While a few legitimate experts exist, the unfortunate truth is most of these people are selling smoke. Their real business model isn't helping startups grow - it's extracting money or equity from inexperienced founders. To see why, we need to understand the principle-agent problem.
The Principal-Agent Problem - Who Will Really Help?
The principal-agent problem is one of the most fundamental issues in economics and everyday life. It arises anytime you pay someone to do something - whether it's fixing your car, repairing a bathroom leak or managing your investments.
In this scenario, you are the Principal - the one who wants a job done well. The person you're hiring is the Agent - the one who's supposed to carry it out.
But here's the catch: the Agent doesn't automatically care about doing a good job. Their natural incentive is to get as much money from you while doing as little work. That's the root of the problem.
The Solution: Aligned Interests
To solve it, you need to align the Agent's interests with your own. That means designing the partnership in such a way that makes the Agent want to do a good job since it benefits both parties. If they're genuinely good at what they do and believe in your business, they will either invest their money or do performance based compensation.
Red Flags of Bad Actors
Now we understand how to tell if someone genuinely has your best interest in mind, we'll break down the tactics of these bad actors so you can recognize them early, avoid wasting your time or money and keep focusing on building something real.
Touting Past Client Results - The Oldest Trick in the Book
One of the most common tactics used by self-proclaimed startup gurus, consultants and agencies is showcasing impressive results from past clients.
But here's the problem: anyone can cherry-pick a success story. Just because they helped one startup raise funding or grow their customer base doesn't mean they can do it for you. It could be a fluke, exaggeration or even completely fabricated.
Even if the story is real, it's still just one anecdote - carefully selected to make them look good. Real credibility comes from consistent results across multiple projects - not from a single highlight reel.
Asking for Upfront Payment - A Major Red Flag
Another big warning sign is they want your money before doing anything.
If someone truly believes in their ability to deliver results, they should be confident enough to get paid after those results show up - not before. Performance-based compensation isn't just fair; it's a basic filter for weeding out pretenders.
When they demand payment upfront, it usually means one thing: they don't trust their own skills enough to risk not getting paid. And if they don't believe in themselves, why should you?
Also, if advertising or media spend is part of the equation, watch closely. A serious, competent person will be willing to share that risk - by putting up some of the funds themselves.
Charging Ridiculous Fees - The Illusion of Value
Just because something is expensive, it doesn't mean it's good. Many so-called startup experts will bank on the fact that you'll assume high price equals high quality.
They'll throw out big numbers and claim, "That's what I'm worth." But price doesn't equal proof.
This tactic plays on a well-known psychological bias - the idea that if it costs a lot, it must be valuable. In reality, high fees are often just a smokescreen to cover up lack of substance, results, or expertise.
"My Time is Valuable" - A Hollow Flex
You'll often hear consultants and agencies say, "My time is valuable." But here's the truth: people's time is meaningless - it's the results that actually matter and what we want when we pay anyone.
For most startups, cash is much more important than time. And if someone truly values their time above all else, they should be confident enough to put in their own money to accelerate business progress.
Time is only worth what it produces. If someone spends 20 hours and delivers nothing useful, that time has no value to you. On the other hand, if they bring real results, they deserve fair compensation - not because of how long it took, but because of what they achieved. So don't be guilt-tripped into paying for someone's calendar. Compensate for outcomes, not effort.
Making Ridiculous Claims - Instant Success Is a Lie
"If you follow our method, you'll be making six figures in 30 days." Sound familiar?
Wild promises are a classic red flag. Whether it's overnight growth or secret formulas for success, anyone making unrealistic claims is either lying or dangerously out of touch.
Building a successful startup is hard and messy. Anyone who says otherwise is selling a fantasy - not a service.
What About the Genuine Marketers?
Here's the test: do they offer any kind of written guarantees? If not, that's a red flag.
Even if they show past success stories, correlation doesn't equal causation. Just because their previous client saw growth doesn't mean it was because of them. In many cases, those clients might have succeeded no matter who they hired - or the results could've come from factors completely unrelated to the marketer's work.
A real professional backs their strategy with accountability. If they're not willing to put their money where their mouth is, ask yourself why. When there's no skin in the game, it's easy to take credit - and your money - without delivering anything of real value.
But What About the Big Consulting Firms - McKinsey, Bain or Boston Consulting Group?
The Legitimate Players
Good question, these large consulting firms who do billions and have almost every Fortune 500 company as clients. Are they really scammers?
Mostly, no. Firms like McKinsey, Bain, and Boston Consulting Group aren't just handing out opinions - they're doing proper, systematic research and making recommendations based on insights derived from that research. Additionally, these recommendations are made in such a way as to be implementable. This is because advice is easy - anyone can give them - it's implementation that's difficult.
But Still Be Cautious
But let's be clear: even big firms can drift into useless territory when they start giving advice without proper research to support it and without a proper path to implementation. So while these firms aren't scams by default, anyone - big or small - who just offers personal opinions and nothing else should raise your guard.
A Note on Secret Hacks
Everyone wants the shortcut - the hidden trick that will instantly make everything easier. You'll hear stories like, "We changed a few words on our website and sales doubled overnight," or "Switching the background color and font skyrocketed conversions."
Sounds amazing, right? But here's the truth: even if those stories are real, they're cherry-picked outliers - the exception, not the rule. They stand out because they're rare.
The Magic Formula Question
Think about it like this, suppose this magical formula does exist - they did find a way to turn lead into gold. Why would they sell it? They would do a lot better by keeping the formula a secret and making the gold themselves.
As we've covered in our previous article, there's no magic formula that will skyrocket your business. Sustainable growth doesn't come from hacks - it comes from creating a genuinely good product and selling it properly.