How To Pitch A Disruptive Business Plan

One of the things I learned during my EMBA was how to break down, re-organize and clearly explain certain kinds of information; a skill which has proved useful when preparing and pitching my start-up based on my b-school business plan.

In late October, that got put to the test. I had the opportunity to pitch my start-up at an innovative business contest at a well-known business school in Frankfurt. My nascent company is called MedPayRx. It will use blockchain technology to create smart prescriptions for all legal prescription drugs and medical devices. This being Germany now, that includes medical cannabis.

In other words, we are planning to help mainstream a revolutionary medicine using a highly disruptive technology and business model.

In this post, I will share three insights from the pitching event that might be of interest to students, start-ups, and those in disruptive businesses.

Introduction To The Event

The Maintech Summit at the Frankfurt School of Finance and Management (co-sponsored by Excon, a local start up instigator) is the first real academic-based “shark-tank” environment for disruptive start-ups in Frankfurt. The event is held on an impressive campus, and tackles disruption from all angles. Blocksource, the team who won this year’s competition (MedPayRx tied for second place), also pitched a blockchain-based business model – although focusing on a different market niche. Blockchain 2.0 is here!

If you are a disruptive tech start-up, the Maintech Summit is a must for next year. Frankfurt is a major European banking centre, and you can pitch in English!

But enough about the event; here are three lessons I learned.

1. Have a Story to Tell

The concept of medical cannabis covered under health insurance has just become law in Germany. But the law is new, and so there is still a stigma attached to this form of treatment. There is also still a great deal of uncertainty about blockchain. Not to mention its use in managing health records. And so, we had to address both.

The whole point of a start-up is to come up with a monetized solution to a pressing problem. MedPayRx aims to do this by solving privacy, supply chain and compliance issues created by the new regulations and an existing infrastructure which is literally paper-based and managed by fax. From a digitalization perspective, prescription management and insurance approvals is ripe for reform.

And on the issue of medical cannabis? The Bundestag voted unanimously for it to be covered by public health insurance in January and the law went into effect in March. Don’t like cannabis reform? Blame the German government!

When pitching, I usually get a laugh at that line. And I am pretty sure I did at the Maintech event. Although it is tough to know for sure because academic Germans don’t seem to laugh easily in such settings. Left to their own devices they do not clap either. They rap the desktops with their knuckles!  Clapping is an invention that is being introduced slowly in international business schools. That said, once the Germans warm to it, they do it enthusiastically and well.

No matter how hard they tried to conceal them, though, I did get a few grins. MedPayRx may not be the first cannabis-related business plan conceived or pitched at an accredited b-school since medical reform this year in Deutschland, but we are on the cutting edge of this trend!

2. Build a Strong Business Model

A successful business model for a start-up combines the trifecta of a desirable product, identifiable market need, and a capable team who can execute on the idea.

For MedPayRx, cannabis is part of our strategic market entry plan. It is a medical product suitable for a couple of niche markets whose time has come. The recent legal reforms give us a unique window of opportunity.

In addition, our team has already built a working proof of concept harnessing well defined technology.  The combination of these three factors established our cred, which helped win us a business school pitch opportunity, and secured us second place in the competition.

It is clear that blockchain business models will become a staple at business schools everywhere soon. It is also very likely that cannabis-themed business models will begin to percolate through business school competitions in every jurisdiction where reform has taken place.  But with lingering social stigma towards cannabis – even of the medical variety – how do you begin to be taken seriously? Short answer – build a strong business model.

3. Justify Your Product-Market Fit

MedPayRx’s smart prescriptions can be used for all prescription drugs and medical devices, including medical cannabis.  In light of recent reforms, our initial focus on cannabis makes our initiative timely and relevant.  However, the stigma against cannabis is still real.

Be ready to justify your product-market fit.  You can bring in science, market analysis, and common sense arguments to explain why you are focussing your product or service on the market you have chosen.  Why is now the right time for this solution?

Anticipate your audience’s fears, biases and objections, and the resistance will quickly disappear. By focusing your potential investors’ attention on your innovative solution to a specific social need you can control the conversation, helping to shift their questions from “should MedPayRx be doing this?” and “should I invest?” to “how should MedPayRx be doing this?” and “how should I invest?”

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The Consulting Value Proposition

Why do organisations hire consultants?

If you are a junior consultant, knowing why your work is valuable is likely to make your job more meaningful.

If you are a partner, knowing why your work is valuable is likely to help you sell consulting projects and make money for yourself and for the firm.

Below we outline five (5) reasons why organisations engage consulting firms.

1. Expert Knowledge

Consultants can provide management with the expertise needed to address specific business problems. For example, a company that needs to update its computer systems might seek advice from IT consultants.

The benefit of bringing in specialist consultants is that they are likely to have experience solving similar problems and an understanding of industry best practice. Large consulting firms can draw on a breadth of experience and offer clients a broad range of expertise applicable to a wide range of business problems.

Areas of expertise that a consulting firm might provide include:

  1. Industry specific knowledge;
  2. Strategy;
  3. Marketing;
  4. Supply chain optimization;
  5. Distribution;
  6. Organisational change;
  7. Information technology;
  8. Tax structuring;
  9. Risk management;
  10. Human resources; and
  11. Turnarounds.

Expertise can form a crucial part of a consulting firm’s value proposition and can be something worth fighting over.

An example from 2014 occurred when McKinsey poached two partners from AlixPartners, one of the world’s best-known restructuring firms.

Restructuring is a niche service which requires specialized knowledge and industry experience. In an apparent attempt to stop McKinsey poaching key talent, AlixPartners sued its former employees (Eric Thompson, managing director of AlixPartners’ Hong Kong office, and Ivo Naumann, head of its Shanghai branch) on claims that they misappropriated trade secrets before they left the firm’s Asian operations.

Expert knowledge can be very valuable to consulting firms and their clients.

2. Independent Advice

Consultants can assist management by providing independent advice.

Consultants can provide more objective recommendations compared with full-time staff since they do not have a vested interest in the outcome. For example, consultants would be able to recommend cost saving measures such as layoffs, restructuring, offshoring, and outsourcing. Consultants can also recommend growth strategies like market development or product development, which may be good for the organisation overall but not in the interests of a particular manager, division or department.

3. Catalyst for Change

Consultants can assist management by supporting organisational change.

There are four reasons why consultants may be well placed to do this:

  1. Impetus for action: Consultants can provide research to support a particular plan of action, which can provide the stamp of approval that management needs to legitimize its plan and overcome internal opposition. A consulting report can also provide an impetus for action by clarifying the reasons that a proposed course of action makes sense.
  2. Convenient scapegoats: Related to the first reason, consultants can provide political cover to help management pursue a potentially risky or unpopular course of action. If employees are unhappy with layoffs, management can blame the consulting report. If shareholders are unhappy with performance, management can blame the consulting report. “Nobody ever got fired for hiring McKinsey.”
  3. Open communication: Consultants can facilitate open communication within a firm and enable good ideas to reach management. Since consultants do not have a fixed position within the organisational structure it is likely to be easier for them to collect information from employees at all levels.
  4. Employee engagement: Consultants often engage with staff at all levels within an organisation and, as a result, employees may feel more involved in the change process making them less likely to resist proposed changes.

4. Implementation

Consultants can assist management by implementing recommendations.

A firm may find this appealing because implementation may be a dedicated project unrelated to the firm’s ongoing operations.

Hiring outside consultants can help a firm overcome internal bureaucracy and inertia favouring the status quo. A firm may also lack the expertise or manpower needed to implement recommendations efficiently and effectively.

5. Cost Effective Solution

For some types of projects (e.g. software development) consultants may represent a cost-effective solution.

A firm may lack the competencies needed to complete the project in a timely or cost effective manner and it may not be feasible to hire and train full time staff.

Even if engaging outside consultants appears more expensive compared with employing full time staff, it may still make sense to hire outside consultants since (a) they can be dispensed with more easily after the project is complete, and (b) consultants may be able to complete the project more quickly, which could give the organisation a competitive advantage.

[For more information on the management consulting industry, please download our “Guide to Management Consulting“.]

Image: Pexels

Consulting Exit Options

Exit Opportunities

One of the benefits of starting your career in the management consulting industry is that it provides many favorable exit opportunities.

Some of the possible exit opportunities that a consultant may consider are outlined below.

1. Another Consulting Firm

Just because you leave a consulting firm doesn’t mean that you have to leave the consulting industry.

A junior consultant with a few years of experience may decide to move to another consulting firm which offers a better office location, better pay, the promise of accelerated promotion, or more interesting projects.

2. Internal Consulting

Some companies have an internal consulting unit designed to provide support within the organisation on issues such as strategy, business development, marketing, and project management.

The benefits of this kind of arrangement for the consultant include less travel and a steady stream of work.

The downsides may include lower pay, less variety of work, and perhaps less dynamic colleagues.

3. Large Corporates

Former consultants can land themselves strategy, marketing, operations, business development or management roles in large corporations like Amazon, Apple, Coca-Cola or Procter & Gamble.

The benefits of working at a large corporate include better job security, less travel, and shorter work hours.

4. B-school

Probably the most common next step for junior consultants with a few years of experience is to attend business school.

Some consulting firms will offer to pay the tuition fees on the condition that the consultant returns to the firm for a number of years.

5. Startups

The current trend (which I believe will only become more mainstream in the coming years) is to build a team, raise capital, and start your own show.  A few years of experience at a top consulting firm can provide you with a cash buffer, a strong business skill set, and a network of friends and former colleagues who can help get your new project off the ground.

[For more information on the management consulting industry, please download our “Guide to Management Consulting“.]

(Image Source: Flickr)