Your tech startup is perfectly poised to disrupt the industry, your MVP is out and beta clients are raving about it. You’re on a path to scale but first, all startups need to answer some life or death questions. How to convince investors your solution is genuinely innovative? Where to expand? What features to prioritise for the best product-market fit? In which category should you play and how to position your offerings to appeal to customer needs?
Industry analysts are the #1 information source for evaluating emerging technologies according to Sapphire’s 2020 CIO Innovation Index –and the #2 source for effective ways for startups to get attention after VC’s.
Analyst relations is often perceived either as obscure or the privilege of large, established, technology vendors. They have ample people resources and a large budget to pay subscription fees.
It doesn’t have to be that way. The upside of AR is immense: being mentioned as a cool vendor or evaluated in a Gartner Magic Quadrant trumps any other form of endorsement to build credibility and get noticed by investor groups. There are further, even more important benefits to engaging with industry analysts. Read on for our top 10 truths and tips for startups on engaging with industry analysts.
1. Analysts are the alpha and omega of the influence game
The influence of these key market players is indisputable. You cannot ignore them. According to IDG’s 2020 Role & Influence of the Technology Decision-Maker Research, industry analysts are amongst the top 3 influencers throughout the buying cycle.
You can visit the IIAR> for a precise definition of Industry Analysts, however, the truth is not so straightforward. The analyst firm landscape is varied, with large firms, namely the FIGs (Forrester, IDC and Gartner), to medium sized market challengers, all the way to the long trail of independent analysts and consultants.
Regardless of firm size, analysts spend their time being briefed by all vendors in their space, speaking to and advising clients and analysing and sizing the market. They evaluate products, write research, speak at their own events and at industry trade shows, alongside custom advisory and consulting projects.
2. Growth isn’t the only outcome… nor the first one
The impact of analyst relations falls into 4 areas: insights, awareness, influence and go-to-market strategy. There are many ways AR can impact these areas, but a snippet of the benefits is laid out here:
- Leverage insights from industry analysts throughout the product life cycle. From inception to launch, starting with feature prioritisation all the way to message testing.
- Analysts do wonders to drive awareness in the marketplace: turning weak signals into trends and shaping categories. For instance ERP was coined by Gartner and Digital Transaction Management was established by Aragon Research.
- Analysts influence buying teams both directly and indirectly throughout the entire purchase cycle. Whether you have an AR programme in place or not, your clients and prospects are advised by industry analysts on inquiries, they read their research or listen to them at analyst conferences and industry events. In general, startups can transfer this 3rd party validation into revenue and scaleups into investment.
- Go-to-market strategies benefit from analyst input as they put your offerings into market context, validate your product and increase footfall via a big industry name at events. Use AR here to accelerate message development and turbocharge your brand communications.
3. It’s never too early to engage
Analysts love to be the first to know about innovative solutions. They know that startups are unlikely to have mountains of customer references, the answers to every single question and a completely polished slide deck. This doesn’t matter too much, since you are a breath of fresh air compared to traditional vendors. You can also use analysts as sounding boards, even if you are in stealth mode, to ensure product-market fit from launch.
You can never engage too early in your company or product’s existence with industry analysts –even at the MVP stage you can benefit from an analyst briefing if you pitch it right. Being recognised as one of Gartner’s Cool Vendors can be a real jackpot, propelling startups onto the radar of technology buyers, vendors and investors.
You may not have the knowledge or the bandwidth from the outset. This is where a specialist agency can help with tightening your pitch, leveraging relationships and using existing knowledge of how to interact with analysts.
4. Analysts will save you time and money
Industry analysts are the Voice of the Customer. You can save time by using their intel to gather business intelligence. Your clients and prospects are already talking to them. Gartner claims its analysts hold over 400,000 direct client interactions per year, Forrester’s clients include 31% of the Fortune 100. Each analyst can aggregate 1000’s of client conversations each year and can distil them into actionable insights. Speaking with 1 analyst is essentially like having a market intelligence team of 10 people.
In addition, analyst insight is key for identifying problems early. Briefing an analyst early can lead to an an inquiry that identifies weak signals based on their industry knowledge. Acting on those insights can help startups avoid expensive mistakes late in product development. Aragon Research for instance helped a Cloud SaaS software vendor rework their pricing structure. This lead to a USD1m deal, which brought new investors and finally, accelerated its M&A roadmap and exit to USD1.2b.
5. Don’t pay to play
An analyst firm subscription is like a gym membership –you get out of it what you put in. You can’t pay for an athletic body just like you can’t pay for a leadership position in Gartner’s Magic Quadrant. What you can pay for is access –but this must be used wisely. Simply paying a subscription won’t generate results. You need to learn how to use the machines and keep up a regular routine to start seeing the benefits. Remember: subscriptions come with inquiries so make sure you are utilising all of the benefits that you pay for.
Importantly, there are also free alternatives to a gym membership –and likewise for analyst subscriptions. Briefing analysts is (or should be) free –but there’s a catch: you only get one chance to make a first impression, so make sure you know what analysts want and how to brief them. While you won’t benefit from their insights, you will occupy their mindshare and startups can leave a lasting impression with only the cost of time.
6. Only buy what you truly need
Analyst firm subscriptions are a significant investment but can deliver precious insights. Reading and internalising analyst research takes time, but can inform your strategy and equip sales teams with precious market and customer insights. A dedicated AR team can glean insights from subscriptions and advise on how best to leverage these within your business. They can also assess which reports you should buy reprint rights for and which will be less beneficial, saving you time and money.
However, we know many are underused by companies. The contracts are complex, but just like when you get your gym-fit body, they require regular upkeep and adaptation for sustained success. It may transpire that members of other teams could benefit from a subscription and need access and others are not using their subscription enough. Set a company baseline, typically aiming to read 3.5 reports per month. Then, by auditing your contracts periodically, you can ensure they are being used by the right people and the services deliver for you.
7. Using a PR agency to do AR as a side hustle will fail
AR can’t be a PR agency’s side hustle as very few have a dedicated AR team. It may be tempting to accept a PR agency’s offer to add AR on top of your PR retainer; yet analyst relations requires a specific skill set and a different set of relationships. For startups, it may seem like unnecessary admin to hire another agency, however, industry experts with knowledge and relationships with analyst firms will provide better results than someone practicing AR as a side hustle.
We see 5 key differences between AR and PR, make sure you understand them and set both functions to be successful in their own right –whilst exploiting synergies.
8. Find the right analysts and influencers for you
You need to understand who out of the thousands out there are the right analysts and influencers for you.There are over 7,800 top B2B tech influencers, 5,000 analysts, 2,100 consultants in over 850 firms. Although only 170 of those firms have 5+ analysts, those 700 other firms cannot be ignored. You don’t need to know all of them –not all will focus on your business area or on your key markets.
It may seem like targeting any Gartner analyst is a foolproof AR strategy. They’re the biggest firm and customers know who they are. However, many independent analysts are influential in their field. If your business fits into their niche, you will benefit far more from their insight and market influence than a Gartner analyst who barely covers your industry.
Dedicated AR agencies and good independent AR professionals have existing analyst relationships and the knowledge of who covers what topics. They will help you navigate the influencer landscape and identify who you need to spend time with to glean market insights and gain market influence.
9. Cut the fluff, prep it, own it.
Analyst briefings require specific preparation. You cannot just repurpose your sales deck for analysts. This runs the risk of committing cardinal sin number 1: presenting analyst findings to an analyst. Even worse if it’s findings from another firm.
Our partner, Thomas Otter, a HRTECH advisor and former Gartner analyst, emphasised on our Clubhouse call that it is always better to go more techie than biz dev for briefings. Analysts are tech industry experts and don’t need hand holding or detailed market background information. You can easily send market data over email afterwards. Get to the meat of your business, unpack your products, present customer references and use cases to prove your value to the analyst.
10. Marathon has AR in it
Analyst relations is a long game. You need to engage early and then often. You can’t win a marathon if you’ve never ran before.
It’s always hard to be patient when you’re in start-up mode because startup culture is so fast paced. But developing those precious human relationships is a long game, so start early. Make sure you have the right AR team and always be following-up: a briefing should end with an action to kick-off another one. Use the fast-pace of your startup but don’t lose heart at the slow pace of AR: categories and quadrants typically take years of patient building-up.
Bottom-line: analyst relations can provide startups with an unfair advantage.
If you can’t remember all 10 truths, at least remember this: influencer and analyst relations do not have to be a “blue-chip vendor only” advantage. Startups can, and should, implement AR programmes as early as possible.
Industry analysts should be in your toolbox. Use them as a resource to:
- Tell you in which category to play and help you scan the market.
- Critique your positioning and help you to differentiate and achieve a better product-market fit.
- Size your total addressable market and help you convince investors
- Point you to the right partners and potential hires to expand and gain market traction.
- Help you understand large vendor (startup) strategies and identify where you are able to complement or challenge them.