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From Suits & Ties to Shorts & Flip-Flops (part 2)

How 2 Years in Consulting Both Helped and Hindered My Startup Adventure

in Startups · 4 minutes read

In response to a request from my good friend Khaled Kteily over at the Management Consultants Network, I am writing about the impact my consulting background has had on my startup endeavours. This is the second post in a two-part write-up. Here, I focus on the disadvantages of moving from consulting to startups.

 

Now that I’ve mentioned the benefits of moving from consulting to startups, it’s time to talk about the flip side, how consulting made things more difficult.

How Consulting Hindered My Startup Progress

A Large Company Once Said: Just do it!

consulting to startupsA common criticism of consulting is that it’s all strategy and no implementation. Consultants come in, analyze from 10,000 feet above, hand over slides with recommendations, and move on. This isn’t entirely true, but when I compare the work of a consultant to that of an entrepreneur, this exaggeration helps highlight how different the roles of each are.

My experience in consulting has taught me to be very meticulous and thorough when evaluating decisions—sometimes to a fault. On several occasions, I catch myself over-analyzing to the point of paralysis. This can prove to be a dangerous habit in the startup world.

The cost of an error in early stage companies is low. The underlying reason is that small size and nimbleness allows for quick detection of errors and rapid course-correction where needed. Hence, in a startup, I am better off quickly executing on decisions rather than cautiously over analyzing and vetting them. The insights I gain from evaluating actual outcomes are significantly greater than those gained from evaluating hypothetical scenarios. Often times, the best and only way forward is to just get your hands dirty.

Today, I make a special effort to overcome the urge to overthink my decisions, and try to cultivate a bias for action.

The Apples and Oranges of CEO Concerns

consulting to startups
Here’s a shocking revelation: the concerns of a Fortune 500 CEO have little in common with those of a two-person startup. Where the former will worry about how to improve the bottom line by a couple of percentage points, the latter will struggle to get a single customer in the door.

The intuition I developed about what is top of mind for a consulting client is simply not very useful to me as the founder of a startup. A lot of the challenges I had to solve in my previous job aren’t even considered in this one. For example, consulting required a lot of planning, continuous vetting of the content by various stakeholders, almost artful navigation of established bureaucracy, etc.

Startups, in contrast, are astonishingly simple. The only stakeholders I need to worry about are the handful of people I can proudly call customers—if any. I find that thought liberating. My mind is significantly less cluttered, and I now have more time and attention to dedicate to core challenges.

Becoming Averse to Risk Aversion

consulting to startups
Progress is slow in large corporations. Proposed changes have to go through several levels of approval, and even then the roll-out is cautious and tepid. A large corporation can’t afford to take big risks often. That culture in turn defines the consultant’s work.

Expectations were clear: deliverables had to be polished with little room for error. This unfortunately leads to a lot of internal iterations prior to presentation. And sometimes—frustratingly—a week’s worth of work would be thrown out because the client simply wasn’t interested, and we—the consulting team—didn’t bother to vet the work before polishing it.

As mentioned earlier, the cost of a mistake in a startup is much lower. The better course of action then is to try, fail, repeat, until you hit the right stride. It’s a numbers game after all. The more potential solutions you try, the higher the likelihood you are of finding a suitable one.

“The master has failed more times than the beginner has tried.”
— Stephen McCranie

As an aside, I don’t believe startups are inherently riskier than more established companies. Rather, they are better equipped—almost by design—at coping with small failures. Large corporations, however, put millions of dollars at stake every time they make small changes in their business as usual. Marcelo Calbucci puts it nicely:

“Great entrepreneurs are not risk-seekers. They are risk-mitigators.”

Managing your brand

Management consulting branding is a double-edged sword. In general, most professions will recognize that consulting “graduates” are reliable and high performing individuals. It’s not so much the case in the startup world. Consulting occasionally has a negative perception among entrepreneurs, especially in the eyes of the more technical crowd. They will get stuck on some of the negative points mentioned above as well as many of the consultant stereotypes (e.g., only concerned with high-level strategy, have poor execution skills, are too corporate, conventional, and risk averse.)

These perceptions are not entirely unfounded, but like all stereotypes they are applied sweepingly. Unfortunately, it’s a branding problem that is almost inevitable. And ex-consultant entrepreneurs will have to work hard to dispel it.

This wraps up my early thoughts on consulting and startups. I have only been at this for 6 months and expect to continue doing so for a while. I’ll make sure to revisit this topic once I get deeper into it. In return, I’d love to hear your thoughts whether you are considering consulting, have already done so, or never intend to.

 

This is the second post in a two-part write-up. In the first post, I looked at the flipside, how consulting has benefited me in my current entrepreneurial adventure.

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Published on:   November 26, 2013