Asia’s tech scene is booming. Here come the consultants

In the tech world, startups are the stars of the show. Books are written and movies are made about garage companies that make it big, rather than the famous venture capitalist that backed them. Scrutinizing financials doesn’t capture the public’s imagination the same way that Jack Ma’s charismatic speeches do. But even Jack Ma could not have been successful without support from a range of services: law firms, investors, agencies, and yes, consultants.

Tech and startup consultancy isn’t new. Technology is complicated, and implementing it in the real world even more so. Consultants come in and fill the knowledge gap. But what’s new is the fact that Asia’s tech scene is booming. And along with this trend, boutique consultancies are entering the market in droves.

The word “consultancy” has been so overused that it sometimes loses meaning. Broadly speaking, consultants are simply people with specialized knowledge who offer advice for a fee. Consultants come in all stripes, from global firms like Accenture to lifestyle entrepreneurs running one-man shows. Their scope of work varies. Some just give strategic advice. Others go into the trenches with their clients.

What we’re focusing on are specialized consultants that zoom in on the internet sector – and that encompasses ecommerce, payments, product development, and operations. We’re finding that lines are getting blurrier. Some consultancies function like agencies and vice-versa, some agencies act like product companies, and some investors do consulting on the side. More on that in a second.

Consultants sometimes carry a negative connotation. After all, there’s the black sheep who gives advice that don’t benefit a business, charging exorbitant rates for the meager value they’re providing. Ultimately though, survival of the fittest comes into play: effective consultants get more business. Charlatans fade away.

Digital sherpas

Tech industries succeed due to a circulation of talent and knowledge. Some successful entrepreneurs or tech executives become investors or consultants. The latter often serves as a transition stage between commitments. An entrepreneur who achieved a soft landing and finished his term in the acquiring company might do some consulting before moving on to the next startup.

Consultancy is also a destination for entrepreneurial-minded folks who don’t want the risk associated with a bona fide tech startup, yet still want to strike out on their own. They do have some risk appetite, giving up plump gigs and tightening cashflow in exchange for the upside of getting early equity in the next Facebook or Google. Or in Venturebean’s case, the next Flipkart.

Anjana Vivek (right) runs Venturebean, a pioneering startup consultancy in Bangalore that has been around since 2007. A chartered accountant, Vivek offers her finance and management expertise to entrepreneurs in what was a nascent startup ecosystem. The company provided classroom sessions on venture capital funding, funding strategy, deal terms, and valuations, as well as consulting services on business strategy and execution.

“We work with startups across all stages, from idea to growth, funding to exit. Services are a mix of fee-based and success-based, including equity. We have a base fee for business planning for early stage companies. Startups find significant value in this as it helps them in strategizing, go to market planning, and setting out a step-by-step action plan,” Vivek tells Tech in Asia.

Clients of the firm included a cleantech entrepreneur, a startup building technology for low-cost mobile phones, and the investment arm of a large education company, where Venturebean mentored its portfolio companies.

While doing startup consulting might seem like a no-brainer in India now, things are always crystal-clear in hindsight. “I remember a time when people said that the same consulting service provided to a large corporate could fetch significantly more revenue. Those working with startups were viewed as foolish,” says Vivek.

“Today there are many consultants jostling for a piece of the startup valuation pie. Some are competent and understand the domain, some are there because the hype has drawn them in. Some have even made their money elsewhere and are investing time and money and providing advisory services. Specialized consultants are entering the space. Hence entrepreneurs have a much wider choice today of whom they should go to. Consultants also have many more entrepreneurs with potential to work with. It’s exciting times ahead.”

Dawn in Southeast Asia