Will Bachman: Our guest today is Alexander Petersen. He is a McKinsey alum and a successful entrepreneur having starting a pet care business called Wagly. After starting Wagly, he was able to attract private equity funding to grow the company and hire a strong full-time leadership team. Alexander is now the owner of a boutique consulting firm focused on animal health, which I learned in this episode is a $50 billion industry.
Alexander has built a thriving firm by tightly focusing on an industry where he’s been able to get to know all the top players and build lasting relationships that continue on beyond individual projects. You can learn more about his practice at DanaShift.com. That’s D-A-N-A-S-H-I-F-T.com. I enjoyed our conversation and I hope you do as well. Alexander, I am so thrilled to have you on the show today. Thanks so much for joining.
- Petersen: Thanks for having me. I was looking forward to this.
Will Bachman: Fantastic. Before we get into all the professional stuff, I know that you have some really cool hobbies and I wanted to ask if you’d talk a little bit about that, about rock climbing and flying. Tell us a little bit about how you spend your time outside of work. Then, we’ll get to the work.
- Petersen: I guess I find that anything that involves altitude gets my heart pumping whether it’s mountaineering in the Alps or rock climbing here in southern California or taking my little Piper Cherokee Six out for a spin in the desert. That’s what I like doing. If I can share it with good friends and family, it gets even more exciting.
Will Bachman: Somehow it seems like both those hobbies are a commonality. I know several independent professionals who like either rock climbing or flying their own plane. I know some consultants actually who will fly their own plane to assignments and will look up local airports and just fly there. They won’t take an assignment if there’s not a good little airport nearby.
- Petersen: My favorite story along those lines was a conference one of my favorite clients had organized in Jackson Hole, Wyoming. It was a real treat. I got to fly my plane up to Jackson Hole. It was just beautiful over Nevada, Utah.
Then also after the event, which was at a beautiful hotel in Jackson, I got to go climb the Grand Tetons with a very good friend of mine from Idaho that drove in. That really made it the perfect professional personal mix. I felt that was very unique and very different from what I might have been able to do in my old corporate job.
Will Bachman: That is a great, great example. Let’s turn to that a little bit. Describe your path and how you got to independent consulting, where you’re at today.
- Petersen: I guess I’ve taken a bit of a winding path. I started in Europe. I’m from Denmark and Sweden. I joined McKinsey in Switzerland, spent five years in Geneva as part of the pharmaceutical medical product practice, and then transferred for what was supposed to be an 18 month short-term transfer to New Jersey, but really loved it.
I spent another five years with McKinsey in Jersey and got to know a particular subset of the industry, which is animal health. I served some clients there and then joined IDEXX Laboratories, a diagnostic company that’s focused on animals. I had a great time there as a general manager running the software businesses and really became a bit more of an intrapreneur launching a bunch of new businesses that seem to have turned out really well.
I got to the point where a few years ago I decided to leave IDEXX and start my own company. It’s a multiunit pet services company where we take care of dogs, provide veterinary and boarding and daycare services. It is a little out of character for the brainy consultants, but has turned out to be really a lot of fun, a lot of energy, great people in that business.
As that business got the private equity funding that it needed, we were able to hire the right management team. Since then, over the last year and a half or so I’ve been focused on building my own independent consulting practice. I’m really more building a broader consulting team also with other independently minded consultants that I work together with to serve clients in both animal health and human health.
Will Bachman: Now I’m feeling a little bit ignorant here. When you say animal health industry to me I guess I’m thinking, “All right, there’s pets and vets. There’s I suppose big animal, cows and stuff get shots, whatever.” Could you give us a little bit of an overview of the animal health industry? How big is it? What are the major players? I just don’t know much about that industry.
- Petersen: Not ignorant at all and I think you captured it. You got small animals and large animals, pets and farm animals. The pet space in particular has been really booming. It’s a $50 billion plus industry and it’s driven by a profound secular trend, which is the bond between pet parents and their pets.
There’s this trend that has to do with humanizing in some ways the pet, but more importantly a bond and a relationship that goes way beyond just pet as property. It’s really the pet as a member of the family. Now it’s created a series of business opportunities that have grown significantly for many, many years.
Even through the recession, it’s been an incredibly stable market, stable in its growth. It’s pharmaceuticals for sure, but also services, veterinary care, pet hotels, doggy daycare, treats, food. Look at food. Food would be a good example. You’d think pet food is a boring traditional industry.
Not at all, there’s an organic component to it. There’s natural products. There are advanced gourmet recipes. There are foods that are specifically for athletes with athletic dogs. That’s become a real growth opportunity with private equity investing in major assets in the space and lots of entrepreneurial things starting up all the time.
Will Bachman: That’s a really cool overview. Tell me a little bit about, you’ve really developed a focus on this industry as well as I understand some on human health as well. Talk to me a little bit about how you have come to that focus and the benefits of being really targeted as an independent professional or someone who is like yourself running a boutique.
- Petersen: Absolutely, I think like a lot of people. When I was a consultant in the beginning of my career I was a real generalist. I had a lot of interests. I wanted to get to know the world and really, really enjoyed it. What tends to happen though is you start knowing something about something. For me, animal health is, like I said and I tried to express, there’s an energy.
There’s also an opportunity for entrepreneurship that’s different from many aspects of human health because we have less regulations, because there’s investment, because it’s self-pay and so we don’t have the insurance issues. It seems like it’s been a palate that allowed me to draw some really interesting things whether it’s launching Wagly, the multiunit company I talked about before, or this consulting work that I do here.
It’s given me a lot of flexibility. To your point about specializing, it just happened. You end up having relationships that come down to people. You know them through the impact that you had. As I took the slightly scary jump from being an executive to being an independent consultant, it was just natural that I first called the people that knew me through what I’ve done recently and that respect some of the specific businesses I’ve bene involved in.
They were incredibly welcoming with both advice and suggestions, leads. One thing led to another and now I think myself a group of people around me are really known as a really strong entity that you’d be remiss not to call if you wanted to do some work in animal health, particularly around commercial issues, business development issues.
Will Bachman: Beyond calling folks that you already knew, could you talk through a little bit about your business development process? Whether it’s writing or speaking or going to conferences, what’s worked for you?
- Petersen: Absolutely, I have enormous respect for people that are able to really lead through content, as you said, writing, speaking. That’s not been my journey. I think I’ve really led through relationships. What happened is the way a network works is in concentric circles. I tried to think very hard about where are the people that lead the key clients I want to serve?
I literally listed it out in a very starry eyed fashion the top seven or eight companies that I would be incredibly proud to serve. I thought hard about where are the CEOs and the top executives at those companies going to be? How do I build a relationship with them? That led me to identify a number of trade shows and conferences, industry events, sometimes smaller meetings that some of my key existing clients would hold where they bring in experts throughout the industry.
That seems to have really worked. An example is a recent engagement that we’re actually currently doing that started exactly through that fashion. I was going to a conference in Las Vegas, went to another conference in Orlando. I happened to meet the same executive that happened to be one of the key leaders at a company that was on that list that I really wanted to serve and respected.
We thought it was funny that we ran into each other twice, but a few weeks ago I was at an investment forum with a bunch of investment bankers in London and there he is. Same executive shows up and he says, “Hey, do you have a few minutes to chat?” We took a few minutes and he said, “Listen, there’s this problem I’m trying to solve. There’s a company I’m trying to acquire. I’m trying to figure out if it’s a good idea for us, whether they’re ready. Do you have a perspective? Do you think it’d help us out?”
I think what I’m trying to illustrate is that for me business development has been less about trying to be everywhere, trying to get your name out, trying to promote my website. It’s much more about becoming a known entity for the few people that I really aspire to serve and building something like a closer relationship where we’re a familiar face. They understand what it is we have to offer.
It’s very much like recruiting candidates. When I talk to candidates I always talk to them about don’t try to represent yourself as you could do anything, you could take any job as long as you get paid for it. Rather, be really, really clear about what you do and what you don’t do. Opportunities in my mind tend to open up when you make those choices.
Will Bachman: Seth Godin has this discussion around being the best in the world or being famous to the family or being world famous where the world is defined as the community that really matters. It sounds like you’ve nailed that of figuring out the ecosystem that you want to be in and the number of folks that you want to be famous to and figure out how to reach them. It sounds like-
- Petersen: It’s really funny that you say that. I’m from Denmark, as I mentioned, and we have this expression. It’s called world’s famous in Denmark. As an example, we have a mountain in Denmark. It’s called the Mountain Of The Sky. If I’m not mistaken, it’s 157 meters high. It’s world famous in Denmark, but no, absolutely. I think that familiarity also makes it a lot more fun.
Honestly when I think about the industry and the profession that I’m part of I don’t necessarily think about it as a business segment. I think about it as my extended family. When I go to the trade shows, because I know everybody there, it feels like a really fun event. It’s not intimidating. Conversations rarely feel like cold calls even if you’ve never met the person because you have language in common.
You have experiences in common. I may not be able to talk in detail about their company, but I can talk about the trends happening, about recent deals and transactions that took place, ask them about their perspective on initiatives that are being discussed at the conference. Again, familiarity makes everything so much easier and more fun. I really enjoy what I do.
Will Bachman: Then, you just become a natural person for folks like that to call when they have an issue. Talk to me a little bit about your firm and how you’re building out your firm. You’re a little bit more than just an independent now. You’re building a boutique consulting firm I think with some employees and some virtual team members.
- Petersen: We started DanaShift with the idea saying how do I take the best of what being an independent consultant provides us with? It’s the ability to do the kind of work we want to do and turn down the work we don’t like, the ability to pick the people you work with, and frankly also the ability to have balance in your life, not making work the only thing you do.
On the other hand, it’s also trying to think about the very best from the firm I worked at before and the firms that other people on my team work in. We stepped back and said, “Let’s try to figure out if we can have an even higher level of relevance and depth in our industry with the same level of rigor, analytics that the traditional professional services firm would have.”
To layer onto that, there’s this notion of operational background. Most of the people that I work with, they’re not just consultants. They have either started a business, run a business, been inside a real company. We talk a lot about this notion of empathy with a client, empathy that’s not fake or on purpose, but rather we know where they’ve been and we try to incorporate that in our thought process so that our deliverable isn’t the deck or the blue book.
Our deliverable is a client that actually feels they know how to do it and is going to be able to drive change in their business. That’s been the model. It’s been really good. It’s been a great way to bring in people that either had passion to go develop clients that didn’t necessarily know where to start and didn’t have the structure to support them as independents.
On the other side, it’s individuals that were really strong consultants maybe weren’t as comfortable creating or as successful in creating a consistent stream of ongoing work. There’s a place for that too. My work with Umbrex is a good example to bring in some really great people that have depth in their area and passion and fit in just naturally in a project.
Will Bachman: That’s great. That shows one example of how it’s useful to know a set of peers as an independent professional where either you might want to bring in other people as subcontractors or vice versa, a chance for work. Walk through a case example of one of the projects that you’ve done, especially highlighting any tips or tricks that you think are broadly applicable.
- Petersen: I can talk to a recent project that we did in the same animal health space. It was a project related to some pretty technical channel pricing working with various levels of distributors, dealers, and things of that nature, and figuring out how the client could price its products to its customers. I think it was archetypal because it required a series of points of view and expertise.
It required of course understanding animal health, which I can claim to do. It also required real understanding of how to maximize the distribution network or how to optimize pricing across large number of SKUs in a reasonably unstructured market and a number of other related skills. I didn’t necessarily have those myself. That wasn’t my areas of expertise.
That’s where this notion of working with multiple independents made a lot of sense. We brought in three different individuals, one that had a lot of experience with marketing and sales, one that was much deeper with a nice finance background, and then myself in the industry. I think together we were brought in. I’d run into an executive at the company that had raised this opportunity with me. We came in at the very tail end of a request for proposal.
It’s a formal RFP process. They brought in three of the large consulting forms, the types of firms you’ve heard about and might have worked at before. We were very successful. We ended up beating them and getting the engagement and it was really fun too to also hear their feedback about why we did refreshing in some ways. We thought we had won the engagement because of the depth of the industry knowledge and because of the great proposal we wrote.
The reality is we probably got it much more because they liked our style. They liked the empathy that we demonstrated. They liked the fact that we didn’t look down upon them as the smart consultants. All of these things, you can’t take that stuff. It comes because we’re happy to do what we do and because we brought together the right group of people that were really passionate about serving the client
Will Bachman: It sounds like you built a really powerful team. What other sort of feedback have you gotten from the years, from your clients on why they’re selecting your firm?
- Petersen: It ranges a little bit. I mean I think that there’s certainly an aspect of I don’t need to teach you everything about my industry. When I tell you the name of one of my distributors you actually know their CEO and their head of marketing rather than having to look them up on Wikipedia. There’s certainly that and they enjoy that. I think the other aspect is that we’ve gone out of our way to make sure that we’re never seen as self-centered.
We’re focused on what’s right for DanaShift, but rather really keep the executive in mind. We want to make them successful. What that means is we’ll turn down work. We’ll descope projects. We’ll, I think more importantly, demonstrate a very independent point of view. For example, you might be brought in to help them evaluate an acquisition. It might be follow on work if the acquisition happens.
If you go tell them that, “No, I don’t think this is a good fit,” there’s other things they can do. I think the feedback we get is around independence and empathy probably is the two most important and then relevance to the industry. The other thing I might want to add is a lot of independent consultants seem to tie pricing to their value proposition.
Meaning the idea that you’re going to pay a lot less for an independent consultant than you would for a big firm. That’s usually true, but I think it’s a mistake to start there and focus on that. My experience has been that we don’t charge prices that are that different from the large consulting firms and we don’t talk about price as the reason to pick us. I think that changes the conversation.
It allows me to not have to think that hard about bringing in the right independent consultant. It allows me to not get into the deep negotiation about their fees, but rather bring in the right person at the right time and also be flexible. At the end of the day, sometimes I got to do what I got to do and I might decide to do more work for a client than what they’ve paid for. I can make that choice and not have to worry about it too much.
Again, I’d encourage any independent consultant to think really hard about what are they really good at? I think they should be confident that if they’re working on the right project with the right client, they’re worth every bit of what they could’ve been worth as part of a big top five management consulting firm if not a lot more. They probably have gained a lot of experience since they left that firm that they can be able to bring to their own engagement.
Will Bachman: It’s such a great point that getting into a price discussion can just be such a downward spiral, a race to the bottom. It sounds like you’re doing the race to the top instead. I know that building relationships is so important to you. It particularly makes sense the way you’ve set it up where you’re really focused on an industry.
Talk to me a little bit about how you build relationships over time with clients, particularly when you’re not there serving them. How do you stay in touch? Do you just pick up the phone and say, “Hello,” send emails when you see something interesting? What are some of the things that you do to maintain those relationships when you’re not on active assignment?
- Petersen: That’s a great question. First and foremost, I really believe in the out of sight, out of heart kind of thing. If they haven’t seen you, if they haven’t talked to you lately, it’s not that they don’t think you’re competent. It’s just that you’re not going to be the first person they think about when they have a problem.
There’s definitely a recency effect where people remember the people they talked to in the last two to three months really beyond that. I definitely go out of my way to think hard about how to do that. It starts from a very traditional CRM-like approach. We’re using Insightly, which is a great cheap CRM tool that you can install in your phone. I have every one of my contacts on there.
I’ve identified who are the individuals that fit that definition of they’re the kind of client I want to work with, they’re the kind of individual and company that both fit that criteria. Those that I don’t know yet I set specific goals about finding ways to meet with them primarily through these conferences like I described. I go to conferences and trade shows. I very rarely ever make it through the actual trade floor.
I spend the entirety of the time there in one-on-one meetings with individuals who I’ve set up time with. Sometimes it is a bit of a cold call. It’s like LinkedIn and I reach out and say, “Here’s who I am and here’s my background and I’ve heard a lot about what you’re doing. Want to sit down?” I rarely get turned down. I pretty much always get an hour at the trade show to build a relationship.
From then on, I try to get into some kind of regular pattern. With clients I’ve served before, I try to have a monthly call with a pre typed agenda where I always have one or two new things to bring their way and get a business update from them. The first two to three are pretty awkward. The fourth and the fifth and the sixth start feeling really fun like it’s talking to an old friend and engagement opportunities come up that way.
I think the other aspect that I really believe in is, again, this notion of getting away from self-orientation. Over the last few months, I’ve helped one of my client’s daughters get into a college in Maine. I happened to have some roots in Maine. I knew some people there. I helped another client pick the car of his dreams.
I helped another client plan his trip to France with his family. I feel like being able to just reach out to people in an honest and direct way and say, “Hey, how can I help? What are you up to,” and not always talk about, “How can I serve you,” tends to be a very strong builder of relationships.
Will Bachman: I got to ask what was the car of his dreams?
- Petersen: It was one of these fancy Mercedes AMG cars. He was picking between fancy Audi and a fancy Mercedes.
Will Bachman: That’s the side you came down on, yes. That sounds like you’re really going beyond business to build deep personal relationships and just getting widely known as someone who wants to be helpful regardless of if it’s going to result in a project opportunity.
- Petersen: I think that’s right and I can’t think of a meeting that I’ve had that was truly a throw away meeting. Either I learned something about the company or the industry that made me smarter or I got a lead to go talk to someone else or I heard about a conference that I wanted to attend or I met someone that I’m going to want to be in touch with. The bar for me isn’t a lead from every meeting. The bar is did I learn something?
Did I actually enjoy the meeting and did I find that it furthered the agenda a little bit? You often go into meetings thinking, “I’m not sure what this is going to be all about and whether it’s going to be of value.” When you step back and you look at your notes, something happened in every single meeting if you pay attention, if you keep your eyes and ears open.
Will Bachman: That’s so true. What advice would you give for folks? Maybe it’s an associate partner at McKinsey or someone who’s had experience at a top tier firm and thinking about setting up their own practice. What advice would you give for someone maybe six months or a year before they leave a big firm on what can you do to prepare yourself to really be successful when you launch?
- Petersen: I don’t know how good advice I have, but I have a few thoughts. One is just confidence, confidence that you add value. I mean you might have been taught in your firm that you valuable for that firm and the incredible value they offer and so on. The reality is clients don’t buy firms. They buy individuals. They bought you. Think hard about what specifically you are good at.
To the point we were making before, think about what are you known for? What have you done that’s relevant? Where did you really have fun? Don’t necessarily only think about where the economic opportunity is, but really where it’s going to be easy and relevant. With that said, I’d say there’s also a great sense of realism that’s required. You got to be thoughtful about things.
For example, I’ve run into a number of independent consultants that say, “I really want to advise startups.” That sometimes works, but they may not be able to pay you. If that’s important to you, if you feel like right now from a cash flow perspective you can’t afford to take equity to support you, don’t do that. There’s a mix of do what’s really exciting to you, but also be realistic about where the real opportunities are.
Where are the clients that can afford your services? I’d say also it takes time. It’s like finding a new job. You got to place a number of calls. You got to have the uncomfortable cold calls. I’d say assume it’s going to take you a three to four month campaign to land your first one or two real projects. That’d be piece of advice number one. I think piece of advice number two has to do with sustaining it.
Someone recently told me about what they called the wave phenomenon with independent consultants. What they’re referring to is this notion that I’m going to do a big project. I get completely submerged into it and I don’t think about client development. Then, I come up for air. I start looking for clients. I look for clients. I look for clients. Then, I get a project and then I get submerged again. You get in and out of the wave.
I think finding ways to avoid that is really, really important, setting time aside for client development. You got to have two to three meetings a week if you want to sustain the rhythm. That sometimes means it’s okay to accept part-time engagements because it leaves a little bit of time to do other things. Don’t necessarily try to maximize your utilization. Rather, think about maximizing your opportunities to continue building your relevance in the industry.
Will Bachman: You’re hitting on something that so many people mention. You got to carve out that time. It’s tough when it’s taking away from billable hours or billable days. David Fields talks about it as treating it as your future business is a client that you’re serving today. If you starve that client, you’re going to starve in the future.
Alexander, this has been a fantastic discussion. I didn’t know much about animal health. I feel I know a little bit more now and it’s really interesting how you have taken that sector and, by really going deep, you’ve enmeshed yourself in it and gotten known. That can be a really successful strategy to build a firm.
- Petersen: Thank you, I really enjoyed it as well. I think that the conversation was really fun. I think hopefully I’ve conveyed a sense of enthusiasm. We started with rock climbing and flying and those things. Those are hobbies that honestly I was only able to take on after leaving a big consulting firm that used all of my time.
I think this independent consulting path is one that’s worked out great in terms of being able to raise two beautiful girls and do some crazy things, climb some crazy mountains, and also have work that’s fulfilling and exciting. Thanks for the opportunity to share that enthusiasm.
Will Bachman: What’s your next big rock climbing trip?
- Petersen: I’m going to Switzerland with the same friend from Idaho that I mentioned who met me up in Wyoming. We’re going to Switzerland and we’re going to go climb Matterhorn.
Will Bachman: Fantastic. Before we close, Alexander, how can folks who are interested in your firm find you online? Do you want to give out a website or how can folks find you?
- Petersen: Absolutely, go to DanaShift.com, D-A-N-A-S-H-I-F-T. You’ll learn a little bit about us or just go to my LinkedIn page. That’s an easy way. If it’s not, just give me a call. I’m happy to give my number because, again like I said, there’s no throw away conversation. If I can give you any help, advice, point you in the right direction, that always makes me very happy to give back, 949-415-4068.
Will Bachman: Fantastic. Alexander, thank you so much for joining. This has been great.
- Petersen: Thank you.