7 - The Emancipation Of Expert Knowledge
My last post outlined how I went about exploring the professional services problem space. And how one day I noticed abruptly diminishing returns from that exploration. I’d got what I needed. T.S. Eliot’s quote couldn’t have been more appropriate:
“We shall not cease from exploration, and the end of all our exploring will be to arrive where we started, and know the place for the first time”
My exploration brought about a staggering shift in perspective. Here is how I came to see the professional services space I thought I knew.
A Broken Bargain
Today’s professional service firms are a legacy of the guilds of the mid-19th century, subsequently supersized for the needs of globalisation. The grand bargain at the heart of professional services is:
Professionals receive exclusivity in terms of the credentials and regulations required to provide advice in their area of expert knowledge; in exchange for
Upholding standards and putting the interests of clients first in delivering advice.
The grand bargain has become extremely one-sided. At the most fundamental level, the way expert knowledge is delivered has barely evolved since the mid-19th century. And professional service firms are running businesses focussed first on profit maximisation. I found myself bumping into huge flaw after huge flaw.
Professional services are eye wateringly expensive. Professional service firm partners are the most expensive account managers in history. As a client, you pay for this expensive account management across all of the different categories of professional services you use (accounting, tax, corporate finance, law) and even subcategories within them. But you don’t care about these different categories. They are semantic distinctions. You just want your job done.
The supply of professional services is restricted, pushing up the equilibrium price. Imagine an alien came down to earth and received an explanation of the entire taxonomy of different vocations. That alien then got a briefing on what LinkedIn was. Finally, the alien was asked which vocation they expected to be able to get the most benefit from LinkedIn and therefore to have the highest standard of profile. After potentially recruiters, the alien would say partners at professional service firms. The token nature of your average professional service firm partner’s LinkedIn profile demonstrates the skewed seller’s market that they operate in.
Professional services are antiquated. They are predicated on charging for people’s time. Yes, more firms are operating fixed fees. But probe how those fixed fees are calculated and eventually you’ll find a spreadsheet with how much of different peoples’ time the work is anticipated to take. Charging for peoples’ time incentivises made to measure vs off the peg productisation that might be better for the client.
They are rigid in their delivery. One to many delivery of professional services isn’t used. There is a myth that no two client situations are the same and so work needs to be bespoke. This is a false dichotomy. It may be that no two client situations are 100% the same. But why can’t clients group buy the work that is generic and then bespoke buy the element that is specific to their circumstances?
Professional services are opaque. As a client, I am responsible for identifying when I need advice, what advice I need, whether a particular professional services firm is well placed to provide it, whether the advice I get is good and whether the price is reasonable. I am poorly placed to do all of this; not least because I have to do it in a world where there are no useful review platforms of providers of professional services.
Whilst the individual people are great, today’s professional services firms deliver a primitive customer experience. No amount of money spent on professional services today can get you anywhere close to the customer experience you get from spending £30 with Deliveroo on a Friday evening. It takes a long time to receive your advice. You don’t get proactive visibility of progress; you have to chase. There is negligible good-quality proactive suggestion of advice you could benefit from. If there are cost overruns, you invariably find out after the fact when you can’t do anything about it and are simply expected to pay for them. Yes, delivering expert advice is more complicated than delivering a pizza. But not infinitely so.
The above are all flaws affecting the client due to the one-sidedness of today’s grand bargain. But that’s not to say that working in a professional service firm is a vocational utopia. The bargain is broken on both sides and there is much cause for professional dissatisfaction. The expensive fees frequently bring with them unreasonable client expectations that you feel compelled to bend over backwards to cater to. And whilst you develop immense intellectual capital as a professional, you don’t develop any of your own intellectual property.
After The Asteroid
In my last post I shared how I asked the following question in exploring the professional services problem space:
An asteroid has hit the earth and wiped out the entire infrastructure of the professional services industry (accounting, tax, law, consulting etc). All existing firms, their property and ways of doing things are irrevocably gone. All people and their personal expertise remain, as do all current laws and regulations. The means of disseminating expert knowledge needs to be rebuilt from a complete blank canvas. What would you build and why?
It was time to ask myself that question. My answer: something unrecognisable from what exists today. The world looks very different when you look at knowledge first as a product rather than a service where you are charging for peoples’ time. It opens up incredible possibilities. To delight the customer. To reframe the grand bargain and deliver knowledge in a better, cheaper and faster way, in exchange for more reasonable client expectations, with surge pricing if they want to deviate from them. To offer a platform for experts to create intellectual property and maximise the leverage of their expertise such that they resemble a Youtuber more than they do a professional of today.
I came to see that there are four stages of expert knowledge:
Establishing that there is a problem/need in the first place
Identifying what that problem/need is
Coming up with a solution
Implementing that solution
And that the future is about moving as far down through those stages without charging the client. By doing so, one can only be better placed to profit from the subsequent stage(s).
I was able to frame a hierarchy for delivering knowledge in a way that best served the client:
Can it be free, if not then
Can it be charged for as a subscription, it not then
Provide an up-front piece work fee with clearly defined expectations. With the onus then on the supplier to communicate if the scope has changed and the fee needs to increase. No ability to do that after the fact
My Problem
I saw a huge opportunity that I was incredibly inspired by. One that my skills and experience made me excellently placed to address with my insider’s perspective from having worked in professional services coupled with the outsider’s ability to be able to reconceive. I saw abundant opportunities to delight, work with brilliant people and, with my wife, Jess, being a lawyer, she was engaged by. I checked myself as to whether I should explore the reading and careers problem spaces further before committing. But having come to see the professional services opportunity that I did, I knew there was no way I could not do it.
When I started, I was exploring the future of professional services as a problem space. I’m hugely grateful to Michael Wood. He challenged me as to whether that was very exciting as a problem, professional services being a means of solving, rather than a core incarnation. He was right. We live in a world where none of us has sufficient expert knowledge to cope with all of our daily challenges / achieve our goals. The world is only going to get more complex. The need for expert knowledge is only going to grow. Today’s means of delivering expert knowledge is a broken bargain. Knowledge is a non-rival and non-excludable good. It wants to be free. It wants to be shared. In short, it wants to be emancipated. And with it the providers of expert knowledge emancipated to get maximum leverage for their expertise. I hope to have the opportunity to spend the next 10+ years of my life working towards the emancipation of expert knowledge.
The emancipation of expert knowledge is a problem space; a mission. I now needed a way of moving forward and building a business to address it. In my next post, I’ll move on to how I went about choosing the initial customer pain to address and conceiving of the initial product offering. Thanks for reading and stay tuned!