $4,000/month. I live frugally, and this gives me incredible freedom.
Why does this matter? Because when you know your personal "enough" number, you can make strategic decisions instead of desperate ones.
With three years of consulting revenue, SimpleDirect and ANC combined now have 36-48 months of runway. That means I can take months without revenue and still be fine. I can experiment. I can say no to bad opportunities.
Consulting gave me the freedom to experiment with SimpleDirect without going broke.
When You Should Make the Jump
Here's my rule: Your consulting revenue should hit at least $100,000-$200,000 annually before you consider transitioning to pure product.
(This assumes North American clients and cost of living. Adjust accordingly if you're elsewhere.)
But honestly? The number matters less than the confidence. You need enough runway to survive the transition period, because building a product while maintaining consulting clients is hard.
The Question You Should Really Be Asking
Instead of "When should I stop consulting?", ask this: "When should I start building systems that let me do both?"
Life isn't a binary choice. I spent three years in consulting when my own playbook said two years was enough. But year three felt financially safer, so that's what I did.
The beautiful thing about consulting is that it funds your product experiments. The dangerous thing about products is that they can kill your cash flow while you figure them out.
Do both. Use consulting revenue to derisk product development.
What I'm Doing Now
I'm currently in month 36 of the consulting model, transitioning SimpleDirect to B2C while keeping ANC focused on consulting. It's not pretty, and it's not fast, but it's funded.
The honest truth? SimpleDirect never reached Stage 3 as a B2B SaaS. We made a strategic choice to pivot entirely to B2C. Why? Because I wasn't motivated by solving direct mailing problems for contractors. I'm 27, and I want to build a real product business.
But here's the key: I had the option to make that choice because consulting revenue gave me runway.
The Bottom Line
If you're building a SaaS and getting squeezed, try the consulting-first method. Sell services before you sell software.
If you're already consulting and thinking about products, don't jump too fast. Build systems, automate what you can, and transition gradually.
Either way, remember: consulting isn't a step backward. It's strategic patience that lets you build what people actually want instead of what you think they need.
The goal isn't to choose between consulting and products. The goal is to use consulting to fund the transition to products that actually work.
Want the full framework? Check out "The Anti-Unicorn: The Consulting Model" at founderreality.com - it's completely free and walks through exactly how to make this transition work.
Tweet me @TheGeorgePu with resources you want discussed in the next episode.
Get my free ebook "The Anti-Unicorn" at founderreality.com - the consulting-first approach to building in 2025.
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