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Not all consultants are worth it. Some drive real impact. Others just burn your time and budget.
In this episode, Toni and Raul dive into how to tell the difference. They break down when it actually makes sense to bring in outside help, how to vet someone properly, and the biggest red flags to avoid.
You'll learn why consulting is a real skill, what good execution support looks like, and how to think about pricing and value.
- (00:00) - Introduction
- (02:48) - Do you actually need consultants?
- (05:22) - The consulting relationship with startups
- (08:29) - Identifying red flags
- (10:41) - The hammer people
- (16:17) - Consulting is a skill
- (21:14) - Consultants as challengers
- (24:40) - Pricing and value in consulting
- (30:06) - Execution and enablement
- (33:38) - Summary
- (35:45) - Next week: Chris Tottman on VCs
Creators and Guests
What is The Revenue Formula?
This podcast is about scaling tech startups.
Hosted by Toni Hohlbein & Raul Porojan, together they look at the full funnel.
With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.
If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.
TRF - Consultants
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[00:00:00]
Introduction
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Toni: Today, Raul and I are gonna discuss consultants. To be honest, I am not a big fan of consultants myself, but I do believe with the rise of AI and employee efficiency, more and more companies will outsource deeply specialized in high expertise tasks. Two. Consultants, advisors, and coaches. But the big problem remains, how do you spot the good ones from the bad?
And that's exactly what Raul and I are gonna talk about today. Enjoy
Raul: if LeBron James and Tiger Woods and Christiano Ronaldo another are better with a coach than without. You're probably too.
Toni: You will have then operators that you know, know a bunch of things really well, but have to stay abroad to a large degree.
And then once in a while. There will be a thing that requires deep understanding of a single issue. It doesn't make sense to hire that person in full time,
Raul: stay away from the hammer people. They will have very clear, very repeatable answers that are just not necessarily addressing the [00:01:00] problem, and most of all, very simplistic answers to quite complex problems.
Toni: I think consulting is a lot of selling, selling of ideas, selling of views, selling off, you know, change and stuff, but it is an actual skill in itself. Mic and I, we always talked about kids. You don't have those yet. That's why we're talking about magic, the gathering, all of that stuff. But for everyone else, you know, think like, Hey, what's going on with Tony Kid, Tony's kids?
Well, I have an update for you. Um, no, there's not gonna be one more. We're gonna keep it at two, but my smallest one today. He's graduating daycare, he's now going from, you know, in danger. You call it tu uh, in Germans, like kinder, cri uh, you're going from this first thing where you spend your first three years, he's now graduating to kindergarten.
Um, so there's a, there's a kid's life update for you all. But yeah, I mean, ro maybe you enlighten us on when, when is it you are planning to actually multiply kind of what's, what's your, what's your [00:02:00] plan for that?
Raul: Is that something you can plan? So simply, I, I don't know if you planned it. Um, no, no, we didn't.
There's a couple elements that need to be in place, I guess, uh, like a good process, um, let's call it not the revenue engine, but the kid making engine. There's some pieces missing.
Toni: How, how often is your mom asking you about this?
Raul: So she's learned not to anymore. Um, I would say that's, uh, after a while you, you, you kind of get it, but I mean, I don't even know if I want kids to be honest.
Um, it really depends on the situation. I've been telling her since I was 12, 13 years old. I don't want any. Yeah. Um. Plus, I got you. So, so I get enough company. Yeah, there you go. I have to deal with you every day. Okay,
Toni: well there we go. Um, what other things, uh, are people dealing with that we want to talk about today, Raul?
Do you actually need consultants?
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Raul: we've actually graced the edges of this sometimes, but, uh, today is another time that we thought it would be a good idea to talk about consultants slash advisors slash coaches. And, um, we thought it would be kind of a, a [00:03:00] sweet spot to give our thoughts on when you're trying to work with these. What are the things you should be looking out for?
What are red flags? As in this is what you're trying to avoid when you see that run away? And what are green flags, as in this is what you actually like to see, uh, or what you'd like to question and then see what happens. Uh, is it the right, uh, answer there? And so obviously this is because working with consultants can be hugely beneficial.
There is a point to working with them. But, um. And, and, and at all stages by the way. Uh, they can help you get there faster. They can help you reduce your learning time and, uh, you can genuinely be better off working with them.
Toni: What do you say to people? Which was basically me 10 years ago, very much full of myself.
Not that that has changed, um, but uh, basically thinking and saying, I don't, I don't need those fricking consultants. They just come in, they cost a lot of money. They really just organize a meeting or two. Send me a slide deck. I mean, all of that stuff is useless.
Raul: Yeah. Do you, what ki what's your sport, [00:04:00] by the way?
I don't think we've ever talked about this. Mine is basketball. Do you like basketball, football? What's your thing?
Toni: I don't have one bad, bad, bad way to try and build the coach example. I can totally see where you're going with this. Let's just say, I am playing football. Let's just for the sake of it.
Raul: Yeah.
You think Christianna Ronaldo has a coach? Yeah. He's got like 20 probably, right? Yeah. Yeah. You think LeBron James? I, I guess you know who that is. You think LeBron James as a coach?
Toni: The, the bigger question is do you think they have a management consultant that For sure. We probably have financial advisors and everything too, by the way.
Yeah, probably. Yeah. Probably. The,
Raul: the thing here is, um, I don't think, by the way, the, the, the lines between coach and advisor and consultant are that, uh, a clear, to be honest, if those people at these levels of the game, and that's just not. Not just true for sports, but for anything can benefit from having additional people help them out, then you can too.
Mr. Little serious, a startup taking themselves very seriously. Uh, to be quite honest there, like if LeBron James and Tiger Woods and Christian Ronald are better with a coach than without, you're probably too, and the same is [00:05:00] probably true for consult. This is all obviously very high level, but um. I think what matters is having a good one and one that can actually help you there.
And this is where people, a lot of people have actually been stung by the black sheep. People who claim they're really good or that have good intentions, but just can't follow up.
Toni: Before we kind of move on to that part, which is actually really kind of the, the insightful part I wanna say of the, of the session here.
The consulting relationship with startups
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Toni: I do have a feeling though, that this whole consulting relationship with organizations is gonna change in the future. I think organizations are gonna become. Leaner and smaller and more efficient, right? We talked about, uh, AI and automations and all of that stuff. We now saw the first solo founder, uh, build a company and sell it for $80 million in like six months.
We're now seeing kind of a team of three people getting to, uh, a million and beyond and wanting to go to 30 million. We had Amash on the, on the podcast, and we will see more and more of those examples. Right. And um, I [00:06:00] think what's the flip side of that is that I. While you start automating all the menial task away, like all the boring stuff, um, you will have then operators that, you know, know a bunch of things really well, but have to stay abroad to a large degree.
And then once in a while, there will be a thing that requires depth, that requires deep understanding of a single issue. It doesn't make sense to hire that person in full time, right? It wouldn't go like, oh, we are three people. Let's hire a CMO to do the branding stuff. Like that wouldn't make any sense.
Uh, instead, I think people will start more and more to be like, okay, I have this one very specific challenge. None of us can really kind of solve this is, this is not an AI challenge or automation challenge either. I think this is a, we need to get someone externally in helping us with that, with that challenge, and I think that kind of approach.
I think that's gonna, I think that's gonna increase in the next couple of years. Um,
Raul: so this is another one where I think the sports analogy actually comes in, and this is not where I wanted to go, but if this [00:07:00] continues and if this propels itself forward, think about what athletes really do. They don't just have coaches and consultants and advisors and all that.
They also have. Absolute specialists at some very narrow things that they work with. So, um, Kobe Bryant, who recently passed away a couple years ago, uh, was one of the first ones, for example, when he had knee problems, he was traveling to this one doctor in Germany, actually Germany by the way, who offered a very specific niche thing, uh, and, and, and treatment for his need that he wasn't able to get anywhere else.
And he paid royal money for that. Uh, and also was rewarded with extending his career quite a bit. So when you're kind of at the leverage where your knee is making you hundreds of millions of dollars and, uh, I don't think that's so different from when you're at the leverage. Yeah. From when your, your funnel is making you hundreds of millions probably.
You want the absolute best you can get. What do a lot of startups do? Even early on when there is high leverage? They get Mr. Joe Schmo intern and want to pay them a thousand bucks a [00:08:00] month to do all of it at once.
Toni: Yeah. I wonder if there's, and maybe you're gonna go into this, um, but I wonder if there's some kind of a, because I can see that, uh, I, I've been, um, as an operator and as a, as, as a founder, trying always to be super scrappy about things, right?
Kind of trying to be cheap about this. Um, and I think a lot of people are stuck in this like, oh, you know, how can I know that that person is worth what they're saying and so forth, right? But you know what, instead of having this wandering.
Identifying red flags
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Toni: Let's just kind of go into the couple of things that we kind of put together where we are seeing like, hey, those are, um, those are issues.
Those are, let's just say red flags, right? Kind of. I think we have like a red flag or, you know. Very much amber moving towards red kind of flags here. So, um, what's the first one role?
Raul: I'll preface this, uh, by saying what comes before all of this is understanding exactly what your high leverage points are, as I was just talking about.
And I think a lot of the [00:09:00] time, the confusion or the frustration, maybe the insecurity of working with advisors is not knowing that this is exactly the thing. That is actually high leverage for your company right now. Yeah. Um, and that it will produce that RI if solved correctly. Because if you know that, then the question is not necessarily a one of, oh, should we pay for this?
Should we pay for that? It would be very clear what is worth taking money in your hands for? So even if you were scrappy, there is no point in being scrappy as a virtue. Uh, you, you need to know where to be scrappy and where to expand.
Toni: I'm wondering if everyone knows these things. So, I mean, if I'm. Uh, LeBron James and my knee hurts.
I'm like, my knee hurts. That's the pain point. That's the problem. I need someone that makes knees unheard, basically. Right? I'm sometimes wondering kind of in a complex system like go to market, and maybe it's a little bit less complex in the beginning, but you know, certainly it's later on. I almost wonder if people are diagnosing things correctly, like, oh, you know, we have [00:10:00] a pipeline problem, but actually no, maybe you have a messaging problem because that's leading to your pipeline problem and so forth.
Right? I think there's, um, there's a skill. Um, and I'm not saying that needs to be, uh, you know, consultant either, but I think there's a skill and a difficulty in even diagnosing correctly to then get the right consultants or the right, uh, the right people into fix these things. Right? There's a little bit of a GP to specialist.
Um, kind of analogy here, potentially. Um, yeah. But I think that's super interesting too,
Raul: and, and the right people can also help you figure out the high pressure points and high leverage points for your company. Yeah. Just like the GP you just mentioned. Right. Again, the question is how do you know who's the right one for you?
Let's kick things off here with, with the first. Red flag that we're looking for.
The hammer people
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Raul: So, uh, we've called it before and that's the name I've termed, uh, the Hammer people. So stay away from the Hammer people. What's a hammer person? I'm a person. Someone to whom everyone, uh, everything is a nail. 'cause that's what they have as a hammer.
And how does it translate to you as a venture, as a startup? Well, these are the [00:11:00] people that, for whatever problem you have in go to market, they have one or two answers. That they've done at the previous company that they worked at. Uh, your funnel needs to be reworked. You need sales training. Uh, you don't have enough leads, sales training, uh, people don't enter data into the Salesforce system.
You need sales training, my man, um, and so on and so forth, right? And, and they will package it nicely. And if they're smart and a little bit eloquent, then they will have better ways of delivering than I just did it. But essentially they will have very clear. Very repeatable answers to always the same problems that are just not necessarily addressing the problem.
And most of all, very simplistic answers to quite complex problems,
Toni: I gotta say, right? Kind of. I'm, I'm, you know, this one team that I'm advising. Um, I recently. Advise them, um, to do more outbound and, and, you know, while, while we were working through the issue and I was like, oh shit, I think they need to do more outbound.
I was at the [00:12:00] same time also like, Tony, come on, is, is this your hammer? And you're just seeing nails everywhere. Everything needs to be outbound, outbound, outbound. But, um, but no, I mean, you know, I challenged myself kind of, Hey, is this, is this really the right answer? And kind of in their case, it actually was.
Works perfectly. Um, happy, happy they've been doing this. Um, but um, I think as a, as a person doing some of the, the advising, you also just need to be aware where your own bias, where your own comfort zone is, because you will always try and go back to that comfort zone. Right. And I think that's, um, I think that's, you know, the normal tendency and, and, and not necessarily because they, um.
You know, they wanna be evil or something like this wanna mislead you or something like this, but they just are heavy in this area. And then that's why kind of that might happen. But how do you, yeah. How do you green flag this role? Kind of how do you get out of the, um, how do you help people to spot that the consultant is a hammer person?
Raul: So let's say your example right here for the green flag part. [00:13:00] You're someone who personally is, I would not call a hammer person because of obviously the, the variety of things you've seen, but also your approach of fundamentals and first principles and understanding, uh, things I would say on a physical level, which typically would lead you to when you were giving that advice of outbound.
This is your solution. Uh, I would assume, first of all, you just said it, you've questioned yourself. Is this really the right thing? But you've probably also considered more than one option, right? You, you didn't get there and said outbound in itself. And even when you said outbound, then what followed after was probably, uh, giving justice to the complexity of the problem.
So it was not just outbound in itself. Yes. Is that true? How did you, how did you give that, that actual answer?
Toni: The thing was actually that, um, realizing that the. Recipient of the outbound, um, was someone in an area, in a region, I don't wanna be too specific here, but in a region and in a job function where actually you and [00:14:00] I believe that outbound still works.
Uh, basically kind of having these, um, uh, you know, features of being in Germany, up on Germany still works like the phone works, right? Having the features of being in a very niche position within an enterprise, um, that didn't, hasn't been completely spammed yet. Um, and, you know, a, a bunch of people that aren't spending their life on LinkedIn.
Seeing all the tactics and, and so, and building, therefore building all of those defense mechanisms basically, since it kind of ticked those boxes for me it's like, this could totally work. Like this could absolutely work. And yes. You know, again, the, the real question though is like, how could my client, I.
Figure out that I'm not a hammer person. That's actually the real question you have for, for everyone listening. Right.
Raul: So what you just did, what would we call that, the couple last couple of sentences that you said was, which was basically the justification of why you thought outbound was a good answer.
You could probably [00:15:00] call that an analysis. Or a dissection of the problem, right? So what you're looking for, the green facts you want is a proper dissection and analysis of the problem. Yeah. That starts from a non-biased standpoint if possible, and considers a variety of solutions. That's the second point.
And a variety of approaches. And first principle thinking, meaning, I'm trying to understand the problem from the roots, understanding really what pushes the needle and what, what moves the needle and what doesn't, and goes from really the business needs, uh, at the end of the day. Now, that doesn't mean.
Someone is not a hammer person, but it's a strong indicator. Um, first of all, typically because hammer people are not that sophisticated, so they wouldn't be able to. Properly analyze and dissect the problems since business problems are, can be typically quite difficult.
Toni: Yeah.
Raul: Uh, and even if they are with a little bit of pinpointing here and there, you can probably figure out their biases and figure out that they're actually always going towards the same direction.
So the one thing you should be looking out for here is. I could personally present you an analysis that goes into always exactly the same end result that [00:16:00] I want to get to from the beginning. I could do that. I choose not to, but if you were to question me a bit more, it would be more difficult. And if you were to engage in an actual conversation about that, it would be even more difficult for me to get to exactly where I wanted to go while still giving a coherent answer.
I.
Toni: Yeah. Okay. Let's move on to the next one.
Consulting is a skill
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Raul: And I think this is quite controversial, um, as has the first one already been a little bit, maybe the red flag would be someone lacking actual consulting experience, right? And, uh, I don't mean experience in itself, right? That's a wonderful thing. So someone has been 10 years, twice, five, twice, five years, CRO at some SaaS company.
So that could be a great thing. Could also be terrible for you, by the way, but let's assume it is good. That does not mean they're a good consultant. So first of all, consulting is a skillset of its own, right? I have been working at this for 10 to 12 years, and it took me a while to really figure out how to actually be good at this.
And I would say I'm good at this right now, but I definitely wasn't in the first year or two, and I definitely wasn't, just because I had worked on a problem before, it is not the same [00:17:00] to have solved the problem than to help someone else solve the problem, solve the same problem, um, and. First of all, most problems you're gonna, cha you're gonna face as a consultants are not exactly the same as you've solved them yourself.
So I think that there is quite, uh, an overvaluing of people who've done it actually. Um, and while that is helpful and undervaluing of people who are then able to translate that to results for you because that's what you really care about. Yeah. The fact that you're looking at CV is just a proxy.
Toni: What I sometimes call is, is, uh, consulting is an actual skill.
Right. Yeah. Kind of selling's a skill. Coding's a skill. Leadership is a skill. Consulting in itself is an actual skill of, you know, a mix of a few of those things that I just mentioned. Like, I think consulting is a lot of selling, actually selling of ideas, selling of you selling off, you know, change and stuff.
Um, but, but it is an actual skill in itself. So what is, you know, if, if you were to kind of try and help someone to pinpoint. Whether or not someone has that skill in [00:18:00] itself, right? It could be, yes. They have been a consultant with BCG for 10 years. They probably have that skill now, but like, um, if they don't, um, what proxies would you use to figure out if someone has that capability?
Raul: Every consultant skill set can really be different. So I would say that there is not one exact thing you'd be looking for, but it always comes back to solving the same problems. So what you would like to do is, is when you're. Interviewing for that consultant position or when you're talking to someone who could be helping you that way, look at the way they go through problems.
So as I talked before, it is about the analysis dissection of problems, but it's also about the clarity and the way of communicating those problems. So, uh, are they able to. Quickly absorb what matters in your business to ask the right questions. Do you feel like they're getting to what really matters? Or do you feel like they're only getting away now sometimes maybe they're getting away a little bit because they actually have a goal later in mind.
But af if you, if you look at the whole session, did you actually talk about what mattered in the end? Did they, did you have a feel that they grasped what [00:19:00] mattered for that business? And did they do so in a, uh, in a small amount of speed? So, um, in a short amount of time. So, uh, this is one of the skill sets of being a consultant is you might be working.
So, me personally, I'm working with eight to 10 companies right now. Uh, I have to onboard myself super fast. I have to ask the right questions so that I know how to work with that company after a day or two where maybe in if I were an employee, I would have a month or two. So that's also maybe something you're looking for.
Do they have a short time to understanding and to kind of be at least 80%, 80 20, onboarded? But then there's maybe some more, uh, concrete things here. So, uh, are they able to give clear answers, uh, and to move ways forward? Are they able to take unstructured thoughts, uh, and implicit thoughts and put them into an explicit way?
So, for example, Hey Tony, based on what you just told me about, it seems like these are the three main. Things, right? I'm not sure what we do about number three. How about we just start working on the first two ones, right? Uh, have you tried this? Have you tried the other? Okay, why not? Why? And so it's kind of like a decision tree [00:20:00] that I'm discussing together with you.
And I do that, uh, to arrive at clear recommendations, clear steps forward, so I have an idea of how to actually, uh, proceed here and a strong execute execution plan. So if they're able to communicate those things, it's very likely that that's already a little bit of a consulting skillset, right? Yeah.
Toni: I actually think kind of it's a little bit.
Again, some of this stuff is changing. I think the way consultants will engage with companies is going to change. Um, and speed to value, just like in a product business, you know, this being a service business, super important. Right. And you just mentioned kind of the time it takes for you to get onboarded.
It's, it's really important to kind of keep this super short because otherwise, um, it will just. Reflect poorly on the, you know, whatever value kind of add afterwards. Right. It's kind of interesting how those two concepts of selling a product, selling a service, how they're kind of merging. Maybe they have been the same all the time, but it's maybe just making click in my head that, um, [00:21:00] the way we, um, we evaluate those things, it's actually in the, in, in very much the same way.
Um, yeah, but let's, let's not linger too much on my, my, my, you know, stream of consciousness here. What's the. The next one I like a lot by the way.
Consultants as challengers
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Toni: Um, which is really about, they, you know, those consultants, they, they don't say no, they keep saying yes, kind of the yes are consultants and that's a bad thing.
Why
Raul: to, to an extent. Uh, it depends really on the person and also the personality. But you are also getting a consultant to tell you where you are wrong. And that should start with any good consultant actually, especially for a founder or CEO with even the most basic of assumptions. Right. I'm not saying they should question everything and fight you on everything, because obviously you should know more about your company and, and you do, but they should be kind of pointing you in certain directions and, and teasing you here a little, a little bit here and there is like, are you sure that outbound is really your problem?
Are you sure you've tried correctly? Hey, uh, maybe you threw, maybe [00:22:00] you threw the towel too fast in the uk. Like what about this? What about that? Right? So if they, if they just take things for granted. Uh, along the way, and then also take very easily things for granted as to the recommendations and the action plans and what should be done.
That's not a good sign. So, uh, a, a good conversation with a consultant, especially early on, right? So we're not talking maybe after the third or fourth time you've met should be a little bit of a struggle and it should be where maybe they're challenging you a little bit on your assumptions and on, is this really what should be done?
Maybe this is not actually your problem. Have you, have you looked at it that way? Have you looked at it this way? I. Right, so kind of the shaping era of the relationship where it's really about discussing the job to be done and nailing down what is there to be achieved and how to do that. That should be a little bit of a fight if they're not pushing back and if they're not really also asserting themselves a little bit and their ideas, I.
That's probably not a good sign. Now you can still agree at something later on. So it doesn't mean that they have to be, uh, uh, [00:23:00] impossible to work with, but it, it shouldn't be that easy.
Toni: I'm just wondering because sometimes, you know, questioning too much. I mean, I kind of even see this employees working, you know, for me, right?
Kind of. It sometimes feels a little bit like, you know, doubters and like, you know, besa visas and, and, and that kind of stuff. Um. I think it's a fine line. I'm just gonna say it out loud. Right. I think it's a fine line. And I think it's also a, in some point, at least kind of this, the employee relationship, almost a team member relationship.
It's like, you know, you can raise your hand once, you can raise your hand twice. But after the third time saying, no, we're going this direction. Um, then I also kind of don't want to hear about it anymore. And I think, I think that extends a little bit also to, to consultants to a degree. Right. At some point the consultant's gonna be like, well, you know, if you wanna run out the cliff.
You know, you, you gotta do that my friend.
Raul: Yes. And, and, and that's what they might do. So a good consultant might. So first of all, consultant is not your employee, right? Yeah. So it is not the same kind of relationship. I would go mad if my employees would be [00:24:00] doing what I do every single day with, with a, uh, with kind of the, the consultant clients I have.
But, um, then again, I'm not an employee and I'm not looking to be one for those cases. Right. Uh, so they specifically also. Want me to do that. Uh, the question is how do I, how do I do that? And maybe do I find a way where it's like, uh, a productive kind of discussion. And luckily, a lot of times I find a way, right?
But if someone goes out there and pays top dollar for a consultant and someone who really has experience, they don't just expect them really. And you also shouldn't expecting them to just nod ahead and be like, yes, boss. Yes, boss, yes boss. Right. Um, these are typically the order takers, not necessarily the people who have an idea of what really matters and what shouldn't.
Right.
Pricing and value in consulting
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Toni: Let's talk about. Price next. Actually, I don't know. Is it too cheap? Is it too and expensive? Kind of. How, how does, how does that actually work?
Raul: So I, I'll throw that question back actually, because basically when we pre discussed this, uh, we're talking about, well, a bad consultant, a red flag to look out for is there, if they're too cheap.
Now you as. Currently a consultant [00:25:00] and CEO, uh, how's your, what are your thoughts on this? Like, uh, are you looking for just the cheapest person possible, or is it, uh, is price not an issue with this kind of consulting thing?
Toni: Yeah, I don't know. I think it's what, what I struggle with in the whole consulting kind of realm.
And that's why I also, you know, I don't actually have some of those skills. It's very intangible value. You're selling to a degree, right? Kind of. I, I really enjoy selling a product. Like here's what it is, try it out, test it out here. That's what I'm gonna do for you consultants kind of. Yes, it can do everything, but can it really?
Right. So that's why it's really difficult. I think, uh, uh, setting a price. It's sometimes like a, like a confidence game more than anything else I feel like, which, which I just don't enjoy necessarily as a, as a way to kind of think about it. But I mean, theoretically thinking, right? So I had this, for example, with, um, recruiters right in the beginning.
Um, excellent recruiters. I was like, you know what, um, let's add some recruiters to get us SDRs. That was the biggest bottleneck. And basically we had [00:26:00] incentive to try and, you know, get them to do the work for us the cheapest way possible, because, you know, that saves us money, it reduces my cac, blah, blah, blah, blah, blah.
And then after a while, you know, it dawns on me that, um, the way those consultant, uh, those recruiters are working, um, is. Okay, which of my clients is paying me the most? Ask this client with my, you know, the first place I'm gonna go with any new talent is gonna go to that client. When that client says, no, I'm gonna go to that client.
When that client says, no, I'm gonna go to that client. The problem is you don't want to be at the bottom of that list, right? Kind of. You don't want to be the last client they go to. Because, uh, all the good talents basically kind of have been taken then at that point already. Right. And I'm not sure how it translates completely to the consultant thing that we are discussing right now.
But at least there's a, there's a piece to it here where I'm thinking it's um, uh, it translates over, doesn't it?
Raul: [00:27:00] This is not necessarily how my brain works. So this might not be kind of a self-serving thing, but it doesn't have to be talking to people who do consulting, advisory coaching. They will prioritize their time and they have to, because that is such a different job when they're like a freelance consultant or they have a management consultancy, they have to go by what pays, obviously, and they have to kind of achieve a certain amount of money.
Right? And. Maybe you could work together with them for less money. That would also mean that maybe you're number six on their pole of, of, of projects that they're working with. And it can also mean that they can only give you and actually give you two, three hours a week. I think there is this kind of trope that consultants are always overcharging that is not true.
Like people really don't see a lot of times the thought and the the work that goes behind the scenes and yeah, that's true. And, and. I only have 40, 50, 60 hour, how many hours I work a week and I have 10 ventures or five ventures I work with. Um, I will have to kind of divide my attention between those companies.
Right? And that is also a little bit of an indicator now, [00:28:00] I think it's ethically and, and, and also morally important to really also be transparent. It's like who you're working with, how many, and also tell someone if you can take really them on and give them the full attention, but. The money you pay them also directly translates to the attention that they give you.
Naturally. It would be the same for you if you were to do it that way. Right? You're gonna give your focus to where it matters most. And the, the thing is, if you want me to, uh, solve a problem for you, there is different intensities of how it can help you do that. Right. And obviously, price is one of the ways that dictates that.
Toni: Yeah.
Raul: On the other hand though, really the. Cheap versus expensive, whatever that means in your area can be really different. Like there is no price. That is a lot or that is little. Like I've known consultants who take 50 bucks an hour. I've known consultants who take a thousand an hour and they're probably not even expensive.
It depends on the area of expertise too, but. When you have multiple options, price should really not be the most important indicator, especially when you really understand the ROI of what you're trying to achieve. And someone can propose you [00:29:00] an a, a great plan or convince you that they're the person to achieve that.
That's really what should matter. Uh, and a couple things first before price. Now I'm not saying pay out of your ass for everything, that would be dumb, right? That would not be a good advice either way here. But, um. Uh, it should be a, a total package there. Maybe one more thing about very clear, transparent green flags to look for, right?
So how can you see these things? Are they very transparent with pricing? I talked about that? Is the pricing kind of shaped to where you can work with them for a longer time? So typically the longer you work with someone, the more clear it will be. Are they good or not at, at what they're doing? And then also are they willing to discuss maybe some kind of variable component.
This is a very strong and clear indicator. Not every, uh, project lends itself to that, but at least in the world we are in the world, even you as a listener are in, I would venture that 70, 80% of consulting projects you do can, could have some kind of variable component, uh, to the, to the pay. And, um, if they're open to that, that's already a good sign.
Toni: And I, I guess it [00:30:00] does leave leaders almost kind of to the last bullet here, um, which is really about the ability.
Execution and enablement
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Toni: For them to help you execute stuff, right?
Raul: What matters here, and I said this in the beginning, is it is not the same skillset and it's also not the same to do something on your own or help someone do that thing and achieve that outcome that they're looking for.
These are different things. Again, sports example, you don't necessarily, uh, have to be the best player to be the best coach, right? And, um, some people are great at both. And typically the experience as a player lends itself to also being a better coach. So these are all factors. But what ultimately matters is you want someone to help you achieve your goal.
Now, that could be because you hire them in a fractional position and you actually want them to do it, but it could also be that. By, by the way. But that is also more expensive. So that's one of the reasons to not take everything as a fractional C-O-C-M-O, what have you. Um, or you're saying, well, the way that this works out, I can see them just helping us with the [00:31:00] retainer of five hours a week, touching some things here and there, and giving very, very good advice and analysis.
Um, the question is like, is that really moving the needle analysis and recommendations? Probably not. So what you're looking for here is. Do they have an idea of how to actually execute? And this, I think out of all the things we've talked about is the rarest. So, uh, there's a bunch of people who by now, and this didn't used to be the case six, seven years ago, who by now could tell you very eloquently about the bow tie.
And they could tell you very well about PLG and they could also tell you how to run, uh, an AI driven sales motion and all these things. The question then is, out of these people, how many actually have a skillset that could help me achieve that outcome? And that takes more than just putting up nice slides.
That takes more than just knowing the what to do. It's about the execution skills, and it's about the enablement. It's about strong stakeholder management, clear [00:32:00] communication, uh, project management, if you wanna call it that way, the. Boring stuff, but that is the stuff that gets things done. So when someone tells you, Hey, you should be doing the bow tie.
Ah, that's nice and all. What matters is when they're like, okay, and this is how we're gonna do it, right? First of all, we're gonna do this, then we're gonna do the other. If that goes wrong, we might pivot to to C or D. We're gonna have to talk to these and these people once a week. This is how we're gonna do it.
We're gonna focus on these and 3, 2, 3 things that we measure. We're gonna be in budget, time and scope. The project's gonna be this long, right? This is what matters. And then also. Uh, gets them, gets the, the, the result really. And in addition to that, in the end, they're looking to also leave you better off than they found you.
So they're looking for a way to enable you so that when they're done with the thing that they're building, you're, you're at a higher level than you were before.
Toni: Yeah. I'm wondering if there's also difference than there between, you know, being a consultant, a coach, an advisor. I feel like those three things, they sound sometimes like the same.
Um, but there are differences, at least in the [00:33:00] depth of execution, help that they kind of, uh, that they should provide. Right? And I think people out there should be, um, let's just say do have an advisor, you know, which, which I don't think is a necessarily a bad idea, but like you should be thinking about, um, do you want this person even to execute stuff or do you want my consultant only to advise?
Right? Kind of that there should be differences in, um. You know, what kind of skill sets you're looking for and kind of how that specific resource fits into the problem that you're having, right? Because not every problem lends itself or someone externally to, to execute it for you, right? There's some that totally do, um, but it's not always the same thing.
Summary
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Toni: Ro like, you know, we could go on here for quite a bit. Yeah, I was kind of, um, uh, trying to, um, keep this super compact for our listeners here. Um, and. I think maybe we kind of stop it here. Like we talked about a bunch of different things, like should you be doing, uh, you know, [00:34:00] consulting services and, you know, should be kind of buying them in general, like.
I am still not a thousand percent of like a yes or no on this, but what I do believe is this is going to change going forward. And then I think we gave some really tangible pieces of advice for people to, um, you know, look out for, to make sure that the person that they're engaging with, which might be magical, might have some, you know, pros and cons to it, which doesn't necessarily need to read people to reject someone, uh, but just to kind of be aware of, you know, how to manage that.
That resource and get it to the best possible outcome.
Raul: And to sum that up really quickly, the five points, right? So, uh, try to stay away from the hammer people, right? Everything is a nail to a hammer person that's not a good consultant. Uh, look for people who have actual consulting experience, not experience as a practitioner only, but experience helping someone achieve those goals.
Look for people who say no to you, right, in a constructive way, and help you also shape the problem in itself. Uh, look for people [00:35:00] who are not necessarily cheap, but transparent about pricing, and also will give you the full attention, right? Not on, not necessarily choose the cheapest one, but choose the one that has the best package and look for people who have an idea and maybe even the track record of actually executing rather than just talking about things.
Especially for startups. That's not really the thing you're looking for. You want someone who can. Execute and enable you to be at a better point after the project than you were before.
Toni: Raul, thank you so much. Um, and, uh, hope this was helpful for everyone. If you think so, and if you're thinking about adding consultants, maybe send this.
Uh, podcast to a couple of your friends that are evaluating that too, and then otherwise, have a really good rest of the day. Cheers everyone. Bye bye-bye.
Next week: Chris Tottman on VCs
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Toni: Next week, I'm talking with Chris Tottman. He is a general partner of Notion vc and he has been the co-founder and CCO of Message Labs, which he and the team sold to Semantic.[00:36:00]
For $700 million, little bit more than a decade ago. We're talking about why taking venture capital money has quite some downsides attached. And number two, why your team probably needs a VP of product market. Fit. If you don't want to miss that conversation, hit the top start button and see you next week.
Chris: There's this kind of, what we call this kind of delusional force field that we have, that we believe what we believe and it's important that we need to believe what we believe in order to like, you know, be lean forward and go in, you know, as the founder is taking extraordinary risk. But the reality is, you know, from a vc, so staying on the venture track, so being.
Which is growth driven. Let's say it's 1% of all of the VC deals that get done. So let's say there's a hundred percent of companies, not all a hundred percent are pitching for, for VC type money or, or, or, or trading their equity for working capital, but let's say 10%, uh, of those that are pitching, uh, get VC money, but there's only gonna be a 10th of those 1% that actually, um, stay [00:37:00] broadly speaking on the, on the, on the venture case.