12 Jan Follow these three rules when choosing tech consultants
Hamlet: Do you see that cloud, that’s almost in shape like a camel?
Polonius: By the mass, and ‘tis like a camel, indeed.
Hamlet: Methinks it is like a weasel.
Polonius: It is backed like a weasel.
Hamlet: Or, like a whale?
Polonius: Very like a whale.
— Hamlet, by Edward deVere, 17th Earl of Oxford (AKA William Shakespeare)
Occasionally stumbling across truth but mostly skilled in sycophancy, Polonius was a hack consultant to Denmark’s king. Hamlet exposed the sucking up of Polonius in a classic exchange that should be enshrined in the canons of business literature about sleazy consultants.
In this benighted age, though, Shakespeare’s timeless wisdom seems to fade more every year. ’Tis a pity for all of us – yes, including technology entrepreneurs.
Tech entrepreneurs are everywhere besieged by Polonius-like consultants. Rather than bringing real solutions to painful problems, these consultants are expert at parroting back opinions by their clients and extending the length of their consulting contracts. Alas, most entrepreneurs are less adept than Hamlet in dealing with these charlatans.
This is surprising because tech entrepreneurs should be expert in choosing consultants. All you have to do is behave like one of your own customers. Yes, there are three simple rules for engaging consultants that you should have learned from your own customers:
1) Never give a consultant a minute of your time without you personally knowing their qualifications or being introduced to them via a strong referral.
Think about how tough it is for you to get traction with your target customers. Unless you’ve established your bona fides in some previous relationship, they don’t know you or your technology. They have no reason to spend any time with you, much less do business with you.
The only way you might get a meeting is if someone they know and trust suggests that they do so because you can really help solve the customer’s problem. That’s a good rule for you to use with consultants, too. Your time and resources are as least as precious as established companies. It will pay for you to resist expending them on folks who you don’t know or aren’t preceded by a strong referral.
There is a rare exception to this rule.
Occasionally, good consultants will invest their time and effort in getting to know your company from third parties and publicly available information. If a consultant approaches you with a compelling and detailed explanation about how he can solve one of your very painful problems, go ahead and listen. Just make sure you demand references before doing anything further.
2) Only spend your precious resources on “must-have” consulting services.
If you’re a tech entrepreneur, you know that you can only be successful if you are offering your customers a solution that they “must have” rather than one that would be “nice to have”. The difference between the two is a huge chasm rather than a mere crack.
A must-have solution is one whose value to your customer far, far exceeds his cost and effort to buy and implement it. This hurdle is actually cleared by only a small fraction of new technologies introduced every year.
Similarly, tech entrepreneurs – classically short of time and resources – should subject every consulting proposal to an assessment of whether the result of the work (if successful) is a must have. Building a tech business involves many must-have solutions, but comparatively, few of them can be outsourced to a consultant.
Don’t forget that you should also consider whether you actually need that solution now rather than later.
3) Only use consultants who will “invest” in delivering you a successful solution.
If your emerging tech business is finally generating revenues, you’ve probably gotten to that blessed milestone only by giving your customer something more than a must-have solution to his severe pain. In fact, “must have” usually just opens the door to a negotiation in which your customer demands that you ensure his success in using your still-unproven solution.
There are a variety of ways this might be done (such as success fees, payment claw backs, deferred milestone payments and revenue sharing). Each demonstrates to your customer that you are committed to his success and are willing to stake some of your compensation on it.
Much the same can be incorporated into consulting contracts. In fact, merely raising the issue is a powerful way of separating the performers from the poseurs. If a consultant volunteers it before you raise the matter, you could be dealing with a real winner.
While there are other useful rules to engaging consultants, these three are especially delicious because they require consultants to experience the demanding world in which entrepreneurs live.
There’s one final rule: After toying with Polonius, Hamlet much later killed him (perhaps mistakenly but not unjustifiably). It’s strongly recommended that you never harm a consultant (even the obnoxiously persistent ones).
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.