Had we launched a startup and a consulting business at the same time in 2006 or 2007, we may have taken a lot more criticism than we did.  But even in the middle of 2008 — before the stock market crashed and many people realized that the salad days were over — I heard a lot of good things about the model.  The "capital efficient" startup model was just starting to take hold and most people thought that we could effectively balance the needs of both businesses.  I mean, it's better than starving right?

It has worked a little better than I originally expected.  Here are a few points about our experience that we've learned over the last 18 months or so:

• Focus is great and perfect for an ideal situation where you are adequately funded and you know exactly what you're building.  Kudos to folks who have that luxury.
• Focus, however, may work against you if your team members need a dynamic work environment.  Our team works best in bursts of 2-3 weeks at a time.  If we worked on one thing all the time, we would be less productive.  I have seen us work hard on something for say a month at a time, and we tend to slow down towards the end.  We get stuck on things that we can't quite solve.  Variety helps us.
• So we aim to have a few software projects and a few consulting arrangements both at the same time.  It turns our startup into a cross-disciplinary group that takes lessons from one project and applies them to the others.  It's helpful far more often than you'd think — and as a result, we have both better products and we provide better services to clients on the consulting side.

At some point in the not terribly distant future, we will have to focus our energy more directly.  The two businesses will likely divorce one another as the stakes get higher with world-class customers and possibly investors.  But I don't think I'd start a company any other way if I had to do it all over again.  Focus is great if you can afford it, but the serenditpity you get from doing a few things well pays off tremendously.