Before founding Cadence Translate, I worked in management consulting at Bain and Company and in private equity with Hudson Capital Management. While there, utilizing expert networks was a common part of my research routine. Our office was in Times Square and we’d have to, for example, create market share forecasts for the tank rental industry in Texas. Expert networks provided the perfect mix of speed, accuracy, and convenience for us to conduct such research from our office.
My exposure to this type of knowledge discovery business model was a strong influence in my eventual decision to found Cadence, and during the company’s short lifespan, we’ve facilitated over 3,000 expert network calls.
This experience, both as a client and a supplier, has given me considerable insight into client expectations for these calls. Using this insight, I’ve distilled clients into two different types not divided by industry, but rather by the goals of their calls. If you take this advice to heart, I’m confident you’ll be able to serve your clients more effectively than ever before.
For you Greek mythology buffs, Cassandra was a young princess cursed by Apollo to utter prophecies that would always come true but that no one would ever believe, most notably the Trojan war and the city’s subsequent destruction.
What does this have to do with investment analysts and management consultants? Like the ancient Cassandra, the Cassandras of the finance and consulting worlds have a strong pre-held belief that they know what will happen in a given market; all they need is the proof.
This is where expert network calls come in. Cassandras dial into an expert network call looking for specific information. These clients have done their homework and research on their own; what they’re looking for in these calls is simply confirmatory due diligence. I’ve had Cassandra colleagues who’ve even put whole presentations together prior to expert network calls:
So what are the takeaways?
- Speed over depth: Cassandras are on a strict timeline and need confirmation of their hypotheses fast, whether it’s a market growth rate, a forecast for M&A, or even the quality of management teams. Find a good match, but don’t waste too much time expanding the existing expert pool as they’re likely going to agree to take a call with the first expert network who provides a ‘good enough’ expert.
- Tried-and-true experts, not first-timers: As time is of the essence, source experts who have done a handful (or more) expert network calls. They’ll be more succinct with their answers and comfortable with the format. This, in turn, allows experts to affirm (or refute) a hypothesis much faster than a first-time expert.
- Cross-sell transcripts: Your client is prepping for an investment committee meeting, a steering committee meeting, or a partner review. If they are doing confirmatory DD, you can bet they’d appreciate having a transcript of the call for easy internal sharing.
Meticulous Muddy Waters
While the top Google search for Muddy Waters yields the wikipedia page for the famous blues musician, the Muddy Waters I’m referencing is a famous research and consulting firm that specializes in business and accounting fraud. To give you an idea of the clout they hold, this is what their report last December on OSI Systems single handedly did to their target’s stock:
These guys aren’t messing around.
Identifying what a Muddy Waters client might look like is much more instinctual than a Cassandra. These clients are looking to dig deep and explore. They aren’t doing confirmatory due diligence, they are doing exploratory due diligence. They might have a hypothesis, but these expert network calls are very much a part of their research process.
How do you serve a Muddy Waters client effectively?
- Take your time: Muddy Waters clients are interested in getting deep into the weeds of their research questions. To these clients, waiting an extra day for a client who’s going to be able to take them deeper into their area of research is completely worthwhile.
- Expand your expert pool: Every expert network prides themselves on having an expansive expert pool, but this is the perfect opportunity to source untapped experts, especially those across the language barrier. Muddy Waters clients will especially appreciate the unique insights that first-time experts not available via any network will offer.
- Get feedback right after every call: As these clients are paying $1,000 a pop to go deeper into their research hypothesis, they will inevitably want to change course on occasion. Get ahead of that and ask them after each call how it went. And note that this might annoy Cassandra to be checking-in so frequently.
Every client you serve is going to have different priorities, but if you can differentiate the Cassandras from the Muddy Waters, you’ll be able to not just give them the best experts available, but the fastest path to their respective goals, saving them time and money and ensuring they’ll be back for more.
And if you are a client of expert network who is reading this, are there other mindsets you adopt besides Cassandra (confirmatory DD) and Muddy Waters (exploratory DD)?