Information is a hot commodity—as the saying goes, knowledge is power. In an ever-changing world of information, companies are faced with the challenge of keeping up with their respective industries in order to gain insights and make strategic decisions. This is where expert networks come into play.
An expert network is a service provider that connects clients with experts who are paid for sharing their specific market expertise through short consultations, usually in the form of 1-hour expert interviews. Expert networks not only facilitate in delivering experts matching the client's interest, but also take care of scheduling the interviews, create processes to ensure the exchange of information is compliant, and of course, handle payments.
The services of expert networks have become more and more relevant as companies are increasingly seeking specialized and real-time expert insights on emerging or niche markets and industries to validate and perform due diligence on investment cases, benchmark performance with other market participants, challenge innovations and greenfield growth plans (i.e. new products or going into new markets) or understanding sudden market turbulence or unexpected market dynamics. Expert networks are thus a key access point to perform primary research and to quickly grasp a deep understanding of markets and industries clients aim to navigate.
As trends come and go, the demand for relevant insider information on ever-changing markets and industries is growing. Expert networks provide expertise beyond the research capabilities of clients and give clients the opportunity to really get answers to the specific questions they have directly, and hence are a more relevant source than secondary research such as purchasing market reports and market data or performing desktop research with own team efforts.
Expert networks are tapping into this need for instant access to expert knowledge. Companies are willing to pay for this as it gives them access to specialized insight they are not able to source in any other way and it drastically streamlines and speeds up their research process. This has become common practice to the extent of the expert network industry which has grown quickly into a $1.5 billion industry headed by a handful of expert network companies including "The Big Five" — GLG, AlphaSights, Guidepoint Global, Third Bridge, and Coleman Research.
Expert network users can be largely split into two categories—clients and experts.
Although the client of expert networks can be anyone, in theory, they are especially geared for use by larger companies, investment firms, and consultants who rely on specific industry insights to thrive in their respective markets and industries. The most common types of clients include:
Experts typically fall into the following profiles:
Experts are certainly not entirely in it for the money. In fact, many experts indicate they enjoy doing these expert calls to structure their own thoughts about the market (supported by smart questions posed by clients) and to strengthen their network and thought leadership in environments other than their existing networks.
So, what about confidential information? Of course, experts are never allowed to share confidential information about their current or past employers or anything that is proprietary or protected information. To that matter, experts must limit the knowledge they share to only information that is public or otherwise obtained over their years of experience in their area of expertise which is their own accumulated insight and viewpoints.
Experts typically engage in consultations on personal entitlement (or the entitlement of a company if they own it or are allowed to by their employer) and have to make sure they are not restricted within their employment contract to perform and earn money with expert interviews as "side-gigs". Often this is mentioned in an employment contract under "auxiliary activities".
Several operating models explain how expert networks source their experts, match them to clients and ultimately make revenue, which we explain below:
Expert networks will source through an already existing database of experts or in some cases through a custom recruiting method or combination of both. The way an expert network sources also defines its operational model. The main categories which expert networks fall into are:
Traditional expert networks rely on manual work of researching and scouting the expert network's vast database of experts to find the right fit for clients. Such networks typically have a huge team to find and follow up on best matches by manual client account management. This is what we call the "resource-heavy and low-tech" players—or as some put it, the "old game".
These networks include large players such as GLG, AlphaSights, Guidepoint Global, ThirdBridge, Coleman, and up to 80 very small networks, typically focused on a specific region or sector.
Technology-focused expert networks use various technologies and algorithms to custom source experts, which in principle takes away the need for having a database of experts to deliver as experts are sourced on the spot. Some of these networks claim to use AI (artificial intelligence) or machine learning but many differences seem to exist in the ability of tech-driven networks to source and match experts appropriately.
These networks are clearly the challengers for the traditional networks but becoming scalable is not an easy task given the complex nature of finding the right match with technology and processes needed for compliant knowledge sharing. Arguably, this model saves a lot of time and manual labor and could create a lot of efficiency in the market but takes considerable investment and understanding of the industry to bring to market.
Networks that have developed the most sophisticated tech-driven models so far are Atheneum, Prosapient, and Expertwired. A small set of other networks are observed but seem to have a lesser reliable technology suite to compete.
Self-serve marketplaces provide an open platform for customers to directly "click and book" experts. Experts are sourced generically, so not specific for a client search and therefore the chances you find a perfectly matching expert for your niche interests as a client are slim. The growth and scale of the available experts on such a platform depend more on generic marketing and organic visibility of the platform than the other sourcing models.
There are only a few startup platforms with this model, such as Clarity FM (focused on startup advising and coaching) and Expertisefinder (focused on universities) but they do not currently seem to provide a suitable solution to be used by clients such as private equity or top-tier strategy consulting firms.
As you may have noticed, none of the traditional players employ this model (the ones with the largest databases of experts and which you would at first glance think to be suitable for it). This is because it would require a full overhaul of their operating model and most likely would also create some concern for experts realizing the rates clients pay are significantly larger (often >$1,000/hour call) than what experts receive from these networks (often not more than $200-300), evidenced by the annual reported figures of some of the leading traditional networks. The solution for some of these traditional networks is to provide clients access to the direct search of the database behind a client log-in to shield rates paid by clients to experts.
Most expert networks are subscription (or pre-paid credits)-based where clients are paying a yearly or monthly fee which provides them with a number of credits. These credits can be used to purchase expert interviews (most interviews would cost 1.0 credit for a full hour, or sometimes 1.5 to 2.0 credits for premium profiles). Additional services such as transcripts are also charged in terms of a credit value. The subscription-based model is still widely used by traditional expert network companies.
In the last years, more flexible payment models have emerged, somewhat driven by clients pressing for more flexibility. These are referred to as pay-per-use models that charge clients by the hour or minute of expert consultation time without long-term commitment or payment to the expert network. This model attracts clients which different usage patterns such as a one-off consult or generally infrequent use throughout the year.
"The Big Five" and other traditional expert networks have long depended on the process of manually finding experts, which requires a lot of resources and manpower. These incumbent players have grown with a fairly resource-heavy model, clearly shown by the more than 2,000 employees GLG alone employs to handle client requests and match the right experts from their database.
For many startups breaking into the expert network scene, technology has been the catalyst and what makes them stand out from the old frontrunners. Using technology-driven methods makes the process easier, faster, and more cost-effective for all parties involved.
In terms of the revenue model, it is noticeable that both models see great differences between what clients pay and what experts receive, mostly unknown to either stakeholder. In most industries where technology and marketplace transparency are present, the basic laws of economics (efficiency in supply vs. demand) would suggest that the current pricing mark-up observed in the market will not be the last of its kind. As some technology-driven expert networks are on the rise with the potential to create transparency and equality of information and with solid investor backing, we strongly believe this market will be disrupted.
At Expertwired, we believe the technology-driven model paired with an open marketplace format will be the future of expert networks and make access to real-time market intelligence much more transparent and accessible for all.
We advocate transparency for the benefit of both clients and experts. We aim to serve both clients and experts, although we fundamentally believe value should go to the one who brings it—in our case our experts. We empower experts to get more value for their knowledge. Expertwired is not only simplifying the process for clients but making the industry more profitable for experts. By using technology Expertwired can keep costs low for clients and earnings high for the experts, who really are at the core of expert networks as the individuals of value, sharing their knowledge and market expertise.
The expert network industry is evolving and those at the forefront of technology-driven expert networks have the potential to lead the industry in a whole different direction. Keep an eye on us!
We are disrupting a global market of traditional operating expert networks with our AI-technology driven and transparent marketplace to make sure you get better matching experts for a much lower price.