Wednesday, December 29, 2010

Ex-consultant going to a startup

I recently came across a Quora thread here that debated whether ex-consultants added any value to startups. The answers varied from 'Consulting is evil and a house of lies,' to the kind of skills that consultants develop and which of those might or might not be valuable to startups, specifically in the consumer internet sector.

I decided to take a different approach in analyzing this, by utilizing a framework I came across while reading Clayton M. Christensen's book Seeing What's Next: Using Theories of Innovation to Predict Industry Change. The book's hypothesis is that the success of a startup management team can be maximized by ensuring that they have been attended a unique set of schools i.e., they have past experience in tacking some of challenges they are likely to come across in an uncertain environment of a startup. Here are the schools of thought that the book puts forward, along with my assessment of whether consulting experience can help in that particular skills.

  1. Operated in environments with high degrees of uncertainty: A consulting project is well structured at the outset, but changes continuously based on recent events, client demands etc. Being flexible and ready to adapt to change is necessary for success in consulting, as in startups. This is a definite plus for consulting.
  2. Developed plans to unearth seemingly unattainable knowledge: Neutral, since consultants seems to often find knowledge that the client sought unattainable, but they do so by leveraging the resources of the consulting firm, which are unlikely to be unavailable to a startup.
  3. Experimented and found unanticipated customers for a product or service: Neutral. One does come across market research projects, but this is not necessarily a feature of most products consultants work on.
  4. Placed bets based on theory and intuition, not necessarily detailed data: Neutral. Depends on the kind of project and your workstream. If you are working on a workstream as a market sizing, you will likely have access to a large stream of data, vs. if you are doing organizational design, in which case theory and intuition play a bigger role.
  5. Resourcefully solved problems without spending much money: Negative. Typically consultants have a not of resources, detailed reports etc which they can purchase.
  6. Built a management team from scratch - a team with skills matched to the task. Negative. You might get some experience at the Project/Engagement manager level, but before that, you are hardly ever building teams.
  7. Shown experience in fending off certain corporate processes and in harnessing or manipulating others, in order to get the right things done quickly: Positive. Being able to influence others and work through corporate processes is an essential consulting skill, which will help in startups.

So they you have it. What's my conclusion? Consulting is a valuable experience, but when interviewing people for startup roles, one must look at other aspects. Has the person worked at startups or technology companies in his/her career? Is there an industry expertise that the person brings? Has the person shown instances in his or her career where he/she succeeded with use of minimal resources?

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