Why Your Startup Needs an Analyst Strategy
The prospect took months to agree to a proof of value for your startup’s product. You and your team spent days working on the pitch, customizing the demo, and dedicating a sales engineer to answer questions. The POV went well, not great, but well enough that you think you’ll get a signed contract this quarter. You send over a contract. It’s a marquee logo you can’t wait to share with your investors.
A few days go by. Then a week. Silence. You’ve written a few emails to the prospect, but don’t send them because you don’t want to be pushy. On the tenth day, you click on an email from your prospect and your heart sinks.
“Hey, my boss called [insert random analyst firm here] and they haven’t heard of you. She thinks going with an unproven startup for this project is too risky given the changes we’ve had in the executive ranks. We have to go with a more established vendor. Maybe we can revisit in a year or two.”
While unfair to many startups, this scenario plays out exactly like I’ve outlined dozens of times a month for a range of companies. Large enterprises use analyst firms for many things, and one of the most common is vetting vendors.
A dedicated analyst relations strategy can mean the difference between success and failure for an early stage enterprise startup. Many founders cannot recognize the value analysts provide, and view analysts as stodgy types living in ivory towers, regaling the unwashed masses with alternating predictions of doom and prosperity. (Don’t get me wrong — there are certainly ivory tower analysts, but they tend to be generalists with little day-to-day influence.)
Founders discount analysts because they don’t understand what role analysts play in a healthy technology ecosystem. They often see them as little more than producers of seminal research like Waves and Magic Quadrants. This is short-sighted.
What do analysts do, exactly? Analysts provide unbiased advice to technology buyers (a.k.a. end users) and technology sellers (a.k.a. vendors). They distill advice from hundreds or thousands of annual interactions with clients in multiple geographies, industries, and company sizes.
While the previous paragraph is technically correct, it’s not very helpful. Analysts typically do some or all of:
Writing reports
Not just the quadrants and cycles and predictions you’re familiar with, but they also write about best practices, new and emerging vendors, industry trends, market size estimates, among others. As a startup, getting a mention in any analyst research is worth a hundred blog posts, dozens of column inches in a press piece, or thousands of favorable tweets.
The press often quotes these reports, giving your company far more exposure. If you’re a client of these firms, you can use reports as social proof a given firm noted your company favorably.
Advising your prospects, customers, and investors
Technology is complex and changing rapidly. Many end users don’t have time to keep up on every market shift, changing tech trend, and hyperbolic headline. They outsource much of this work to analysts, expecting them to cut through the chaff and tell them what matters.
And technology is only the start. Good analysis needs a wide view, bringing in organizational, economic, social, technological, environmental, and legal factors into the equation. Analysts break down not only how a given technology or vendor plays in a given space, but also why.
Analysts establish a public presence
Today’s analysts have adapted their delivery to encompass more than just their clients. The best analysts cultivate a public persona through mass and social media. This shift occurred because their customers read articles, watch videos, listen to podcasts, review infographics, and so on. Analysts need to be where their customers are, hence the increasingly public personas of many top analysts.
The more public the analyst, the more influence that person has.
Concluding
By forcing many companies to adopt technologies and practices, the global pandemic made analyst firms more essential than ever to their customers. Faced with unrelenting change, end users turned to analysts for advice on technology, organizational design, staffing, procurement, and much more. Their pivotal role means your startup needs an analyst relations strategy to be successful. Building that strategy is the topic of a future article.
