6 Myths About Industry Analysts and Startups
This week I attended a fabulous session hosted by Gartner Israel, designed to help CEOs and Marketing executives at technology vendors learn how to get the most out of working with Gartner. As Nancy Shapira-Aronovic, Gartner’s newest account exec put it, “When you think marketing, I want you to think Gartner.” And Nancy should know, since she headed marketing and analyst relations at several leading high tech companies. Listening to the presentations and speaking with my fellow attendees, I realized that there are several prevalent myths about working with analysts:
Myth #1: You have to “Pay to Play.”
Startups have a love-hate relationship with analysts, and not just Gartner. The assumption among many entrepreneurs is that if you pay an analyst firm, they will write favorably about your company. Let me set the record straight. There are analyst firms in which you can pay for coverage; however this is considered “sponsored” coverage, and the document will typically have your logo on the front together with the logo of the analyst firm. You quite literally will be buying the analyst firm’s services to create a white paper or other document, leveraging their industry expertise and name recognition, to produce a piece of content that you can use in your sales and marketing efforts.
If the document contains just the analyst firm’s logo, for example a Gartner Magic Quadrant, or Forrester Wave, or a shorter research piece, your company does not have to pay to be included. It is completely up to the analyst’s discretion which companies he or she decides to mention. From personal experience, I have seen startups get mentioned and even lauded in analyst documents without spending a cent. Of course for the annual surveys like Magic Quadrants and so forth, there are specific criteria that the companies must fit into, for example, a certain level of revenues, or minimum number of enterprise customers, so these types of documents may be harder for a young company to be included in.
Of course if you DO pay for an annual subscription or for consulting hours, it is easier to get more access to your relevant analyst(s), which may (or may not) turn into coverage. But there are no guarantees of this, and you still need to proactively keep the analysts updated about your company’s progress. And there are completely free ways to keep analysts informed about your company, through vendor briefings, quarterly email updates, and so on.
Myth #2: Analysts sit in an ivory tower – we know more about our market than they do
Startup execs tend to be experts in their specific field. Anyone who is passionate enough to create a company around a certain subject is bound to know a lot about it. And it’s true, analysts may have a broader field of expertise, within which your specific niche is just that – a niche. But that doesn’t mean you know MORE than they do. You may know more about your specific product area, but the analysts have a valuable broader perspective. They are out there, day after day, talking to your potential customers.
As Michael Yoo, SVP High Tech and Telecoms Programs for Gartner put it, industry analysts can help vendors get a view into customers’ minds, for example, how do they make a buying decision? What other elements are necessary in the sales puzzle in order for your specific widget to get selected? What are some solutions competing for the same budget that you may not have considered competitors? Exactly the types of questions that are hardest for a vendor to answer on their own. So be careful about having snobby attitude towards an analyst’s knowledge – there is much to learn from analysts if you will simply listen.
Myth #3: We should start briefing the analysts around the time of our product launch
Analysts take a very long range view of the market, and prefer to know what is coming down the pike months in advance, just like their customers. As was mentioned in the Gartner event, it’s best to start speaking with the relevant analysts for your target market at least three months in advance of your official launch, since that will give you time to get feedback from the analyst and possibly incorporate it into the product or at least into your marketing messages. Analysts may not be willing to sign an NDA, but they’re also not going to go running to the competition to tell them what you are doing if you ask them to keep it under wraps. They are used to “off the record” chats, and like anyone, enjoy being given the opportunity to contribute their expertise, rather than having your product and marketing content basically presented to them as a done deal.
Something I was not aware of, but learned at this event, is that clients of Gartner can run their marketing materials by analysts, to receive feedback. For example, you could send a slide deck for feedback, and the analyst could tell you which messages from the slides s/he feels will most resonate with your potential customers. This sounds like a great service that I encourage you – if you are a client of Gartner – to take advantage of. If you are a client of other analyst firms, it’s worth checking if they offer a similar service. It may not be in their brochure, but if you have a good relationship with an analyst they may be willing to do it anyway.
Myth #4: Gartner is the only analyst firm worth talking to
Certainly among IT decision makers in large enterprises, Gartner is one of the leaders, with other companies such as Forrester and IDC also leading in various areas of IT. But there are literally dozens of other analyst firms, and that’s just if you are targeting IT buyers; many of these may be a better fit for your particular needs. There are also lots of startups out there that may be in high-tech, but whose target audience is not IT decision makers.
You can be a hi-tech company targeting veterinarians (believe me, I recently met just this combination). Depending on what market you are targeting, you need to identify the key influencers in that market. And you are right, if it’s not enterprise IT, Gartner is not relevant for you. Even if it is enterprise IT, depending on what you are selling, there may be some niche or “boutique” analysts that cover your specific exact area, and have even more influence than Gartner, Forrester or IDC for your specific target customers.
Update June 24: Nancy points out in the comments that Gartner is no longer just focused on enterprise IT, and has invested in Retail, Manufacturing, Government, Telecom and Mobile, Healthcare and SMBs.
Myth #5: Being placed in the “Niche” quadrant of the Gartner Magic Quadrant is bad. The only place worth being is in the “leader” quadrant
Most analyst firms have some version of the Gartner Magic Quadrant, an annual document that maps product vendors according to if they are “niche,” “visionary,” “challenger” or “leader.” The terminology might change slightly from analyst firm to firm, but the concept is the same. (One boutique analyst firm I have worked with in the past offers something they call a “Market Quadrant,” tee hee). While it’s important for vendors to be included in such documents, there is no shame in being considered a “niche” solution, unless you really are designed for the masses. The niche quadrant is a perfectly respectable place to be.
Usually in the body of the document there will be an explanation of why you are considered niche and not something else. Just getting on the quadrant itself is usually an important accomplishment for a small company, since as I’ve mentioned, there are typically fairly rigorous entry requirements to even be considered. You might be considered niche since your solution only integrates with a particular platform, or because you only target companies with over 5000 employees, or…because you are a small company from Israel.
If it really drives you crazy, put a special effort into how you answer the quadrant questionnaire the following year, and spend the year speaking with the relevant analyst(s), helping them get to know your company better. Companies have been known to move “up” a quadrant as a result of positive analyst relations, but this will only show in the next version of the document, usually around a year later. One tip is that this ranking can be influenced by the number and type of inquiries the relevant analysts receive about your company, so if you have customers or prospects that you know are clients of a particular analyst firm, try to remind them to ask the analysts their opinion of your company. Of course, if you’ve never briefed the analyst and they have no idea who you are, this could actually hurt you, so this has to be just one part of your overall analyst relations program.
Myth #6 Analysts don’t really want to hear from us – we’re much too small
Not true! Every analyst firm has a page on their site with instructions about how to give a vendor briefing. Follow those instructions carefully, fill out the relevant request forms, and you, too, can talk to an analyst. Of course it’s wise to invest some time in researching who is/are the relevant analyst(s) for your specific industry. See what they’ve written, look at their bios, check out their blogs and their tweets in order to determine who you should be speaking with. You are entitled to do vendor briefings once or twice a year at NO COST, even if you are not a client. This is because analysts like to hear about new things in the market. In fact, it’s part of their job. They need to know more than their customers, and this is one easy way for them to stay ahead. BTW before you do your first analyst briefing, check out these excellent tips from a Gartner analyst.
Today there are other ways to get in touch with analysts besides vendor briefings. Many vendors write blogs that are open to reader comments. If you see something interesting on their blog & write a comment, you could very well begin a dialogue with them. Same for tweets – you can retweet what an analyst says, or respond to things that they tweet, and potentially begin a relationship that way. Don’t be obnoxious about it, though. Analysts are people, and they respond to people, not random tweets.
What has been your experience working with industry analysts? Please share in the comments.
Image by…me. Word cloud created in Wordle.
Updated June 24, 2012 – added one sentence to myth #4 based on a comment.