Leveraging Business Expertise: How to Build a Fortune 500 Enterprise from Scratch (F500 Handbook)

Expertise is a critical asset to every business. Some businesses are able to pay third parties such as consultancies, market research firms, and agencies to access business expertise. These third parties provide expertise in different ways, often based on products or services that include analysis, data, and information in exchange for hefty fees. Firms such as McKinsey, Accenture, and Gartner have built global franchises based on their ability to create the perception that they have expertise that other people do not.

It’s this “scarcity of expertise” (or more importantly the perception of it) that provides these third party firms with market power that typically comes in two forms. First, the perception of scarcity allows firms to win and protect market share. Second, it allows them to charge their customers premium prices to access the expertise. The net effect of the strategy of scarcity is that, historically, the vast majority of businesses could not afford to access third party expertise given that scarcity always drives prices higher.

Today, the internet and a proliferation of business experts is fundamentally changing how expertise is created, distributed, and consumed by professionals. Now, any size business can access world class expertise to help them make better business decisions. This Brief analyzes how small businesses can now access the expertise that has traditionally been reserved for the Fortune 500. It’s part of series of Briefs that examines how even the smallest of businesses can build a F500 enterprise from scratch.

The internet is changing the fundamental nature of business expertise by improving the accessibility, cost, and relevance of expert information that professionals consume (Focus is a living, breathing example of this). These changes are occurring in a few different areas including the:

1. Creation/publication of expertise – There’s no shortage of ways for professionals to espouse their expertise online. In fact, there’s been a proliferation of expertise in recent years via obvious techniques such as posting a resume online or blogging. And more recently, the hot new trend in creating expertise is Q&A. Q&A allows experts to answer specific questions that other users have. Sites like Quora provide experts with a forum to answer specific questions from a community interested in a specific topic such as start ups. For example, a user asks the question “Why is ecommerce such a hot area in venture capital now?” and on Quora several well known venture capitalists provide well thought out answers. (Why? Signaling that you are an expert in the professional world is good for business on many levels, but that’s the subject of another Brief).
2. Identification of business experts – Identifying true experts has always been one of the major obstacles to accessing business expertise. In an offline world, the transaction costs associated with identifying and connecting with true experts were prohibitively high for most businesses (all of those failed consulting projects are proof of that). While the internet is making “everyone an expert” in something, it’s also providing a platform that scores expertise. This scoring may take place via well known tools such as blogs (# of posts, depth of those posts) and LinkedIn (experience, # of connections).  And then there are more advanced techniques for measuring expertise such as the number of Twitter followers (Twitter) that an expert has or the number of subscribers to an expert’s RSS feed (Google Reader). Either way, now, when professionals search for expertise they can find it and actually measure that expertise in some interesting ways. There are, of course, still challenges with identifying true experts, but it’s not due to a lack data or information on potential business experts.
3. Distribution of expertise – The distribution of content has undergone some radical changes in recent years. That’s logical given the proliferation of content we’ve experienced recently. The very smart Dave Winer describes it as the river of news – in the world of business, expertise in the form of information, data, and analysis flows by you like a river and you take a drink when you want. It’s such a powerful metaphor for dealing with an overwhelming amount of content that both Twitter and Facebook have adopted it as their primary means for distributing content. There isn’t a river available for pure business expertise yet, but look for the business community to borrow from some of the consumer precedents out there in the coming years.
4. Consumption of expertise – With all of the changes in the creation, identification, and distribution of expertise, it logically follows that expert content is also being consumed in different ways. It goes without saying that most business expertise is now consumed online - that much seems obvious, except when you recall the days of attending trade shows, reading a trade publication, or hiring a consultant to consume expertise. But the consumption of expertise is also experiencing more fundamental changes in that consumers can now interact with the expertise by rating, augmenting, remixing, and redistributing it just to name a few examples.

The internet has made the creation and consumption of business expertise less costly, more accessible, and more relevant. These changes have democratized business expertise so that now any size business can access the information, data, and analysis they need to make better decisions.