Do you want to work for the worst manager ever?

This week I enthusiastically started working on my web site. Eventually I scrapped it. Through this ultimately frustrating process I learned that new business strategy is a process that cannot be fast tracked. Not because you need to be super careful, dotting the i’s and crossing the t’s. Not because the risks are particularly high – after all you have not done much yet and there are still no real stakeholders. But because long before you put up a web site you first need to deal with a fundamental question – are you looking to work for yourself or to work on your new business?


The process of developing strategy for a new business cannot be rushed because there are still many options, many ideas, many possibilities. But all you have is your own enthusiasm. You realise that you cannot defy gravity and become a respected global enterprise overnight. You also realise that you need to start somewhere, and bootstrapping is actually pretty difficult; whether you are incubating a new business or literally trying to haul yourself up by pulling your boot laces, both are equally challenging.

The reality of entrepreneurs is that many do not realise the difference between developing a business and creating their new job where they work for themselves. This fundamental question is something I encountered when putting up the website and which I am working through at the moment.

For a new business to succeed, it needs early revenue streams; you need customers who are willing to pay for the value you can offer. Without financial help in the early stages, investment in product will be slow. Value is easiest achieved by offering your own skills and services to customers through selling your time. Recruiting is not viable unless you can afford to pay salaries and carry the risk of underutilisation early on. But if you become the chief consultant yourself, who then will work on your business? Do you intend to do the job of Director over weekends?

The solution for many technical people who become entrepreneurs is to develop their new business based on their own passion, capabilities and experience. After all that is where the perceived risks are lowest and where the value proposition is clearest.   This is also where they have the strongest network of prospective clients and partners.  So they form what is effectively a consulting company, and continue to do what they have been doing for most of their previous working life. The main difference is that they now work for themselves.  And they can be a tyrant on themselves when it comes to being a manager!

Not that there is anything fundamentally wrong with consulting. Consulting companies can be low risk, provided during the formative years there are one or two sizeable clients and a real market demand for the expertise. A consulting business can be “de-risked” by sub contracting resources thereby avoiding paying fixed salaries in the first few years. Consulting businesses can run on very low overheads, and the margins are adequate to fuel a level of business development and organic growth. Consulting businesses can become “body shops” – also a short term viable business model but hardly very differentiated and of limited enduring value, particularly if the anchor customers go elsewhere.

If you have a consulting business are you really an entrepreneur or have you just found another job, working for a startup with yourself as manager?

Many founders of consulting companies invest “sweat equity” in the early stages to only find 10 years later that the business still relies on them and has no real differentiated value without them.

Many founders are compelled to sell consulting time in the formative years because they don’t have financial resources to do otherwise. But as a new business owner you need to be crystal clear on your strategy, and this requires an understanding of where you want the business to go and the stages it must go through to get there.

As your new consulting business grows will you continue to replicate a consulting business model and scale up by employing other consultants? At what stage do you stop consulting yourself and focus exclusively on the business development itself? In the first years will you deliberately reinvest the profits from consulting into another type of business model altogether? How much of your time will you spend on your clients and how much time will you spend on your business? What is your exit plan, or do you personally want to continue to be a consultant years beyond “retirement”?

If the balance between selling your time and working on your strategy is wrong you may either fail to win early clients or cause your business to stagnate and fail.

I have been working through these questions over the past week as I thought about the first phase for my business. The really difficult questions surfaced when I started to work on the new web site. A public web site needs to articulate the value proposition clearly and I found myself really unhappy with the early attempts. There still are too many dimensions to the business and this resulted in a confusing value proposition. In effect my web site ended up looking like a million other web sites. “About us”, “Contact us”, “Services” etc. It lacked clear focus because I still lack clear focus!

For me the consulting route is viable and I do have the technical expertise to make it work. But my intention is to avoid the full time consulting trap and be part of a business that does not solely rely on my own technical skills or consulting hours to prosper. The new business must grow and create value while the future Directors sleep. The business needs good people to run operations. It needs good products that sell themselves and a ready customer base for the products. In short I need to help the business hit a niche market at the right time with the right value proposition, and this evidently requires patience.

If you have already started a new business then perhaps you can identify with some of the discussion. If you are considering starting your own business you should ask yourself whether working for yourself as the executive manager in a new job is what you prefer, or whether you want to develop a new business model altogether and be the owner.

This has been a productive week for me, and frankly quite frustrating because I am impatient and want to be making more tangible progress! But getting the right strategy is more important than the extra month or two it might take to think through all the dimensions. The website can wait a while!

“Nothing great was ever achieved without enthusiasm.” ~ Ralph Waldo Emerson