Several startup’s I’ve met are either:
a) testing the market for a B2B product venture or
b) doing consulting and looking for a way to improve their economics and scale.
At Leonid we drove to our current business in three steps:
1. taking whatever consulting we could get to pay the bills
2. driving to a product/market fit for repeatable consulting ‘products’ we wanted to scale
3. MVP’ing and scaling software products where we saw a win for our customers
Driving to a product/market fit on standardized consulting products had a number of positive effects on our economics, summarized here:
Leonid’s been profitable every year since 2007, and focusing the consulting business on standard products gave us the ‘learning’s and earning’s’ to invest in product development. Without any outside financing, we MVP’ed several bits of software and arrived at our current portfolio of four products.
The consulting gave us a major head start on product development in that we had an opportunity to formulate in ‘concierge’ fashion manual steps we’d later automate with our software MVP’s. It was a good deal for the customer and for Leonid.
Leonid’s certainly not the first company to follow such a recipe, but I do think the recipe’s underused. The next section has six tips I’d recommend to anyone pursuing the recipe.
Six Tips on B2B Consulting as ‘Concierge’ Vehicle
If you’re interested in more detail, here are my slides from a related talk I gave at the Lean Startup Circle San Jose: