Nisos’s Pivot Playbook: Trading Consulting Revenue for Product Scale
Turning down revenue is counterintuitive for any startup. But in a recent Category Visionaries episode, Nisos CEO David Etue revealed why saying no to certain types of business became crucial to their growth. The story offers valuable lessons for consulting firms eyeing the transition to product-led scale.
The Consulting Trap
Nisos began as a consulting firm founded by two former intelligence community operators. As David explains, “The founders were two operators in the US intelligence community, and they saw that nation state actors were not just targeting governments, but targeting private sector organizations.” The consulting model offered clear advantages: every project was funded by sophisticated clients willing to pay for solutions to real problems.
However, a few years into their journey, the team realized consulting would limit their potential impact. “They stepped back and said, hey, I think we have, instead of being a consulting company, as they were founded, to really look at how we could invest in the trade craft, our intelligence trade craft and importantly, technology enablement to transform how intelligence was delivered.”
The Hard Pivot
Making this transition required difficult decisions. As David notes, “We made some difficult decisions, that there were some offerings that we have that didn’t fit in our vision, intelligence, vision. And so we stopped doing those and that was turning off revenue as an early stage startup is a fascinating endeavor to go through.”
The company moved aggressively from hourly billing to subscription pricing, taking their subscription revenue “from nearly zero to 20% subscription revenue business to north of 90%.” This wasn’t just about changing pricing models – it required fundamentally rethinking how they delivered value.
Balancing Scale with Expertise
A key insight was that pure automation wouldn’t solve their customers’ problems. “Our products are combinations of people, process and technology,” David explains. “But in our case, it’s our people who are a superpower and it’s our people who enable our clients to be heroes.”
This hybrid approach proved powerful. Instead of trying to automate away the need for expertise, they focused on making their experts more scalable through technology. The result? Over 108% net dollar retention, showing that customers found sustained value in their managed intelligence model.
Lessons from the Journey
Looking back, David emphasizes that focus was critical. When asked what he’d do differently, his answer was immediate: “Focus. Hands down. Focus.” He elaborates that while their consulting background provided valuable insights, they “ended up supporting, even within managed intelligence, a number of different buying centers and use cases early in our journey.”
The pivot also transformed their sales process. Instead of lengthy scoping discussions, they could respond immediately to customer needs: “If someone calls you and said, ‘hey, can you solve this problem?’ And you’re like, ‘yes, maybe, let me go figure out how much that costs, let me ask you ten more questions’… versus ‘yes, we can solve that problem, here’s our offering and here’s what it cost.'”
The Path Forward
Today, Nisos has validated their new model, but they’re not done scaling. As David puts it, they’re “well past the couple of folks in a garage stage, but we’ve got a long way to go to be that 100 million plus company in ARR that we know we can be.”
For consulting firms considering a similar transition, Nisos’s journey offers crucial lessons:
- Start with clear evidence of market demand from consulting work
- Be willing to turn down revenue that doesn’t fit your product vision
- Focus on making expertise scalable rather than trying to eliminate it
- Standardize offerings to accelerate sales cycles
- Maintain focus even when it means saying no to opportunities
The key insight? Sometimes building a scalable business requires having the courage to walk away from revenue that could slow you down. It’s not just about adding products to consulting – it’s about fundamentally rethinking how you deliver value to customers.