Executive Summary

• Consulting is a very different business model than selling research.
• In this article, we will explain our focus on selling research over consulting.

Introduction

The Brightwork website for some time has been focused on giving away free content to obtain consulting contracts. For example, the forms that are currently at the end of each Brightwork article, allow the interested readers to reach out.

In this article, we will discuss why we moved away from focusing on consulting.

Selling Research to Multiple Customers

Companies would often reach out to us to have reports or analysis written. The problem with such arrangements is while they look profitable in the short term, there is often a minimal ability to sell the work to another customer. If that can’t be done, then there is no way to scale the revenues of a research entity, and it comes to resemble a consulting firm — that performs research and publishes research.

The Problem with the Publishing Model

Publishing information and giving it away for free — such as quite a lot of articles at the Brightwork website, only works if you are selling something or if you are advertising on the website. Brightwork could become more of a media company, and just seek to grow readership. However, the problem with this is that the only real revenue mode for and IT media company is industry sources. So driving towards such a goal (as Diginomica is doing) simply leads the revenue sources to undermine the ability to report on topics honestly.

Secondly, Brightwork is too in-depth to ever be a real media company in any case. It is clear that while popular, Brightwork will remain a niche provider of information. And niche providers need to charge high average prices to a small number of customers. This topic is covered in the following excellent article.

A quote from this article is..

“In fact, publishers going forward need to have the exact opposite attitude from publishers in the past: instead of focusing on journalism and getting the business model for free, publishers need to start with a sustainable business model and focus on journalism that works hand-in-hand with the business model they have chosen. First and foremost that means publishers need to answer the most fundamental question required of any enterprise: are they a niche or scale business?

Niche businesses make money by maximizing revenue per user on a (relatively) small user base
Scale businesses make money by maximizing the number of users they reach”

Brightwork = Niche

This approach of selling research to multiple customers is a bit like being more of a product company or more like a software company than a consulting company (an entity that gives away free research to obtain consulting may be a research entity, but the revenue model is consulting).

Companies that are successful in selling research naturally also pickup consulting.

But if one moves to a product model, the consulting is not viewed as primary. The creating and selling of research items become primary. This entirely changes the mindset away from giving away free information. It creates the realization that you must find a way to charge for content. We would rather sell three companies of a $12,000 research item that receives a $36,000 consulting contract.

First, there is less friction, and less competition, as consulting has insane levels of competition. Consulting puts us in competition with companies that could never perform objective research.

Consulting is not document-driven; it is oral and PPT driven.

Our Personal Productivity

Secondly, while we can obtain high degrees of productivity with research and writing, I cannot obtain much efficiency with consulting because there are “people involved,” and things have to be explained, to multiple groups, there is a wall of flesh. There is constant negotiation around scope and pricing and the potential follow on project, etc..

Furthermore, consulting does not scale with just a few people. Consulting companies that thrive financially have large numbers of consultants that obtain projects for long periods of time. These consulting companies employ a layer of “political officers” that cajole and massage the client. It is a distinct skill. Furthermore, the “spot” consulting is an unsustainable business model. The spot consulting model is where a client comes by and cherry-picks your knowledge with a small project, often with the promise of a larger project that does not materialize.

With the spot consulting model, the client hoovers up information, but without “paying the freight” that allows the consultant to monetize the cost to acquire that knowledge. Many of the requests that we get are for “drive-bys” that are for small contracts, but that intend to transfer IP out of Brightwork as swiftly as possible. In essence, a large percentage of people and companies that contact us are IP thieves.

Conclusion

This analysis led us to focus on performing and selling research on over-performing consulting or consulting research. When companies reach out to us, we feel it is important not to jump at a consulting arrangement — even though it would pay — because we are not a consulting company. We are a research entity, and this leads us to keep with our business model of only accepting research inquiries.

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