Epistemic status: 

We have low–medium confidence in most of our claims. We expect to update our business model and services as we learn. Our current thinking is based on: 

• Three paid pilot projects (totalling ~800 hours) and ~5 light-touch pro-bono engagements for EA organisations 
• Consideration of the comparative advantage of strategy consultants and gaps in the EA ecosystem
• Desk and qualitative market research from speaking with ~30 EAs and consultants

Recent changes in the funding landscape have had a significant impact on our work and our (potential) clients. Like everyone else, we are still in the process of understanding the implications and updating our models accordingly.

The goal of this post is to provide a balanced and detached overview of cFactual while motivating potential clients to connect with us. We acknowledge that the latter is a potential source of bias. 

The goal is not to make consulting appear as a more attractive career path than 80.000 Hours and we think it is^[1] nor signal that there isn’t more space for other agencies^[2].

The words “we” and “our” refer to cFactual and cFactual’s core team, Max and Jona.
 

Executive summary 

We explore, optimise, and execute with you - seeing the world factually

Introduction

cFactual is a new, EA-aligned strategy consultancy with the purpose of maximising its counterfactual impact. Our goals are to execute high-expected-value projects^[3][4], while building a talent pipeline of consultants^[5] for high-impact organisations. 

Background 

Several EAs have expressed interest in consulting services (e.g., here and here), and informal market research has increased our confidence that such demand is substantial. Encouraged by positive client feedback for three pilot projects, we decided to launch cFactual. 

Theory of Change

cFactual aims to provide value through three different services: 

• Explore the right allocation of money and talent
  • We can help analyse the viability of a potential project or spending decision, develop a multi-year organisational plan, or help with goals and prioritisation of activities.
  • Case Study: Workplace and professional groups strategy for Centre for Effective Altruism (CEA)
• Optimise theories of change (ToCs) and key performance indicators (KPIs)
  • We can help define the ToC, identify uncertainties and key assumptions, and set up a progress tracking system with fast feedback loops. 
  • Case Study: ToC evaluation and KPI design for GovAI’s fellowship program
• Execute high-stakes projects on short notice 
  • We can help with time-sensitive decisions, manage urgent projects (like a crisis response), or support large-scale fundraising. 
  • Case Study: C-level workshops for Fit For Purpose within four weeks

We work with hires, visiting consultants and contractors on various projects over short time periods. This grows their career capital, provides insights into various EA orgs and topics, and enables them to transition into EA careers.

Team

Jona and Max combine a background in strategy consulting and EA. Within EA, Jona worked in community building and as an independent consultant. Max has experience in community building and longtermist research. We work with a large network of experts, partners, and contractors.

Comparative advantage

The comparative advantage of consultants is to provide expertise, reliable support, and an outside view on a limited timeline. We distinguish ourselves from conventional consultancies by being knowledgeable about core EA concepts, well-connected in EA, impact-driven, independently truth-seeking, and transparent in our reasoning.

Approach

We plan to spend our first year refining our value proposition by running experiments and projects. We are uncertain where most of our impact will come from, so we aim to iterate upon our theory of change through fast feedback cycles. Our service charge will be one direct feedback mechanism^[6]. If we judge that our opportunity costs relative to joining an existing high impact organisation are too high after six months, we pre-commit to shutting cFactual down (as we have done previously with other projects). 

Let’s connect

We encourage you to connect with us, as this might change our trajectory:

1. Share your ideas or concrete project needs
2. Get to know us better
3. Provide feedback anonymously 

1) Why cFactual

1.1) Demand, market research, and pilot projects

Since 2021, several EA Forum posts have recognised a need for more management capacity within EA. For example, see Ben Kuhn’s post on common challenges of EA organisations and Luke Muehlhauser’s EA needs consultancies. Luke Muehlhauser indicates that “EA orgs like Open Phil and CEA could do a lot more if [they] had access to more analysis and more talent” and that consultancies within EA can “(1) produce decision-relevant analyses, (2) run projects (including building new things), (3) provide ongoing services, and (4) temporarily ‘loan’ their staff [to EA orgs]”.

Our market research, including ~30 informal qualitative interviews^[7] showed demand along these dimensions. We ran three paid pilot projects totalling ~800 consulting hours. The organisations we worked with provided positive feedback, were willing to pay for our services, and wanted to hire us for follow-up projects. We expect that demand for consulting projects will increase as EA grows. 

1.2) Comparative advantage 

1.2.1) Comparative advantage of consultants in general

You might consider hiring consultants when you need:

• Expertise that you don’t have in-house and don’t want to build. Consultants can provide:
  • Proficiency in a problem area that organisations face only a few times in their lifetime, e.g., designing a progress tracking system or prioritising activities at various levels of granularity
  • Efficiency in project execution where consultants have done the same task many times before, e.g., developing a theory of change or doing project management 
  • Broad pre-existing knowledge and connections to people and orgs from past collaborations 
• Reliable support on short timelines and/or don’t want to hire someone full-time for a project. This might be because you: 
  • Need to react to an unforeseen crisis or make an urgent decision without having staff to work on this additional topic
  • Want to hire someone only for a short period to explore the potential launch of a new program
• An independent outside view on your decisions or projects. We think that:
  • It can be valuable to have someone challenge an unusually consequential decision and it can be easier with an unbiased outside view. Our experience shows that challenging implicit assumptions during client engagements tends to be a common source of value.
  • There is a potential conflict of interest in disagreeing with clients, but this should be less acute in a community that celebrates changing one’s mind as the EA community does.

On a more concrete task level, we believe that some consultants can be good at:

• Analysing, e.g., 
  • Learning about a new topic quickly and focusing on what is decision/action-relevant
  • Conducting expert interviews
  • Developing tailored structures, frameworks, and approaches to guide one’s thinking and make sure nothing gets dropped
• Deciding, e.g.,
  • Enabling busy people to make high-quality decisions by preparing relevant documents and analysis
  • Prioritising what to invest in and conducting Back of the Envelope Calculations
• Implementing, e.g.,
  • Getting the most important things done despite a multitude of tasks and competing priorities
  • Strong communication (running meetings well, effective stakeholder management)
  • Being easy to work with

For illustration, we have worked on ~30 projects in the private, public, and social sector. Our project experience outside of EA includes 

• supporting the evaluation of a $300M grantmaking program, 
• quantifying the impact potential of a tech company’s new climate product and conception of a minimum viable product, 
• developing a digitalization strategy for the minister of education of an EU country, 
• and developing a COVID-19 crisis response plan for the CEO of a machinery producer.

1.2.2) Comparative advantage of cFactual

We differentiate ourselves from other consultancies by being: 

• Knowledgeable about core EA concepts: being familiar with core EA ideas (such as cause neutrality, scope sensitivity, moral circle expansion, and counterfactuals) and working preferences (such as being particularly mindful of time)
• Well-connected across EA organisations: making connections and creating insights through working relationships 
• Impact-driven: optimising for insight instead of polished slides, adapting plans as insights evolve, and sharing honest opinions on client decisions, even if they may be uncomfortable for cFactual and/or the client
• Independently truth-seeking: thinking extensively and from first principles, considering problems from many different angles, being mindful of our own biases and limitations, and arriving at conclusions independently, while avoiding sloppy deferrals 
• Transparent in reasoning: highlighting the primary considerations that guided our thinking and conclusions, indicating levels of confidence, and presenting the best arguments for and against recommendations, as well as key uncertainties and cruxes

1.2.3) Comparative advantage of the founding team

cFactual’s core team consists of Jona Glade, founder, and Max Negele, who recently partnered with Jona as founding consultant. 

Jona developed expertise in scoping, structuring, and executing strategy projects during his time in industry (BCG, Accenture, & CPC) and as an independent consultant for EA-adjacent organisations (CEA, GovAI and FFP). He has held leadership roles in community building, including vice president of EA Austria, board member of EA Germany, and founder and strategic advisor of the EA Consulting Network (EACN). He quit his PhD in AI and decision-making in favour of a more counterfactually promising career path. Jona graduated from the University of Vienna with a master’s degree in psychology, where he worked for three years as a research assistant. 

Max honed his strategy consulting skills during his time at BCG, where he also gathered experience in EA community building by co-organising the global EA workplace group. Before that, he explored research in AI governance and longtermism, supported by BERI, Forethought, and the Long-Term Future Fund. He graduated from the University of Oxford with a master’s degree in economics, where he wrote his thesis on implications of value drift for decision-making.

Max and Jona have a network^[8] of: 

• ~200 consultants in the EACN covering many firms, seniority levels, and areas of expertise
• ~80 experts covering the private, public, social, and research sector
• ~20 advisors, incl. senior leaders of EA orgs or senior partners from large consultancies
• ~10 contractors and partners, e.g., Callum Calvert, an independent expert in quantitative impact measurement, formerly ~5 year researcher at Founders Pledge, where he set up the KPI system (Case study)

1.3) cFactual’s theory of change and business model

Our sources of impact^[9] are 

1 - Influencing activities aimed at improving the world effectively by:

• Facilitating impactful activities, e.g., % increase in likelihood of activity happening, # of weeks project start accelerated by
• Deprioritising less impactful or harmful activities, e.g., # hours of low-impact work avoided 
• Improving effectiveness of activities, e.g., % increase in quality
• Optimising efficiency of activities, e.g., # of hours saved for client staff while keeping quality constant

2 - Building a talent pipeline for the EA ecosystem by:

• Helping full-time consultants to build career capital, e.g., developing core consulting skills, getting insights into various EA orgs and applying EA thinking 
• Offering consultants fellowships to get them involved in EA and allow for informed career transitions. We have worked with five consultants who are transitioning out of for-profit roles into direct work. One was introduced to EA through working with us and now does community building in two countries

Our current hypothesis is that cFactual can maximise its impact by charging daily rates. This business model (1) provides direct feedback, (2) ensures that clients have “skin in the game” as a proxy for relevance, and (3) reduces our dependency on funders. Still, it could be that the most promising projects don’t have a client entity and/or that clients don’t have enough funding for us (especially after recent changes in the funding landscape). Hence, we are open to updating our business model to whatever realises our theory of change best.

Unlike typical consulting firms, we will be operating as a capped-for-profit. Profits will be reinvested into scaling cFactual as an organisation, donated, and/or used to subsidise a small number of projects for EA orgs that cannot afford standard rates^[10]. 

2) When to partner with cFactual

2.1) Current service portfolio

We want to explore, optimise, and execute with you.

Exploring the right allocation of money and talent

We can help analyse the viability of a potential project or spending decision, or develop a multi-year organisational plan, including goals and prioritisation of activities.

Illustrative description

1. Problem: 
   1. You have an idea for a project or a new strategic direction, but are uncertain if this idea is good enough in the first place, how it compares to other activities, and how it fits into your overall strategy, and you don’t have capacity to explore it in-house.
2. Solution: 
   1. We jointly explore the viability of your idea with minimal time spent on your side.
3. Client examples and voice
   1. Case study: Workplace and professional groups strategy for the Centre for Effective Altruism (CEA), where we jointly explored what to do with workplace and professional EA groups, if anything at all

Rob Gledhill, Head of Groups at CEA:

“[...] Answering challenging empirical questions with Jona felt both high quality and minimal exertion on my part.  [...]”

Optimising your theory of change (ToC) and KPIs​ 

We can help formulate the ToC, spell out uncertainties and key assumptions, or set up a system to track progress with fast feedback loops.

Illustrative description

1. Problem
   1. Setting up ToC, KPIs and feedback loops can be difficult, especially in longtermism as it is harder to get data on the outcomes of one’s actions. There is thus a tendency to deprioritize this due to more urgent work, despite its potential to move the needle.
2. Solution 
   1. We can help you set up your ToC and KPIs and think about what feedback would be useful to become even more focused, by drawing from our previous experience in this area. 
3. Client example and voice
   1. Case study: ToC evaluation and KPI design for GovAI’s fellowship program

Sam Clarke, Strategy Manager at Centre for Governance of AI:

“cFactual produced a talent-related KPI faster and to a higher quality than I expected. I was delighted to find significant progress on important questions arriving in my inbox once a week. I appreciated the impact-driven working style” 

Georg Arndt, Chief of Staff at Centre for Governance of AI:

"Jona gave good advice on what's feasible and how an impactful project on KPIs could look like. [...] The project is shaping up well [... and] I expect (~60%) GovAI to further engage with cFactual [...]. I'm very excited about the prospect of bringing the consulting model to EA without all the fluff and grandstanding. [...]

Executing a project on short notice 

We can help with time-sensitive decisions, orchestrate urgent projects, or support large-scale fundraising.

Illustrative description

1. Problem
   1. You might need reliable support only for a certain amount of time - sometimes on short notice - for example, when preparing for an unforeseen high-stakes decision or responding to radically changed circumstances.
2. Solution
   1. We can potentially deploy talent for analytical, managerial, or executional tasks within ~3 days
3. Client example and voice
   1. Case study: C-level workshops for Fit For Purpose within 4 weeks

Karen Levy, Co-founder at Fit For Purpose and formerly Senior Director of Innovation at Evidence Action:

[...] In my opinion, many actors in the EA (and EA-adjacent) space would benefit from access to high-quality consultants who are already versed in effective altruist concepts and related skills. [...] I was impressed with Jona’s professionalism and his careful reasoning. He asked all the right questions about the goals of the project and the magnitude of its potential impact. [...]” 

We are still exploring the ideal service portfolio and delivery model. Hence, we encourage you to connect, even - and especially - if you are unsure about cFactual being the right fit. We are looking forward to jointly figuring out if and how we can be helpful while being mindful of time.

2.2) Other services we are exploring

We are also exploring other services, especially: 

• Being a coach and/or sounding board for executive staff. We are currently running a coaching pilot with a recent co-founder who needs to prioritise the most urgent activities in their organisation.
• Helping governments, tech companies, and other influential non-EA organisations adopt EA thinking 
• Shifting our core activities towards talent development, e.g., by running a career-transition fellowship
• Researching EA-relevant best practices, e.g., in management
• Acting as an intermediary between EA orgs and non-EA service providers, for example, by connecting EA organisations to typical consulting firms

2.3) Services we will not offer

We are currently not working on deep technical or philosophical questions, like technical AI alignment or metaethics, but we will leverage insights from these areas as appropriate for our services. We are also not considering projects with a medium-to-long time horizon, like a 5-year build-up of a civilizational refuge or outsourcing of entire organisational functions. 

3) How cFactual approaches its first year

3.1) Goals for 2023

Our primary goals for our first year are to: 

1. Deliver excellent projects for EA-adjacent organisations. This involves:
   1. Developing an inside view of our clients' needs including uncertainties, constraints, up- and downside potential
2. Improve our value proposition^[11] through experimentation and iteration, generating a view of our expected impact in working with different clients, services, and delivery models. This involves:
   1. Making our key assumptions and uncertainties explicit and prioritising between projects partly based on information value 
   2. Collecting feedback on our work and comparative advantage 
   3. Better understanding clients’ needs through market research
   4. Updating our theory of change continuously
3. Clarify key uncertainties around what type of talent is most conducive to our mission. This involves:
   1. Employing contractors with different skill profiles on a project-by-project basis
   2. Identifying skill gaps 
4. Build organisational infrastructure and culture. This involves:
   1. Forming an advisory board
   2. Improving internal processes and norms
   3. Facilitating open discussions and ideation around organisational culture
5. Avoid failure modes and downside risks (find here a more detailed overview). This involves:
   1. Addressing failure modes on the client- and cFactual-side
   2. Avoiding harm to EA orgs, the EA community, and the world
   3. Setting up mitigation strategies using external and internal guardrails

Overall, there is considerable uncertainty regarding what we will be doing and how it compares to the opportunity costs of joining other high-impact projects. We plan to have tight feedback loops, including regular reflection meetings to red-team ourselves and update our models. We pre-commit to shutting down cFactual after 6 months if we think we are unlikely to break even over expected opportunity costs over two years. 

3.3) How you can become part of our first year 

We invite you to have a very low bar to get in touch with us (customer feedback is among the most important things for us at this early stage).  

1. Share your needs with us: fill out our contact form to discuss a potential project, or use the project expression of interest form if you already have a good model about what you want to achieve. We will follow up to see how we can be useful, if at all.
2. Get to know us better: visit our website, follow our work via the newsletter, express your interest in working for us, or reach out to connect. If you are a consultant, we encourage you to check out the Effective Altruism Consulting Network and sign up for its newsletter.
3. Provide feedback: share your highly appreciated feedback anonymously. 

Thank you (in alphabetical order) to various people who directly and indirectly supported us along the journey: Anneke Pogarell, Ari Kagan, Callum Calvert, Eli Kaufman, Georg Arndt, Gidi Kadosh, James Snowden, Jeffrey Poche, Joan Gass, Joanna Ruan, Karen Levy, Konstantin Sietzy, Lennart Heim, Linchuan Zhang, Lisa Soder, Luke Muehlhauser, Max Daniel, Markus Anderljung, Merlin S., Michael Aird, Mike McCormick, Neil Ferro, Neerav Kingsland, Nick Fitz, Rob Gledhill, Sabrina K., Sam Clarke, Sam Hilton, Sarah Pomeranz, Simon Asbach, Zachary Robinson, among others. 

Thank you Akhil Bansal, Callum Calvert, Devon Fritz, Joel Tan, Konstantin Pilz, Leonie Kößler, Lisa Soder, Marius Hobbhahn, Simon Grimm, and Vaidehi Agarwalla, for providing valuable feedback on this post.

An especially big thank you to Nils Voelker for being a motivational and executional force behind the scenes throughout the entire process.

1. ^{^}

    We pretty much agree with the assessment of 80.000 Hours that direct work is probably more impactful, everything else equal 

2. ^{^}

    We think there is room for more agencies and are excited about friendly competition. Feel free to connect to discuss

3. ^{^}

     We define a project as a limited time period with a set of activities aimed at previously agreed goals. This is the definition used in many professional services firms. By “executing … projects,” we do not mean “incubating organisations” or “starting organisations”.

^{^}

 We will not work on projects with long time horizons (>18 months), or deep technical or philosophical questions. We will apply insights from these areas in our services.

^{^}

 This can include former consultants transitioning to direct EA work or EAs getting trained in management. 

^{^}

  cFactual will operate as a capped-for-profit organisation charging clients and donating or reinvesting profits, or reducing daily rates if appropriate.

^{^}

 The market research was conducted before the FTX crash. Hence, most of the insights on concrete needs might be outdated while still being reflected in our prioritised services.

^{^}

 In this context loosely defined as people we feel at least comfortable reaching out to ask for a significant favour, e.g., reviewing a document about our key uncertainties or making relevant introductions. We would expect these individuals to respond positively more often than not.

^{^}

 One of our key objectives in 2023 is refining our theory of change and doubling down on the most valuable activities. 

^{^}

Formalising the legal and governance model will become a priority once we reduced uncertainty.

^{^}

 It is not obvious to us which service to double down on, if any. 

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