Consultancy partnerships & Startups
Earlier this week one of our portfolio companies, Jupiter Intelligence, announced a strategic relationship with Guidehouse. Guidehouse and Jupiter created a strategic alliance to help utilities quantify climate risk and build resilience. As the energy transition intensifies, energy providers must create and implement integrated plans to address climate resilience. Guidehouse (formerly PWC’s public sector consultancy) is a leading global provider of consulting services to the public and commercial markets, with broad capabilities in management, technology, and risk consulting.
Many technology companies actively avoid working with consultants to deliver commercial traction. It implies a few negative traits to the sale:
1- Indirect access to the end customer
2- Implied lengthy integration or sales cycle
While there is no universal rule, I tend to believe that consultancies, like Guidehouse, can be a very important part of a start-ups journey. I see 4 main reasons:
1- Validation and trust: Big corporates have been burned by committing to a startup, only to see that NewCo go out of business…or worse, be adopted or acquired by a competitor! Consultants vet the startups and will maintain the technology relationship, and find an alternative, should the startup go down hill.
2- Corporates require white glove service: if you are an early stage startup, you are likely going to get overwhelmed with corporate demands. The consultancy helps manage those requests (and bills hourly, accordingly!).
3- Finding budget: If your technology is new, or solves a new problem in the organization, consultants can work wonders in helping you find the internal champion, and budget. Their presentations will prove RoI and then also identify the best groups in the organization that will benefit from the new technology.
4- Reference and Distribution: Consultants make money on advisory services and integration services. With a new technology start-up, the consultant makes $ from both opportunities. With a proven ability to help a client, a consultant can quickly replicate the offering for the other, large customers. The start-up is essentially a medium for the consultant to grow a relationship with a corporate. But, all three sides win: more tech sold & adopted, more digital corporate, well-paid consultant.
Guidehouse checks a lot of these boxes for Jupiter and I am excited for them to help address the energy and industrial verticals within the Fortune 2000.