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Why Your Startup Shouldn't Hire Consultants

Don't worry I'm a consultant

Hired guns. Code mercenaries. Consultants.

Whether you are early stage or have an established product, bringing a consultant onto your startup can be a dicey prospect. Here are reasons not to and some things you may not have thought of.

While there is truth to all of these, there’s more to be considered. Reality is, many startups are successfully using consultancies (although they may not advertise it). In a world where good people are hard to hire, time to market is tight, and product quality is critical, hiring a consultant is not always the right thing to do. However, it’s also not always not either (if you’ll pardon the double negative).

Reason 1: They’re Expensive

If you need to hire a design / engineering consultant (in Boston, at least) you are likely looking at $100 - $250 per hour depending on the shop and what you need. That’s $4,000 - $10,000 per week per full time person. Assuming you had a full time hire that had a total cost of $150k per year (after taxes, benefits, overhead, etc) that’s around $72 / hour.

Ouch.

Of course, this assumes we are comparing cost for the same value which probably isn’t true. Not only might you be getting something better or different than you have internally but you don’t have the same costs associated. A consultant pays their own taxes, vacations, benefits, etc.

You usually don’t hire a consultant for a whole year. You bring them on for something specialized or because they offer something you don’t have in your internal team or can’t hire. They’ve got experience and skills that can prove to be invaluable:

  • Strategic insight. A general knowledge of the industry, best practices, and the ability to pinpoint the best technical or product direction.
  • They’re battle tested. They’ve been through the full project life cycle across different team sizes, contexts, and technologies. This adds crucial perspective that only comes by experience. Especially knowledge that only comes from previous failures.
  • They’re good. Maybe really good. That’s why they are “expensive” (usually). They’ve got the skills you need and can get things done quickly.
  • Consultants come with friends. Hiring a consultant from a consultancy means you’ve got a pool of similar resources you can draw from quickly without going through the hiring process for each one. Even for independent consultants, they often have a wider network to draw from when you need someone based on personal recommendation.
  • Consultants are easier to let go.

You may bring on a consultant simply to augment your team and add momentum. Add a consultant or two where it makes sense, crank for a while, and then scale down to a slower pace after the push.

In a perfect world, when you needed to grow your team you’d be able to hire passionate, invested people with the skills you need when you need them. That’s a fantasy. The reality is that hiring (both salary and consultant) is hard; it takes a lot of your time and involves significant risk.

Reason 2: They Walk Away with Knowledge

History matters in a startup. The reasons why things are what they are (both good and bad) are important. A consultant may come in, do some great work, and then walk out with all the good bits in their head. This is a legitimate risk for anyone hiring a consultant.

It’s not, however, a show stopper:

  • Integrate them in the team so there is knowledge sharing during the work. Make sure other people at least know, and ideally have worked on, their stuff. Do code reviews. Seriously, just do them.
  • Have them put together documentation during the course of the work (not at the last minute) and use it themselves.
  • Embed them in team discussions so they know why the team did what they did and vice-versa. The random, informal conversations are often the most valuable.

If this is a concern, don’t give a consultant the most important piece of your product and then have nobody else know about it. Add some redundancy or minimize risk by putting them on something else.

Reason 3: They’re Not Invested

Your core team is passionate and invested, you hope. (Let’s assume they are.) A consultant is usually seen (rightly) as an outsider who comes in, does something, and walks away with no strings attached. The assumption is that they won’t deliver the same quality or be as proactive at addressing problems as your core team.

Again, a legitimate concern.

Get a consultant with a good reputation, a good body of work, and seems like someone you can trust. Protect yourself by getting them as closely integrated with you and your team as possible; tight collaboration will quickly shed light on lurking concerns.

It’s incorrect to assume that consultants don’t have stake in your project. Consultants live and die by their portfolio and having happy clients is critical. Finding new clients is expensive and difficult. Happy clients come back for more work. Especially when working with startups, it’s foolish for me not to do everything I can to help them succeed.

Allow Me to Illustrate

Here are a few scenarios where bringing in a consultant may make a lot of sense.

Get Your Product Off the Ground

As a founder in an early stage startup, you face many challenges in getting your product off the ground. Furthermore, many founders have never designed a product, built a software platform from the ground up, hired a creative team, scaled anything, worked with big data, and might be working with emerging technologies such as mobile.

That’s a big, steaming pile of risk. Building the wrong thing, building it poorly, or taking too long can be a killer.

Bring in a (very) small team of experienced consultants who can not only build the technology but help you understand the product, the technical landscape, and build the right product. Furthermore, while working with the consultant you can be working on hiring that long-term team. The product gets built in the time needed and you get some breathing room to put your team in place.

Add Momentum or Features to an Existing Product

You’ve got your core team established and product off the ground. You have a well defined roadmap. Problem is, you simply don’t have the man power to get it all done in the time needed.

Bring in a handful of consultants, integrated them tightly into your team, and hit the ground running.

Bring in Some Expertise

This is the likely the most common case for a consultant; you need a special skill you don’t have in-house and doesn’t make sense to develop. Find a consultant that can do it but can also do a lot more; integrate them as much as possible and get as much out of them as you can. For instance, if you bring in a firm to do some mobile work get them to add value in other places such as touching the REST APIs, helping you create a mobile roadmap for after they are gone, or giving advice on to what degree your web apps need to be responsive.

Consultant != Contractor

I’m making an assumption here in the difference between a consultant and a contractor (this is my definition). Consultants (disclaimer: like me) are often brought on for their thoughts and experience in addition to getting the work done. Consultants may even challenge their clients with new ideas and approaches.

Contractors are brought on to perform a task, build a feature, do something specific.

Success or Horror?

Have you considered using a consultant at your startup? If you’ve used one, how was your experience?