Hi there! A lot has been happening at Brainsfeed lately. We are in the middle of an intensive process of identifying the best resources to collect data, and building the Brainsfeed Infosphere!
The famous Margaret Fuller once said," If you have knowledge, let others light their candles in it."
And so, every week, we will try to present a key stakeholder in a lucid and digestible form for your benefit.
First in the series are "Expert Networks." A report by Bloomberg states that European investors are willing to dole out as much as $1300 an hour, even amidst cuts in their research budgets. Paid expert calls are an addictive product.
Let's dive right in to know more!
🔎 Problem
What do you do when you need very specific answers to often very nuanced questions in topics of which you have little to no knowledge?
Consultants, investors, and product designers often take up new projects in a space where they have no prior knowledge.
💡 Solution
Speak to an industry advisor or an expert - “someone who has done it before” to learn new perspectives and acquire high- level knowledge about specific topics, generally while conducting market research.
That’s where expert networks come in.
❓ What is an expert network?
A marketplace to hire vetted subject-matter experts for 1:1 consultations on a variety of topics.
Used by Individuals and businesses to find very specific answers to very nuanced questions.
A survey by Inex One puts the total market at $1,360 million in total revenues for 2019, generated by more than 100 expert networks.
🤷 How do they work?
They are groups of Subject Matter Experts (SMEs) who can be hired through
long or short-term contract
on an as-needed basis
or be held on retainer
They have experts either as employees or on a freelance or contract arrangement.
Experts in these networks work either on a -
Subscription-based model - Experts are paid on an hourly basis.
Transaction-based fee model - They charge for each interaction with the client.
🏦 Who uses them?
Widely used in the financial industry and by private equity firms, by asset managers, banks, and consultants, although currently, the hedge fund community has a stable (or even declining) usage.
The recent years have seen notable growth in the corporate segment driven by former consultants bringing their research habits and an active sales push from firms like GLG and Atheneum.
Non-traditional users of expert networks such as Fortune 500s, start-ups, and market research firms are trying these services for the first time.
🌈 Benefits
Allows the companies to focus on what they do best and turn to expert networks to find the right advisors to answer some of their most challenging questions requiring specialized knowledge.
Receive a reasonably rapid response and can quickly jump on a call to discuss the challenge. Calls may total several hours, but it’s still a lot cheaper than hiring a consultant for two full weeks.
These calls don’t come cheap. Some basic packages charge $100,000 per company for the service of pairing employees with the right experts, which can be topped up if they need more phone time. Businesses can sometimes pay expert networks up to $1,300 per hour for advice, and they have no idea how long it will take to find a solution.
🔥 Leaders
There are four major leaders in the expert network industry.
GLG remains the largest player, and has continued growing in a crowded market. However, competitors are chipping away at its previously dominant market share.
AlphaSights and Third Bridge are not far behind, both averaging 30% annual growth over the last five years.
Guidepoint is seeing growth again by revamping its business.
Many expert network firms operate majorly in particular regions where they already have a pretty strong foothold. Notable regional or national firms include :
Conversely, Techspert.io, NewtonX and Prosapient have all successfully automated parts of their expert recruitment delivery.
Deepbench offers both an expert network and a platform for expert networks (as does regional champion Coleman).
📈 Evolution of expert networks
Very valuable to clients in the 1990’s when they originated because of their vast pool of experts.
In the early 2000s, they had built unique and proprietary databases of 100,000+ expert profiles by recruiting experts at industry fairs, and via referrals.
In the next decade, Linkedin enabled a new generation of expert networks that focused on custom-recruiting experts for each new project.
Today, the largest networks boast 600,000 experts in their internal databases, but most of those experts were recruited years ago.
Companies are now using automation to try to upend the expert network industry. Digital marketing strategies, application of advanced technologies such as artificial intelligence and machine learning have enabled top expert network firms to meet the demand of experts through LinkedIn, and various databases. The machine-driven expert networks include Xperiti, NewtonX, ENGllc, CleverX, Techspert.io, Prosapient and Atheneum. Inex One enables users to aggregate the Expert Networks in a secure SaaS platform.
The rise in the gig economy concept is also driving the expert network industry.
📉 Insider Trading
Expert networks have been implicated in several recent civil and criminal insider trading prosecutions. In fact, new companies like Lynk completely avoids any mention of the term “Expert Network” in their marketing to avoid the bad reputation that comes with it.
Response from Expert Networks - Added restrictive and arbitrary controls that do not sufficiently alter the risk profile of the interactions, and limit the dissemination of legitimate information.
Weakness in the current system - The secrecy of the consultation between the expert and his or her client.
DeepBench - Uses their proprietary technology to delivers better experts or to build and manage your own network of experts.
Experty - A decentralized application on the Ethereum blockchain that aims to “offer an avenue to connect two or more people so that they may conduct a paid knowledge exchange”.
Brainsfeed helps clients generate significant value and save precious time by making ready to use, customized lists, on-demand. Contact us at ask@brainsfeed.com with your specific research needs.
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