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What do you think of "1B": offer to move into a consultant role? I don't have personal experience here, just working off stories from others, but the benefit t
by WorldMaker 4y ago
What do you think of "1B": offer to move into a consultant role?
I don't have personal experience here, just working off stories from others, but the benefit to starting as a Consultant on X is that you 1) force yourself to stand up your business entity and have a "First Customer" relationship started, and 2) "help" them to externalize the maintenance burden/risk on X.
I've heard (again, not something I've personally done, just stories I've heard of other successful people), that some companies love the chance to move opex to external consultancies and shift it to a different "more transparent" account in the budget if given the right opportunity. ("More transparent" because unlike opex spent on salaried FTEs, consultants have to bill their hours and that becomes auditable.) Especially for risks/opex outside of core business.
After you've established yourself as the go-to Consultant on X that builds up leverage to then bootstrap into the M&A with a conversation like "Since we are now the experts on X, would you consider selling X to us and further externalizing it from your expenses?" The company externalizing that maintenance risk/cost of labor that they've been spending on X should have a better idea by that point of what X as an asset is truly worth to them and possibly how much risk/burden they still expect to spend on it in the future.
Lots of ways that approach can backfire too (again, you're just as likely get fired as to get a consultancy). But also overall it looks a lot less like a "hostage negotiation" than some of the other suggestions and gives you a longer built-in "runway" for take-off than outright quitting first. Not that that runway is entirely safe as a business plan either (if your focus is on buying the IP of your first client you likely aren't busy diversifying your clients).
- toomuchtodo 4y agoThis is not a bad approach, although it carries similar risks to my suggestion. Time is non renewable, so OPs approach will be governed by their time horizon and risk appetite. You can move fast if you’re confident and prepared, but you can derisk further at the cost of time with the approach you mention. It’s also heavily dependent on your relationship with the org and your contacts within.