The Value of an Expert Opinion
Friday, January 30, 2015
Bringing in the experts is a very popular suggestion during periods of uncertainty. It's great to spend a fixed amount (even if it's a very large fixed amount) in order to receive the solution to a pressing concern. Under conventional thinking, as long as the cost of the expert opinion is less than the profit (or savings) to be gained, it's worth the cost.
There's just one problem: experts aren't always right. Here are a few famous examples of experts who made bold statements that turned out to be "not so good."
- Michael Dell - In 1997, the founder and CEO of the computer company Dell was famously asked what he would do if he were in charge of Apple. His response? I'd shut it down and give the money back to the shareholders. Apple recently reported $18 billion in profit last quarter - a sum larger than that of any other company in the history of the S&P 500.
- Irving Fischer - One of the most famous economists of his day, he was asked about the status of the stock market. His answer was direct and to the point. Stock prices have reached what looks like a permanently high plateau. Three days later, the notorious stock market crash of 1929 began. It was the most devastating crash of all time and the catalyst for a decade-long depression.
- Robert Metcalfe - The co-inventor of ethernet was considered to be an expert in all things networked. In 1996, he predicted that the internet would suffer a "catastrophic collapse" within the following year. It's still widely used nearly two decades later.
So what great advice do I have? Expert opinions can't be right all of the time, especially when great changes are in the works. As such, it is often a good idea to take all opinions with a grain of salt and reduce the value of such advice accordingly.
With my disclaimer complete, if you're looking for an expert in the field of pricing, why not contact me, or (if you'd like to take the first steps toward being an expert yourself) purchase a copy of my book on software pricing.