I have always been somewhat uncomfortable with intermediaries whose business models depend on friction in a market.
Not because intermediaries cannot create value. They certainly can. They help buyers and sellers find each other, facilitate transactions, and sometimes assume risks.
But what happens when the friction they help overcome could be eliminated altogether?
And what happens when maintaining that friction becomes more profitable than removing it?
The Bread Analogy
Imagine buying a loaf of bread for €5.
The exact same bread is available elsewhere for €3.50, but you don’t know where.
An intermediary knows and sells it to you for €5.
There is nothing inherently wrong with this. You are willing to pay the price, and the intermediary earns a margin.
But what happens when everyone can instantly discover where the bread is available and compare prices?
The intermediary’s information advantage disappears.
Unless the intermediary provides additional value, there is little reason to continue paying the premium.
The interesting question is not whether the intermediary deserves to make money. It is why the information problem should continue to exist.
The Consulting Market
Consider the market for independent consultants.
A customer needs an experienced consultant and has a budget that reflects that expectation.
The assignment passes through one or more intermediaries, each taking a percentage of the hourly rate.
By the time the offer reaches the consultant, the compensation may be considerably lower.
This is usually discussed as a question of margins.
But there is a more important consequence.
An experienced consultant might decline the assignment because the compensation is too low. A less experienced consultant might accept.
The customer could therefore end up with a less experienced consultant, despite having a budget sufficient to attract someone more experienced.
Higher compensation does not automatically mean higher competence. But intermediary margins can exclude qualified candidates who would otherwise have accepted the assignment.
Market friction does not merely consume money. It can influence the quality of what the market delivers.
What If AI Removed the Bottleneck?
Today, customers often rely on consulting brokers to reduce the number of candidates they need to evaluate.
Each broker presents a small selection of consultants. The customer compares a handful of CVs and selects a few candidates for interviews.
This makes the process manageable.
But it also means that potentially excellent candidates never reach the customer.
We have solved the problem of limited human information-processing capacity by restricting access to the market.
What if that limitation disappeared?
Imagine an open digital marketplace where customers publish assignments and consultants make their capabilities and availability discoverable.
AI agents help consultants identify relevant opportunities and prepare applications.
The customer’s AI evaluates all applications, identifies the strongest matches, and explains its reasoning.
It can even prepare individual interviews designed to verify each candidate’s claimed experience rather than simply repeat what is written in the CV.
The customer makes the final selection.
AI agents then help both parties compare contractual terms and prepare the agreement.
No traditional consulting broker required.
Not because we have automated the broker’s existing process, but because we have removed much of the friction that made the broker necessary.
And the money previously consumed by intermediation becomes available to reduce costs, improve compensation, or attract more experienced consultants.
Reducing market friction can improve the value delivered, not merely reduce transaction costs.
But Who Owns the Marketplace?
There is an obvious danger.
What if we replace numerous consulting brokers with one dominant AI marketplace?
We might eliminate some friction while creating a new gatekeeper.
That is why I believe three principles are essential:
Openness. Interoperability. Transparency.
Customers and consultants should be able to use different systems and AI agents without losing access to the market.
They should understand how candidates are evaluated, what commercial terms apply, and what they are paying for.
The marketplace still needs infrastructure, security, identity verification, and governance. But these services need not depend on collecting a percentage of every hour a consultant works.
AI does not automatically guarantee an open and transparent market. These are choices we need to make when designing the systems.
From Managing Friction to Eliminating It
There is a broader pattern here.
When a system contains friction, we often introduce a function to manage it.
The function becomes specialized. It develops processes, tools, expertise, and eventually a business model.
Over time, we become so accustomed to the function that we stop questioning why it is needed.
We optimize the handling of friction rather than asking whether the friction itself could be removed.
AI creates an opportunity to reconsider this.
Not simply by automating existing activities, but by making entirely different ways of organizing work and markets possible.
Some intermediaries will continue to create genuine value through expertise, assurance, coordination, or risk management.
But those whose primary advantage is that buyers and sellers cannot efficiently find, evaluate, or transact with each other may face a more fundamental challenge.
Their traditional function may no longer be necessary.
A Final Thought
We often discuss AI in terms of productivity.
How can AI help someone perform an existing activity faster, cheaper, or better?
But perhaps we should also ask a different question:
What activities would no longer be necessary if AI removed the problems that made them necessary in the first place?
In the consulting market, reducing friction could give customers access to better consultants for the same money.
And the principle extends far beyond consulting.
The real opportunity is not just to make intermediaries more efficient. It is to make markets more efficient by removing unnecessary intermediation.
Leave a Reply