The announcement of TechDirt’s Insight Community shows the possibilities for eBay-like technology analysis marketplaces. TechDirt’s offering gathers together a group of curated bloggers who offer anonymous responses to companies that want feedback on specific issues. The companies as well remain anonymous, in a double blind setup that protects competitive intelligence and the blogger’s reputation at the same time.
Bloggers are to be paid just $50 to $100 per response, which seems extremely low if they want to offer truly valuable analysis from bloggers and analysts with deep expertise and knowledge. It takes time to research and put together valuable intelligence and insight and it takes a base level of understanding that only comes from long-term dedication to a field. People with those qualifications are likely to have other opportunities to make money, opportunities that make $50 to $100 for an entire blog post look like cat food.
Kevin Maney of USA Today suggests that part of the value proposition here is that companies can save money: “Why not give [bloggers] a way to make extra money by answering specific questions posed by a company, and at the same time give companies some input that would cost less than hiring an analyst or consulting firm?” That’s the wrong way to look at it. A more liquid and efficient analysis market should give better value, not necessarily lower prices. As Seth Godin said in Cheaper:
Cheaper is the last refuge of the person who’s not a very good marketer. Cheaper is easy and cheaper is fast and cheaper is linear and cheaper is easy to do properly, at least at first. But cheaper doesn’t spread the word (unless you are much cheaper, but to be much cheaper, you need to be organized from the ground up, like Walmart or JetBlue, to be cheaper). They are, you’re not.
Cheaper is a short term hit, not a long term advantage. Cheaper doesn’t create loyalty, because the other guy can always figure out how to be cheaper still, at least in the short run.
Ed Sim of BeyondVC mentions Gerson Lehrman, a community of experts that sell to the hedge fund industry, as being similar in philosophy and structure to TechDirt’s Insight Community. Could Gerson Lehrman have possibly succeeded by paying its experts $50 for a piece of work? No way. In hedge funds, there’s so much money sloshing around, $50 is nothing. In technology, it’s not much either.
The point of creating an analysis marketplace is to get long term advantage. Over time, inefficiencies will be squeezed out and the overall price that companies pay for the analysis they need may turn out to be lower. Or it may be higher, if they find that with a better market structure it makes sense to allocate more money to buying outside expertise.
Those who want to create free marketplaces in information, research, and analysis ought to consider how they can improve the market structure to offer better value to buyers. For example:
- Pay according to how buyers rate the intelligence. Provide a number of responses to the buyer for their particular question. Let them rank the responses. The highest rated feedback is paid the most, the lowest the least, or maybe not paid anything at all.
- Keep a record of ratings of analysts and filter that back into how much companies pay for feedback. Let them request the highest rated analysts, for a fee.
- Let buyers request analysts they’ve used before or those recommended by a colleague. Referral requests should improve the analyst’s overall value rating.
- Consider how the marketplace could auction off the analysis of sellers. This way you could attract analysts who provide extremely useful feedback by paying them enough to get them to look away from their other opportunities.
Your offering is not a real marketplace unless you let the market set the price. The way TechDirt is arranging it looks suspiciously like they want to keep big money for themselves and pass on just token amounts to those providing the real value. You can’t build a marketplace by choking those who provide the value in it.
UPDATE: Mike Masnick of Techdirt clarifies some aspects of his analysis marketplace in a comment on my post. Notably, the analyst-bloggers get to set their price.
9 Comments
Anne… Good points. I’ll add that 1) what you’re going to get for under $100 is reaction and high level opinion, not analysis and 2) that the anonymity is an odd and unattractive feature - why do the bloggers need to remain anonymous? I can’t think an advantage to the blogger/analyst, nor for the firm.
Yes, for $100 you’re not going to get in-depth research or considered opinion.
As for whether the blogger-analysts should have some level of anonymity, that’s an open issue. There are questions of how honest the analysts feel free to be, how much they are subject to influence that might distort their opinions, and whether external factors like outside reputation might affect their reputation in the analysis marketplace in such a way that inefficiency is introduced. In general, open and transparent seems better and more web2.0ish. But it’s not clear that the dynamics would be the same, better, or worse than if all parties were anonymous. How can the market be made most efficient and produce the most value? How does anonymity play into that? It’s a new world–maybe some experimentation needs to be done to see what works best.
Anne, great post. I was there for the blitz demonstrations and I think that this is an interesting proposition. I’m going to register just to cover the experience.
Hi Anne,
I’m CEO of Techdirt and just wanted to clear up some of the issues raised by your post. Kevin was wrong in stating that bloggers simply get $50 to $100. As you suggest, it is a market place. The bloggers get to set their own prices. Kevin had asked what the typical price was — and so far, $50 to $100 seems to be the range that people are choosing. And, based on that, I should say that I 100% disagree with you that at $100 you don’t get “in-depth research or considered opinion.” You’d be amazed at the level of analysis and opinion the bloggers in the program have already been giving.
Also, almost all of the feature suggestions that you make are already in the program, or are on the roadmap to be added soon (your first point, of ordering the responses to determine payments, is on the roadmap — all the other features are already available).
As for the anonymity issue, that’s only one aspect of the service, and came from specific discussions with both bloggers and our existing customers. There are a ton of advantages in having the anonymity — from more honest analysis, to actually responding to the issue rather than the company (i.e, telling a company what they want to hear as opposed to what they need to hear). However, again, that’s only one aspect of the service, and some of the offerings will allow discussions without anonymity in place. It all depends on what the bloggers and the companies need for the particular issue they’re raising.
Finally, the focus is very much on better value for your dollars, not “cheaper.” In the beta tests we’ve been running, that’s exactly what we’ve found. The companies (multi-billion dollar ones) that have been using the service feel they’re getting a lot more value in seeing multiple different perspectives and analysis (including discussions *among* and *between* the various bloggers) than just talking to “the wise man on the hill” at some analyst or consulting firm.
If you have any more questions about the service, please feel free to ask me.
Mike
Mike, thanks for the clarification. Sounds like your insight community is much closer to a real marketplace for analysis than how it had been portrayed.
Interesting point that the companies get great value out of the discussion itself, just like we learn things through blogosphere back and forth. And it’s free! So perhaps it’s hasty to say that $50 can’t buy you considered opinion. In-depth research for a c-note? Perhaps not, but maybe the market for that will evolve, and thoroughgoing research will be compensated appropriately.
Brian, given Mike’s clarifications, it looks a whole lot better than I thought. I may submit my own name/blog.
likesay, emerging competition.
I wonder if there are any intellectual property implications. Would my insights be considered work for hire, and therefore the property of TechDirt? If so, I think I’d approach the questions I answered like ghostwriting assignments. Pretty specific, topics I know well, but not requiring a new line of thinking. I wouldn’t want to lose my ideas/work for $100 (or the going rate). Especially since the insights aren’t attributed to the blogger. As I type this, I think I’m more hung up on the anonymity (lack of attribution) than the rate. Interesting concept.
Brenda, I don’t have a good understanding yet of the IP issues for this, not having worked in the analyst field. But my sense is that if it’s going to work as a market and not a sort of ad hoc consulting firm, the analyst herself needs to own whatever she produces, whether it’s anonymously offered or not.
I have run into a similar problem on one of my current contracts, where they own whatever I produce, leading me to be very careful about what sort of insights I offer. In such cases, you’re right, the reasonable approach is to offer detailed specifics but not new lines of thinking.
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