From Business School to Consulting Empire

IESE grad Daniel Callaghan has launched MBA & Co., which connects out-of-work MBAs with companies seeking consultants. Unsurprisingly in a recession, both supply and demand are robust

By Anne VanderMey

By a lot of measures, this is the worst of times for the scores of companies struggling to survive the downturn. Many ailing businesses can't afford to bring in any outside help when they most need it, and certainly can't hire an MBA. As a result, consulting firms are feeling the pinch. Even at the best graduate business programs, recent grads and would-be consultants for Bain, McKinsey, and other top firms are now rethinking their career choices.

But for Daniel Callaghan, a freshly minted MBA with a new consulting firm, it's also the best of times. An entrepreneur by birth—his father and grandfather each launched businesses of their own—Callaghan saw opportunity in the plight of needy students and needy businesses. In March he founded MBA & Co., a freelance consulting firm, after graduating with an MBA from Spain's IESE (IESE Full-Time MBA Profile). The business plan, he says, is to take advantage of the surplus of top-tier MBA talent who haven't yet found their dream job or who have had their start dates deferred—an increasingly common problem—by using a Web site to match up the grads with the growing number of companies that need consulting but can't afford the big-name brands. "It's a very good time for the business model," says Callaghan, who believes he's found a niche in the current economic climate. He quips: "And it seems like the market is starting to think so, as well."

Indeed, just three months after MBA & Co. began serving clients, nearly 2,000 MBA graduates and MBA students on five continents have created online profiles offering their freelance consulting services to the more than 100 businesses registered on Callaghan's site. Though it has a full-time staff of just three people, it has offices in both San Francisco and London, and has plans for further expansion. Callaghan predicts that by the end of its first year, the company will have seen more than $4.2 million in transactions, raking in $420,000 for the company with its 10% commission.

Student consulting has obvious benefits. In many cases, the only difference between an MBA student or graduate looking for freelance work and a starting McKinsey associate is a corporate business card and a six-figure paycheck. And companies seem to be taking note. At business schools across the country, experiential learning programs where students complete projects at real companies, usually for class credit, are seeing increased demand. "[Student consulting] is much more widespread now," says John Fernandes, president and CEO of the Association to Advance Collegiate Schools of Business. It is good for the businesses that get inexpensive, skilled labor, and good for the students, who get real-world experience. At the University of Pennsylvania's Wharton School (Wharton Full-Time MBA Profile), requests for students' services are at record levels, and the school's Small Business Development Center has doubled its capacity over the past two years because of high demand for consulting services, says Therese Flaherty, the program's director.

By applying a for-profit business model to what was essentially nonprofit consulting, Callaghan has created something unique. With cheaper labor and very little overhead, MBA & Co. is an extremely efficient system. However, that efficiency may also prove to be a liability. At MBA programs that offer student consulting through the school, students report directly back to professors who aggressively monitor their progress and offer guidance.

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