Is there such a thing as tech-focused management consulting?
Specifically, are there management consulting firms that work with startups and big tech firms? Or is that something one can specialize in at a big MC firm?
AV&Co
For the OP: AV&Co has great exits into corporate strategy positions at big tech companies (e.g. Microsoft, Uber, etc.)
Accenture
can also be specialized in after a few years at an MBB type firm
Accenture
Big tech yes - many major firms have groups that focus on the 'Technology, Media, & Telecommunications' (TMT) sector - that's what you're looking for
Startups not as much because they don't have as much discretionary spending but there are definitely exceptions
Check out the McKinsey FUEL practice
Generally though, big firms’ offerings for startups can be like using an oil drill when a screwdriver could do; too expensive and geared towards large corporate programs.
You see some 1-10 person boutiques in this space that do well though, and the big firms are experimenting with alternate pricing/engagement models for earlier-stage companies.
Thanks. I guess VC firms serve as consultants of sorts to their portfolio companies, so that's where startup specialists go.
also interested
Big MC firms (MBB, Big4, T2) work with big tech firms on a variety of topics from strategy to organization to pricing to operations.
Legacy tech companies (IBM, Cisco, Intel, Microsoft etc.) in semiconducter and enterprise software and are typically the biggest buyers of consulting services in "tech". More work here.
The large consumer-tech firms such as the Facebook, Google's, Amazon's of the world don't have a big culture or history of buying consulting services--they do a purchase but the work is typically less strategic in nature. Some work here.
Large "startups" including private/public Unicorn type companies such as Uber/Airbnb/etc. don't have a culture and/or history of buying consulting services and many can't afford the prices. Little work here though consulting firms are finding creative ways to get in.
Small-medium startups, priced out altogether and really no need for consulting at this stage.
this is really helpful. what is different about large consumer tech companies that differs from the legacy companies that DO hire strategy consulting firms like MBB - do you think it’s all internal and there’s a reason why there’s a difference?
Part of it is cultural. Another part of it is that the “sexy” tech companies have no trouble attracting + retaining armies of young MBB-caliber folks (including lots of ex-consultants) who they can work at a similar level of intensity.
More “legacy”-type corporates have a harder time retaining such an in-house team, even if they can poach ex-consultants for managerial/exec-level roles.
I don't want to dox myself, but my boutique consulting firm 200 works with a lot of startups, but in the life science space. Keep in mind, these life science firms are extremely well funded for their size. We are talking 10M+ Series A. One of my clients had a 50M+ series A and like 10 employees.
Most big consulting firms won't touch these companies, because the juice is not worth the squeeze. However, boutique firms tend to be able to service this area better, because they tend to use smaller teams.
For example, if you contract Big 4/MBB, they will want to bring in a team of directors, managers, senior consultants, consultants, analysts. Boutique firms tend to have smaller teams, which in turn makes them cheaper. Also, these start-ups sometimes face liquidity risk and bankruptcy, something most big firms won't want to deal with.
Previously, I worked at a Big Consulting Company, and my partner was complaining to me that a 5B+ market capitalization was too small, and too much effort for too little revenue.
I think there's a certain niche for consulting services to biotech startups. Startups are certainly able to raise a lot of VC money, partly out of necessity. But the process of navigating the whole drug discover process is itself so painful and the number of buotech-qualified VCs is too low that unlike in tech, consulting services do work here
Qral group?
Surprised no one mentioned McKinsey Digital practice
McK digital isn't focused on tech companies, it's focused on tech work for all companies (e.g., a digital transformation)
McK FUEL is probably the best comparison as it primarily services pre-IPO startups. AV&Co primarily services telecom, if I'm not mistaken
Altman Vilandrie works with media and telecom. The people usually exit to big media/telecom companies such as Disney, Warner Media, Verizon, NBC Universal, etc., in finance/corp dev/strategy roles.
What is tech focused management consulting? It's complete bullcrap. You're either tech or you're not. If you can't implement it yourself you're nothing more than a scammer. That being said, the absolute A tier of "tech consulting", whatever that means, is without any doubt Palantir.
Non-MBB world: AV&Co. (lot telecom and media but starting to do more tech), Bulger which was recently acquired by Parthenon does a lot of enterprise tech, S& has a TMT practice that does a fair amount of tech work, Accenture Strategy, Arthur D. Little - lot of telecom, IoT and enterprise tech, CMA and Cartesian (almost entirely telecom). All of the above should have strong exit opps.
At MBB, you can specialize in TMT later on (EM or higher) but rarely tech specifically. At some boutiques, you may be able to specialize in tech but later on (Principal level). That said, if staffing needs you on a telecom project, you're going to be on that telecom project. Exit opps from MBB to tech firms are obviously quite strong.
A lot of the tech related MC work is on the diligence side or value creation side for PE funds and those tend to be very interesting and intense projects - especially if you're looking at a tech firm that has 10 different products each in its own market. Big tech firms do occasionally hire consultants for commercial strategy and M&A work but bankers run the show here. You'll see a lot of this with the big cybersecurity firms and other enterprise tech firms.
Others may have different views / experiences from the above.
hi! was wondering if you could speak more to Arthur D Little in the US?
Big Tech usually doesn't hire MBBs. They have their own strategy teams, which are usually made up of ex-MBB, and their corp dev teams are ex-banking and PE.
As a poster above said, the "traditional" legacy tech firms hire MBBs pretty frequently. A good friend is a junior partner at MBB and works exclusively with those clients on issues ranging from operations to pricing to market entry.
Certain offices will be stronger in specific areas. For instance, BCG Los Angeles has a robust healthcare and media/entertainment practice groups. Also, LEK consulting's LA office has decent work with media/entertainment as well. MBB offices in SF will have stronger presence with legacy tech and SAAS firms.
Can you clarify the difference between Big Tech and traditional legacy tech? I would assume Big Tech is FAANG but who would the legacy tech firms be?
Legacy tech examples are IBM, Cisco, HP, Intel, Oracle, Adobe, etc. Typically firms have been around longer, stock performance isn't as strong, have more of an enterprise and/or hardware focus. No hard and fast line for all of these as some have performed fairly well in the market. These kind of companies are what "Jack Barker" from Silicon Valley embodies if you've watched that show.
Microsoft I guess could go in either bucket.
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