I now started my independent consulting firm focused on tech ventures only (plug: http://www.growthroute.com) and I completely agree with David that to scale exponentially, you need to productize, and productizing in consulting is tough although not impossible: books, workshops (with large or wealthy audience) and software solutions (think Salesforce). So you start as a consultant, grow your expertise, and then package it into something whose cost doesn't grow linearly with sales.

As a growth-oriented start-up, David is right again, you need to keep sight of the goal: if it's exponential growth, then you can start with consulting contracts to fund and refine your product and find your sales formula. Once you found it, you need to productize it and that means finding the core of what drives the sales in a large (and/or wealthy market) and mass-producing and distributing it. If you keep acting as a consultant and have to customize things for every new sale, your costs grows with your revenues and you can't “explode”.

Btw, this is nothing new in start-up theory, but I'm surprised how many don't get it. Quoting Crossing the Chasm (1991):
“The winning strategy is built around the entrepreneurs being able to “productize” the deliverables from each phase of the visionary project. (…)
The goal should be to package each of the phases such that each phase
1. Is accomplishable by mere mortals working in earth time
2. Provides the vendor with a marketable product
3. Provides the customer with a concrete return on investment that can be celebrated as a major step forward”

Start-up gameplan: build your product through consulting with visionaries/early adopters who are ok with your shortcomings because they want an edge at all cost, and then productize it for the early majority. Have a formula that keeps cost growth linear even when your revenues grow exponentially.

That's why so many VCs like the web and biotech. The jury is still out in cleantech – and I've wondered on my blog in the past whether there wasn't a new play here that involves growing less risky start-ups more linearly rather than seeking to supercharge one showing early promise.

I now started my independent consulting firm focused on tech ventures only (plug: http://www.growthroute.com) and I completely agree with David that to scale exponentially, you need to productize, and productizing in consulting is tough although not impossible: books, workshops (with large or wealthy audience) and software solutions (think Salesforce). So you start as a consultant, grow your expertise, and then package it into something whose cost doesn't grow linearly with sales.

As a growth-oriented start-up, David is right again, you need to keep sight of the goal: if it's exponential growth, then you can start with consulting contracts to fund and refine your product and find your sales formula. Once you found it, you need to productize it and that means finding the core of what drives the sales in a large (and/or wealthy market) and mass-producing and distributing it. If you keep acting as a consultant and have to customize things for every new sale, your costs grows with your revenues and you can't “explode”.

Btw, this is nothing new in start-up theory, but I'm surprised how many don't get it. Quoting Crossing the Chasm (1991):
“The winning strategy is built around the entrepreneurs being able to “productize” the deliverables from each phase of the visionary project. (…)
The goal should be to package each of the phases such that each phase
1. Is accomplishable by mere mortals working in earth time
2. Provides the vendor with a marketable product
3. Provides the customer with a concrete return on investment that can be celebrated as a major step forward”

Start-up gameplan: build your product through consulting with visionaries/early adopters who are ok with your shortcomings because they want an edge at all cost, and then productize it for the early majority. Have a formula that keeps cost growth linear even when your revenues grow exponentially.

That's why so many VCs like the web and biotech. The jury is still out in cleantech – and I've wondered on my blog in the past whether there wasn't a new play here that involves growing less risky start-ups more linearly rather than seeking to supercharge one showing early promise.