By MELISSA KORN The Wall Street Journal
Got a small project and a small budget? For some companies nowadays, the solution is simple: Rent an M.B.A. to do the work.
A new breed of job sites has cropped up to match M.B.A.s and business-school students with companies seeking short-term help and project work.
The companies get trained talent to help with marketing, financial modeling and investor pitches for a fraction of what they would have to pay big firms like McKinsey & Co. or Boston Consulting Group Inc. For the M.B.A.s, the weeks- or months-long freelance projects can sharpen their skills before they start a full-time job, provide some extra cash on the side or, for a few, offer a flexible alternative to a corporate career.
Fledgling startups were the first to use these services, but big companies—among them American Apparel Inc. APP -4.98% and Ogilvy & Mather—have become customers, too.
“If you can bring in external expertise affordably, why would you not avail yourself of that?” asks Ryan Holiday, the marketing director at American Apparel. Last fall, his team used HourlyNerd Inc. to streamline a weekly marketing spending report. They offered $1,400 for about 20 hours of work and got a Harvard Business School grad to do it.
HourlyNerd, created by three of the school’s students and backed by investor Mark Cuban, has signed on more than 2,700 M.B.A. consultants from top-tier business schools and coordinated about 150 projects since its September debut.
Outward Bound USA Executive Director Peter Steinhauser used HourlyNerd to find two M.B.A. students for a couple of strategic projects at the outdoor-education nonprofit. “The final product was 90% of what I might get from one of the better-known consulting firms at about 20% of the cost,” he wrote in an e-mail.
The Big Three firms—McKinsey, Bain & Co. and BCG—remain healthy, and they are still a choice destination for many M.B.A.s. But as more multinational companies tap freelancers for small projects, changes may be ahead.
“We’re in the very early innings of the end of the traditional consulting model,” says HourlyNerd co-founder Rob Biederman.
The average project on MBA & Co., another freelance marketplace, lasts six to eight weeks and runs about $28,000, though one assignment lasted two years and cost the client $600,000, says co-founder Daniel Callaghan.
Generally, client companies post project details, including a timeline and proposed budget; consultants then bid on for the job, listing their profiles and rates. The middlemen take a cut, often 10% to 20% of the total budget. Companies can review the consultants’ work after the project, and the freelance coordinator keeps tabs to make sure the work is completed. Companies pay up front, and the consultant is paid when the project is complete.
Private-equity firm SFW Capital Partners LLC used another M.B.A. matchmaker, SkillBridge Inc., last fall to find someone to create an information packet that helped the firm assess an investment opportunity. The project, completed by a student from the University of Pennsylvania’s Wharton School, took about 30 hours and cost around $5,000.
Ordinarily, the Rye, N.Y.-based company would have hired an established consulting firm to do the work, and it still does that—for some projects. But those contracts often run to six figures. “You had to buy [expertise] in much larger chunks,” says Ahmad Sheikh, a partner. Using freelance M.B.A.s, he can easily add “flex capacity” to his 13-person shop, and he advises the companies he invests in to do the same.
“It’s the kind of expense that goes on a credit card,” says American Apparel’s Mr. Holiday, noting that he didn’t need to seek multiple approvals before hiring the freelancer.
That flexibility appeals to the consultants, too. Bianca Fargnoli, a 2012 Wharton graduate, earned $10,000 last summer for five weeks of part-time work helping an upstart San Francisco hotel company create a business plan, gather competitive intelligence and organize information for investor presentations.
Katie Wright wanted to fill some free time during her second year at the University of Virginia’s Darden School of Business. The 26-year-old has completed two part-time assignments through HourlyNerd for a combined $3,000.
The independent work suits her, she says. “I like that level of ownership.”
Write to Melissa Korn at firstname.lastname@example.org