• Recent Posts: Influencer Relations

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Boutique Analyst Firms: Pretenders and Contenders

The analyst landscape is constantly changing. In some cases, an analyst leaves a larger firm to start a boutique firm because he or she wants the flexibility that comes with being part of a smaller firm. For instance, former Forrester analyst Charlene Li responded to a Twitter questions about her new firm with the following tweet: “New company is flourishing, lots of activity and best of all, lots of freedom and autonomy.” In other cases, acquisitions by larger firms or layoffs cause the formation of new boutiques. To the vendors these new boutique firm requests represent the opportunity to interact with a potentially influential analyst or to waste valuable time and money. 

Because former analysts from other firms started many of these new boutiques you must carefully look at the potentials for influence in your specific market space. The problem for AR is deciding which boutiques to ignore, which to devote minimal resources to, and which to dedicate significant time and effort.  In the Online SageContentTM Library article “Contracts – Pretenders and Contenders,” SageCircle discusses how to establish service levels for responding to requests based on ranking and tiering of analysts. This article includes the downloadable SageTool “Decision Framework on Boutique Firm Status.” However, due to the sheer number of startup firms in any year, this article’s research needs to be extended to include your criteria that specifically focuses on new boutiques.

Some startup firms have only a couple of former practitioners, where the goals of the firm are to generate enough revenue to match their former salaries and to maintain their status as analysts.  In some cases, the principals are coasting on reputations developed at their former employers, rehashing work they did previously, and failing to generate new business, research, and ideas.  These are the firms that SageCircle categorizes as “pretenders.”  At most, pretenders receive only Tier 3 status, supported through none-to-many information delivery channels (e.g., analyst newsletter, AR blog and access to the analyst portal). 

On the other hand, there are boutiques where the principals are aggressively seeking to grow their company and contribute to the marketplace through placing quotes in the press and landing speaking engagements to increase firm visibility. These firms, categorized as “contenders,” are intent on generating salient new research and developing clout in their markets.  They can be accorded Tier 2, or even Tier 1 status, depending on AR’s analysis of how far the firms will go and how closely they match the vendor’s market.

Rapidly assessing contender vs. pretender status is important for AR because there can be a significant payback by developing an early relationship with an up-and-coming boutique. In the short term, the payoff comes from exposure for your company in the analysts’ press quotes and speeches, thus supporting AR’s “Shaping Market Perception to Generate Leads” strategic initiative.  In the long term, the payoff comes from enhanced company revenue as boutiques developing technology buyer client bases start impacting individual sales opportunities.  Technology providers who bet early on a boutique can often develop an enhanced relationship that later technology providers cannot match.

SageCircle Technique:

  • Separate the contenders from the pretenders by analyzing the 10 factors* SageCircle has identified as key indicators, including analyst status, content, marketing and business development and quotes in the press
    • SageCircle Advisory or Online SageContentTM Library clients have access to the full set of evaluation factors, deeper discussion and “Decision Framework on Boutique Contender or Pretender Status” SageToolTM
    • SageCircle Advisory clients can set up an inquiry to review their decision about a boutique firm
    • SageCircle Advisory clients can request our analysis of boutique firms to save time
  • Determine your investments in the boutiques future
    • Upgrade status, i.e., moving up the ranked analyst list so they get a higher tier
    • Enhance flow of information by AR doing overview briefings
    • Provide time for occasional executive conversations via the phone
    • Generate visibility by recommending the boutique’s analysts for speaking engagements and press interviews
    • Buy token contracts
    • SageCircle Advisory clients can set up an inquiry to review their potential investments in a boutique analyst firm

The access to key vendor executives is an interesting “perk” for contender boutiques. This offer is doubly valuable as it is both an excellent research opportunity as well as a great marketing tool in the form of executive name-dropping. 

Note that this discussion pertains to whether you should add a boutique to your briefing list and how highly to tier its analysts for briefing and service-level response purposes.  It does not touch upon whether to buy services from a firm for in-bound research consumption.  These decisions should be made independently. It is both possible to brief a boutique firm without purchasing their services or to decide not to aggressively brief a boutique firm’s analysts while still buying their services for internal use.

Bottom Line: Existing or newly-launched boutiques are a great danger or a great opportunity for AR. A danger in that they can siphon off scarce resources. An opportunity in that investing in them early will generate a champion when they become more influential. Making the effort to determine whether a boutique is a pretender or a contender is well worth the time.

Question: How do you evaluate the status of boutique firms?

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2 Responses

  1. […] has the potential to be a contender (see Boutique Analyst Firms: Pretenders and Contenders) with serious visibility and […]

  2. […] AR should develop a framework that will help them determine consistently whether a newly independent analyst is a pretender or contender […]

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