Gap in the Market Plus Market in the Gap

“When I was thirty-three, and my vehicle hove into view in the shape of LEK, I asked myself whether I was ready to become co-founder of a serious global firm – that was what we intended – to rival the giants of BCG, Bain and McKinsey. I pondered the question, and eventually decided I was ready, because: •  I really understood the concepts of strategy consulting and how to sell it. •  I could see a gap in the market for our first phase of success – we could build a British-based firm able to package and sell ‘American’ concepts in user-friendly ways to British and European bosses. •  Not only was there a gap in the market, but there was also a market in the gap – a big target market which was under-served. We could see something that our top competitors couldn’t: that the decision-makers in British and European companies were often put off by American ‘power salesmanship’ and jargon, by a lack of intellectual subtlety, and a failure to understand local nuances. We aimed to capitalise on that. •  Although we were a new outfit, LEK had partners who had worked for two of our top rival firms at a senior level, and we reckoned we would be at least the peers of the consultants we would be selling against. •  We were really excited about being in business for ourselves, taking whatever risks we wanted to, choosing who would work in our venture and reaping the rewards for ourselves and our people. •  We were confident about the economics of our new business if we could sell large chunks of business. We knew that strategy consulting was highly profitable, that it required no capital investment, and that it could be cash-positive very quickly.”

“The third lesson is to ask yourselves similar questions to decide if you are ready: •  Do you understand the market niche backwards? •  Can you see a gap in the market, and what is it? •  Is there a large enough market in the gap? •  Have you worked for one or more major competitors at a senior level? •  Can you see something your rivals can’t? •  Does it excite you? •  Can the new vehicle become cash-positive and profitable quickly, and do you have enough capital to reach breakeven (bearing in mind this nearly always takes longer than expected)? •  You should only launch your new vehicle when you are sure you are ready.”