The CDD sausage and Expert Network OpEx

Expert networks have immense OpEx, largely driven by their inefficient modes of interacting with clients. This "black box" problem cannot be solved by the networks themselves, but by introducing a dedicated expert network aggregator.

When I was at McKinsey, I routinely used 4-5 expert networks. I would blast out the same email to them all and get hundreds in return. It wasn’t pretty, but it’s part of how the CDD sausage is made.

Most strategy consultants are slightly less self-flagellating, but still use 3 expert networks per project. That’s the pain-to-gain tradeoff. Limit yourself to just one network, and you see just a subset of all relevant experts. Conversely, for every network you engage, the admin work grows.

Now, if consultants think expert interviews are a pain to arrange – you should see the other guy. Expert networks suffer from inefficient admin work, too. Let’s quantify this by looking at GLG's P&L statement from its 2021 IPO attempt, at the time the leading expert network.

74% gross profit after paying experts is pretty good. Then they spend 57% of revenue on operations, support, SG&A. That includes things such as salespeople, IT, that snazzy midtown office, marketing and finance – but in what is really a high-velocity recruitment firm, the by far largest team is recruiters.

Recruiters (associates) are the productive engine of an expert network. They are the ones generating those $589 million revenues, by recruiting experts and matching them to clients looking for insights.

But the engine looks like an old 2-stroker, due to:

The expert network black box

Expert network associates routinely service 6-10 projects in parallel. That means an associate spends on average 1 hour per project and day.

But projects are different. Some projects you get day 1, and you’re the only network. On others, you’re invited late to pick up the scraps. Problem is you don’t know which one is which. It’s a lemon problem.

So you’ll end up guessing and allocating your time randomly. You’ll work on some projects that won’t yield, as the client already took their calls last week with another network. In other projects, you’ll leave the client disappointed, wondering where the experts are.

If you only knew which project would yield, you’d sell more expert interviews per day. Your clients would be happier, and your P&L more attractive.

Real-time status and wallet share of wallet

With Inex One, expert network associates see the project status live, across all projects. They can plan their day optimally and adjust focus between projects in real-time.

Consider the user experience, getting project invitations either on the platform (seeing their EN Score), or as a rando email.

At scale, your workflow looks like this:

The result? Clients get optimal service, and expert network associates make more money per hour worked. This productivity gain translates to better economics for the expert network and client, which is why an expert network aggregator is superior vs. emailing with expert networks.

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