I've been through some pretty brutal experiences recently with venture capitalists and I'm looking into ways I can start a company without VC money.
Has anyone out there used consulting to bootstrap their company? What are some of the pitfalls that I can avoid?
I think vast number of entrepreneurs are doing that, including my own company.
I think the biggest pitfall is the being stuck in consultation hell, get comfortable and forget that building great products to generate recurring revenue is the way out.
Not spending enough time on the product because the billable hours are paying the bills.
Clients have different expectations when they are paying you by the hour/project than when they are buying your software. You'll have to say no a lot more when selling software.
Providing support to clients with different hardware, software, levels of ability, and time zone differences. Selling B2B may not be as much of a problem.
Focusing on too many markets/industries. In consulting you can rely on the client providing more of the business/domain knowledge and usually they're more willing offer it.
Focus your consulting in the same niche as your end product -- then the two worlds will cross-pollinate, you'll be making the right connections with your consulting, etc.
If you have a product idea to start and you know that is the end goal, then you are a lot better off than someone who starts consulting with the general premise of starting some recurring income type products later.
Personally making a business out of consulting sounds somewhat deadly and not much better than having a day job, though I know some people love that kind of work.
That's what I'm doing now - I've found it helps me to prioritize tasks and time.