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Consulting: 18 things nobody tells you about solo practice

January/February 2014

business analytics news and articles

Doug SamuelsonBy Doug Samuelson

So you’ve decided to break free of whatever organization you worked for and go out on your own as an analytics guru, have you? Solo practice does have its attractions. You’ll have a boss you can always reason with. You get to set your own hours, rates and expectations. Freedom! But there are a few things you had better keep in mind.

1. Everything is your responsibility. Paying the bills, writing thank-you notes and holiday cards, marketing, sales, doing the taxes, even cleaning the toilet – it’s all yours! You see to it or it won’t get done. This means:

2. Your time and attention are your most critical and scarce resources. Manage them accordingly. Lots of people will want to talk to you, usually about what they want, not what you want. Be polite and approachable, but learn to say “no,” preferably gently, but firmly when necessary. You’ll have to say “no” a lot. And, to make this aspect of your life more difficult:

3. Hordes of people have something to tell you. Ralph Waldo Emerson famously wrote, “If you build a better mousetrap, the world will beat a path to your door.” True enough, but since he hadn’t tried it himself, Emerson did not realize who those path-beaters were. Maybe a few want to buy your mousetraps, but many more want to sell you something they claim you need, or instruct you on moral and legal obligations you may or may not have as a business owner. Or they just want to tell you a story that means more to them than to you. They know someone who tried what you’re doing and succeeded . . . or failed, or got indicted, or developed a drinking problem. Again, you’ll have to say “no” a lot. Sometimes you’ll need to say it immediately after the other person’s “hello.” Or, in some extreme cases, even earlier. So …

4. Take all the good advice you can get, but remember that no one knows your business better than you do. A baseball player knows he’s in a slump when cab drivers who couldn’t make their high school team are giving him hitting tips. He knows he’s in a bad slump when he starts listening to those tips. The most useful information comes from people who have done something very similar to what you’re trying to do. Remember:

5. Sometimes a little arrogance is a good thing. If other people could do what you do as well as you can, they’d be doing it, wouldn’t they? But openly displaying arrogance turns people off. What you want is quiet confidence: I’ve done things like this before; I can do this, too. I know you want what I can give you. This attitude is the sure cure for writer’s block and speaker’s terror, too. Speak quietly and modestly, but walk with assurance. But also remember:

6. You still need to please other people. You can usually disengage from a client with less difficulty and cost than you’d incur in leaving an employer, and you get more of a choice of teammates, but you still have to do things you don’t like in order to keep clients and colleagues happy. And …

7. You still need to depend on other people. You’re free, free, free, but all those things you are responsible for and don’t want to do have to be delegated to other people. You’re not going to be good at everything, nor are you going to have the time and energy to do all the things you’re good at. And you’ll still need people to critique your drafts, help you debug computer code, fill in gaps in your expertise, introduce you to new clients and prospects – and so on and so on.

As you become more senior, you’ll want to hire other people to do more and more things you do well. You may still be better at it, but your time is becoming more valuable. It’s advantageous to pay someone who can do it half as well as you at one-third the price. And your price is the opportunity cost, that is, the value of whatever you could be doing instead. Both in the marketplace and internally, you should be spending an ever-increasing proportion of your time doing things no one else can do –- and for which, therefore, a high price is justified.

Of course you have to keep selling to stay in business, and you need to focus on selling what you want to do and profit from. So keep in mind:

8. Your expertise isn’t the most important thing you’re selling. Your most critical asset is trustworthiness. This includes being right when you offer a technical solution or suggestion, but your client won’t even receive and process your technical input – in fact, probably won’t even engage you – until you’ve established that you know the client’s language, understand the client’s problem and point of view, and care about meeting the client’s needs. Perhaps you’ve been trained that you have an obligation to give the client your best technical solution. Wrong! You have an obligation to give the client the best solution they can and will implement. Among other things, this means that every single decision variable in a model of a system has to be something the client can control, and every single data element your model uses has to be available to the client at the time a decision is to be made. Also keep in mind:

9. Most senior executives are not nearly as knowledgeable or as confident as they appear. Management is mostly quick decisions with incomplete information under intense scrutiny, where the first slip can be a career-breaker. Managers above the first-line supervisors generally have little or no contact with where and how tasks are actually done. They know they can’t rescue bad situations by themselves. They value people they can trust and depend on who know certain subject areas better than they do. On the other hand, if untrustworthy people seem to know something the manager doesn’t, the manager may perceive them as threats rather than assets.

Most companies aren’t as badly managed as they appear. They’re worse – the managers know more than you do about where they messed up. But they have survived – respect that! The key is to avoid messing up on the relatively few requirements for which failure can totally kill your company quickly. For example, don’t let your phones get cut off, make timely tax payments and don’t issue bouncing paychecks. And understand that executives you serve have had to “triage” what they have to handle, too. Help them with one of their few key requirements and they’ll keep coming to you for more help.

A closely related point:

10. Don’t assume the clients really know what they want. Even if what you were to deliver was specified in excruciating detail, you can’t assume they’ll love it when they see it. You have to deliver partial answers (prototypes, preliminary analyses, simplified models) early and often, and engage the client throughout the process in refining the statement of objectives. Deliver multiple prototypes and let the client choose which to pursue further – you keep the client committed to the development process, and you elicit what their real priorities are.

I’ve done a number of software development projects for a firm fixed price, under a contract that comprised three tasks: Task one, it’s ugly and balky and frustrating, but if you can manage to get a full set of test data in, the output indicates that the computations are being done correctly. Task two, the program fully meets specifications: output in formats specified in the task order, user-friendly, doesn’t break under intense challenge testing. Task three, I fix everything they didn’t like after it met spec. The three tasks are equally funded.

This contracting approach prevents the usual “requirements creep” and continuous wrangling over change orders. It has the added advantage of weeding out quite a few bad clients, as people will never sign a contract like this if they can’t acknowledge to their bosses that they can’t write a perfect spec.

Now, as you prepare to go selling, remember these three things:

11. In a successful sales call, the salesperson does about 5 percent of the talking. Listening to the customer is critical, and not just to learn what you could say next. Once I saw a super-salesman interviewed on the Tonight Show. Johnny Carson asked, “How would you sell me this coffee cup?” The salesman promptly responded, “Tell me all the things you could do with this cup.”

12. Humor can be a very good icebreaker. You have to have a good feel for what the other person thinks is funny, though. Humor with strangers is risky. That’s precisely why it’s so effective when you get it right. In any case, pay close attention to cues that let you know whether you’re breaking down barriers to trust. Remember you’re there to get them to believe you understand their problems and can solve them, not to entertain them or show them how smart you are. Techies often blow sales calls by talking too much about technical details.

The right way to show your capabilities without talking too much:

13. You have to keep replenishing your intellectual capital. If you concentrate exclusively on billable work, your skills will be obsolete within five years. Take courses. Participate in professional societies – especially your clients’ and prospects’ professional societies. Read. Listen. Write articles, do presentations and pay attention to the feedback. Find knowledgeable people and ask questions. Mentor others; their questions will stimulate you. Learn new methods, new application areas and new ideas, not just extensions of what you already know well.

And then how do you translate this knowledge into effective communication? Well …

14. Don’t always “be yourself.” This recommendation shocks people. Of course you shouldn’t pretend to be someone or something you’re not, right? Especially you shouldn’t claim expertise you don’t have. But consider how many former actors have succeeded in lines of work far removed from the stage. Acting teaches you to work out and feel how someone else would view the world, what they would do in a new situation, what they might mean by what they say. Wargaming helps you develop a set of skills highly similar to what you’d get from acting, as a role player or from directing, as a game designer or moderator. Maybe when you were in school you were advised, “If you want a B, learn the subject. If you want an A, learn all you can about the teacher.” Similarly, the most successful advisors focus on learning the client’s point of view, typically by some form of role-playing.

Speaking of others’ point of view, here are some important points about your friends, family and financial backers:

15. Most people don’t share your risk preferences. Entrepreneurs are, by definition and by nature, risk-takers. Most people aren’t. This can create serious conflicts. To cite one particularly important example, your spouse probably doesn’t share your willingness to take risks, especially if you deliberately chose a mate whose steady job brings stability to your joint finances. When you explained what you were planning to do, your spouse may have assented without really believing you’d actually do it. Keep communicating about what risks you’re taking and what your plans are in case things go badly. Understand that you may have to change some plans in order to provide needed assurances. The same is true of friends who could back you financially: If they have significantly more money and financial stability than you do, they may be reluctant to risk their money with you. To ameliorate this problem:

16. Borrow money before you need it. Whether you go to a bank, a venture capitalist, your friends or whoever, the best time to borrow is when you don’t really need money. If you wait until you desperately need money, you look like a bad risk. If you borrow some money, or establish a line of credit, and repay it, you help to convince lenders that you will pay as agreed next time. And if you need to ask for another loan before you’ve paid off the last one, you’re likely to see a previously generous lender turn more reticent than Ebenezer Scrooge. And similarly …

17. Talk to people when you don’t need their help. If you get a reputation of only calling when you want something, you’ll soon have trouble getting your calls answered. You’re already enforcing the same rule on people who call you, aren’t you? And finally …

18. Remember the (Colin) Powell Doctrine: don’t get into anything unless you know how you’d get out of it. This is nowhere more true than in a business. Do you want to keep it for life and pass it on to your kids? If so, do they want it? Do you want to get bought out? If so, do you want that buyout to include a good job with the buying company? (Not usually something that works out for more than a year. You didn’t like working for someone else’s company, remember? If you go this route, be prepared for getting quietly pushed out.) Do you want to go public and cash out? Do you want to make a certain amount of money and then quietly close down?

Your exit strategy dictates a lot of other decisions. For example, if you want to retire in 10 years and don’t care whether the business continues after that, growing rapidly and hiring a bunch of people will head you into trouble. If you plan to go public, high-quality record-keeping is essential. If you want to stay for life, don’t get an ambitious board that might decide you’re holding the company back from greater success.

If you have questions, I do happen to have some time available …

Good luck!

Douglas A. Samuelson (, D.Sc., is president and chief scientist of InfoLogix, Inc., a consulting and R&D company in Annandale, Va., and a contributing editor of OR/MS Today and Analytics. He has been a federal policy analyst, a high-tech inventor, entrepreneur and executive, a consultant and a researcher. He is a senior member of INFORMS.

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