The Rise Of The Consultant-Turned-Entrepreneur
By Dana Rosenberg (Startup Enthusiast, Self)
I’m an East Coast transplant to the West Coast – I come from the world of suits and business casual, investment banking and consulting. When I decided to transition into tech startups, I met some resistance from people who thought that I would be too focused on long-term strategy and high-level thinking to actually execute at an early-stage startup.
At the same time, I’ve watched many startups emerge that are founded and operated by former consultants. I realized that in many ways, a person’s experience as a consultant is relevant to their success as an entrepreneur. From the skills you learn to the network you develop, there’s value to be found in consulting that is often underappreciated in the startup world.
To find out exactly which consulting skills are most valuable, I spoke with several ex-consultants-turned-founders in technical and non technical industries, each representing a different startup phase: Gagan Biyani, co-founder of Udemy (post Series A); Kathryn Minshew, co-founder of Daily Muse (pre Series A); Daisy Jing, co-founder of Perfect Beauty (pre Seed, and 2012 PITCH Startup Competition finalist); and Dan Rumennik, founder of Good Life Beverages.
What I found was this – no matter what stage their company was in and no matter what industry they focused on, they all agreed that consulting skills have come in handy in the startup life.
The Idea Stage
At the very initial stages of a startup, entrepreneurs need to have a good sense of market demand for their products and the competitive landscape in their space. Since consulting projects are short and cyclical in nature (begin a 3 month engagement, rinse, and repeat), consultants get good at quickly grasping the dynamics of a new industry.
As an example, Kathryn Minshew highlighted that these research skills were especially useful to her when initially conceptualizing The Daily Muse:
“When The Daily Muse started to build out a recruiting & career discovery product, I used skills learned at McKinsey to quickly understand the market, and to interview a few players at related companies (The Ladders, etc) to learn what had and hadn’t worked for them.”
The Development Phase
As startups progress past the idea stage into the implementation phase, founders need to put together a roadmap for product development and initial launch. The best entrepreneurs will know how to break their plan down into well defined, executable, and trackable milestones – which is to say, they need to know how to manage a project.
Project management skills are, once again, something most consultants come to learn early in their careers. In a client-facing industry, like consulting, meeting deadlines is an important determinant of customer satisfaction – and if you don’t deliver what you promised by a certain date, you risk losing a significant chunk of future business. By working in teams and delegating tasks, consultants learn to work quickly and efficiently to complete any project they face.
For example, Dan Rumennik discussed with me how he honed his project management skills through problem-solving in consulting:
“I had a great manager that really forced me to break down a larger problem into smaller and more manageable components and my approach to Good Life Beverages is the same. If I would’ve taken a look at how much I needed to do just to get BCalm on the shelves – from creating the formula, to dealing with regulatory requirements, to designing our branding and packaging – it would have been overwhelming. Now, that I’ve taken each of those projects and broken them down into discrete tasks, I’m able not only to do it, but to get them done myself.”
Once a startup is off the ground, I heard from several founders that the ability to think on your feet became one of the most important skills when growing their company. From recruiting the best employees to pitching angel and late-stage investors, having a sharp mind and an agile mindset can be extremely useful.
Consulting hones these skills by teaching you how to clearly communicate your ideas on paper and then present in front of
C-level executives at some of the world’s best companies. It also teaches you how to say something with 20% of the knowledge, but 100% of the confidence.
As Daisy Jing prepares to unveil Perfect Beauty at Women 2.0 PITCH Conference & Competition on February 14, she’s very appreciative of the communication skills she learned in consulting:
“As a consultant, you have to run meetings with the client at a young age. It’s intimidating at first, because you’re speaking to people who are much more senior, but you learn to be confident and speak clearly. Now, when I’m pitching or talking to people about my idea, it’s the same thing. You never know what they are going to ask and you may not have answers to every little detail, but at least you’re prepared.”
The Growth Stage
Finally, it helps for entrepreneurs in later stage startups to have a good understanding of how to scale a real business – your ability to execute on an idea and build product in a vacuum will only get you so far. In their project work, consultants are exposed to many facets of a business across several industries and are asked to perform both strategic, operational and financial analyses for their client.
Gagan Biyuni finds these consulting skills especially useful as he grows operations at Udemy,
“It’s really helpful to understand end-stage business when you’re managing a company post Series A. Knowing the difference between business development, cost structures, and revenue models helps you get a grasp on operational and finance related tasks necessary to run a company.”
From the perspective of these entrepreneurs, their experience as a consultant has been valuable to some aspects of their startups. That being said, I’m not advocating that every entrepreneur go into consulting first or that every consultant makes for a great entrepreneur. Rather, I am advising you to be open about the applications of consulting in entrepreneurship.
As you approach hiring decisions for your next employee, or you debate making your big leap from consulting to pursue your startup dreams, don’t let preconceived notions about the big suits, the PowerPoints, and the long-term strategy get in the way of opportunities for you and your company.
Editor’s note: Got a question for our guest blogger? Leave a message in the comments below.
Photo credit: Peter Renshaw on Flickr.
About the guest blogger: Dana Rosenberg is the Community Development Lead at HealthTap, where she is in charge of user acquisition and engagement, marketing, PR, and branding. Dana is also the Lead for Women 2.0 Founder Friday Silicon Valley. Prior to moving out west, Dana was a consultant at a boutique healthcare strategy consulting firm in New York, where she advised clients on target screening, acquisition and product commercialization opportunities. Follow her on Twitter at @Dana_Rosenberg.