As the owner of an internet consulting firm, my team often views ourselves as a startup consulting firm. By virtue of the services we offer, we tend to attract a lot of startups. I’m writing this post because there seems to be an inherent misunderstanding about what startup consulting actually is, or at least what it means to us.
Through working with a lot of entrepreneurs over the years, I’ve found that the vast majority of people and companies I work with come in thinking about the wrong things. I’ll touch on that in a moment, but before I do, let’s actually investigate what a startup consultant should be.
Top 7 Things a Startup Consultant Should do For You
- Spend a great amount of time to thoroughly understand your vision and goals
- Determines the skill-sets required for the management team, and the amount of manpower needed to achieve near-term, medium-term, and long-term goals
- Assesses your current human resources and makes recommendations for role definition, recruiting, and/or removal of management personnel based on company vision and goals
- Assesses your current capital resources and makes spend recommendations
- Assists in developing your vision such that a go-to-market strategy is feasible and within current budget or attainable budget
- Makes recommendations for delegating certain roles and responsibilities based on resources available
- Can give you first-hand insight into the challenges you will face along the road, citing specific examples and how to overcome them
Now that we understand what a startup consultant should be doing for you, let’s take a look at what actually happens when a would-be entrepreneur comes into my office.
Top Questions You Shouldn’t Ask a Startup Consultant
Before reading further, I am writing this article for new tech/internet-based startups that have not yet shipped a product. I am not writing this for new small businesses looking to get $25,000 from a bank to buy more lemonade stands.
- Will you help me write a business plan?
Well, yes, but it will cost you $450.00/hour. But that’s not why you shouldn’t ask for a business plan. When you’re starting a new company, you need to be doing things, not thinking about doing them! If you get to the point where you need a business plan to present to a financier, great, this is a problem you want to have, but it’s not a problem right now. Going to a financier with nothing but a business plan will get you, well, a business plan.
- Can you help me get a patent for my idea?
Yes, but I wont. Do things! Work! Then if your idea looks like it’s coming together, we’ll talk about whether it’s necessary to patent this baby before letting the public take a look at it. Otherwise, let someone else build it. I’m not in the business of buying and selling ideas, I’m in the business of building.
- How much will it cost to maintain this?
Sometimes this is a fair question, but only when referring to technical aspects like hosting, fixing bugs, etc. But most of the time, new entrepreneurs are asking how much it will cost for me to run their business. If you want me to run your business for you I will own it, not you. This would never happen because I would rather pursue my own ideas than yours, but just to make a point, part of your specs for the build better include a way for you to manage user activity. Why most people never include this in technology specifications is beyond my comprehension.
- How much marketing money will it take to make this ‘work’?
In startup world, we don’t market, we growth hack. I can go into a whole post about the difference between marketing and growth hacking. But to be short, growth hacking doesn’t require much or any money in order to get the word out, only amazing brains. Why growth hacking? Because traditional advertising and marketing usually costs more money than you want or have to spend. Okay, so how much does growth hacking cost, and how much do I need to make this ‘work’. A startup consultant should be paid to come up with this strategy, and instead of aiming for ‘make this work’, he or she will aim for a key performance indicator (KPI) that makes sense. Don’t trust someone who says their KPI is a combination of Facebook likes, Twitter & Instagram followers. While these add value, every business should have some similar and unique KPIs based on the business they are trying to start up. Once you have the strategy and the KPI benchmarks, then you can talk about how much time it will take to execute the strategy that should reach the determined KPI benchmarks (or how much you need to pay, or how many interns you need to recruit, etc).
Okay, now back to the title of this blog post
How do you justify startup consulting services when you have no money?
First you need to find a company that is capable of offering both startup consulting services, and technology and marketing services for startups. You also need to find a true startup consultant, one who is willing to take the time necessary to understand your vision and goals, and assess your entrepreneurial value.
Real startup consultants are as much investors as they are consultants. Startups have no money, so how do you make money doing consulting work for them? Answer, find smart, resourceful, and persevering entrepreneurs who understand that getting some seed money to work with a consulting team is nothing compared to the mountain that is building a startup company. And that if we can’t scrape together a few thousand dollars for consulting and prototype development, maybe we should think about getting a 9 to 5.