Startups Should Think Twice About Hiring Consultants

After leading his startup to a $13.2 million Series A and hiring 100 employees globally, this CEO believes that paying others to solve early problems is a lousy way to build a strong, scalable business.
Charles Miglietti headshot
Charles Miglietti
Expert Contributor
October 26, 2020
Updated: October 28, 2020
Charles Miglietti headshot
Charles Miglietti
Expert Contributor
October 26, 2020
Updated: October 28, 2020

I’m a French startup founder, and when I decided to break into the U.S. market, consultants came out of the woodwork promising to help me figure out a plan of attack — for a price.

One well-known consulting group announced that if I cut them a check for $150,000, they’d provide me with a bespoke go-to-market strategy for the U.S. marketplace, allowing me to quickly scale up on this side of the Atlantic.

I was tempted. After all, breaking into the U.S. market isn’t easy. As a foreign startup founder running a company that wasn’t yet an active player here, there was plenty I didn’t yet know about making a splash in the States. Still, I politely declined, and sent the consultants on their way — because if there’s one thing I’ve learned since starting Toucan Toco in 2015, it’s that paying consultants to solve your problems is a lousy way to build a strong, scalable business.

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Time for a New Playbook

All of this might come as a surprise. For many founders hoping to make it big in Silicon Valley, hiring consultants is part of the standard playbook. First, you raise a chunk of money from seed investors. Then you pay people to solve whatever problems you’re facing — from talent acquisition to branding to crafting an effective go-to-market strategy. And finally, you use those purchased insights to fuel rapid growth. Right?

That’s certainly one way to build a company. But I’ve always believed that when you pay people to solve your problems and try to buy your way to rapid growth, you’re borrowing against your own future and short-changing yourself and your investors. At the end of the day, if you buy solutions, you never learn to solve problems for yourself — and that means you’ll never build up the institutional creativity and know-how that are required to generate truly sustainable growth.

Take hiring, for instance. It’s easy enough to pay a recruiter tens of thousands of dollars to connect you with talented candidates. But at my company, we’ve chosen instead to invest that money in building a strong internal culture, which we use as a calling card when marketing ourselves to potential candidates. It’s a slow-boil approach, but as we’ve grown, it’s helped us both build a reputation as a great place to work and develop networks that now make it easier for us to find star candidates for new vacancies that open up.
 

Go Slow to Get Ahead

Now, we’re taking a similar approach to breaking into the U.S. market. After sending the consultants packing, we spent a long time thinking carefully about the places where we truly excel — and the areas where we can genuinely execute better than anyone else. Through that painstaking and sometimes uncomfortable process of self-reflection, we were eventually able to identify a niche that no other company is currently serving effectively. By using that unique value proposition to gain a beachhead, we’ve become a respected part of the Boston tech startup scene, and we’ve secured the customers and talented staff we need to grow in the United States.

It’s been slow going, and we still have a long way to go. Could we have gotten to this point faster by writing that $150,000 check to a consultant? Maybe. But I’m inclined to think taking that path would ultimately have left us in a weaker position. We might have developed a strategy faster, but we wouldn’t have learned much about ourselves, our target customers, or the U.S. marketplace along the way.

 

Building Strong Foundations

Of course, saying no to consultants doesn’t mean refusing to take advice. Leadership coaches and mentors are incredibly valuable — but they’re valuable not because they spoon-feed you ready-made solutions, but because they help you to learn, grow and find solutions for yourself.

Ultimately, because my company chose to go it alone along a harder and slower pathway, we’ve been able to lay far stronger foundations that will serve us well as we grow our business in the U.S. We’ve also avoided overspending or needing to raise extra capital. So as we gain a secure footing in this country, we’ll have the resources we need to scale up in a sustainable way.

That’s something any startup can learn from, no matter which side of the Atlantic you’re rooted in. It’s tempting to see rapid growth as the only goal, and consultants as the key to scaling up quickly. But for any founder, the real goal is to build a company that has staying power. The only way to achieve that is to solve problems on your own — so that you and your team can develop the practical skills and hard-won business know-how that you need to succeed.

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