Abundance And Scarcity In The Insight Market
from the it-all-fits-together dept
Last week, after I wrote about some of the theory behind the Insight Community and the Smart Dossiers offering (which is a subset of the Insight Community), someone asked how my writings on economics fit into the equation. It’s rather straightforward: In any market there are likely to be various scarcities and various abundances. You should always look at the scarcities as problems that need to be solved and the abundances as the resources you can use to solve those problems.
So, as we were building out Techdirt’s business, working with various Fortune 500 companies to better understand various technology trends, we again began to notice an interesting set of scarcities and abundances. On the scarcity side, companies were really hungry for useful and actionable insight about their biggest challenges. At best, they could hire a big analyst firm or a big consulting firm, which would be excessively expensive, and often wouldn’t give particularly useful information. In fact, it was a huge risk, since they would only receive a single answer, as if handed down from a wise man on the mountain, with no idea if it was accurate or not. At worst, they could have internal people try to do the analysis, often passing it off to a junior person to handle the work. Again, this would result in a single opinion (often from someone not very experienced) providing an important analysis that was also biased by coming from inside the company, rather than with an outsider’s perspective.
At the same time, we were discovering an immense abundance in the ability to find and communicate with smart, knowledgeable passionate experts, many of whom we got to know via their participation on Techdirt itself, or via their own websites and blogs. At first we began to tap that group informally, to help us with the work we were doing with existing clients — but we realized it was better to formalize the system, which is how we came up with the Insight Community, helping to eliminate the middle man and solve the scarcity (relevant, timely insight) with the abundance (lots of knowledgeable folks). The trick was coming up with a system that allowed the best, most useful insights to bubble to the top. In other words, figuring out not just how to connect companies to smart people, but to make sure that those companies could get the best, most relevant and insightful analysis out of the most qualified folks in that group of experts. To do that, we put in place a competitive system, that allowed experts in the community to compete to show they could provide the best insight. The end result has worked quite well, making it incredibly easy for companies, both big and small, to tap into this network of experts in order to get the best, most relevant insights into the challenges they face, gaining multiple expert opinions — and doing so at a price the company gets to set.
Of course, while the “name your own price” model works well in some cases, it doesn’t work for all. It can sometimes be an impediment for a company that knows they want something specific and isn’t sure how much to bid for it. So, to help with those situations, we wanted to focus on common types of cases that the Insight Community was being used for and start to launch more packaged solutions — the first of which is Smart Dossiers. Many of the customers using the Insight Community, had used it to get a straight analysis of a company. Sometimes of themselves (to get a quick snapshot of multiple outsider expert viewpoints), but more often of other companies they were dealing with: customers, competitors, partners, investments and investors. For example, we had one company use the Insight Community to create detailed “dossiers” on the company’s top customer targets, so that its sales people could be better informed while calling on them. Another firm needed a competitive landscape of a new market it was about to enter, and was able to get a bunch of experts to all weigh in on the competitors in just over a week.
So, yes, we are putting into practice the economics that get discussed here all the time. It’s all about taking an abundance and helping them “solve” a scarcity that companies desperately are looking for help solving.
Filed Under: abundance, experts, scarcity, smart dossiers, techdirt, techdirt insight community
Companies: techdirt
Comments on “Abundance And Scarcity In The Insight Market”
Competing for the client's happiness
Aren’t you worried that instead of the best insights you will instead get people competing to compose what the client is most likely to select as the sort of ‘insight’ they were hoping for?
In other words there’s certainly a market you’re tapping into, but I’m not sure it’s the market you purport to serve.
Re: Competing for the client's happiness
Aren’t you worried that instead of the best insights you will instead get people competing to compose what the client is most likely to select as the sort of ‘insight’ they were hoping for?
That’s definitely a good question, but we haven’t found it to be a problem at all for a few reasons:
1. The experts themselves in the community take the matter pretty seriously and (to date) seem to have no problem whatsoever telling a company where they disagree with them.
2. There is something of a peer review system as part of this as well. Other experts see what it is that you have to say and can respond and discuss other experts’ statements, which creates a more honest discussion.
3. Most of the time, it’s not at all clear what the company “wants” as the response. That is, they’re not necessarily looking for a specific answer. They’re really investigating an area and trying to understand it. It’s usually quite hard to “game” the system.
In fact, we’ve noticed that in many cases, the person who writes the most detailed *critique* of an existing strategy often does quite well, which is the opposite of what you might expect. The companies are signing up for the service to get an honest opinion and seem to be more than willing to reward people for giving that honest take.
Re: Re: Competing for the client's happiness
In fact, I would imagine it is quite the opposite. When you contract directly with a single organization to give you advice, the amount of advice you don’t want to hear is generally proportional to how much they think you want to hear and not how much you need to hear. They have everything to lose.
A group of individuals that feel insulated and mutually competitive are going to be more honest.
as a participant in your community, it seems that
(a) you are afraid of the power of the economics of non-market based peer production (Benkler 2006) by not letting the experts collaborate, either in a second phase (i.e. first submit insight than re-work one “socialist” insight).
(b) it seems that the one and only factor that correlates with “winning” is length of an insight. I wonder if this is because the client feels they pay-per-word? Participants have adapted to the market fast, and it has clearly led to a different form of responses in the last weeks and I am not sure this trend actually is helpful in the end.
(c) In combination with the scarcity of challenges available, this leads to very strategic behavior from the participants, which in the end will decrease community size fast. So I am not sure if the insight community as designed right now will scale.
Re: Re:
Hi Philipp,
Thanks for the feedback though I’d like to respond to some of the assertions.
you are afraid of the power of the economics of non-market based peer production (Benkler 2006) by not letting the experts collaborate, either in a second phase (i.e. first submit insight than re-work one “socialist” insight).
This is not the case at all. As we have tried to make clear, while we launched the service (in beta, as it still is) with single-user insights, we have been working diligently on adding collaborative insights as well:
http://www.insightcommunity.com/blog/2007/12/18/next-up-future-plans/
We just are not yet ready to launch it yet. So it’s not that we are “afraid” of it. It’s simply a matter of prioritizing, and the first part of that process was to get the basic system working for generating insights. Allowing more collaboration has always been a part of the plan and we’ll certainly be rolling that out as it’s ready.
it seems that the one and only factor that correlates with “winning” is length of an insight. I wonder if this is because the client feels they pay-per-word? Participants have adapted to the market fast, and it has clearly led to a different form of responses in the last weeks and I am not sure this trend actually is helpful in the end.
I’m afraid this is not true. While it is true that those who do more *thorough* analysis are likely to win, that need not be the longest. The length is not the sole determinant in winning, and we’ve seen very long insights that have not won, and shorter ones that have. It really comes down to thoroughness of the response that seems to appeal to companies. While there may be some correlation to length, to claim that this is the only factor is incorrect and does not reflect the views of the customers.
Re: Re: Re:
Dear Mike,
you persuaded me and I am looking forward to the next iteration. I think the idea of insight communities will be the most revolutionary aspect of web 2.0 and you are the farthest advanced in thinking about what it means to set them up. Not 100% persuaded though that the scarcity/abundance idea is the only/best framework to capture it. Alternatives might be subjective/intersubjective or strategic/communicative.
Re: Re: Re: Re:
I think the idea of insight communities will be the most revolutionary aspect of web 2.0 and you are the farthest advanced in thinking about what it means to set them up.
Thanks, I appreciate that. Though, I also feel that we’re very early on in this process. We have a lot of stuff we’re hoping to do with it, and our biggest frustration is not having all of it ready to go already… Making sure the core concept worked was the key — and now we’re moving to take it to the next level.
Not 100% persuaded though that the scarcity/abundance idea is the only/best framework to capture it.
I agree. I apologize if I implied that was the only framework at play here. It was just designed to explain where some of the thinking came from in helping us design the system, and in recognizing both what the real problem was that companies were having (the lack of insight) and what resources were being underutilized (all those knowledgeable people).
Alternatives might be subjective/intersubjective or strategic/communicative.
Would love to hear your thoughts on how those would apply, whether here or privately (if you prefer).