Why we needed to kill our consulting business in order to build a better version of it

“There comes a point in every long-term relationship when you reflect on what you’ve accomplished together and set your sails for where your journey will take you next. Sometimes that journey ahead demands tough choices that lead down different paths (Carter Murray, CEO FCB)”.

When Marc, Markus and I started Simplify in San Francisco the market, the need and potential for boutique innovation consulting firms were different from today. We were one of the first innovation consulting firms which focused on innovation culture, team building and business design for SME’s. Since our heritage was European it did not take long to build traction among companies from all over Europe and as the next logical step we moved our business to Berlin.

This was five years ago.

Since then we worked for many large banks, FMCG companies, B2B and SME’s to help them with their innovation initiatives and new business models. Along this way, we worked with some of the smartest people that always challenged and inspired us (shoutouts to Bettina, Frida, Hendrik, Isabel, Marili, Monika, Selina, Sina, Steffany, and Vanessa).

What really fucked us up

But running such a small consulting firm comes with a lot of challenges. Spending budgets on sales and marketing is one especially when the cash situation would require a more conservative approach. We were not prepared for companies and decision-makers that were just cheerleaders along the way instead the leaders to lead innovation in their organizations. We were not prepared for the many partners we started building relationships with but who were just trying to learn from us. We were not prepared for the competition from all sorts of larger consulting firms, agencies and freelance consulting who were starting to eat our lunch. And we were not prepared for clients that tried to press every penny out of us because they felt innovation is just a commodity service such as buying pencils from a supplier. We’ve expected a vacation on a sunny island but we’ve gotten into a Hurricane.

In addition, we’ve made a lot of right and a lot of wrong decisions. One of our key hypotheses was that consulting as we know it today will cease to exist very soon. And that we needed to have an answer for that if we as a business want to survive. I always believed that you need to run a consulting business like a software company in order to scale it. Humans, call them consultants, are the key problem because they don’t scale. And speaking of scaling innovation - this is the key challenge where most companies large or small fuck up.

Our own experiment

And this is where we started thinking about how to scale new business models in multiple languages, across borders and even more than 20 services, all at the same time? We have done that many times, as consultants for companies, as mentors for startups with blood sweat and tears. But teaching a machine doing it is quite different.

So we designed a machine-learning algorithm based on a consulting/mentoring process. In our first learning experiment, we got 10 customers on board, sold them a mentor chatbot and staffed it with real humans in the background to respond to their questions, well like humans - with the only exception that these companies thought they were talking to a chatbot. Based on these learning we build a Slack bot got another 10 companies on board and let the algorithm run. Again, a lot of learning that are now going into our first consulting/ mentoring bot prototype. What started in Simplify will now eventually end up in an Innovation AI company. At this point we are really focusing what machines can do best, having a lot of potential answers for very complex problems and situations available while we on the other side train human users to make more informed and faster decisions. Such a framework would have been impossible in our Simplify consulting approach because it is just too technical and many of the people we talked to thought we were crazy.

A new company, but a very similar mission

After the first two prototype stages, we decided it was time to disrupt our own business model and kill our darling. It was a tough decision but especially with the changing market environment and the challenges we faced, we figured it would make more sense to build the disruption machine instead of being disrupted by something like it.

I am sure we will be facing many of the challenges we faced before. But we are now trying to build something that can bring innovation and mentorship to startups and smaller companies, even in very remote parts of our world where you would hardly find consultants or mentors.

Thank you, Bettina, Frida, Hendrik, Isabel, Marc, Markus, Marili, Monika, Selina, Sina, Steffany, and Vanessa. It was still awesome, despite all the challenges.