Expert Profile: Dan Schonfeld - Finance, Strategy & Tech Specialist
After training with McKinsey, Dan spent over ten years consulting in multiple countries, followed by 6 years in PE, where he ran a successful impact investment fund. Now, Dan splits his time between VC and independent consulting.
We enjoyed a wide-ranging conversation about Dan’s freelance journey, how to set up a project for success, the importance of trust in client relationships and his take on the current tech investment landscape. So let’s dive in:
What do clients come to you for - what’s your USP?
Broadly, I’m finance and strategy. Within that, a lot of fundraising, due diligence, modelling FP&A, commercial strategy, go-to-market, corporate development, operations, pricing - the list goes on! 10 years in consulting gives you an EXTENSIVE toolkit.
USP-wise, clients like my ability to tie strategy to numbers: to integrate the long-term strategy and align it to KPIs, unit economics and value generation. There are a lot of people who are experts in either strategy or numbers - whereas I guess I can marry the 20,000 feet in the air strategic view, with the operational finance what are we doing tomorrow view.
Boiling it down to a one-liner, I get s*** done! When people talk to my previous clients, that’s what they hear. Consistently. I’m a safe pair of hands. So that’s the other thing my clients really appreciate - peace of mind. They know I’ll deliver quality, on time.
Context-wise, I really enjoy tech, especially software. It tends to be higher velocity, and has the unique challenges that come with a high velocity business. You’re building the ship and sailing it at the same time. I love that! Other businesses can plan ahead more, software moves super fast and keeps me on my toes!
Why did you decide to start freelancing?
Ha! Well, originally, not by choice, but it’s become, well…an addiction!
I ran an impact investment PE fund for 6 years. It was one of those brilliant all-encompassing roles, and when it ended - back in 2017 - I started looking for something similar in the UK. But it was tricky because I’d principally worked in emerging markets, mostly in Africa, so the view was that my experience didn’t translate.
Emerging market firms were interested in me, which was great - but they all wanted me to move to Africa; which I didn’t want to do because my family’s here in London. I realised it would take me a while to find something permanent and I decided to freelance as a stopgap, to keep myself busy and pay the bills.
Was it easy to get started?
The first 3-4 months were tough - probably are for anyone, because you’re building a pipeline and figuring out positioning - but then the contracts started rolling in!
I tend to have a few projects running in parallel and then dial up and down as needed. I love it. There’s great variety and you’re constantly learning - new people, new contexts. And the money’s the same as perm - if not better.
I have gone permanent a couple of times. I’ll always consider permanent opportunities - but they have to be pretty special. The perm roles I’ve taken in the last 6 years were both great, and both ones where I’d freelanced first.
As a side note, freelancing can be a great way of finding your next permanent role. It's a lot easier to join an organisation on a contract - because there’s less risk, there’s less box ticking, and it’s much faster. It’s a great way to get your foot in the door and see if there’s a good fit - kind of ‘date before you marry!’ My role at Dext started as a strategy project, and I ended up in a P&L role as Director of Operations with responsibility for Strategy, Alliances and Partnerships, M&A and Operations!
Are there any downsides to being a freelancer?
It’s the hunter vs farmer scenario. The horizon is always shorter than you’d like. You think in terms of weeks and months, not years. It does require a certain level of self-belief to get comfortable with the idea that the end is always in sight.
Also, there’s a lot less BAU and a lot more pressure to perform: everything’s urgent, against a deadline, deliverable focussed. I like this kind of pace, but it can be pretty stressful.
When do you say no to a project?
If I don’t think a project can succeed, or I’m not confident of delivery - let’s say the timeframes are unrealistic and the client isn’t open to flex - then I’ll walk away.
I also need to like the people I’m working with. Of course you can’t always like everyone, but there are usually 3-4 key people who you spend a lot of time with on a project. If I don’t have a good connection with all of them, things can get intolerable pretty quickly.
Finally, if it’s a long project, it MUST be interesting. If I get bored, it tends to gradually dull my edge - which is bad for everyone. With short pieces I’m more open - I did some fundraising for a challenger bank recently, it wasn’t particularly exciting work, but the team were great and the pay was good, so I said yes!
Do you prefer to work remotely or on site?
Obviously the last couple of years I’ve worked remotely, mostly by necessity. I actually think it increases efficiency. (I confess, now I actually see going into town as a nuisance - the meeting people part is great, it’s the two hours burned on the commute when I could have been working!)
I think the start of a project is the best time to have in-person contact - when you’re becoming part of the organisation, getting to know people, developing networks etc. - you can’t do that on zoom.
Also, I’d always recommend interviewing and pitching face-to-face too. You have a lot more to work with in terms of body language. The same goes for key / large meetings - I always push to have those in person. More than two or three people on a video call just isn’t effective.
In terms of approaches to project management, what are the trends you’ve noticed in different companies?
I’d say larger companies tend to have better infrastructure - project design, processes, software etc. The downside is that decision-making often becomes some rare form of torture!
Younger or smaller companies often have limited resources, and they tend to work in sprints. Structure-wise there’s typically not a lot in place for a 3-4 month project. Obviously as a freelancer you’re used to adapting - the issue comes when companies don’t understand the necessity for and structure and process; and because they’re focussed on managing the runway, conserving cash, putting out fires, you end up fighting for their bandwidth.
How do you address this?
You need to set the stage correctly and align expectations from the beginning. As a consultant, you naturally ask: what does my client want from me? It’s equally important to ask: what do I need from my client, if I'm going to deliver what they want?
Then you have to be clear with your requirements. If you’re not, you’re setting yourself up to fail. You might need to be super direct and say - this isn’t going to work unless I get x frequency of meetings, access to x data and, x percentage of your time. You MUST be explicit.
On which note, how do you set up for success more broadly - what do you always do at the start of a project?
Secure and deploy the voice of authority!
People often conflate client with company, but in my mind, the client is always a person - typically the CEO / Chairperson / a VP / member of C-Suite. Someone senior. Generally in the first conversation I have with that person, I’ll explain that the second we kick off, I’ll need to be channelling their authority: when I’m walking around the company, talking about the project, I need to be speaking with their backing, and everyone involved needs to know that.
I make sure my client knows that it’s up to them to lay that groundwork before I arrive; and that if it’s done well, the likelihood of project success increases by a massive factor.
Make the structure visible and palpable: people need to see and FEEL IT around them
If you’re working with a corporate and they’re well versed in projects, they'll have a system in place and you can adapt to that. In an organisation without much resource, capabilities or tools, you have to create them or improvise. I run a lot on Excel when I’m working with startups, but platforms like Notion and Coda are also good options.
Whatever the context, I make it clear that the process will be VERY structured. There’ll be milestones, deliverables, meetings, deadlines etc. Then I’ll go ahead and make that structure visible. Meetings in diaries, Slack, whatever tools are at hand (and if there aren’t any, I’ll improvise, usually with Excel). These are the tangible manifestations - the artefacts - of the structure - they help make people feel comfortable, contained and focussed. Ultimately they make the project feel real.
What’s the biggest mistake you see clients making in their relationships with freelancers?
Haha! Well, my wife’s also a consultant - we have a lot of these conversations! I guess the main one is that clients are just people like us… And like us, they want everything, they want it yesterday, and they want it for free!
Seriously though, the main issue I come across is lack of trust. For example: a client has mismanaged their own expectations at the beginning of a project, and then won’t trust you when you tell them that what they want isn’t achievable; assuming instead that you’re haggling / trying to squeeze more time / money out of them. This is a major problem.
I practice a form of extreme candour - I guess it’s in line with my character. If I think a client wants too much too fast, I’ll explain why it can’t be done. I’ll also explain that, as a consultant, my reputation is everything. I want to do a great job and get a great endorsement. There are literally no incentives to lie or connive. If there’s receptiveness, we can move on. If not, I’m likely to walk away - client trust is vital.
And in the interests of balance…! What are the biggest mistakes you see consultants making and what advice do you have for overcoming them?
Let’s say you know you can’t do the job in the timeframe required, but you want it, so you agree. Recipe for disaster. Either you'll deliver sub-par work, or you’ll be late.
Of course it can be hard not to overpromise, particularly if you’re not that confident, or you’re new to freelancing. But it’s your reputation at stake - so you MUST give yourself more room. The good news is, you usually can.
I worked for an absolutely brilliant client once - super smart, just not experienced when it came to strategy. The initial brief was for a 5 year strategy, with delivery in 3 months.
I said I thought it would take 5. My client was adamant that 3 would be enough. So I said: ok, I’ll start, aim for 3 months - it’s on the record that I don’t think it’s possible, but I’ll give it my best - then we can review 6-8 weeks down the line when we all know more.
Two months in, it was super clear to all of us that the level of complexity we were facing would make a 3 month delivery impossible. It took 6 months in the end - and nobody complained!
Politics matter. We’re human!
Some consultants opt for the line - I’m a professional, I’m here to do a job, I’ll focus on the data and the insights and the analysis. I won’t even register the politics.
This can be a big mistake. You miss clues and signals and make enemies because you’ve ignored agendas. People can take their agenda being ignored extremely personally - someone might wholeheartedly agree with your analysis and recommendations, but blow them out of the water anyway, purely because they’ve felt ignored. We’re human.
Option two is to be aware of politics, but to not engage. This is better than ignoring them completely, but still not as good, I think, as embracing them. Politics are inevitable and if you give time and energy to understanding them, they can actually be a real asset.
For example, If I’m making recommendations about a topic, I need to understand how it sits with / conflicts with the priorities of the key stakeholders. If I do that, I can almost always find an angle that fits with everyone’s agendas: I can build a coalition.
Also, if you engage and understand the politics, you may end up getting close to very senior people. The people at the top of businesses are often quite isolated, and if you’re someone who understands their perspective, someone they can confide in, you can be exposed to really useful information - which in turn can make a real difference to what you end up delivering!
You work with startups and big corporates, you’re an investor, you’re on boards - how do these different contexts inform / influence each other?
When I’m consulting for startups, I add a lot of value in fundraising and investor comms, because I understand how the other side thinks, I know which KPIs are going to be interesting. The fact that I’m an investor, I’m on boards and I’ve worked for large corporates also means I’m more credible with founders, and they’re more likely to listen to my recommendations.
Sometimes I’ll bring knowledge that I’ve built in the startup world into big corporate contexts too. Take large FS firms, for example - there’s a huge amount of tech. Having worked in and invested in a lot of tech companies and seen everything from the bottom up, I have a hands-on, granular understanding of the ecosystem. That’s useful.
Personally I think the more you’re a jack of all trades as an independent, the better - both in terms of getting staffed onto projects, and being kept on. You’re a kind of multi-purpose asset - in fact someone recently described me as a Swiss Army knife…! In most organisations there’s a huge premium to having someone like this in-house.
On the flip side, it sometimes makes it harder to get a permanent role - because people want specialists in permanent roles.
You run a VC angel syndicate - how do you see the tech investment climate looking over the next couple of years?
I’ve read a lot lately about tech reaching a plateau - no way! Take the distributed ledger tech underlying crypto - we’ve barely scratched the surface of its potential.
In the short term, valuations are coming down to a more reasonable level - this is a good correction. Many companies who don’t know how to make money have lost 80-90 % of their share price, and that’s ok. It’s Darwinian. It’s similar to what happened in the aftermath of the dot com bubble bursting. The firms that survive - they’re going to be the next giant killers, the ones challenging the Metas and Googles and Microsofts and Amazons. In that sense, it's a super exciting time.
All you need to do is hang on to your cash, pick up the right opportunities and be patient: investing in early-stage companies is not for the impatient!
And any final thoughts?
Ha! Well, I genuinely think independent consulting’s the best thing since sliced bread; and with the world becoming more agile, flexible, remote and hybrid, more and more companies are saying let’s get an independent in: it’s becoming the norm. There’s so much potential in freelancing.