Alphasights: Purveyors of Knowledge
“No [person’s] knowledge here can go beyond his experience” – John Locke
The maxim that knowledge is power is heard so often that its fundamental truth may be obscured with repetition. Nonetheless, knowledge is the indispensable currency that makes the highly competitive world of business go round, enabling investors and executives to beat their competitors on the battlefield of commerce.
The Problem
Business practitioners evaluating transactions, exploring growth markets, testing new products and conducting the full range of activities to make the wheels of commerce turn have needs for high-quality, timely, and actionable intelligence. They seek to understand consolidation drivers in an industry, the factors that make an enterprise switch its software provider, a customer’s tolerance for price increases and countless other micro and macro questions.
However, their ability to access fresh knowledge that does not already exist in their organizations is limited. Personal networks are narrow, strategy consulting teams are expensive and removed from frontline business, and LinkedIn is dauntingly big and time-consuming to navigate. Moreover, they are rarely operating in their business-as-usual setting when in need of such knowledge – they are often pressed for time to submit a takeover bid, launch a product before their competitor or meet a high volume of executives on a short trip in a new geography.
Alphasights Overview
Alphasights is a knowledge network that connects Clients seeking specific insights with topic expert Advisors for direct, confidential interactions. The firm is a professional service outfit that brokers the exchange of knowledge in a high-touch, tailored, customer-centric manner that has won it the business of several firms. It serves senior professionals private equity, hedge fund, consulting, and corporate clients around the world out of its 9 global offices. Alphasights connects its corporate clients with on-the-ground professionals with contemporary expertise on the specific business topic.
How it Works
Alphasights assigns a specific account manager and/or multi-person Client Service Team for their corporate clients. These Client Service professionals learn their clients mission, ways of working, etc. and they build personal relationships with the key people who will be using the service.
When the client has a specific business objective – e.g., evaluating a key player in the insurance technology software market – she will reach out to her Alphasights CS and outline her need in a template. She will outline her broad areas of questions, attach screener questions, outline the attributes of the expert she wishes to engage, and make further specific requests (e.g., I want the Chief Procurement Officer, current of former, at companies A, B, or C). The CS takes these criteria and searches for the Advisor that meets the specific criteria, and sends a preliminary shortlist to the Client. The Client will indicate her preferences and her availability on an in-built calendar. The CS subsequently arranges all the logistics of arranging the meeting, held virtually or in-person. Clients fill out short satisfaction survey on the Advisors she connected with and the CS frequently checks in to ensure that the Client is making progress on her objectives.
What Makes Alphasights Different
As a user of the service in my roles as a management consultant and private equity investment professional, I had average experiences with similar service providers in the past. Typically, I was connected with self-selected experts from stagnant databases whose knowledge was either limited or out-of-date. Several were retirees were removed from their respective industries as time increased, they were being placed on projects for competing clients, and everyone had access to the same general information that ultimately minimized the opportunity for competitive advantage.
However, a few unique elements made Alphasights my preferred expert network provider:
- Highly fit-for-purpose Advisors: CS consistently located the right advisors with the desired experience and expertise who knew how to present information in the most useful manner for my need
- Seamless customer experience: The logistics, user interface, speed of turnaround etc. of the whole process were painless
- Thought partnership: CS professionals were problem solving partners who tried to grasp what I was solving for
Scalability and sustainability
I believe the business model is highly scalable and sustainable, although it faces some challenges.
The key strength is the cross-side network effect. Clients are attracted to the breadth, depth, and vetted quality of Advisors on the Alphasights network. Advisors are happy to remain compliant with the network’s requirements (e.g., no multi-homing) given the high volume of requests that come from Alphasights’ expanding roster of clients.
However, I see two main risks. One is that of commoditization of information – as the number of Clients on the platforms grows, with many having overlapping interests (e.g., a multi-bidder PE diligence on the same target), Advisors’ expertise may not provide a competitive advantage to any single player. The second risk is that of disintermediation – Clients and Advisors may go off-platform to establish a bilateral relationship after their first contact.
I agree that the risks of disintermediation for this business are high. We’ve seen examples in our class where similar platforms choose to “manage their revenue expectations” and position themselves a lead generation platforms instead of full-service providers. They charge only for making the initial connection- and accept that they will be disintermediated as trust builds between the users they connect with the experts. As an advisor, would your position be that Alphasights should accept disintermediation and focus on lead generation, or should it fight disintermediation? How might you approach the idea from a costs/benefits perspective?
Interesting note, thanks for sharing!
I would be interested to see if Alphasight eventually moves into digitizing/archiving all the information that experts provide and then cross-sell it as an additional product – e.g. now it would be interested to read how politics/economists thought about Spanish flu in the beginning of the past century. That would effectively leverage the commoditization of information (commodities like gold could be indeed appreciate with the passage of time) to prevent clients from leaving the platform.
Thanks for sharing! I’ve worked in the same industry as you, consulting, and wondered about the value of experts. I agree that they are tremendous in getting a lay of the land, understanding industry dynamics, and assessing strategic positioning of players. Sometimes their opinion get aggregated to inform growth projections and inputs for market maps. While this used to be the predominant way to get an estimate, newer data vendors are popping up every day. With their ability to observe the markets by aggregating thousands of data points, I wonder how long we will resort to using a few experts to guide our recommendations.