Scaling a Professional Services Firm is Like Traveling to the Moon – It Isn’t Rocket Science: Part 1 – The Moonshot

Viewing the challenge of scaling a professional services firm through the metaphoric lens of traveling to the moon is insightful for success. There is sufficient demand to start new firms. Cognitive Market Research (June 2024) estimated the global market at $6.1 trillion in 2023, with a compound annual growth rate of 5.2% through 2031. Supply, while harder to estimate, is also robust with between 50 and 100 million employees worldwide. Connecting these two is the essence of any professional services organization.

The first challenge to overcome is a person’s own inertia to invest their time and energy to start a firm. If you are reading this, you probably already started, or you are seriously considering it. Congratulations! Most people never take the leap to build a professional services firm or a rocket. 

The second challenge is setting the end goal for yourself and your firm. Growing a firm to scale is as hard as escaping Earth’s gravity well. Only a tiny fraction reaches the Moon. We define the “Moon” for professional services as over $2.5 billion in annual revenue or 10,000 employees. This is somewhere in the 99.5th percentile of all professional services firms. The vast majority of firms are somewhere in between.

Through the lens of traveling to the Moon, we can view the range of professional services firms as a range of orbits between Earth and Moon:

• Low Earth Orbit (LEO): Ranges from 100 to1,200 miles above Earth’s surface. Most satellites and many space missions operate here. This is the point almost all successful professional services organizations achieve, and no further. (A few people and $0.25 to $2 million revenue. Satellites in LEO experience more atmospheric drag, leading to orbital decay, which necessitates regular altitude adjustments or shorter mission durations. It is crowded with satellites and debris, increasing collision risk. Professional services firms in this orbit are often called “lifestyle” firms which seldom survive their founders.
• Medium Earth Orbit (MEO): Ranges from 1,200 miles to 22,236 miles above Earth. These are mostly used for navigation satellites. It takes more time and energy to reach this orbit. These firms’ founders can typically reach a financial exit within ten to twenty years at between $5 and $25 million annual revenue.
• Geosynchronous Orbit (GSO): Where a satellite’s orbital period matches Earth’s daily rotation. 22,236 miles above Equator for the special case of Geostationary Orbit (GEO), which is popular and crowded. Professional services firms in these orbits operate in lucrative and relatively large niches. The larger the niche, the more likely they experience competition. These firms run in the $50 to $100 million annual revenue range.
• Lagrange Point (L1): Positions in space where gravitational forces of two large celestial bodies, like the Earth and Moon, balance the centripetal force felt by a smaller object. L1 is where the gravitational pull of the Earth and Moon equals the centripetal force needed for an object to orbit with them. This is the 99^th percentile of professional services firms, 500 to 1000 employees ($150 million to $1 billion annual revenue). Closer to the Moon than Earth, and in the curve of the knee in professional service firm size distribution.

To escape Earth and reach the Moon, a traveler must overcome significant barriers:

• Gravity: Each successively higher orbit between Earth and the Moon requires more energy in the form of thrust, to achieve escape velocity from Earth’s gravity well at its surface. The higher the desired orbit, the greater the mass (engine, fuel, etc.) needed for thrust, and the greater the inertia to overcome, requiring even more thrust. Thus, the need for the most powerful engines practical.
• Atmospheric Drag: The resistance experienced by a rocket as it moves through Earth’s atmosphere is caused by friction between a rocket’s surface and air molecules, which slows the rocket down and reduces its efficiency. There are several “drags” on a professional services firm, from finding prospects and converting them into lifetime customers to finding recruits and developing them into actively engaged employees. Rockets typically tilt from a vertical to a more horizontal orientation to transition from fighting gravity and atmospheric drag to building the necessary horizontal velocity for orbit. Professional services firms must navigate a changing course to go ever higher. They must continuously adapt.
• Heat Generation: As a rocket moves through the atmosphere, its surface heats up due to friction. Heat-resistant materials and protective shields add weight and complexity, further impacting performance. Once outside the atmosphere, the challenge shifts to protecting against the radiation and micrometeoroids of space. As professional services firms rise, they can manage friction through scalable organization structures, efficient governance and execution, customer management, strategic planning, etc.

In the world of moon rockets, the challenge of reaching the Moon with today’s technology is to build a rocket with multiple stages (typically three). Each stage is designed to perform efficiently to pass through lower orbits to ultimately reach the Moon. Each successive stage is smaller as the earlier one is discarded. Each stage uses the most powerful engines possible in that phase of flight. In the world of organizations of people, the “moon rocket” metaphor begins to altitude. It does not offer an organization of people a viable solution to reach the Moon in the context of scaling professional services.

It does leave waypoints along a trajectory to a practical, powerful scaling solution. Engines are essential, and the engines for scaling professional services firms are small teams. We will explore this space in Part 2.