Tell us a bit about Quinlan & Associates.
I previously worked in investment banking and strategy consulting, with my last role being the Head of Strategy for Deutsche Bank’s Global Markets Equities business in Asia Pacific. Having worked in both consulting and in-house roles, I noticed a major gap in terms of knowledge within the financial services consulting industry, with a real absence of quality service providers in the region. I saw this as an opportunity to start a firm with some high calibre ex-colleagues from top-tier strategy consulting firms and investment banks (including regional COOs and Heads of Strategy) to form the core team at Quinlan & Associates in 2016.
Our job within 2 years was to create a brand and value proposition that was fundamentally different to the big firms, building on our company slogan, “Strategy with a Difference”. Now, we compete directly with global incumbents despite our much smaller scale. We've also started to broaden our service offering by working a lot more with start-ups, especially FinTech firms.
How is Quinlan & Associates different from other strategy consulting firms?
I think a lot of consultants get far too caught up in academia and theory. 30,000 foot views by themselves are useless, because you're 30,000 feet away from where you actually need to do the work. It's one thing to size a market, talk about industry trends, and where the next growth opportunities are going to be - that's naturally a part of what we do at Quinlan & Associates. But what actually matters is how can you attack that opportunity and monetise it.
I think what a lot of the traditional consulting firms lack is the ability to translate good insight and thinking into commercial reality. This is because most consultants are young kids who have never worked a day in the industries they are advising. As such, many lack a strong commercial acumen or an understanding of execution. It's all well and good to put a plan on a piece of paper, but if the company doesn't have the manpower or the expertise to execute it, the strategy is completely useless.
Source: Quinlan & Associates
We call ourselves an end-to-end strategy consulting firm, working with clients across their entire value chain. We treat consulting engagements like a partnership process, combining our insight with our clients’ personal perspectives. In doing so, we can deliver a strategic project that directly addresses a client’s pain points, from beginning to the very end.
Isn’t it a bit risky onboarding start-ups as clients?
With the incumbents, a lot of projects are your “typical” strategy engagements. Without wanting to sound too cynical, a lot of the time big firms want you to either provide data or an insurance policy / rubber stamp on their own agendas. In my opinion, it’s easy to fall into what’s basically a glorified marketing function. Moreover, a lot of the projects aren’t really focused on growth, especially in the banking space, so the mood isn’t all that exciting.
The area where I saw most potential to scale was around the FinTech and start-up space, who are looking to eat into the revenue pools that traditional incumbents have long dominated. From a growth perspective, there’s a lot of opportunity.
I also look at what start-ups really need. It’s without question that all require funding. However, they also need a lot of strategic guidance to commercialise their business - after all, if you can make money, you may not need to raise it. I see many startups stuck on some fundamental questions like: “how do I price my product?”, “who should I be speaking to?”, “how do we actually prepare a narrative to address what our customers really need?” I think that's where we, given our experience, are able to make an immediate impact. Moreover, unlike a large consulting firm, we can be flexible in the way we charge our clients and our engagement process, including taking on equity and potential advisory roles within the firms. It's a much longer term relationship as opposed to “here's a deck, best of luck.”
From your experience, do start-ups have strategy?
To be blunt, many start-ups have no clear strategy. While most have a good understanding of what their product does, they usually have no idea how to translate that into an actual business. Unless you have a clear strategy to take a good market opportunity and differentiated idea and build a company around it, then it's just another idea with no legs.
Most of the time, it's hard for founders to translate customer spend to ROI. Start-ups need to change the narrative from, “This is our product and this is what it costs” to, “This is our value add and solution and this would be the return on investment after you engage with us”. That's a completely different story.
Generally, strategy is not a core competency within a lot of FinTechs, and that’s no fault of the business owner. For founders, the core priority is to find new clients and grow your business, so they often end up as operators (but with the cost being their head in the sand). Moreover, when strategy is done internally, it not only takes a considerable amount of time, but it’s inherently biased. As such, you're not necessarily making the right bets or going down the right path; you're doing things that play to your strengths, in areas where you believe you can succeed.
A common misconception is that consulting is a luxury. It’s not. In my view, if you get a strategy right, that's your company's plan (and story) for the next 3 years. This can then be used for a number of purposes, including marketing collateral, corporate communications, investor decks, company websites, and sales pitches.
What shouldn’t strategy consultants be doing?
I set up Quinlan & Associates because a lot of what I’ve seen strategy consulting firms do is average, at best. I’ve heard of businesses that had spent a fortune on a consultancy only to say, “I could have just done it myself” or “I didn’t get much value from that”. And I honestly don’t blame them for feeling that way.
People think that consultants are paid to tell you what you already know. While many firms might do that, a good consultant is one that can look at things objectively, provide new insights, and structure a data-driven narrative that delivers your message in a way that is 50 times better than your original approach.
We also aren’t big fans of hypothesis-led inductive reasoning. Most people seeking advice need you to genuinely understand their situation. This is much like what happens when you go to a doctor. They won’t just give you a diagnosis; you have to run through various checks / tests to converge on what your actual ailment is. Only then can they provide a solution. Consulting firms are notorious for saying “This is what we think your problem is and you should pay us to prove that” before getting to really know their clients. This approach can often be completely misguided or take a project down a path that doesn’t address the client’s fundamental pain points.
When you're a strategy consultant, it’s your job to challenge ideas and steer the direction of the businesses you’re advising. To do this right, you need data. Hard facts will always trump an emotionally-charged opinion.
Would you mind giving us examples of strategy related fintech faux pas?
An area where many start-ups turn to are accelerators and they should be careful with what they're signing up for (and what the accelerators are offering). While several business models are verys strong, many accelerators offer some desk space, a few mentors to have coffee with you, and the ability to pitch their idea at a demo day. A lot of them don't lead to a tangible outcome; it’s more of a networking experience. During these programmes you might acquire some unique insights, but it’s typically very hands-off in terms of business building from first principles. And if you build everything on top of sand, it’s likely your business will topple.
Another mistake many start-ups make is to hire marketing or design firms to make their decks and websites “look pretty”. However, I see a lot of things that come my way that look nice but are completely vacuous in terms of content.
Many B2B FinTechs in Hong Kong may also struggle to sell their solutions into international banks, given the epicentres of decision making for a lot of these firms reside in London and New York. As such, Hong Kong FinTechs need to think well beyond competing with the local ecosystem and recognise that their competition is global. I think our connectivity among global banks and being able to plug our clients in to the right people is definitely a big help.
When is a good time to bring on a strategy consultant?
Source: Quinlan & Associates
A start-up can engage a strategy consultant at any stage in their company lifecycle. Earlier on in a company’s lifecycle, we help establish a wider use case for our clients’ businesses and sell their vision to secure some early wins. As they grow, we take their vision and turn it into a commercial reality.
We really add most value when firms are looking to rapidly scale, secure funding, build their industry visibility, and commercialise their product. So many firms end up failing after their initial seed round because they fail to scale or execute on a proper BD plan. Most are having ad hoc conversations without any discipline in terms of the clients they speak to. Many also lack a pricing strategy that strikes the balance between maximising customer uptake and keeping the lights on.
So what should fintech start-ups be thinking about when it comes to strategy?
The first thing a start-up needs to demonstrate is what their product is trying to solve. There's usually two ways to look at this: as an industry pain point that needs to be fixed or an unrealised opportunity that is up for grabs. Next is being able to show the actual size of opportunity. If I can't see a realistic number that sits behind the potential use case, then I won't support that business.
Source: Quinlan & Associates
Thirdly, what's your difference? It’s critical to understand why anyone should back that specific startup relative to its competitors. That can be reflected through your product, your business model, your distribution channels, your geographic footprint, your target target clients, your pricing, and in your team (among various other factors). People need to know why you’re unique.
I think a team is critical to the success of any start-up. You can have the best product in town, but if your team can’t sell it, it won't scale and your business will suffer. The fact is, every start-up in the world has to toot its own horn before it has anything to toot about (i.e. they all start with no clients or track record). So the team needs to be able to sell its vision really well and know how to back it up.
Finally, I need to see how a firm is going to execute on its vision. In other words, what's their strategy? A firm may have figured out how to get from A to B, been part of a few accelerators, completed a POC, and been featured in a news article. Fantastic. Now how are you going to take the business to step Z as you promised your investors? There is a discipline needed here, a systematic process supported by a data-driven approach that needs to see that journey through. That’s a good strategy.
For any startup, it’s important for founders to take a step back and stop trying to do everything themselves. Tee up with the right people that listen to you, complement your skill sets, and can do a lot of the heavy lifting and homework needed to support your growth.