Are the analysts laggards or have startups neglected to brief them? [Startup Saturday]

rocket-for-startups.jpgHere is a comment from a blog that is representative on the attitude about analysts at major firms covering an emerging technology:

“…I think that the Social Revolution is being underreported by Gartner et al, because the enterprise world is a laggard …”

Or maybe the thought leaders and leading providers of an emerging technology market (in this case social media technology and services) have not done a good enough job briefing the analysts and sharing market intelligence.

Myth #1 – The analysts know everything (see Analyst Myths Revisited)

The commenter was right that a significant portion of the advisor analysts’ client base is large enterprises. It is also true that most enterprise CIOs are inherently conservative in adopting technology. So advisory analysts, like Gartner, that get a lot of data points from their end-user client inquiries will not hear about cutting edge uses of emerging technology. Another critical fact in this situation is that an important source of information for the analysts is the vendor community. However, tech startups and small vendors are less likely to have formal AR programs. This means that the emerging technology crowd is not making its point-of-view heard.

So it is logical that if only one side of a debate (e.g., enterprise IT managers concerned about the risks whatever new technology) is talking to the analysts then that side’s opinion and factioids will be overweighted in research. Equally damaging for emerging technology is when end-user clients don’t talk about a new technology or its vendors at all. We know this is happening in places where social media such as hosted wikis are being used without the express knowledge of the IT department, Gartner’s primary enterprise clients. If the startups themselves and the end users are not talking with the advisory analysts about a new market then it is very likely that these analysts will not pay any attention to that market.

Conclusion: the emerging technology vendors have to get their point-of-view known to the analysts via briefings in order for the analysts to pay attention to them and their market.

I bet that some of you are getting indignant at this point. “Wait a minute, why is it my responsibility? Shouldn’t the analysts make the effort and actually research the market?”Sure, in a perfect world, but we don’t live in a perfect world. Analysts are people too, pulled in many directions, so your emerging market might get lost in the clutter of daily life. In addition, they do not always get the institutional support to research emerging markets that do not interest their end-user clients.

No doubt many of you are now thinking: “Ah, but don’t you have to be a client to brief the analysts?”

Myth #2 – Analysts opinions are bought; the more money = better results

The real “currency” to use with the analysts: information and access to executives and domain experts. However, while it is not required to be clients in order to brief an analyst, startups have to have their acts together when requesting a briefing or risk being ignored. New readers to this blog should checkout the “Startup Saturday” series of posts for tips and tricks on how to approach and brief analysts.

SageCircle Technique:

  • Startups staff can educate themselves about Analyst Relations 101 through reading AR blogs, attending seminars and webinars, and finding a mentor
  • Startups can look for “bite-sized” services that provide AR insights and tools at modest prices
  • Startups should use best practices to generate a ranked analyst list that helps them prioritize their briefing efforts (hint: it is not always the analysts at major firms that deserve a high ranking)
  • Startups should ensure that they have rock solid message and elevator pitch before approaching the analysts

Bottom Line: Rather than wasting energy railing against the “stupid analysts,” savvy startups use sweat equity to educate the analysts. This provides several benefits to the startup: a) influencing the analysts’ world view so that it matches the startups; b) obtain market intelligence on the cheap; and most importantly c) generate leads as aware analysts start mentioning the vendors in research notes, speeches and inquiries.

Question: Analysts – What are common mistakes startups make when approaching you to request a briefing? Startups – What holds you back from briefing the analysts?

Do you need “bite sized” AR services? SageCircle can Help – SageCircle has created a series of offerings priced for the startup budget including:

  • Executive Briefings ($495) builds executive support for AR leading to sponsorship
  • AR Briefings ($495) for the marketing/AR/PR team builds knowledge about a key AR issue
  • Mini-Workshops ($895) teach startups the “how” to accomplish a task through a bundle of training, content, tools and inquiries
  • Webinars ($95) address a key topic and lets you ask and heard others’ questions
  • AR Effectiveness Seminar ($995) building the skills foundation for the fledgling AR professional

Visit our website or contact us at info [at] sagecircle dot com or 650-274-8309 for more information about how SageCircle can help take your AR program to the next level.

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4 Responses

  1. Another excellent post Carter. I spend way too much time chasing down vendors trying to get a briefing. This is more an issue with small rather than larger vendors. Calls and emails often go unanswered, and I know I’m contacting the right person. After a while I just give up and when a client asks “why aren’t you covering x, y or z vendor,” I tell them why. It definitely impacts our perception and the way we communicate about a vendor.

  2. Good analysts are realists. Many start-ups are run by idealists/wishful thinkers with inadequate business development skills/support, and the majority therefore fail to make an impact as a result. The good analysts know this so qualify requests from start-ups hard.

    Failure in the market is so often down to a ‘revolutionary’ rather than ‘evolutionary’ or ‘extending’ mindset. From time to time, the revolutionary approach leads to massive success, but this is rare. For the most part, it just alienates the start-up from the decision makers in the target market who are generally trying to avoid rather than look for disruption.

    My advice to start-ups is always to build a bridge between the stuff to which the CIO and their management team is committed, and what is on offer from the start-up. If someone approaches me with supply chain related enterprise level solution and cannot articulate clearly how they add value to an SAP or Oracle eBusiness Suite estate, then I do not take them seriously. If they are offering a collaboration or information management solution and cannot explain how they fit into a Microsoft Exchange/SharePoint environment then they have little credibility.

    The point is that dismissing the current incumbency is not an option if you want to do business in the enterprise space. The chances of a proposition succeeding that does not fit with existing major investments and commitments are pretty remote. Whilst you can take idealistic stances like pointing out that enterprises would never have ended up where they are by design (an often heard line from start-ups), the fact is that it’s kind of irrelevant. Enterprises are where they are and having a start-up preaching that it should be otherwise doesn’t actually help anyone, least of all the start-up.

    On a positive note, there are some great ideas that are born out of the start-up environment, and I personally find it interesting to allocate at least some time to talking with them. The ones that really grab my attention, however, are those that say “this is how we are going to add value in those big accounts” – i.e. those that explicitly acknowledge the existence of the current enterprise IT landscape and the strategic relationships that are associated with it.

    To put it simply, show me the bridge to the real world and I am lot more interested.

  3. Further thought (and something we discuss in the Technology Garden book):

    With regard to ‘unofficial’ use of technology and external services that are not formally endorsed by the IT department, of course CIOs are aware that this is going on, as are enterprise focused industry analysts.

    In fact, we have had some great discussions with CIOs who not so much turn a blind eye, but watch with interest as such activity is taking place. Instant messaging, social media and even hosted CRM and information management systems have been adopted at either a local or individual level within user communities over the past few years.

    Some of this activity fulfils a transient or very localised need and therefore doesn’t go anywhere. In a well run IT department, however, if popularity seems to be growing, then the service/solution type will be formally embraced – which basically means that IT will make sure it is optimally implemented (e.g. from an integration and scalability perspective), manageable, supportable, securable, compliant with relevant regulations, etc.

    If it gets to this stage, then it is common for IT to have to deal with fragmentation – e.g. when users adopt instant messaging unilaterally, you typically start out with activity around 3 or 4 different services, and the same will be true as IT organisations look at formally embracing and supporting social media. Unfortunately, while notions like consumerisation and user freedom are nice in principle, too much fragmentation translates directly to business cost, risk and lower overall effectiveness. This is why you often see rationalisation or replacement as the solution/service area becomes an integral part of the IT landscape.

    It is at this point that reality kicks in for start-ups, who often get displaced as part of this natural rationalisation and formal adoption process. Best case is that one or two will become a standard for the organisation. Worst case (for the start-ups), is that the IT department turns to one of its trusted incumbent suppliers for help. In social media, for example, IBM and Microsoft, will be common ports of call.

    This is why, circling back to the original point in my last comment posted, start-ups really need to have a view of how they fit into the existing enterprise IT landscape and why those that can articulate a good strong story in this area are more likely to get attention from enterprise focused analysts.

    I think to argue that either CIOs or enterprise focused analysts are somehow backward, too conservative or ill-informed is missing the point. If we stick with the social media example, the main thing a start-up needs to do is understand the complexity and reality of the environment being targeted, and then be able to articulate enterprise IT friendliness clearly as well as a strong end user proposition. The latter in itself is not good enough for sustained success.

    On a different note, I would like to say that I am really supportive of the regular focus on start-ups on SageCircle. The problem is that when it comes to analysts, many start-ups don’t know what they don’t know, and therefore end up trying to engage through their PR agency, which is generally a mistake. I hope some of my feedback here helps to underline why it is sometimes frustrating when start-ups get a great reception from journalists, who love stories about disruption and challenges to the status quo, then a lukewarm response from analysts, who are advising enterprises on how to actually do things in a sensible and sustainable manner in very complex and constrained environments.

  4. […] very small vendors, open source or otherwise, do not have formal AR programs. As we pointed out in Are the analysts laggards or have startups neglected to brief them?, vendors should not be annoyed if they or their approach to a market is under covered by analysts […]

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