Vintage consultants, new-age entrepreneurs
Ayushi Gudwani’s new office is in Delhi’s Lado Sarai neighbourhood, an urban village. The narrow street is dotted with art galleries, fashion boutiques and a smattering of technology start-ups. Along one wall of the fourth-floor office, two hangers are stacked with garments: One has samples of her new collection, the second holds pieces from her last collection.
Gudwani runs Fable Street, a workwear brand for women that she started in September 2015.
Behind the hangers, half-a-dozen tailors are at work, a glass partition separating them from the main room. Two chairs and a small round table are the only pieces of furniture. Gudwani guides me there, even as she coordinates with the local chai seller to order us tea, and gives directions to a supplier’s runner.
Her workspace screams garage start-up. Less than two years ago, an office such as this wouldn’t have seemed plausible for someone like her. As a senior engagement manager at McKinsey & Co., Gudwani, an Indian Institute of Management (IIM), Kolkata, and Netaji Subhas Institute of Technology alumnus, lived the high corporate life in the consulting firm’s stately office in Gurugram, near Delhi.
But after seven years at McKinsey, the urge to fashion a new path became too strong. When she left in early 2015, it was as much about leaving the comfort zone of a secure and prestigious career as experiencing what she could never have in her consulting career—the desire to live the exciting journey of building something from scratch.
Interestingly, Gudwani isn’t alone. She is part of a growing cadre of experienced management consultants (often considered the smartest of the smart) who are hanging up their advisory boots to dig new trenches in the muddy soil of entrepreneurship. “Over the past couple of years, this is an upward spiral. Even a decade back, we wouldn’t see so many consultants tread this path,” says Padmaja Ruparel, president of the Indian Angel Network.
Take Kuldeep Jain, for example. As the global partner at McKinsey & Co. (India), he advised clients across several sectors, and had developed an expertise in energy and corporate finance. The consulting firm was his first job after his management education at IIM, Ahmedabad. When he decided to scratch his entrepreneurial itch in 2011, he had spent 12 years at McKinsey.
Over the past six years, he has built Clean Max Solar, an on-site solar power company, into a promising business.
Filling a gap
So how do people who have cut their management teeth by helping chief executive officers (CEOs) and large conglomerates run their businesses lead when the buck stops with them? Do their famed strategic visioning and formidable problem-solving and analytical skills give them an edge? Or does the helicopter, not-get-your-hands-dirty model of consulting prove to be a disadvantage?
The advantages of a consulting vintage are many: a keen eye on profitability as well as a deeply embedded client-servicing attitude that can lead to a sharp customer focus. The partnership model consulting companies work with is also helpful as you learn to rely on and work with others, adds James Abraham, who used to work at the Boston Consulting Group (BCG).
Consultants turned entrepreneurs say they have been bred on visioning exercises. As a result, they have a clear vision of what they want to do. They are able to envision well because of two other key consulting traits: a strong mindset to identify business opportunities and an ability to zero in on ideas that have the potential for large-scale growth.
“If you look at various consultant-entrepreneurs, they would focus on businesses with tangible sights for growth. It usually isn’t about getting swept away by an idea,” says Gudwani. Her “need-gap” was that Indian professional women don’t have access to Western workwear with good fits for the Indian context. Fable Street has developed a styles and fit algorithm tailored for Indian bodies that it claims as its USP.
“Their deep dive into an industry and often exhaustive research does lend itself to solid business models. They understand pricing, product improvements and how to bring in efficiencies,” explains Ruparel.
But it raises many questions as well. Ruparel rattles off a battery of questions when former consultants pitch for funding: How will you hire? How will you design performance reviews? How will you set up an office? How will your accounts team work?
“The fact is, it’s easier to give advice than to do it yourself. You need to check for how they will operationalize a plan, how they will manage the day-to-day,” she adds.
The tough road
Having consultants introspect on this negative flip side isn’t easy. Many owe so much to their consulting stints (and continue to be professionally and personally integrated as “alumni” of their previous employers) that there seems to be a reluctance to be overly critical.
Many privately agree that the journey from consulting to entrepreneurship isn’t a natural progression. The consulting DNA by nature is risk-averse and attracts individuals driven by status and prestige. By definition, entrepreneurship is the opposite of that. It calls for risk-taking as well as the shedding of self-importance. Not more than 10% of consultants are cut out to be entrepreneurs, says a former consultant who did not want to be named.
Sometimes, it’s the very training that made them successful consultants that needs to be adapted in the context of entrepreneurship.
Take the example of James Abraham, who moved to India in 1998 to help grow BCG’s office here; he had joined the firm’s Toronto, Canada, office four years earlier. He left BCG in 2009 to lead SunBorne Energy, a solar engineering and technology company that has built and sold solar plants in Gujarat and Rajasthan. He co-founded Solar Arise in 2015 to invest in and build self-owned solar facilities.
Abraham, who was senior partner and managing director when he left BCG, puts it well when he says that one of the things he valued about his previous employer was their long-term horizon towards clients.
But, in the early years of SunBorne, some of their technical bets didn’t work. The market economics changed so dramatically, so quickly that their economics didn’t add up. Like all entrepreneurs, they had to discard some ideas and plans.
Looking back, Abraham says: “Consultants like hope, as they are pitched in for the long term. As an entrepreneur in India, things take time to mature, so my long-term perspective has been helpful. But the flip side is that I’ve allowed some decisions to linger longer than they should.”
Gudwani echoes the sentiment, saying that they weren’t taught decision making because their mandate was to give pros and cons. “As an entrepreneur, I’ve had to learn to make decisions.”
There is definitely greater clarity on the risk-reward trade-off now, adds Abraham. Even though like all committed professionals he felt he had complete ownership of his clients and their business, as an entrepreneur he has learnt that real risk always rests with founders. “Whether it is reputational, personal, organizational, or linked to leadership, as a person who is building the business, I bear the burden. I empathize even more with the clients I had as a consultant.”
However, it’s as much about learning the ropes of handling challenges and situations few have encountered in their consulting careers. Managing cash and costs takes centre stage at this point. “The real cost of things is very different from the price points I was used to in my previous job,” explains Clean Max Solar’s Jain. “When I started out, one had to quickly learn the hard lesson of negotiation and pricing. What you negotiate for is what you get has been a vital new learning.”
He has also learnt to strip things down to their absolute basics. My language around business has changed completely, adds Jain, because while entrepreneurs take big macro risks and think of a radical idea, on an everyday basis work is really about putting out fires and mitigating risks.
“During presentations, after people have finished talking, I often ask people to explain it to me in conversational Hindi: What does this really mean?” he says with a chuckle. “My language now has more immediacy, of being hands-on and getting the work done.”
Treading a new path
Would they be better consultants after an entrepreneurial stint?
■ Ayushi Gudwani: “I would be a lot better and a hands-on consultant if I go back to consulting now, although I wouldn’t want to go back to just strategy consulting.”
■ James Abraham: “I now approach consulting reports as a consumer. I am amazed, not just at the incredible insights, but also their relevance to me. They do miss out on some of the trade-offs I would face in the implementation though.”
■ Kuldeep Jain: “Diversity of experience, any experience, not just entrepreneurship, would help any professional, as it would a consultant.”