How to make the leap from consulting to a startup

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I left Bain to join seed-stage Opendoor in 2014. For those making the transition to the startup world, here are some thoughts based on my experience.

Opendoor’s Open House signs in front of a home for sale

1. Educate yourself on the startup world

Startups and consulting firms are worlds apart in what their priorities are, how they operate, and what they’re like to work at. Learn as much as you can before applying for jobs. You’ll have a better sense for if startup life will be a fit for you, and it will help you identify interesting opportunities, interview more effectively, and hit the ground running if/when you join.

Unlike consulting firms, startups are focused on building products from scratch, finding customers, and not running out of money. You are no longer advising, you are operating, and unlike the Fortune 500 companies, there is little structure and a nascent company culture. This can feel chaotic at times, but it also means there’s an opportunity for you to be the one building your company’s operating principles, processes and culture.

Not everyone is a consultant like you

Startup teams are diverse in backgrounds and skillsets. Unlike consulting firms, where you work primarily with other consultants, you’ll work with designers, engineers, salespeople, lawyers, etc. You may also work with specialty consultants (e.g. for marketing or design), remote employees, part-time Taskers, you name it! Whatever gets the job done.

Startups benefit from both specialists, whose expertise lies in a certain craft such as design or engineering, and generalists, who can flex across different areas of the business. Unless you have those specialist skills, most consultants operate as generalists, and take on whatever needs the business has that doesn’t require specialists. When there are gaps in domain expertise, generalists will typically learn as they go through mentorship and research.

Startup culture is defined by trying to “make it”

Ryan Johnson (left) and me (right) in our first office

Startups teams are taking a vision and creating a real, live, thriving business from it. Startup culture is therefore typically defined by this struggle:

(1) they’re focused on rapid iteration and growth

(2) they’re scrappy and resourceful

(3) they have relatively flat org structures that allow for autonomy and moving fast

(4) they’re mission-driven. There’s a strong vision for what success looks like, and it keeps the team aligned and motivated.

As a startup, you’re up against incumbent products and/or looking to do things completely differently, so you’ve got to both move fast AND do things better than before.

The lingo is also different. “Post-mortem”, “OKRs”, “data warehouse”, “shipping” — there are countless new words and phrases you’ll encounter. But you’ll quickly adapt, just like you got used to “on the beach.” TechCrunch wrote about this here.

The Internet is a goldmine of resources

There has been a ton written and recorded about startups, so take advantage of all that’s available! The more you’ve read about what’s being built and how startups operate, the more effectively you’ll be able to (1) assess and pick a great startup to join, and (2) build a great product, marketing org, customer success team, etc. once you get started.

Here are a few suggestions to get you started:

• Stratechery — insightful newsletter dissecting tech and business. Subscription is $100/year but well worth it. A few gems to get started with: Aggregation theory, Amazon’s new customer, 2018 year in review
• Techcrunch — tech news! Keep an eye out for fundraise press here (which is how I learned about Opendoor!)
• Paul Graham essays — a couple favorites are maker vs. manager time, and how to start a startup
• PMarca guide to startups, particularly the only thing that matters

Books:

• How the Internet Happened — context on the evolution of tech over the last ~25 years
• Zero to One — Peter Thiel’s take on how to take a company from an idea to reality
• High Growth Handbook — advice for scaling startups across hiring, org structures, and more
• Keith Rabois also tends to have great book recs

Podcasts:

• How I Built This — like it sounds, founders talk about the companies they’ve built
• Venture Stories — deep dives with startup founders, VCs, and thought leaders across a variety of topics
• Invest Like the Best — interviews with renowned investors and beyond

Video/Twitter:

• Sam Altman’s How to Start a Startup class. My favorite section is hosted by Keith Rabois (founder/chairman of Opendoor) on how to operate
• Twitter can also be a great way to get exposure to people and ideas. Explore, follow accounts you find interesting, and start tweeting yourself!

2. Identify your dream job(s)

Based on what you tend to gravitate towards and what you’re reading (see above), you’ll likely start to identify companies you’re interested in. It’s exciting to join a company that ends up growing and doing well, so lists like the Breakout list and Wealthfront’s list can help you hone in on high potential companies. You may find that using the lens of industry/mission or stage to be a helpful way to narrow in on the type of company you’d like to join as well.

Industry/mission: if there is an area you’re interested in, such as women’s health, or space exploration, this can help focus your job search immensely. Don’t worry if you don’t have an industry you’re particularly drawn to though. Most companies don’t require industry expertise, and you may find that other factors of the job like stage, team and role are more important to you than industry. One quick way to search by industry is to filter by ‘market’ in Angelist’s company directory.

Stage: Startups range in size or stage from seed stage (<$2m, <~10 people), series A (~$5–10m, ~10–70 people), series B (~$10–30m, ~30–200 people), to series C and beyond (~$20m+, 100+ employees). Note that these ranges are rough and vary by company. Crunchbase is a helpful place for looking up companies by funding raised and number of employees. The earlier the stage of company, the more risk you’ll take on, but the more exposure you’ll have to things like finding product-market fit and the more equity you’ll have in the company.

Here are a few companies by stage that I would recommend looking at for post-consulting roles:

Seed/Series A: Modern Fertility, Setter, Middesk, Sword Health

Series B: Front App, Newfront Insurance

Series C: Faire, Airtable

3. Interview & assess

Once you’ve pulled together a list of companies you’re excited about, it’s time to reach out. Unlike consulting jobs that have clear requirements and a well-defined interview process, getting a startup job isn’t typically as straight-forward. There may not even be a job posting at the company you’re interested in, but don’t let that deter you.

When I first read about Opendoor in July 2014, there was no actual product yet, just a landing page and a single Techcrunch article announcing their seed round. To get in touch with Opendoor, I asked everyone I knew if they knew someone who worked there. Once I was able to secure an intro, I interviewed and the rest is history.

If there is a jobs page at the company you’re interested in, check out the Operations, Business Operations (aka BizOps), Analyst and perhaps Product Manager roles (though those can be notoriously hard roles to get without any previous tech startup or product experience). See if you can figure out who the hiring manager is (aka your potential future boss). It can be helpful if this person also has consulting experience, as they’ll understand your skillset and where you’re coming from more broadly, but certainly not a requirement.

How to prepare for the interview

1. Understand the business model, market dynamics and key levers in the business to the best of your ability. If someone were to write consulting case studies about this company, what would they write about? How would you solve the case?
2. Be prepared to answer why you want to work at the company and why you want to work at whatever stage the company is at. Also think about how you can demonstrate hustle and resourcefulness, as these are often traits hiring managers are looking for, and which not all consultants innately have (since the job doesn’t require it in the same way a startup does).
3. Ask questions about the business and the team. You’re assessing them as much as they’re assessing you. Some questions I like to ask are:

• What are the current priorities of the business and why? What’s going well and not going well right now? These questions can help you understand what’s important to the business, what some of the gaps might be, and also can help you generally assess how the organization thinks
• How do you acquire customers and what has growth been like over the last few months? What are growth goals over the next 3–6 months? Growth is a critical part of any startup, so you’ll want to make sure the company has traction. A strong company will be growing ~10% MoM or more in customers or revenue, but don’t be too deterred if the company isn’t quite there yet as it can take time to get a growth engine humming. Also ask about churn if you’re meeting with a SaaS company.
• How do decisions get made? What guiding principles or values do you use, if any? This should give you a sense for how the organization operates, and what the principles or values are that help guide the process. You can use this question to dig into culture as well, and assess what it might be like to work there.
• What’s your working style with your direct reports? What are your expectations for someone in this role? This should give you a sense for what it might be like to work for this person. Expectations is a broad topic, but should encompass things like the types of work you’ll do, what you’ll be responsible for, but could also cover things like working hours.

Assessing a company:

While consulting firms have been around for decades and have well-recognized brands, startups are by definition lesser-known entities. There is therefore a lot more onus on you to assess the startup you may join to ensure it has high potential. Here’s an assessment framework:

1. Team: Do they think rigorously and clearly about ideas and communicate them effectively? Are they passionate about the company and what they’re working on? Do you enjoy their company? Ask yourself what’s important to you in a team, and see if you can find ways to test for this in the interview. Just make sure you don’t let someone’s charisma overshadow their level of competence. A note on references: do them! Ask the hiring manage for 2–3 people they’ve worked with in the past and reach out to them. Better yet, see if you can do a “backchannel” reference and find someone who worked with that person who they didn’t recommend, to try to get even more candid feedback.
2. Market: A growing and potentially large market means a startup will have many potential customers and thus much room to grow. Marc Andreessen once wrote that the #1 company killer is lack of market. In other words, if only a handful of people think the product is valuable, there isn’t really much the company can do to grow unless it pivots, which is not impossible but hard to do.
3. Product: How good is the product the company is building? This can be hard to assess, but a decent place to start is your own point of view. Is there real pain that is solved by the product? Is it easy to use? 10x better than what’s already out there? Are customers raving about it? These are all good signs of a winning product.

Startup compensation

Equity, cash compensation, and benefits are all components of startup compensation. Generally speaking, the earlier stage the company, the lower the cash comp will be, but the higher the equity grant should be. Expect cash comp at a seed or series A startup coming out of consulting (~2 years work experience) to be around $90–120k, and up to $135k at a series B or C company. You’ll likely see equity ranging from 0.1% to 0.8% if you’re one of the first 10 hires, and below 0.1% much after employee 10. Note: these are ranges and I’m sure there are many exceptions here. Supply-demand dynamics are always at play, so consider how “hot” the startup is that you’re applying to, and remember that you still don’t have any startup experience yet ;)

1. Equity: equity is probably a new concept for you, so make sure to read up on it and don’t be afraid to negotiate. This could be an entire blog post in and of itself, so here are some links to more info: Startup stock options explained, Explaining equity, and Guide to equity compensation.
2. Cash compensation: see above for ranges, but best bet is to ask other consulting friends who are moving into startup roles to get a sense for the going rate.
3. Titles: don’t worry too much about what your title is. It’s much more important that you do great work and seize the opportunity to learn and have impact on the business. Which brings us to our next topic…

4. Get started and have impact

The most critical thing you can do joining a company as an ex-consultant is positively impact the trajectory of the company.

Here are a few ways to ensure you’re doing that:

1/ Pick up skills you don’t have. Yes, you learned how to model in Excel and make pretty slides, but there are still many gaps in your skillset. I’ve found they break down along the following lines:

• Data and analytics: Take an intro to SQL class or teach yourself using online resources so that you can start to query your company’s databases and track business metrics. Don’t be afraid to ask for an overview of the data schema and how tables are created so can ensure you’re pulling the exact data you want. And if you can document this for the rest of the company and new hires that will join, even better.
• Business development and sales: There’s more to sales and deal-making than being a people person with high EQ. Learn from experienced sales people (they may not even work at your company yet, so ask your CEO if they can help with intros) about things like how to ask questions and tailor a pitch, counter objections, and the power of persistence.
• Product: You may have some intuition around what makes for a good product, but there is a ton to learn here. This job is best learned by osmosis. Who is leading product at your company? If you aren’t already working for them, see if you can shadow them, ask questions about their frameworks for decision making and how they run their team. I’ve heard this book is great and this is a solid blogpost on the topic.

2/ Be a sponge. Given the diversity of backgrounds and skillsets around you, there will be a lot to learn about how different teams work. For example, I didn’t know how engineers planned their work, but quickly learned about “sprint planning” and daily “stand up.” You may even start adopting these practices for your own team’s work (I did!). Keep an open mind, listen, and ask questions.

3/ Know your company’s goals and metrics cold, especially if you’re the one responsible for that area of the business. 1) It’s critical to your understanding of the business to understand what the major levers are and how they are defined and 2) it impacts your reputation among your company’s leadership. And don’t be afraid to ask about how metrics are calculated or defined. Sometimes metrics are thrown together hastily without much documentation, and may even have errors in them.

4/ Be proactive in your 1:1s. Come prepared with your point of view on the business, with what’s working and what’s not with how things are getting done today. Show that your thinking is rigorous and that you have thoughtful and creative potential solutions for the problems of the business. This will lead to opportunities for you to take on more responsibility and will steepen your learning curve.

5/ Focus on hitting goals and moving metrics. You joined a startup so you could build things. This means figuring out what actions will result in moving your company’s key metrics, and doing those things. In the early days of Opendoor, for example, it meant writing copy for Facebook ads, getting those ads live, and talking directly to those first curious homeowners who landed on our site. This translated into our first customers converting, and revenue for the company.

That’s all for now! I’d love to hear feedback from those who are currently consulting and considering a transition to the startup world, and well as from those who have already crossed the chasm. You can find me on Twitter @juliadewahl.