Advice, Facts & OpinionsApril 28, 2012
“Let me tell you about women….”
There are all sorts of answers out there. There are those you really need, there are those you’d quite like, and there are those that are offered completely unsolicited.
If you’ve ever unburdened yourself about problems with a girlfriend/boyfriend there’s a good chance you’ve been given some advice for free; even if you don’t want it.
The quality of that advice generally varies from the not very good to the spectacularly awful. Indeed there is only an industry built around offering relationship advice – just look in the men’s/women’s magazine sections of your local newsagent – because in the course of human history no one has got close to nailing the issues.
So would you pay for such advice? Perhaps not from the guy at the bar who is slurring his words and almost falling of his stool, but someone must be buying those magazines. In truth though, most of that advice sells more as entertainment than useful information.
Broadly speaking, people ask questions online seeking answers that fall under the headings of ‘factual’, ‘advice’ and ‘opinion’. In the age of Google and the global indexation of information, factual information should be fairly easy to find, right? Not necessarily. Something in excess of 99% of the information held on the world’s computers is not indexed and is behind firewalls. If you don’t believe just how little essential information is available online stop to think how many companies, particularly large ones, consciously keep things like their switchboard numbers off their websites. Want a staff list with details of responsibilities and telephone number? You won’t find it on the web. The indexation of information has created the illusion that we can access anything easily and has obscured what we used to accept as fact – that we can’t.
Then there is opinion. Opinions are ten a penny. Some of us would pay certain people to keep their opinions to themselves. Looking for an opinion on the Knicks’ or Manchester United’s prospects for the coming season? You’ll be fighting them off with a stick. Of course some opinions are worth having. If you are a company wanting to do business in a country where it’s essential to have your finger on the pulse of the political scene informed opinions are worth money. There is an entire industry grown up around political risk management – people who keep a close eye on events in small areas of the world who can tell a client if regime change that could threaten their interests is on the cards.
The price of getting it wrong can cost millions. One small example; the state owned Telekom Malaysia stumbled into Jerry Rawlings’ Ghana in the 1990s taking over the state telecoms provider, spent millions without delivering the service Ghanaians wanted and when Rawlings’ party lost power in 2001 ran into trouble. TM ended up selling its stake back to the Ghanaian government for an undisclosed amount but believed to have been at a considerable loss.
One opinion on the political situation in West Africa would have been just that – one opinion, but seeking out a small selection of informed opinions might have paid for itself ten thousand times over.
Similar to opinion is advice. However advice is generally rather more specific and formal. You should be able to find details of laws or the tax code in your country quite easily. Understanding it is another matter. Here the commodity you are seeking is not information but knowledge and expertise. Why spend ten years studying an area you only need to master occasionally, when you can pay for an hour’s consultation with someone who has spent ten years studying it for you. Of course that hour will probably not come cheap but a simple cost benefit analysis ought to determine whether it’s worth paying up.
And this is the basis of all knowledge market transactions – the value of a given piece of information, advice or opinion to you against the cost of not having it or having to research it yourself.
It might not be worth paying a tax lawyer $1000 if you only make $10,000 per year but if you’re worth as much as Mitt Romney it’s money well spent, given what it saves you in taxes.
The same goes for sales contacts, introductions, market analysis and so forth.
For that reason a good proportion of the growing Q&A market will end up being paid for. At the moment people who charge for their research, advice or opinions might answer basic questions on Q&A sites for free as a form of advertising for their paid for services. However as sites that provide a fully transactional service, such as sector leader Mancx, gain ground we will see the growth of an alternative – a space where specialists can tender for projects that require their experience.
The impact of such a development on markets like law, accountancy, risk consultancy and so forth could be electric and the result for the consumer could be hugely beneficial as the benefits of real competition come to these areas as never before.