Thread by @RomeenSheth

@sarthakgh @GLG @GoCatalant This is one of the best pieces I've seen (even though a bit dated) on explaining why consulting will get disrupted. @claychristensen is too good: hbr.org/2013/10/consul…. I saw this first hand at Mckinsey; the Firm was rapidly moving into adjacent markets to prevent disruption

@sarthakgh @GLG @GoCatalant @claychristensen And this @CBinsights report is money: cbinsights.com/research/disru…

I haven't really found good institutional reading on either company, but happy to give you a perspective on why the businesses work well (can trade over DM in more depth).

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights In short, there is massive inefficiency in the market. If I go to Company X, they charge $1,000 an hour and out of that work, 90+% is done by Employee Y (who makes $100 an hour), I can cut Company X, pay Employee Y $300 an hour and everybody is happy.

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights I get the work done for 30% cost, and Employee Y makes 3x. The real value of Company X is brand. So if you can solve distribution (e.g. marketplaces like GLG and Catalant), then Company X is in trouble.

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights Of course you also have to solve the other issues traditional marketplaces place (platform leakage, etc.) but these 2 have been able to do that because of how strong the value prop is for both the supply and demand side.

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights This alone can't disrupt consulting firms though, because consulting firms have institutional knowledge + teams that work on projects. BUT what if these models can help create better packages of knowledge? Then there's magic.

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights Imagine going to Company X for help with a healthcare project and let's say the project has 4 dimensions: anti-trust, tax, IP, and financial strategy. Company X will put its 4 experts on that project. But what if you could get the BEST experts for each domain to form a new team?

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights This is where these models truly disrupt consulting firms. Knowledge is now delivered at the atomic level; either scaled down to an hourly consultation/deliverable for a specific question or scaled up to an in-depth, lengthy engagement.

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights And the consulting firms are going to get attacked from all sorts of angles. I run a staffing and workforce management company and I see players in this industry creeping in to disrupt consulting.

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights @Axiom_Law is an interesting example of having moved from contract legal staffing to deliver real legal work at significantly more competitive rates (with the agility I described) directly to the end customer.

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights @Axiom_Law The competitor to consulting firms at the end of the day is anybody that can package and deliver knowledge better (more relevant, more insightful, less costly, more quickly). There is going to be no shortage of competitors in this space.

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights @Axiom_Law With all that said, I wouldn't count out McKinsey, Bain or BCG. There's a reason those institutions are who they are and all of them are growing at record pace - top and bottom line. There are a lot of smart people at those firms that very intimately understand disruption :)

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights @Axiom_Law They are all also very active acquirors. MBB is very active in evaluating/buying companies directly pushing the ball on alternative delivery models for knowledge or developing technologies that can scale/repackage what they are doing.

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights @Axiom_Law BTW to link back to the original thread - the reason @GLG and @GoCatalant are successful is because they haven't used tech to automate away the work humans do and stopped there. They've used tech to scale time. This is really the value prop of @atrium at the end of the day.

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights @Axiom_Law @atrium When you are going through a startup financing, any rando can you give docs (that's easy). It's the hand holding and ensuring your startup isn't ever going to have a headline that reads ("Silly cap table mistake costs founder a gazillion dollars") that's the valuable part.

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights @Axiom_Law @atrium Anybody looking to disrupt advisory services needs to (a) have tech that frees up time for more human interaction and (b) have the capability to deliver world class human interaction . Consulting is not about the excel model; it's about change management, trust & communication.

@sarthakgh @GLG @GoCatalant @claychristensen @CBinsights @Axiom_Law @atrium The best high end consultants aren't the IQ guys/gals; they're world class EQ folks!

Tweetstorm finished :)