Thanks for your comment, Ishan – great points!
I think their current technology works best for anything that has a specific solution. Case interviews seem a bit more complicated, but I definitely think that some sort of analytical testing – which consulting firms in certain geographies do as a next step after resume screening – would be a good adjacent business to expand to. Not being able to judge soft skills is not a huge problem – this service is supposed to compliment the recruitment process, not substitute it entirely, so soft skills can be assessed at different stages of recruitment.
Fully agree on the resume screening part – it would be great to expand into that. I know some companies try to build automatic resume screening in-house, but certainly it would be more efficient to have a firm for which it would be a core business.
I just wanted to briefly comment on Marco’s point on the ability of other firms to hire the same caliber of talent as McK/Bain/BCG, hence lack of need to pay extremely high fees for MBB.
I think that besides Roger’s excellent point on difficulty to source talent outside of the biggest cities, there are two more points to keep in mind:
– There is a value in external advice, and people tend to value the advice that they pay for more than if they do not pay. I will never forget a conversation that I had, while still at Bain, with one of my senior clients. She said “honestly, we figured out the same solutions a while ago, but the COO won’t listen to u. We need you guys to send your analysis across so that we can finally implement it. That’s why we’re paying you”.
– It is valuable to be able to tap into expertise of other industries and other firms. In-house consulting team of a bank in Germany is unlikely to suggest solutions that were successfully implemented in a retailer in the UK, even though the same solution may work in both. A consulting team can.
Having said that, I do believe the consulting industry is currently being disrupted and in the value of sourcing talent to remote locations, external advice and cross-industry expertise is not enough to keep the industry in a great shape long-term. We can already see consulting firms hiring freelancers as an addition to their projects, more and more firms seeking ex-consultants to hire for their in-house teams, HourlyNerds of the world, and MBB trying to enter adjacent businesses (McK’s solutions, BCG Digital Ventures, …). Consolidation in the markets speaks for itself, too. Curious to see what happens with the industry in the next 20 years.
I love Tesla and white Tesla S is going to be my next car (as soon as I am done with business school debt)!
Great post! I think the fact that Tesla pushes software updates to the cars is key – it can literally transform the already existing cars into self-driving once it develops bullet-proof self-driving technology. The recent actions of Elon: hiring software engineers for Autopilot team (https://twitter.com/elonmusk/status/667516705116065792) and investing in OpenAI (https://twitter.com/elonmusk/status/675431513211600896) suggest he really wants that to happen. Exciting times ahead.
Great post, Yifeng! I would worry, though, that the author-pay model is unlikely to survive long, either: you can argue that an author (and his/her organization) have already put the effort into writing a paper, so why would they be required to pay for publishing? Especially with opportunities to post research results on the internet, which already happens (authors’ websites, institutions’ websites, etc.) and where even reputable but free places to publish exist (think arXiv for computer science). I would fear Elsevier might easily get disrupted if it does not reinvent itself again, maybe with some donations-based model? But if it does, it might not be able to afford e.g. content processing.
Thank you! Their addressable market is huge – they have been focusing on tech clients (their client list includes LinkedIn, SurveyMonkey, etc.), but essentially every organization that hires programmers is their potential client (all industries, all countries). I can imagine that if, say, a tech bubble bursts, they can focus their sales efforts on, say, technology departments of investment banks. Or if the US economy goes south they can focus on emerging markets. There is clearly flexibility there, and the business is scalable (you can reuse the tests on different clients, within reason of course).
Their major barrier to growing at scale, though (and a current bottleneck) is the customer service (contrary to the tests, service is more costly to scale, but obviously required by clients). This is why, being in their shoes, I would perform a sensible customer segmentation and develop a low-engagement model for the least important customers.
I do not view TopCoder and other contests for programmers as a competitor. I think candidates can use TopCoder as a tool to learn and test themselves, with a limited downside risk (and potentially quote their results on their resumes if they rock it). On the other hand, Codility comes into play when a candidate is actually looking for a job (not for a challenge) – it works like an extension of an HR department and tests a candidate in a more “controlled” environment.