Many new founders think a “shortcut” will save time. They take cues from successful competitors, reasoning, “If other consultancies are selling this, there’s enough demand in the market for me as well.” This path usually looks something like this:
It seems like a pragmatic path. Why reinvent the wheel when you can learn from other’s mistakes? There are two reasons it doesn’t work.
First, if you’re offering what everyone else does, clients don’t have a strong reason to choose you. This often forces you to compete on price or depend heavily on personal branding. But these approaches have limits: undercutting competitors works only if you’re the most efficient (and let’s face it, someone can always do it cheaper). And a strong personal brand only works if you’re already recognized and trusted in the industry, which most new consultancies are not.
The second issue is delivery. Consulting services are largely confidential and experienced by few people on your client-side. You can’t buy a service from a competitor and “break it apart” to see how it’s made. While it’s sometimes possible to see the deliverables clients get, it’s not at all clear how they actually delivered.
Even if you do find out the exact process another consultancy follows to deliver their services, chances are you won’t be able to duplicate it. Services are intangible, and a large part of the value clients get comes from the unique experience with the unique people delivering them. You can't copy the soft skills, personality, and gravitas of a consultant or advisor.
Consultancy founders who take this “shortcut” path end up with a non-differentiated offer that won’t deliver desired outcomes to clients. It’s anything but a shortcut to creating a profitable and desirable service.
The second approach consultancies often take to design new services is what I call the “scientific path,” It’s the complete opposite of guessing - founders take a rational approach to gather information and make decisions. The scientific path typically looks something like this:
This seems, at first sight, like a rational and structured approach, testing the market and iterating your offer over time like a scientist. But in practice, this path doesn’t end well for most small consultancies.
One problem is that running experiments requires significant time and resources, with no guaranteed success. You can stay stuck in this path for years - and very few consultancy founders have the energy, financial savings, and perseverance to last that long.
But that’s not the biggest reason we advise clients to avoid this path. Even if you’re willing to invest a lot of time and money into developing your service, there’s an inherent flaw in the “abstract path” - it’s too detached from reality. Real feedback only comes from selling and delivering the service.
Some marketers might argue that experiments are a good way to gather signals of interest directly from the market. But without actually selling and delivering, it’s tough to know what to test in the first place. Trying to rely solely on experiments often feels like guessing, even with a scientific approach.
Both the “shortcut” and the “abstract” paths feel like running in place - a hamster wheel. You are working a lot and getting paid very little, if ever. They will stop you from reaching your revenue and compensation goals.
Is there an alternative? A third-way? I believe so - because every consultancy founder who left that hamster wheel did so following a similar path.
The faster, less risky, and more practical approach is simple: You design your service by trying to sell and deliver it. You start with a basic version, gather insights based on real sales conversations, and use them to refine your service offer over time. We perfected a specific process to help consultancy founders do that, and teach the basic mechanics of it in our go-to-market advisory service.
If you're currently designing or rethinking your service offers, remember: You do not rely on your intuition to come up with a service. Or run endless marketing experiments to validate hypotheses you’re not even sure matter. The only real way to do it right is by selling and delivering something, and refining it over time.
“Occasionally problems will occur. When it happens to your customers, fix the problem fast. Make it your speed and generosity that gets remembered, not the problem.”
Source: Ron Kaufman
By launching a basic version and iterating based on customer feedback, consultancies can significantly reduce the risk of service failure.
According to a survey by 280 Group, on average, 20.9% of products fail to meet customer needs. While we don't have specific numbers for professional service providers, it's still significant based on what we and other advisors who serve the industry have seen.
Are you designing your service with real client feedback, or are you still guessing?
This is one of the key areas we help consultancy founders with in our go-to-market advisory service.