Dan Sweet

The Death of the Expert = Competitive Advantage

The “death of the expert” is one of the most fascinating themes I find myself going back to time and again in conversation with peers.  Let me tell you why I think this is a macro-trend that is worth taking a moment to understand.

It used to be that “expertise”, once developed, assured one of a secure place in the world.  Firms employed experts and thrived.  Those that failed to attract or retain the experts saw their competitive advantage slowly slip away.  That old equation no longer holds for the following reasons:

1.  Expertise is now more broadly attainable than ever before.
2.  Expertise is less easy for individual companies to “own”.
3.  The barriers to applying serious expertise to business challenges have never been lower.

Many companies remain unaware of these changes and, as a result, are leaving massive amounts of competitive advantage on the table.

Let’s break down the three points above in more detail.

1.  Expertise is now more broadly attainable than ever before.

If you don’t know what a MOOC is, you need to click through to Wikipedia and check it out.  Free, open, learning available to anyone with an internet connection.  The Machine Learning class taught by Stanford professor Andrew Ng is the highest profile example I have direct experience with.   If you like self paced video lectures you can consume at your own pace, check out the Khan Academy.  If you want to follow along with a traditional classroom style lecture on your own, check out MIT’s OCW and learn anything from Calculus to Linear Algebra to Python.  Take it to another level by learning to program a robotic car from Google’s Sebastian Thrun.

2. Expertise is less easy for individual companies to “own”.

As knowledge becomes more broadly distributed, it is less likely that any one company will be able to truly “own” a space by simply hiring all of the best people in a particular field.  When the top 3 winners in a open online predictive modeling competition with $100,000 in prize money are a Ecuadorian university student, a teaching assistant from Slovenia, and an actuary from Singapore, you know the world has changed.  187 teams competed over three months and have published much of their details and code here.  Oh, and did I forget to mention that all three of these winners learned machine learning from Andrew Ng’s Coursera course?  It is not possible to own the work product of all of the world’s smart people.  If your competitive advantage was built on being the company that does X really well, your days are numbered if you don’t recognize the significance of these changes and start taking advantage of the opportunities presented by this new reality.

3.   The barriers to applying serious expertise to business challenges has never been lower.  

This is the part where I plug one of my favorite startups – Kaggle.com.  Kaggle has built a platform that routinely eats experts for breakfast.  Straight chews them up and spits them out.  Top team of actuaries from the world’s second largest auto insurer – beaten in under 24 hours.  NASA – beaten by a random glaciologist from down under.  The stories go on and on.  Have a tough business challenge and want hundreds of experts from around the globe competing against each other to solve your problem?  Head over to Kaggle.com and setup a competition.  Need to keep your data private and own the work product?  Setup a private Kaggle competition and invite a few of the world’s highest ranked data scientists to crank on your problem.  Want to keep it completely in-house?  Setup an internal competition and get your R&D guys cranking on a marketing mix optimization problem.  Get your process engineers working on some consumer research.  Let your statisticians work over your social media ROI calculations.  What, they are in silos and don’t talk?  Some people see the future and are getting after it.  If you don’t see it and aren’t getting after it, you will be left behind.

 The expert is dead.  This is good news for small companies and bad news for big companies that aren’t able to adapt.  The upside for everyone is that a new source of competitive advantage exists and is still up for grabs.  The internet continues to further level the playing field.