New York – More action on the expert network front was announced yesterday, with the partnership of DeMatteo Monnes and LinkedIn, giving DeMatteo Moness preferred access to the largest standing network in the expert network business. This follows the news earlier this month that Vista Research had been acquired by Guidepoint Global.
DeMatteo Monnes (DM), a well established, boutique expert network and agency broker, and LinkedIn, a huge professional networking site, entered into a partnership which gives DM a kind of super user account to the LinkedIn network and a proprietary set of search tools. The fact that DM will have access to the over 40 million professionals listed in the LinkedIn network has been widely touted to make DM competitive with the largest expert networks such as Gerson Lehrman, Guidepoint Global and Coleman.
In addition, DM will be able to conduct large scale surveys for clients through the LinkedIn Surveys product. For the privilege of being the chosen one, the expert network is rumored to pay somewhere in the low 7 figures for this arrangement. This deal is seen as an important one by many in the industry. In fact, one article in Silicon Valley Insider went so far as to say that “LinkedIn Deal Whacks Consulting Firm GLG in the Nose”.
The advantage for DM of the preferred deal is the access to over 40 million professionals and the proprietary search tools to aid in DM’s custom recruitment of experts. In addition, DM will have a greater ability to conduct surveys and establish panels within the LinkedIn system. This is a significant competitive opportunity. In addition, DM will be able to gain significant marketing benefit from being able to say that they were selected as LinkedIn’s preferred expert network partner.
As for LinkedIn, they have been actively looking for an expert network partner to hook up with for over a year. The value proposition that LinkedIn has presented to a significant number of existing expert networks and sell-side investment banks is that they would provide preferred access to proprietary search tools and other services to one, and only one, expert network. LinkedIn benefits from being able to commercialize their database of members by selling preferred access to DM. This will enable the firm to focus its attention on building up its survey offering.
Let’s be clear, we have no information about the particulars of the transaction that DM and LinkedIn eventually inked, but we wonder how the economics will work for DM, both from a cost-benefit perspective and from a competitive perspective. While we cannot comment on the cost-benefit aspect, we can provide guidance on the competitive elements of the transaction and the industry.
The Competitive Environment
As reported above, some commentators feel that the partnership gives DeMatteo Monnes a competitive edge on the largest expert networks, like Gerson Lehrman, Guidepoint Global and Coleman Research Group. We agree that DM’s premium access and tools on the LinkedIn network will make the firm more able to compete, but there are some important caveats.
The expert network model lives and dies on the quality of the matches that the firm makes –period. And while sourcing experts is important, it is not really the most difficult part of the value chain for expert networks.
An expert network search or a custom recruiting job has several key components, including recruitment of experts, vetting, and matching. Typically, the vetting will include communicating with the expert to determine their domain expertise, the ability of the expert to communicate information effectively telephonically, and the past experiences of the expert with clients (where possible). When an expert has these qualities, the probability of a good match is vastly improved.
From this perspective, DM has certainly got additional horsepower in the recruitment area, having access to the entire network on LinkedIn. And this extends to the international capabilities of the LinkedIn network. However, sourcing is only half the battle. The real challenge faced by DM will be in separating the wheat from the chaff in the vetting process. Given the immense size of the LinkedIn network, the process of vetting may be quite challenging akin to boiling the ocean for rare minerals. And this is in addition to dealing with the thorny issues of how to build and/or implement a world class compliance system.
One Big Question
One of the dirty little secrets of the industry is that every expert network provider currently uses LinkedIn, as well as other recruiting tools like Monster, ZoomInfo, Xing, Facebook, etc. to help them recruit. Consequently, one of the biggest questions that Integrity has with this deal is “What is DM actually getting that other expert networks (and many recruiters) currently get for free (or they pay a few thousand dollars a year for)?
While LinkedIn hasn’t shown an interest in cutting off expert networks from using the platform altogether, we have heard that LinkedIn has cut off some expert networks from higher value optional services when their contracts have come up for renewal. If LinkedIn continues this practice with all the expert networks, then DM could gain some form of advantage in their expert recruiting process. However, LinkedIn is not the only tool that expert network providers use to find experts.
The partnership between DeMatteo Monnes and LinkedIn is an exciting development in the expert network space. The value of the LinkedIn network is not lost on expert networks and headhunters, and to have preferred access to this network is certainly valuable. It will be of interest to see if the access to these professionals will translate into high quality matches, giving DM a competitive boost in the industry. In the end, that will be the only way to determine if this deal will pay off for DM and LinkedIn.