When to Stop Consulting and Build a Product (Without Going Broke)

Everyone says "build product first."

I tried that. Spent months grinding on SimpleDirect as a SaaS. $29/month pricing. Cold calling contractors. Hired a salesperson named Steve who couldn't even make enough to cover his own salary. We were stuck at $1,000-1,200 MRR.

Then I tried consulting the same idea.

$45,000 in 90 days.

Four customers signed in the first week at $1,800-2,000/month each. That's $8,000 MRR from four deals—more than months of pure SaaS grinding.

Consulting-first isn't Plan B for bootstrap founders. It's the actual playbook.

But here's what nobody tells you: knowing when to stop consulting is harder than starting.

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The Problem Nobody Talks About

I've been doing consulting for three years now. Six figures annually across SimpleDirect and ANC. Cash flow is healthy. Runway is 36-48 months. Life is comfortable.

But I'm 27. And I can't see myself doing consulting in my 30s, 40s, 50s.

Because here's the truth about consulting:

You're selling your time for money.

Look at KPMG. 128,000 employees. They can't scale revenue without scaling people. Compare that to Basecamp—60 people, $200 million annual revenue. That's only possible because they're a product company, not a consulting firm.

When you sell consulting businesses, you get 2-5x multiples at best. And the business is always founder-attached. When you leave, it's worth pennies on the dollar.

SaaS businesses? Different story. Higher multiples. Less founder dependency. Actual scale.

So if you're a founder who started with consulting (or pivoted to it like I did), you eventually face this question:

When do I stop?

Why 75% of Founders Should Start With Consulting

Before I get into the transition framework, let's talk about why consulting-first works.

Harvard Business School estimated that over 75% of venture capital money goes to three cities: San Francisco, New York, Boston.

If you're not in those three cities, you're picking up scraps.

And here's the thing: the US itself is already a tiny slice of the global market. There are 6.7 billion people outside the US. What's the playbook for them?

Consulting first.

Here's what consulting gives you that building product first doesn't:

1. Immediate revenue - No 12-month runway burn before your first dollar
2. Paid validation - Customers pay you to figure out what they actually need
3. Real market insights - You're in the trenches, not guessing from a spreadsheet
4. Bootstrap-friendly - No VC required, no dilution, full control
5. Actual runway - Money in the bank to build product the right way later

When I switched SimpleDirect to direct mail consulting, we signed four customers in a week. That's $8,000/month vs the $1,000-1,200 MRR we were stuck at with SaaS.

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Same market. Same rough idea. Different business model.

The consulting model won by a mile.

The Two Paths Forward (Both Are Valid)

Once you're making six figures from consulting, you have a choice to make.

And here's the important part: there's no wrong answer.

Path 1: Stay in Consulting

Some founders find their game in consulting. The revenue is good. The lifestyle fits. The client base is diversified. Cash is accumulating.

If that's you? Keep doing it.

The downsides:

• You're selling time for money forever
• Lower exit multiples (2-5x)
• Founder-attached (business dies when you leave)
• Hard to scale past a certain point

But if you're fine with those trade-offs, consulting can be a great business. There are plenty of successful examples of founders who built empires purely through consulting.

Path 2: Transition to Product

This is the path I'm taking.

Not because consulting is bad. But because I value freedom over everything else. And at 27, I can't see myself doing high-touch client work in my 50s.

I want to build something that compounds. Something that scales without me. Something that gives me true optionality.

That means product.

The 3-Stage Transition Framework

Here's how to go from consulting to product without killing your revenue or going broke.

Stage 1: Pure Services (Months 1-12)

This is the learning phase.

What you're doing:

• Everything is manual and high-touch
• You're getting paid to learn
• You're validating what customers actually need
• You're building cash reserves

SimpleDirect example: We went from struggling at $1K MRR as SaaS to $45K in 90 days as consulting. Those 90 days taught us more about the market than 12 months of building product in isolation.

Key principle: This is your school. Don't rush it.

You need at least 12 months of this to really understand the problem space. To see patterns. To build frameworks. To know what's worth productizing.

Revenue target before moving on: $100K-200K annual consulting revenue

(If you're outside North America and serving US/Canadian clients, adjust this number for your cost of living.)

Stage 2: Hybrid Mode (Months 13-24)

This is where most founders mess up.

They think it's binary: consulting OR product.

It's not.

What you're doing:

• Automate the repetitive parts of consulting
• Use saved time to start building product
• Keep taking consulting clients (but fewer)
• Drop revenue slowly and intentionally

The math:

• Month 13: $500K annual run rate → start automating
• Month 15: $450K → more automation, start building
• Month 18: $400K → product taking shape
• Month 24: Plateau at $300K (20 hours/week consulting, 20 hours/week building)

Critical insight: You're not quitting consulting. You're using consulting cash flow to fund product development.

Your consulting revenue drops, but so do your costs. You're building frameworks, documentation, and systems that let you deliver consulting with less time. That saved time goes into product.

What you're building:

• Start with your own internal tools
• Automate the boring, repetitive stuff you do for clients
• Document your processes into frameworks
• Create content around your methodologies

Some clients will start using your early product. Others will still want you personally. That's fine. You're transitioning, not flipping a switch overnight.

Key principle: When your product revenue consistently beats your consulting revenue, you're ready for Stage 3.

Stage 3: Product-First (Month 25+)

Now you're a product company that does some consulting on the side.

What you're doing:

• Real self-serve SaaS product
• Consulting only for enterprise deals
• Building for actual scale
• Revenue is 2-5x higher than pure consulting

The shift: You're no longer a consultant who built a tool. You're a product company that offers premium implementation services for large customers.

This is how most successful SaaS companies actually work. They have self-serve products for SMBs, and high-touch consulting for enterprise. Both revenue streams. Product-led, consulting-augmented.

SimpleDirect example: We're currently in Stage 2. For the past three years, we've worked closely with founders and businesses. We've learned what engineering students struggle with (validation, not building). We're now building products that solve those problems at scale.

We're not there yet. But consulting gave us the runway—36 to 48 months of cash—to build products the right way.

When to Make the Transition (The Real Numbers)

Here's my personal framework:

Don't even think about transitioning until:

• $100K-200K annual consulting revenue (minimum)
• 12+ months of runway in the bank
• Clear patterns in what customers need
• Validated demand (people are asking for the product)

Start transitioning when:

• You're financially secure enough to drop revenue
• You've automated the repetitive parts of consulting
• You have frameworks worth productizing
• You're confident in the market

Fully commit when:

• Product revenue > consulting revenue (consistently)
• Self-serve model is working
• You can't serve demand with consulting alone

My Personal Timeline (Honest Assessment)

I'm currently in Year 3 of consulting.

In my original playbook, I said two years of consulting is enough. Then start transitioning.

But I stayed in consulting for a third year. Why? Because I wanted more financial security before making the move.

And that's completely fine.

SimpleDirect: We're winding down consulting, building content, developing self-serve products. Slowly transitioning from $500K consulting to product-first model.

ANC: Staying in consulting. This is my stable revenue stream while SimpleDirect pivots to product.

Having both companies lets me experiment. ANC funds SimpleDirect's transition. If SimpleDirect fails, ANC keeps the lights on.

That's the beauty of consulting-first. It bought me options.

The Mistake I Almost Made

Here's what I got wrong early on:

I thought consulting was a failure. That "real" founders build products first. That consulting was admitting defeat.

That's Silicon Valley talking.

In reality, consulting gave me:

• $45K in 90 days (vs $1K MRR struggle)
• Deep market knowledge I couldn't get any other way
• Cash reserves to build products without VC
• Time to figure out what's actually worth building
• Freedom to experiment without going broke

The only mistake would have been staying in pure consulting forever when I wanted to build products.

But transitioning at Month 6? Also a mistake. I wasn't ready. I didn't have enough runway. I didn't understand the market deeply enough.

Year 3 is my sweet spot. For you, it might be Year 2. Or Year 4. There's no universal timeline.

The signal is this: When you have enough runway to survive 12-24 months of lower revenue while you build, you're ready.

Action Items (What to Do Next)

If you're struggling with pure SaaS right now:

1. Can you offer the same thing as consulting?
2. What would that look like at $1,500-3,000/month per client?
3. Who are 10 potential customers you could call this week?

If you're in Stage 1 (pure consulting):

1. Hit $100K-200K annual revenue first
2. Document everything you do (build frameworks)
3. Look for patterns in what customers repeatedly ask for
4. Build 12+ months of runway

If you're in Stage 2 (hybrid):

1. Automate one repetitive consulting task this month
2. Use saved time to build one piece of product
3. Test product with existing consulting clients
4. Track: when does product revenue > consulting revenue?

If you're in Stage 3 (product-first):

1. Keep enterprise consulting as premium tier
2. Build self-serve for everyone else
3. Scale what's working
4. Don't look back

Final Thoughts

Consulting-first isn't a compromise.

It's the bootstrap founder's competitive advantage.

You get paid to learn. You build runway. You validate before building. You maintain control.

But consulting isn't the end game (unless you want it to be).

The real skill is knowing when to transition. Not too early (you'll run out of money). Not too late (you'll get comfortable and stuck).

For me, Year 3 was the right time. I have runway. I have frameworks. I have validation. Now I'm building products that scale.

Your timeline might be different. And that's fine.

Just make sure you're making the decision intentionally. Not because you're scared to transition. Not because Silicon Valley says you should build product first.

Make the decision that gives you freedom. That's what matters.

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