Getting the Most Out of Expert Advice
By Dan Schwarzman for Zirra
The internet is full of data that can help you understand a company or market. Still, when you want a deeper understanding, there’s nothing like picking the brain of an industry expert. We’re social creatures — we want to reach out to people who know better. But how do you get the info you need out of an expert? Here are some tips.
Experts can give you high-quality information, but it helps to balance this with more than one expert source. If two or three people with a strong understanding of a subject agree on a given point, you can probably rely on that information. If different experts have contrasting opinions about the competitors in a space or the key product feature of a company, this is a sign that you need to do some more research, or that the market isn’t well understood.
Say we’re thinking of investing in a startup that develops perfume for pets, because Fido is stinky*. In order to balance our research, we might speak with people from different relevant backgrounds.
The first expert above could probably tell us about innovations in ingredients and manufacturing. The second would have more knowledge about business opportunities in this space, differences between relevant companies, and which products have the most potential. The third expert might know more about customer sentiment and sales.
Don’t get too caught up in asking the “right” questions. The benefit of talking to industry experts is that you can just ask the questions you need answers to, but it helps not to lead too much with your questions. Getting accurate information is more about asking open-ended questions and getting the expert to talk. In many cases, the best insights come by surprise when experts are on a roll and mention a new angle or aspect that you hadn’t even considered.
It also helps to break things down. To get a full picture, you can ask experts separate questions about:
- Specific product features and technology
- Market trends
- M&A opportunities
- other more open-ended questions, such as “what are some challenges and opportunities in this space?” or “what would be your advice for potential investors in this space?”
Q: What do you see as the future of the pet perfume market?
A: Tangerine-based scents are expected to be popular in the next few years for cat owners. Interestingly, there’s also a lot of innovation in spray bottles. Flashing lights around the nozzle are set to be the next big trend.
Experts are people too, with their own viewpoints, emotions, and personal interests. Keep in mind who your source is — maybe they were previously involved with a competitor and have some bitterness towards the subject company, or are overly convinced of their own expertise and assume that something they haven’t heard of must not be worthwhile.
Some professional experts may have been coasting on their consulting career for a little too long, and their expertise may no longer be up-to-date. Some people in expert network services can fall into this category — they’re career experts who haven’t been toiling in the industry in a while, and might not know as much as professionals who are still working in the thick of it. It’s also good to watch out for the network effect that many analysts fall into, where everyone passes along the same information to each other and end up regurgitating the same generic opinions.
It’s a good idea to check expert advice with data from other sources. In this case, a tip from an expert gave us a whole new angle, which we can now evaluate in different ways.
*We made this up as a joke, but it’s apparently something you can buy.