Many people transition out of consulting, but I have found few make the leap into the startup world. I find this interesting, because I find my analytical and organizational skills from my consulting role are incredibly useful as I help launch new ventures. At the same time, there are some core differences in thought process and philosophy that I’ve faced in the transition. I’m still early in my entrepreneurial career so this list will likely evolve over time, and for all I know these could be general challenges everyone faces. But I’ve tried to lay out the three big challenges I’ve faced below, in hopes that they will help others make the jump.
Problem: Bridging skeptic and advocate
In a startup, there are more unknowns than knowns. We are often uncertain about everything from the technology to ideal first customer segment to something as mundane as where your office should be located. And while we are deeply skeptical as we kick the tires on a technology and try to answer these unknowns, there are times when we must be enthusiastic advocates of the technology even while we haven’t answered these questions.
That transition can be tough coming from consulting, where try to minimize uncertainty and questions around technology get boxed up neatly into the term “technical risk” as one bullet point on a slide. As a consultant, I feel like I’m not ready to become enthusiastic advocates for a technology or startup because I want more answers. I want to dig deeper and de-risk. This is bad because in many cases I can’t get an answer unless I act, but I don’t want to act because I want to further de-risk, and so nothing happens. Because answers don’t exist and won’t for a while, I’ve had to learn to live without these answers and be a simultaneous skeptic and advocate* for the startup.
Solution: Get answers where you can, but have a bias toward acting even if you don’t have the answer. In many cases answers don’t yet exist and won’t for a while.
Problem: Adjusting to the VC-entrepreneur relationship
My life is a quest for self-improvement, and I’ve always prided myself in my ability to receive and act on feedback. So in our first meetings with VCs I thought I did a great job listening to their suggestions, frequently responding to their comments with how we already considered that or would seek to incorporate it into our thinking. So I was surprised when I asked for feedback from one of our BDs and he said, “Do a better job of listening to VC suggestions. You come across as sounding dismissive.” Ouch.
It turns out the culprit was a tactic I learned in consulting. For better or worse, part of my role as an entry-level consultant was proving yourself to the client to establish trust. After all, my team was pulled together from across my firm and I had often never worked in the project’s field. And while most client question were genuine, some did try to test me to see how good I was. The result is that I learned to anticipate questions and be quick on the response. If I knew the answer, I responded with it and how our project had incorporated it. If I didn’t, I admitted I as unsure but used the knowledge I did have to hypothesize an answer (though this is where the project lead often stepped in). But in the transition to entrepreneurship, I’ve found the relationship with VCs is different — while I do need to show what I know, there’s a longer relationship at play and they’re there to collaborate with me in building the venture, even before an investment. So then they make a comment or suggestion, I’m learning to pause more, consider, and appreciate that — even if our team has already thought of it.
Solution: Realize the VC-entrepreneur relationship differs from the client-consultant relationship. While they do want you to know your stuff, they are also there as thought partners to help you launch the venture and will likely make great suggestions you haven’t thought of.
Problem: Balancing the long and the short game
As a consultant, I was paid to think about the long game while my clients went about execution and tackling the short term. I was there to think about how their product would enter the market landscape, how customers would react, and what competition might do. I poured my heart and soul into it and it was awesome, but missed executing. I wanted to go do the thing I recommended and see how it turned out, and I silently questioned why our clients didn’t simply manage more of the strategy for their long game.
When I transitioned into entrepreneurship, that answer hit me like a brick wall: time constraints. I found myself surrounded by infinite short term tasks calling out for attention, from tweaking a pitch deck for an upcoming VC meeting to facilitating communication within a team to answering one-off questions on the market or the technology. With all of these activities, my time to think about long-term strategy evaporated. It took a couple of months to figure out I was spinning my wheels with all of these short-term operational tasks and not getting what I wanted to be, but the solution is easy (if not difficult to stick to): consciously carving out time. For me, that became a 3-hour block on Monday morning and Friday afternoon to think through the long-game, which conveniently coincide with my Amtrak journeys to and from Boston. It can also help to find a buddy; I hold 2-3 hour workparties with a good friend and faculty at SOM where we can hold each other accountable to our goals.
Solution: Aggressively carve out time to think about the long-term strategy for your startup or you’ll never think about it. You may feel guilty ignoring the short-term tasks, but thinking about the long game will (likely)** increase your chance of success and you’ll find that it will help you better prioritize the short term tasks.
* This is not to say that you should downplay or omit risks and unknowns when speaking to potential investors. Rather, it’s speaking with confidence on what you do know and believe is possible despite all the unknowns, and about being clear on what is knowledge versus belief.
** I should say “likely” here because I’m still learning and haven’t proven anything yet. Take all of this with a dose of skepticism and better yet, verify it with someone who’s seasoned and has been there/done that.