Becoming an independent consultant
February, 2022 · 5 min read
As 2021 approached, I experienced burnout for the first time in my 10-year career. Working for a startup, the expectations we set on ourselves had spiraled out of control.
After handing in my notice, I felt lost. What should I do next? Being a frequent reader of Y Combinator, I dipped my toe into the world of SaaS. Creating a successful product is an alluring thought. But like others, I soon realized that coding is a mere fraction of what leads to success.
An ambition of mine has been to excel at software development. Compare making a great, successful product to excelling as a developer, and it’s clear the latter is less unrealistic and involves more work aligning with my interests.
With 2022 well underway, I’m eager to get back on the treadmill. This time, I’m planning on becoming a consultant. In some sense, I’m still creating a product. Except this one doesn’t float on a cloud.
But why do some people become consultants in Sweden? Is there a distinction between freelancing, contracting, and consulting? Caveats and pitfalls? Finally, where do I see myself in all of this?
Consulting is lucrative in Sweden
Having a regular job comes with a ton of benefits. There’s stability and, besides giving your employer your bank details, not much else you need to track. At worst, you’ll have to log your hours using something resembling a college project from a decade ago.
As an independent consultant, you trade off stability. Someone can fire you in the blink of an eye. Survive a bus hitting you, and you won’t have colleagues covering for you as you recuperate.
But you can earn much more. You’re paid more for every hour’s work and pay less tax by essentially splitting your income in two:
- the usual monthly salary
- a yearly dividend
Income in the top bracket has a marginal tax rate of ~70%, which senior developers will hit. Dividends, however, are only taxed at 20% (below a threshold). So you give yourself a comparatively low salary and make up the difference and more through dividends. Invest excess money and save some for rainy days.
Sounds too good to be true, right? Let’s explore some caveats.
Freelancing, contracting, and consulting. Is there a difference?
Like in programming, certain words are often used interchangeably and have overlap. Where the terms generally differ has to do with factors such as project size and length. Is a deadline set? Do you decide your schedule, and can work be done at your own office? Do you have multiple clients simultaneously, and is there an agency involved?
A freelancer could help a small business owner launch a new website. The assignment is non-recurrent and irregular for the business owner, while the freelancer completes it wherever they want.
Contractors and consultants in Sweden typically work as embedded team members. But there’s a subtle yet significant difference between a contractor and a consultant.
Two categories of work
When you boil it down, companies hire you for two reasons: either to do work that someone doesn’t want to do or to do work that someone can’t. From these two categories, it’s easy to tell the type of work you’ll be doing and how you’ll be treated depending on where you land.
A company might have codebases that its developers don’t want to touch for one reason or another. So they get contractors to maintain them, reducing employee attrition. A studio might have a new game blow up overnight. They then fly in consultants to solve scaling issues both near-term and long-term.
Contractors build according to specifications. They maintain systems and augment existing staff. Consultants tend to design and work on objectives.
How do we avoid getting into category 1?
Pitfall: becoming independent too early
Early in your career, you offer little in doing work that someone can’t. If you do, the place you’re working at lacks depth.
If you end up in the first category, you’ll be drowning in mindless work. You couldn’t care less about the product. The client is shorthanded because they don’t value people and foster a toxic environment. Oh, and their software is a mess too.
On the other hand, if you end up in the second category, you’ll lack challenging problems to tackle and seniors to work alongside.
The main point is that you want to expose yourself to environments that maximize growth, not stifle it. And in category 1, you’ll end up disillusioned in a few years and proclaim that everything is wrong with the industry.
As employers can fire you on a whim, you have to perform.
Anyone who’s worked long enough has seen a broad spectrum of developers. Some provide tremendous value to the organizations that pick them up, while others can’t cobble up a basic CRUD if their life depended on it. Now, I’m not a career expert, but you should probably not go independent if you’re the latter.
Because you’re easy to let go of, the interview process is much shorter, making first impressions matter more. You have less time to convince others that you’re sane, have relevant skills, can communicate, and are pleasant to be around.
Where do I see myself?
I’ve got some experience under my belt now and have managed to reach a senior level in my last two employments.
On the plus side, I’ve worked for three years at Paradox Interactive. It’s a well-known gaming company, meaning many developers and hiring managers will recognize it. On the negative side, my latest employer is relatively unknown as they provide a closed platform to enterprises.
Categorizing the domains I’ve worked in, I started with e-commerce and ventured into single-page applications, desktop applications, and rich text editors. My last job involved a broad role, with the domain addition of SSO. The lack of a common thread can be both a plus and a minus.
An advantage is that I’ve got a sizeable amount of original code (not libraries glued together) on GitHub. While I don’t expect anyone from a large organization to look at it, someone at a small company might. Every new hire matters more at that stage, so they’ll hopefully devote more time screening people.
How should I stand out to do category 2 work?
Currently, my strength lies in having a broad skill set. I can do backend work, set up continuous integration, and not feel lost staring at the AWS console. I can do frontend work and create an acceptable user interface. I communicate well with developers and non-technical stakeholders and involve others in designs. I can do these things, but certainly not at the same level as someone dedicated in one area.
Down the line, however, I do wonder whether I’ll need to specialize more. The deliberation is probably pointless right now, and it’s best to evaluate as I go along.
Detailed, practical guides about pursuing the independent path: