MBA Entrepreneurs Found Management Consulting Start-Ups
The consulting industry is booming globally but a bevy of MBA graduates are launching their own start-up firms and going it alone in Silicon Valley, London and Birmingham.
Sprawling across San Francisco’s infamous technology hub, strategist Tiffany Hopkins spends most days bouncing from one innovative business trying to be the next “unicorn” – worth $1 billion or more – to the next from dawn till dusk.
Her classmates graduated into careers at McKinsey & Co, Bain and Boston Consulting Group but Tiffany is busy making waves in Silicon Valley where her business is independent consulting, advising entrepreneurs who dream of becoming the next Zuckerberg, Gates or Jobs.
“There are so many start-ups here [that] I could work with a thousand different companies in a year if I decided not to sleep,” says Tiffany. She is a graduate of Swiss business school St Gallen HSG, where she left in 2010 with an MBA degree.
A consultant by trade, she spent two formative years in Singapore shaping up businesses with Analysys Mason, the telecoms, media and tech specialist. These days she roams the Bay Area, advising entrepreneurs on how to move forward when they get stuck – from lack of funding, fuzzy goals in shifting markets or when new talent is required.
“There have been all sorts of fascinating challenges,” she says of becoming a self-employed consultant. It helps that Tiffany spent a year working for start-up factory Rocket Internet in Cape Town, South Africa a year after leaving Switzerland. The start-up conglomerate, whose recent IPO gave it a market value of €6.7 billion, uses its fuel to accelerate businesses in new markets.
“I sometimes say that both Rocket and the strategy consulting I did after my MBA were like continuations of business school,” Tiffany says. The MBA provided the technical and soft skills as well as the confidence for her to succeed outside a large firm.
She may have worked in business development and consulting but no single company, she says, had every business aspect worked out. “I figured it would be easier to do that on my own, [rather] than to try to change an existing company.”
The consulting industry is booming globally and graduates are entering firms and internal roles at banks and technology groups in hordes – but there is a clique of MBA students who prefer the flexibility and independence of freelance work and entrepreneurship.
“Having your own-consultancy allows you to get hands-on experience dealing with clients and taking full responsibility of projects early in your career – something that rapidly grows your experience,” says Basel Hammoda. He’s a graduate of the UK’s Aston Business School and is the founder of Blue Ocean Consulting.
With an MBA degree on his CV Basel should be able to make it into a large strategy consulting firm like Bain or Accenture, or waltz into a small boutique house – but he does not like the look of the current market. “The chances for an MBA who hasn’t got enough consulting experience to a join a strategy house are not promising,” Basel says.
Consulting has risen to be the number-one employment destination at a host of leading business schools this year – but this means that competition is fiercer than ever before for the associate positions and leadership schemes that serve the graduate community.
“Only Y number of people will get to partner level – it’s a numbers game,” says Tony Somers, director of the Career Management Centre at French business school HEC Paris.
The ones that don’t make the grade can launch their own firms with relative ease, according to Basel who founded Blue Ocean Consulting with just £5,000 in capital. He says that management consultancies do not require intensive investments to launch. “This spared me the hassle of looking for funding at this early stage,” he adds.
His start-up firm, based a stone’s throw away from Aston Business School in Birmingham, is targeting local businesses which are small or medium in size. He aims to focus on the “core services” which these businesses are most in need of: strategic guidance; managing online presence; organisational change; and marketing.
“Birmingham offers golden opportunities for any start-up,” Basel says. Most UK consultants would look to London – and US boutiques can make waves in Silicon Valley – but Basel thinks it is crowded and Birmingham, one of several cities targeted by the UK government for innovation, has a vast mine of SMEs from which he can tap into.
“Looking into the near future, I believe I’m in the right place to start,” he says, adding: “The city is buzzing with business clubs, social meet-ups groups and networking events, enough to keep you busy attending day [and] evening events any single day of the week.”
London, however, was the choice destination for Amarjeet Hans who is the director of a boutique management consultancy not far from where he graduated at Henley Business School 14 years ago.
The MBA helps to run Crystal Clear Business Consultants, which provides advisory services for a range of global companies in sectors including Islamic finance and accounting and audit, as well as the luxury consumer market.
“The more you experience different companies and different cultures, the more you are able to add value to organisations as you begin to understand the way they ‘tick’,” says Amarjeet. The former chartered accountant was able to leverage his alumni network. “Since graduation, I have applied even more of the skills that I learnt, which have now become parts of my ‘personal culture’,” he says.
Basel has also benefited from business schools’ quests to become global catalysts for entrepreneurship. He has been part-funded by Aston’s BSEEN program – a scheme spurred by the European Regional Development Fund that offers graduates a package of start-up support for their ventures. “The support I receive, whenever I ask for [it], is enormous,” Basel says.
He is able to draw on his MBA network by recruiting students and alumni to work in teams as freelance consultants. MBA programs, which incorporate a mix of case study learning and cover a wide variety of industries and functions, are seen as ideal preparation for management consulting.
His diverse background – a bachelor’s degree in medicine and surgery in Cairo, and careers as a dietician and nutritionist before moving to Saudi Arabia where he developed marketing strategies for hospitals – adds fuel to the fire.
Studying a joint-program with St Gallen and Nanyang Business School was “perfect” for the career path that Tiffany wanted to follow. “St Gallen gave me a more traditional, small-school education with a strong financial basis,” she says. “NTU [Nanyang] gave me a new-world, larger-school education with a tech focus. I chose those two schools because I wanted exactly that breadth of experience.”
It is not the diploma that benefits her but the experiences it enables, says Tiffany. “The degree itself is less important than the jobs I had afterwards.”
But there are still challenges that independent consultants must overcome. They must be soft in their approach to each company: observe and then advise. “You can’t just brute force your way to getting them to see why they should do this or that,” Tiffany says.
By focusing on SMEs, which have less capital to spend on services than larger organizations, start-up consultancies may also be limiting their potential reach to just a handful of local firms.
Basel, however, disagrees: “The problem with SMEs is not with cash availability. It is mainly with prioritizing other day-to-day expenses over other bands, and the lack of realization of the importance of having a vision, a strategy.”
In Silicon Valley, however, there is no lack of access to well-funded businesses, many of which seek guidance from both consultants and venture capitalists. It is a natural breeding ground for Tiffany’s independent work, which has seen her consult and partner with IDEO, the international design firm, and Melrose Sound Studios.
“It is an incredible opportunity to stay on top of how our world will change in the coming years,” she says of working in the Bay Area.
“On the other hand, it is something of its own microcosm of entrepreneurship and I have to remember that the rest of the planet doesn’t all think – or more importantly spend money – this way.”