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Yea, but that type of consulting is typically billed as professional services(or similar), not advisory work. If product companies are smart, they might put th
by genmud 3y ago
Yea, but that type of consulting is typically billed as professional services(or similar), not advisory work.
If product companies are smart, they might put this role under costs to acquire customer vs services and then have it as a fee for onboarding. I can’t remember the details, but I’ve been told having really profitable services can really complicate VC/fundraising.
- wslh 3y agoSorry, I didn't understand what is the argument bhind your first paragraph: advisory vs. consulting. Regarding your second paragraph, investors looking for the the YC startup definition don't like services companies because they couldn't scale at the pace of product companies but they are specific investors oriented to these companies because they have a more secured cashflow. BTW, some people like Michael Cusumano [1] argued about hybrid companies to better handling economic cycles. [1] https://mitsloan.mit.edu/faculty/directory/michael-a-cusumano https://mitsloan.mit.edu/faculty/directory/michael-a-cusuman...
- cbsmith 3y agoIt's hard to argue with the idea that a diverse set of revenue streams provides more revenue stability.
- wslh 3y agoYou could read his arguments reading and watching his papers and videos. This is not an endorsement but worked on my business. Basically the argument is that there are business cycles when companies are spending more money on products and less on services and in some crisis with services you can compensate that. There is no general advice for all companies.
- cbsmith 3y agoYes, I am confident that if I read/heard his arguments, it'd be even harder for me to argue with the idea that a diverse set of revenue streams provides more revenue stability.
- wslh 3y agoI understand your argument from the point of view of laser focus for startups but not from the point of view of conglomerates such as Samsung, Sony, Fujitsu, Amazon. In the middle there are zillions of organizations.
- genmud 3y ago> Sorry, I didn't understand what is the argument bhind your first paragraph: advisory vs. consulting. It was more to clarify it was proserv work than anything. In the context of SaaS/tech, typically professional services is implementation, maintenance or break/fix of specific products or technology. Advisory work is supposed to be independent work where you are being paid for (what is supposed to be) unbiased opinions and strategy. It's the difference between staff augmentation / project work and strategic / planning work.