What It Takes: Shifting From Management Consultant To Startup Founder

There is no one specific path to prepare you for building a startup. A career changer takes us through the learnings of making the leap from a management consulting career to founding a startup.

When Michele asked me if I would write an article for the tal&dev blog, I was of course delighted. We had worked together several years ago, him as CEO of the “client” company and I as Partner & Managing Director at the Boston Consulting Group (BCG). Today, we are both in a completely different setup, each as founders of our companies.

The topic Michele asked me to write about is also one that is close to my heart: shifting from a management consulting career to founding a start-up. When at BCG, as part of our recruiting efforts over the years, I noticed that some very top candidates were hesitating between going to a start-up or joining a premier global consulting firm. This was rarely the case when I started my consulting career in the mid-1990s!

The topic has hence clearly grown in interest! After spending over 20 years in management consulting, and having really enjoyed doing it too, I switched to being an entrepreneur and co-founding a start-up in the fast growing and structuring esport (competitive video gaming) industry. Based on this experience, I believe management consulting prepares you very well for becoming an entrepreneur on many criteria, but there are a few challenges also out there where properly overcoming them depends very much on your own characteristics and deep-down motivation for launching a company from scratch.

Before tackling those points, let me first start by why I decided to become an entrepreneur. Being an entrepreneur is not easy, so you should clearly have strong convictions that will be your guiding forces as you embark on the adventure. For me, the two main drivers were the sheer personal attraction to building something new from scratch, and the deep belief that I could bring a new edge to the industry/market with the business idea I wished to pursue.

When at BCG, as part of our recruiting efforts over the years, I noticed that some very top candidates were hesitating between going to a start-up or joining a premier global consulting firm. This was rarely the case when I started my consulting career in the mid-1990s!

Finding a partner

While the second driver is certainly key for launching any new business, each person has to find their own personal drivers. In addition to those, I would strongly recommend not starting off alone. Ideally you already have a partner in mind to jointly start the adventure. If not, I recommend having a close partner with whom you build very early on.

You will be going through an emotional roller-coaster ride as you build and grow your business — the more ambitious the business you are building, the bigger the peaks and troughs of the ride. Having a sparring partner, embarked jointly in the adventure, is a great source to mutually ensure staying the course, bringing different views and analysis to the daily questions (which will be numerous, and extremely diverse, as you grow). Ideally, your partner would have a character and experience quite different than yours, to ensure the diversity of point of view. I was lucky to find this person in my cousin, whom I know of course from the very early childhood days. We together co-founded the company.

Heated debate between you and your partner is not an issue at all — in fact, if there are none, that’s a sign of something wrong. In our case, in the first two years of the business, we had to take many key, structuring decisions about the business’ orientation, business model evolutions, and trade-offs between growth priorities such as product features versus geographic expansion, organic growth versus partnerships versus external growth, hiring new staff versus using external providers, and so on. On such questions, heated-debate is healthy. It ensures you are seeing the problem from different angles and forces one to lay down concrete arguments to prove a point. It hence avoids rushing blindly and making mistakes that are costly or even sometimes fatal, notably in fast growing industries.

Managing this heated debate is more easily said than done. You have to be able to keep a cool head and not let that interfere more broadly with your partnership and the day-to-day tasks of each.

How consulting prepares you

With that said, now back to the transition from management consulting to launching a start-up. As mentioned earlier, management consulting equips you rather well, even though not fully either!

Let’s start with how well you are equipped. Firstly, as the founder (or co-founder) you are the problem-solver-in-chief (at least for the first 1.5 to 2 years), from strategic questions on the business, organizational matters, sales and delivery, general logistics and office management, and of course investor and shareholder management. Your best friend is the logical thinking and structured approach to tackling problems that you learn very early in your consulting years. It becomes a real asset for you, as, even with topics that you are not necessarily familiar with, you have gained an innate ability to break-up a problem in manageable pieces that can more easily be understood and tackled. So that’s without doubt one key asset consulting brings you.

There are more. A second one is filtering noise and focusing on what matters. The ability to look at data, facts, or any input and zero your way into what really matters (most of the time!) is also part of the toolkit of the experienced management consultant, and extremely useful in the early stage start-up world where there is really all sorts of noise you need to filter — as otherwise you can get off track or waste your highly solicited time.

Thirdly, consulting teaches you to be good at multi-tasking, especially if you have held senior positions, where beyond your core client responsibilities, you also typically have internal functions such as recruiting, knowledge development, etc. It teaches you well how to prioritize your tasks, and ensure that you are spending the right amount of time per key topic. A key risk, given the amount of topics coming your way as a founder, is to end up not spending the majority of your time on key focus topics and instead on issues that can be left for later or handled by others (once you start having some staff, which is not a given on day one). I find the 80-20 rule here very helpful. As a rule of thumb, spend 80% of your time on the top 20% priority issues. Having the discipline to stick to that (more or less) is essential.Otherwise you end up spending half a day fixing the broken coffee machine — not good!

Last, but not least, as a startup founder, you will be working long hours, almost everyday. First relief comes quite late in the process. Again, consulting gives you the tough skin needed to have the requisite endurance. Note however that the work load, particularly in the early days of a startup, is more intense than management consulting for the founder(s).It has to be managed properly, but it is actually a real pleasure. You are building from scratch, and it is very exciting to be focused and see the progress happen. It is a very appealing adventure (otherwise you likely wouldn’t have gotten involved in the first place!). You don’t really notice the effort. What helps is the real flexibility you have in organizing your hours. You typically want to have some core hours in the office, but thereafter you manage.

As a rule of thumb, spend 80% of your time on the top 20% priority issues. Having the discipline to stick to that is essential. Otherwise you end up spending half a day fixing the broken coffee machine — not good!

The blindspots

With these four strong assets mentioned, let’s now turn to other requirements for which you may not be that well prepared, or at least, you need to face some clear differences with what you were used to in the management consulting firm environment.

The one that struck me most, and surprised me most was people management. Coming from over 20 years of management consulting, I thought I was very well prepared for managing the “people” dimension of the business. Coaching, motivating, setting performance goals, discussing strengths, but also areas for development. After all, we do a lot of that with our teams in consulting firms — consulting is a people business, people are the core asset, and we typically excel in people processes. Well, it turns out that while that is indeed true, it does not transpose to the startup world. The reason being that you have a much larger variance in the profile of the people you work with. In consulting, while there is some diversity in backgrounds, you typically get a common skill set in people — otherwise they don’t get through the interview process or don’t stay long in the consulting business. In a nearly stage startup, you don’t have the highly structured and mature recruiting processes, nor necessarily the means to hire recruiting and talent managers just yet, nor still the reach to attract the perfect profile (you eventually get to that — and it is a real pleasure — but initially you are not in that position). Hence, you get a diverse set of skill sets and capabilities, and managing them can get complex.

Another people difference is about getting what you ask for. In consulting, when you ask for something, you know pretty much what you will get. In a startup, given the diversity of backgrounds and skill sets, you have to be much more explicit, coach more and check more often. To build a successful startup, you must want to, and be good at (our surround yourself with people who are good at) coaching and developing diverse profiles of people.

The one that struck me most was people management. Coming from over 20 years of management consulting, I thought I was very well prepared for managing the “people” dimension of the business.  Well, it turns out that does not transpose to the startup world. You have a much larger variance in the profile of the people you work with and managing them can get complex.

Another major point is fundraising and investor/shareholder relationship management —which is something new as you seek external funding for your startup. While consulting equips you extremely well in building business plans and presenting them, there is much more to fund raising and investor management than that. On top of clients and people, it is a third very important group of stakeholders to engage with. They are a key group to keep informed on how the business is progressing. Note that they also have their requests and expectations, and clearly come with a voice of their own that has to be heard, managed and a common alignment reached in case of diverging views. Managing this requires frequent dialogue with shareholder representatives, and hence takes additional time from your already very busy to do list! However, shareholders can also be a great asset. As sparring partners who know the business, without being day-in day-out involved in the details, they can be a great source of support to help you in navigating the startup through its growth.

I’ll add one final point to my list: you need to be reasonably good at explaining and persuading others that your idea or innovation is value creating: you need to persuade talent to attract them to join the startup, you need to persuade clients to engage with you, and you need to persuade investors to bet on you. And then, you must deliver on your business promise. To do that, you need to actually ensure to have the right economic model, the right growth plan, the right people, the right organization, the right funding, and a well executed go-to-market. As founder, you need to be involved end-to-end to ensure proper delivery. If that sounds appealing to you and energizes you, then you will likely be a great fit for an early stage startup setting and entrepreneurship.

Enjoy the ride if you go for it!

Being an entrepreneur is not easy, so you should clearly have strong convictions that will be your guiding forces as you embark on the adventure. My two main drivers were the sheer personal attraction to building something new from scratch, and the deep belief that I could bring a new edge to the market with my business idea.

About the author: Alexandre Amoukteh is the Co-founder of  Nicecactus, a global all-in-one online platform helping gamers engage into competition, train & track their progress to become "the next champion". Prior to co-founding Nicecactus, he was Partner & Managing Director at The Boston Consulting Group (BCG), with over twenty years of Management Consulting experience.

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February 25, 2021

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