Koulopoulos asked the two to help Delphi prepare the response to the RFP, in exchange for a share of the contract's value—if they won. It turned out to be a smart gamble: The team won the contract and has since received several more with the city. "There is no way we would have otherwise gotten it," Koulopoulos says.
He hasn't looked back. Tapping his networks, both online and off, has helped Koulopoulos win more work on larger multiyear consulting projects, some of them in new industries, such as energy and health care. Thanks to the outside talent, he says, Delphi can pull together proposals that once took two weeks in two or three days. The practice has turned a 15-person consulting shop into a 115-person powerhouse. In 2011, Delphi recorded revenue of $10 million—twice what it logged in 2010—and half of it was won by these kinds of virtual teams. "We're banking on this to be the growth engine for the company going forward," Koulopoulos says.
Working with strangers, of course, carries a certain amount of risk. Koulopoulos tries to mitigate that by carefully vetting would-be partners. He also asked his attorney to draw up specific contracts that carefully outlined expectations in areas like the handling of intellectual property. Delphi typically sets up its contracts to include a 10 percent to 15 percent finder's fee to those who bring in the work; a similar amount for whoever pulls together the response to the RFP; and a split of the project fee based on the standard daily rate of each consultant.
Koulopoulos has developed a reputation among many in his network as a reliable source of work. "When he picks up the phone, he's not wasting my time," says Michael Cunningham, a Marlborough, Massachusetts, software consultant who has worked on several projects with Delphi. Koulopoulos, for his part, has become such a believer in the model that he wrote a book about it—Cloud Surfing, which will be published by BiblioMotion this month. "We're becoming hyperconnected," Koulopoulos says. "And it's creating a whole new set of business models that were unimaginable two to three years ago."
Action Plan
Start with those you know best. Fewer degrees of separation usually means better results. Carefully vet all people, no matter who refers them.
Create some ground rules. Spell out issues such as how you are going to communicate and who will keep the client informed.
Get a lawyer involved. Get partners to agree about issues like intellectual property—in writing.
5. Get small to get big. (In other words, it's all about the niches)
Two years ago, Medisys Health Communications was in big trouble. The 12-year-old biotech-consulting firm hadn't won a significant contract in months. Revenue, which hit $5 million in 2008, was down to $1.4 million in 2010. It wasn't hard to see why: The sagging economy meant a lot fewer RFPs from major pharmaceutical firms—and a lot more competition from rivals, especially large ones that could offer a wider array of services. With no relief in sight, founder and CEO Anna Walz had no choice but to lay off 12 of her 18 employees.
So when she was invited by one of her clients, Johnson & Johnson, to attend a weeklong program for female CEOs at Dartmouth College's Tuck School of Business, Walz jumped at the chance. Perhaps the event would provide the inspiration she needed to rescue her business.
She spent hours with Tuck professors analyzing Medisys's financials. She learned she had few options; filing for bankruptcy was one of them. Then a professor suggested she read Blue Ocean Strategy, by W. Chan Kim and Renée Mauborgne. The authors argue that companies in highly competitive markets can grow only by finding and owning uninhabited niches, and Walz devoured it. "I got whipped into making a decision and taking a risk," she says.
She called her office in High Bridge, New Jersey, where her six employees were bleary eyed after spending hours putting together a response to an RFP from a major drug company. Walz told them to stop what they were doing. Medisys, she said, was shifting gears. Rather than being a one-stop shop offering marketing, advertising, and medical promotions, it was going to become a niche player. "For a lot of us, it came as a shock," says Scott Buell, the company's vice president of sales and marketing. "But it was obvious our strategy needed to change."
Over the next few weeks, Walz and her husband, John, the business's chief financial officer, hammered out a business plan. Their decision: to drop nearly everything the company had done for years and focus on something it had been providing to clients for free—consulting services that helped disparate groups within large drug companies collaborate effectively. The idea is to get scientists, marketers, and health economists to figure out how to tell the story of a drug—before the marketing or advertising begins.
It turned out to be a smart move. So far, no one else provides the kind of service that Medisys does, says Paul W. Tebbey, senior director of global marketing at Baxter Healthcare, which now works with Medisys before going to its advertising and marketing people. "They're at the forefront of this area," he says. Indeed, rather than competing with the larger consulting firms and ad agencies, Medisys collaborates with them. Revenue doubled in 2011 to $2.7 million.
Action Plan
Think small. In today's economy, depth often trumps breadth.
Analyze your expertise. Find the thing you offer that no one else does, and stop trying to be all things to all people.
Treat rivals as potential partners. Tell them about your newfound focus—and try to work as a consultant or subcontractor.
