Early-stage startups have a massive problem: there are way, way too many things to do, and never enough people to do them. Whether it’s growth marketing, or product design, or software engineering or a myriad list of other tasks, something somewhere isn’t going to get done by the founding team and early employees.
And so it is only natural to seek outside help to assist with those tasks, part-timers (and sometimes full-timers) who can add their talent and experience to a company’s early success.
There’s just one problem: consultants are horrifyingly misaligned with startups, as a recent discussion about how to be a great consultant attests. And so if you are going to work with consultants as a founder, there are massive traps you must avoid in order to make effective use of these people.
I’m a big fan of The Browser, an email newsletter by Robert Cottrell which curates a list of five articles a day across the web that Cottrell thinks are the best of the day. One of his selections in a recent issue was part two of a four part series on being a great consultant written by Tom Critchlow, who is adapting lessons from the theater world into the work of being a consultant.
It’s a great piece, and an excellent guide on how to do (traditional) consulting well, but it is also emblematic of the massive incentive misalignment that comes when you have folks who do work for you but who aren’t employed by your startup. To be fair to Critchlow, his focus is more on big companies and big consulting firms, but many of the nuances he identifies apply just as well to the consulting world that has flooded Silicon Valley in recent years.
Critchlow’s thesis essentially boils down to accepting an organization as it is and not questioning the broad contours of how it is designed:
The sweet-spot (especially in the first few months of an engagement) is identifying the existing flows, biases and strengths of a client so that you can move with them, not against them. Go with the grain.
Why is this so important? Because if you want to work with an organization for a long time and make a difference, people need to like having you around. Sure, you need to be effective but I’d contend equally, if not more important, is to be a pleasure to work with.
That means though that a consultant shouldn’t question or prod or push hard against the executive team on critical problems, or as he says, “No client wants to be in long-term crisis.” That leads to the following anecdote about what a great engagement looks like:
Instead they valued the energy, enthusiasm and visibility I was giving to the problem. At times I felt like a puppy consultant – running around the office being excited about things.
This engagement helped me realize that there is a value to positivity – that bringing energy and enthusiasm to an organization is worth something, entirely independent of the results and outcomes you’re working on!
Although clients will rarely pay for it directly there is value in changing the energy and changing the conversation in an organization. These are precursors to real change. And if you provide this level of positivity and optimism then clients will keep you around irrespective of your “impact”.
If that text doesn’t completely shock you, let me rewrite it more cynically: build friends on the executive team so that you can milk those consulting dollars without delivering any actual results that might terminate an engagement (after all — like dating services — if you actually fix the problem you are hired for, then why does a consultant still need to be consulted?)
Startups can’t afford (literally and metaphorically) to have people around the table who aren’t propelling the growth and development of the company’s product every single day. Positivity is fine (and in the wake of the Away luggage controversy the last few days, a little bit of “nice” can go a long way), but every single person — consultant or not — needs to be entirely focused on results, results, and results. There’s no time for anything else, frankly, particularly at the earliest stages of a startup’s development.
As a founder, you just have to be a hawk for this sort of resource-slurping parasitism. You have to be cognizant of when consultants are trying to “build relationships” exclusively rather than delivering any actual results. It’s also a task that can be tremendously difficult, because for most traditional consultants, their actual primary skill is building relationships and developing engagements, rather than doing the actual work you hired them to do in the first place.
The upshot is that there is a new culture around at least some consultants that can provide solace for founders. “Doers” have been building new firms in Silicon Valley, New York City, and elsewhere predicated on showing results first and working with the constant crises of early-stage startups, rather than trying to relax a team and be a “culture fit.”
In fact, from first-hand experience, the best consultants regularly fire their underperforming startup clients (it really is amazing to behold when you see this by the way). The best and most productive consultants want to work with the next unicorn companies, period. They have a nose for when a startup is going sideways and will frankly abandon their weakest clients to prioritize the ones that are shooting for the stratosphere.
(I unfortunately don’t have any dataset to prove this theory, but my sense is that one of the Valley’s huge scale advantages that has only expanded further in the past few years is simply that there are enough of these results-focused, experienced consulting shops across a range of needs that the Valley has incubated a nexus of performance-driven business services unmatched anywhere else in the world. Silicon Valley founders can select an all-results-focused team in a way that few other regions can match.)
Getting a little more tactical, if you are talking with a consulting firm or an individual consultant, ask yourself the following questions about the engagement:
- How does this project end? How do I ensure that an objective is agreed to and then reached with an actual result delivered?
- Does the consultant want equity? Or at the very least, do they have a sense of ownership in the company, or are they just a cash-driven hired gun looking for the next startup with VC funding flooding out of their hands?
- How narrow is a consultant in their skill? Do they do “business strategy” or do they “optimize the SaaS product marketing funnel”? The best consultants are certainly flexible and open in their thinking, but also know precisely how they create value and can succinctly communicate that to you.
- Do their reference clients refer to actual results (“They drove our conversions by 60% — they were awesome!”) or do they refer to qualitative factors like “Oh, they were great to work with — very nice people.”
- Frankly, and this is the tough one, are they willing to fire you as a client? Are they ambitious and going to push you to be your best, or are they just hitching their wagon for the ride?
Consultants can be super valuable drivers of growth or leaches on your startup’s resources. In many ways it is a tale of two cultures: of management consulting and relationship management versus meaningful, results-driven work that pushes your startup forward. Avoid the former for the latter, and reap the benefit of a new generation of consultants who know how to deliver the results you need, asap.