Hello, and welcome, everybody. This is Joe from startup rate dot
io. Welcome you to another episode
of start up rate dot io, the authority on German Swiss and
Austrian startups. Today, I do have Chris with my. And,
no, it's not my cofounder. It's Chris Holcher. Hey, Chris. How are you
doing? Hey, Joe. Good to be here. Thanks for
having me. Totally. My pleasure.
Today, we will be talking about analyst relations.
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done, Chris. We're talking about here analyst relations,
but I have a financial services background
and which I have been, what I've
been talk what I hadn't had in my
mind when when when, you started
approaching me with analyst relations with some investment analyst.
But that's not the case. We are talking about analyst
relations in big, companies like
Gartner or Forrester. But before we get into that,
how did you get this interesting and very unique job?
Well, get say I'll I'll try cut the long story short. So I I've always
played at the intersection between innovation management, marketing,
product marketing, product development. And,
roughly 15, 20 years ago, I was with a large company called BT Global
Services. I was a product manager there and a product marketing
manager, later. And I was approached to
run, a Gartner, Magic Quadrant
submission. I had no idea what that was. In short, Gartner is the
largest analyst firm in the world, and their Magic Quadrant is their flagship
product that is rating, vendors in
that specific market. So, I was asked to run that
submission for the entire company, so I did, and we did extremely well.
We went from a niche vendor to a leader in that Magic
Quadrant. So they asked me again and again and again, in the
following years, and we did, very well. It's, was a thing
that immediately clicked with me. And, at some point,
I made the switch to run their entire, analyst
relations, program for various parts parts of their portfolio. That was the
compute portfolio, but also their innovation portfolio. And,
one thing that I've heard over and over again from analysts was that they love
to speak to the real innovators in the market, which is very often
startup, but they cannot really afford spending all that much time with
startups because young companies very often have no conception of
analyst relations. And if they know about the term at all, they often have
misconceptions about it, which makes it not time well spent for an
analyst, to reach out to startup, sadly.
So at some point, I decided to make the switch, step out of
that mega player, and focus my knowledge and my
understanding entirely to the benefit of startups and bring that understanding
into the ecosystem that needs it really the most. And that
is how I got into analyst relations for startups.
Mhmm. Before we
get into how you could do that, can you tell
us a little bit of reasoning the benefits why startup
should do that? From our conversation before,
what I understood is it's especially important
for startup in b to b space because a lot of the people
who make purchase decisions, cover
cover themselves, cover the jobs, when they can say,
look, it's in this Forrester. It's in this Gartner analyzers.
It's in the metric quadrant, whatever. So basically,
they have external validation of their decision.
Is that one of the big points? That is absolutely true. Yes.
Well, maybe very quick introduction what analysts actually are.
So analysts, there are roughly 10,000 analysts in the world,
scattered around 700 different firms, of which Gartner is by far
the largest one. Then there's IDC and Forrester as the big three.
Then there's a medium section, also generalists,
like like, Omdia or GigaOm, RedMonk or so that
they that have, basically a broad spectrum of
areas that they cover, but they're medium sized firms. And then
there are a whole lot of specialists. Like, in Germany, we have Koppenger
Koehl, who are security specialists and identity, men
specialists, so very good at what they do, or IoT Analytics, also
a German company, very good at what they do, obviously,
Internet of Things related topics. But they're small. They're maybe,
like, 15, 20, or a 100 people, so very
specialized. So, also important to understand
the you know, why analyst relations is important. It's important to
understand what they're used for. And the first,
the first thing is, as you mentioned, buyers are using analysts to
protect them kind of from overly confident marketing. So,
you can win new customers through analysts, and that is,
because, in b to b tech, 3 and 4
CIOs say that analyst publications and their direct guidance,
on their purchasing challenges are,
our analysts, are are there are the number one impact in their short
listing and buying decisions. And that is, you know, just to
give you a dimension, a single analyst has 750 to
2000 interactions with buyers, and
and potential partners of yours, per year. That is a single
person. And you cannot just leave that, impact,
to your competition. Then there is a second reason.
So, of course, through all those interactions that an analyst has with a with a
buyer, they get really deep understanding
of the demand and of their motivations, of their architectures,
frankly, also of the the entire decision making context. So they
understand extremely deeply and extremely at a great breadth and
depth, they understand the market. So vendors
can use that, on an aggregate basis to
inform their portfolio decisions, their road map decisions, their go to
market, their messaging, what resonates, what kind of language works with
buyers and whatnot, at what point in time, and for what reasons and all
that. So you can make better informed decisions much quicker.
And we both know, and our audience probably as well, that,
especially with startup ups, it's all about making bolder decisions
faster than your rivals. So, that is what
analysts can, absolutely essential doing,
especially in the b to b tech world where where everything is so fast paced
and it's very unforgiving. And then, of course, you can get a quite a
marketing boost out of, analysts once you get mentioned in one of their
reports. And that doesn't have to be the magic quadrant. In fact, the MQ is
not not really designed for a starter. It can
be a 1000000 other types of reports like investor reports or,
innovation reports, technology reports, market reports, and so on. There's a
plethora. Emerging tech radar is is a thing or
Gartner hype cycle report. If you get mentioned in there as
one of a handful of example vendors for a specific,
technology, you can use that as third party validation of your
relevance and your your quality really as a vendor
to to people who may consider, buying your thing or
to, you know, have third party validation for your thought
leadership paper and things like this. So this can be very, very
impactful. And last but least, also investors, of course, do
inquire with with analysts to qualify innovation, to
qualify trends and demand. And they, you know, they they
want to see AR savvy startup because
it tells them that you are of a certain maturity in your management
and you understand this super important part of the playing field.
And, and, of course, that entirely changes their
their risk calculation and thereby impacts
your term sheet, if you are on the radars of the
most, influential analysts. So one thing that, you know,
the the the the hyper successful
startup of the last years, companies like CoreAI, for
example, they have been on the radar of,
analysts very, very early on. They've been a cool vendor with Gartner,
I don't know, 7 years ago or something. And just 2 years later, they made
it into one of their flagship reports, and now they are a multibillion dollar
company because of the enormous impact
of industry analysts. And, that's kind of the reason
why you want to be, in that game.
Sounds pretty much like a marketing boost
or a marketing shortcut, a marketing hack to to be
in there even though it's not as easy. Do step
x then do step y. It's a little bit more complicated.
But in general, you have a
few steps you can do to approach
an analyst. How would you
prepare as a startup to get there?
We may tell the audience that we are right now looking a little
bit at, a theoretical approach to
do an analyst briefing to one of those big analysts
and tell him or her what is so special about
your product, what's so special about your company, why he should include
you. Yes. Okay. Let me say one
thing just before I answer your question, to
to to handle the assumption that, analyst relations is predominantly
a marketing thing. Marketing is probably the most visible part
of it. But, I've done a lot of research myself together with
the University of Edinburgh Business School, and we may get to that later,
that the marketing section of analyst relations, the value that you're getting is
only a fraction of the actual business value that you're getting. It's the most
visible bit, but it's not the most strategic bit in many cases.
So the most strategic bit is actually sharpening your your product market
fit, sharpening your go to market, accelerating your road
map, making the right decisions, taking risk out of your out of your
journey, attracting better investment, and all that. So that's all non
marketing bits of value or even attracting,
and keeping the best talent in the world as you can demonstrate
in your in your hiring, conversations that you are working with the
best informed brains in the market, and that they maybe even have access
to all that research and all that all that data and and insight.
That can really set you apart from others, and it helps you attract and keep
the best talent in the world. So it has a plethora of different
values, and a good analyst relations specialist can help you,
get hold of all that value far beyond just the marketing bits of
it. Although, I agree the marketing bit is, of course, the most
visible one, I mean, by nature, of course. Now
to answer your question, so what should you do, as as a
step? Step 1 is you, should
make the, strategic decision, first of all, to
qualify, is this for me or not? So
analyst relations is not for everyone. Analyst relations
is only relevant for real innovators.
An innovator does not need necessarily need to be
just technology innovation. You can be an absolute
me too product, but you can be hyper innovative on the way how
you deliver it or on your pricing or on your service
or on your you know, you bring it to a new region in the world
where it's not been available so far. So that can be, an
innovator as well. So, but understand just
doing the same as everybody else in the same way as everybody
else, analyst relations will not be for you. And that is not to dismiss,
you know, that kind of business. It can be very profitable business. It's
just not of relevance for analysts. So you need to find out, are there
analysts covering my thing, and is what I'm doing in the way that I'm doing
it relevant enough for analysts to actually play with me? And
I can help, or people like me can help,
startup qualify this very quickly, really.
Now, step 2 would be to make the conscious decision to
start analyst relations as early and as strategically
as you can afford if you're in b to b tech because it is
of enormous impact to the success of,
companies in that field. So Into terms of of a startup
up maturity, when you do have product market fit
around series a, when you're already, looking at around €1,000,000
annual recurring revenue, that would be the point when you would start
it? No. That that that is what most,
VCs tend to, where where they have
an action item of analyst relations on their on their checklist.
But in order to be able to tick that off, you need to engage
much much sooner. Because especially in the United States, for
example, doing analyst relations is a standard
much earlier in the process. And if you ask analysts, and I've done that with
the research that I've been doing, they are
startup much, much earlier even while you define your minimal viable
product, even when you're still in beta phase, even way
before you have your first, reference customers or so.
So startup always assume they need to have a certain revenue or they need to
have reference customers or they need to have a certain maturity. And analysts
typically say, no. No. No. No. No. We want to hear from you before
your pilot customers have started to mess with your ideas. Because we
want to understand your original thinking. Because we are
analysts. We're not, you know, we're not influencers. We don't have
an influencer proposition where you pay us money and then we say nice things
about you. We are here to analyze, to understand, and to
aggregate thinking. So, they want to speak with
you much, much sooner, and they're open to being reached out to
very, very early even in your concept phase. And you need that early
engagement to build up, to use the time, to build
credibility, to build their confidence in your
idea, in your delivery, in your completeness of vision, into your
ability to execute so that they can actually, at some point, be
sure that when they recommend you to inquiring
buyers or inquiring partners or investors, that
they are not recommending bullshit. So you need a
certain time to build that confidence, and
you should start that as early as possible. The cool thing
is doing briefings with analysts is always free. So
there's no reason, you know, to say you couldn't afford it,
because you can start doing briefings very, very early on
without spending a dollar or a euro on it or even a cent.
And although briefings are typically a one way street where
your information goes to the analyst, if you do them well, you can
even get some feedback for your for what you're telling them
about. And that can be enormously valuable.
One client of mine has has has received,
you know, recommendations to just alter their their propositions
slightly and target specific,
you know, personas at certain types of companies, and now
they're getting literally hundreds of projects requests from Amazon
Web Services. So it's done, you know and it's
an qualitative, support that you're get, and it it
is not always the same. It has a 1000000 different shapes, but it can be
life changing. So you should start very early and be very clear
about how you do it. Now once you've done that decision, the actual
first step would be to identify the right analyst to speak to because
they're all different. You know? As I said, there are 10,000 different analysts in the
world, industry analysts in the world. Some are focusing on technologies,
others are focusing on certain market segments, others are
focusing on functions like marketing or or,
or finance or what what have you. And most of them have a mix of
all of this, and all of them have their different backgrounds and histories and
and, research agendas. So you need to really figure out who
is best positioned, to be interested in what I do
and best positioned in terms of the companies that inquire
with that analyst to be relevant for me. So,
that is step number 1. Of course, that is quite difficult, and it's
quite hard for someone who is not a professional in analyst
relations to to figure out that fit. And, honestly, I wouldn't really
know how to do that if I if I, you know, weren't in that
space. So I would recommend go get yourself,
someone into your team who has an analyst relations background who can help you do
that or, hire an external specialist to help you through
that phase. And that doesn't take forever. It takes a few weeks or or
a couple of months, depending on how far you want to go, but
it's, time and money very well spent. Once you've done
this person also should help you to to actually prepare
and do the rebriefing. If you threw together
a a PowerPoint in last minute, just mix the few decks
and, the the the and,
don't really know what's on each slide, it won't
it's very likely you won't get a second preview with this analyst. That
is very, very true. Don't make the mistake
of just you repurposing your marketing slides or your your
sales pitch or your investor pitch. This is the wrong information
delivered in the wrong way, and it's typically, you
know, at the wrong depth and and and not in the language that
an analyst would require. So,
go get help, you know, structuring your briefing, focusing
your briefing, and also you need to be very, very precise in the
language that you're using. So a vision is not the same thing as a
mission. A purpose is not the same thing as a vision. A strategy is
not, I say, not a long term plan. A plan and a
and a startup are 2 very different things in nature.
So analysts are very, because they are they are all about
telling things startup. So they need to understand very precisely what
you're about and what you're not about. So you need to use very accurate
language. And, if you're getting that right,
it sets you apart from, you know, 98% of your of
your rivals already. And by the way, it's also very helpful to understand your
own business in that very accurate language and and make these
decisions. So, yeah, design,
a winning analyst, introductory briefing. And
to give you an idea, the
the structure that I've developed, for for myself
is is around 10 slides or so, 10 content slides. You typically
get 30 minutes. Of those 30 minutes, you want to
reserve at least 5 to 10 minutes for q and a at the end. That
gives you a maximum of, like, you know, 20 or
so minutes you can actually present. And in those 20
minutes, you need to thoroughly thoroughly explain
your business workings. And,
and that takes some experience. So, if
I can I would recommend get yourself, an author relations specialist
who can, help you design that?
Once you've gotten the feedback from from the from the analyst,
ideally, a feedback not like, thank you very much. Don't call us.
We call you. That would that would mean that would
mean you haven't made the cut. But if you get a feedback, like, that
was very interesting. I would love to stay in touch. I would
love to get a follow-up on this particular aspect. I would love
to speak to one of your pilot customers or one of your, you know,
gartner, or could we do an extra session on this particular aspect?
That tells you the analyst has made the decision to let you
into their, world of thinking. So that means you are in
fact relevant to their end customers who are inquiring
about the thing that you're offering. So that tells you
it's a very thorough, a very reliable way
of proving product market fit because that
analyst is so in-depth, connected to
your target audience and to the wider market in all sorts of
way because they do nothing else every day. So,
that means you're in. So you're now on the radar of that analyst. The next
challenge is to get from the radar onto the map if you to stay in
that picture. So you want the analyst to actually put you
into one of their reports, into their, you know, publications
of whichever shape or form, and, that
you will need to work on. The the
big dimensions are complete your completeness of vision and your
ability to execute, and you need to demonstrate both,
over time through repeated briefings and through repeated
interactions with that analyst and proving to the analyst that you're
working along your road map and, you know, you're following up on your on your
promises and you you slowly, gradually build
their confidence in your product, in your ability to
deliver, in your strategy, in your ability to follow through and do the
things that you you know, to execute the things that are in your startup,
and to build that confidence that at some point, he or she is confident
to recommend you, not just in direct conversations to
to people inquiring about the type of product that you bring to market, but
also to put you into their, innovation reports
or their, their,
yeah, their their bigger thinking about market trends and and predictions and and
things like that. So that would be the next phase, which then
consists of, a 100 different actions that you will need
to take and and and build this confidence.
But I have to admit, with now around
20 20 plus minutes in recording, I
do believe we have made already a
pretty big, uh-huh, moment for many
founders out there. Just to have in mind
that not magically some of those companies
will have you appear in the report, but it's actually
pretty tough work to get in there. You likely need a
specialist. You likely need quite some time
in order to get this done.
It does cost some money. Do do you have a pretty rough
idea what happened to few of your clients, what they are
doing? I know it's it's not a one on one relation very likely. I can
give you a couple of, examples. So,
most impressively, maybe, when I worked with a company in
the communication space, doing analyst relations,
right, so to say, to cut it short, suddenly
led to 5 times more more leads that they generated.
At the same time, with the leads that follow through,
they had a a much better win rate and, the the deals
that they were able to win suddenly went from pretty
operational types of deals to far more
strategic levels of conversations and far more strategic,
deals that they were able to close. So the individual value of the,
of the individual deal was much bigger and which led to
a a I'm not I hope I don't get this
wrong. So they I've they have 5 times the leads and 4 times the
revenue that they generated compared to previously. Now that is, of
course, not not something that I can, you know, promise for everyone. That was,
you know, this company being particularly successful
with how we were able to make analyst relations work for them
in the challenges that they had. So I'll give you another
example. We had, I was
working with a, with a transformation, consultancy,
and they were able in this very difficult market environment,
they were able, through their analyst relations, work,
attract much more, talent that they were
able to attract previously just because they were, they were
able to be to offer a highly valuable
proposition to the people that would be working for them through their access
to top notch, industry analyst knowledge and and
data and all that. And that was very attractive to people who would otherwise maybe
have been working for Accenture or for McKinsey or someone, which also
would have had analyst relations contracts, but not in the
same way executed as this small firm was able
to give them direct access into those, bits of research,
because they understood how to handle it in a productive
way. I can give you a third example, and that was, a
company that I've worked with in the IoT space. They actually
became a cool vendor, you know, highlighted by Gartner in one of their
reports. And at the time, they didn't really know what to do with it. So
they just put it on their website and nothing really more happened. A year
later, one of their competitors from the United States,
pretty much offering the same thing, did, was
also highlighted as a cool vendor in the Gartner report.
And, they knew what to do with analyst relations. So
they actively worked with that, with
that, visibility and with the insight that they could gain from
it, through the analyst. And,
and, just, 2 years later, when, the
the first company had hired me, because they had difficulties
in getting investor money and stuff, And we did briefings, and we
did inquiries and and things. And I got them into a
Gartner investor report as one of just 5 other example
vendors in that particular field, which
highlighted them to the market and got them a few months
later, got them a serious, series a
investment, at at a at a certain valuation.
Now through that report, we were able to spot that other vendor
in the US who appeared 1 year later, but now was
mentioned in that same investor report. And they had already
surpassed the the German company that I was working now
with surpassed them because they engaged in analyst relations
earlier in their maturity cycle. They were now at a
valuation that was 5 times as large as the German company
just because they started their analyst relations journey
earlier, knew what to do, and played it
more thoroughly, more strategically. So the German company was in the
market a year earlier, was highlighted earlier, didn't know what to do
with it, started analyst relations later,
and got outplayed by 5 times the valuation within just a
few years. So it's very different
for every for each company, and it depends very much on your
market situation, on your product, on your priorities that you have.
But it can have an absolutely substantial impact on
everything that you do. I see.
And, that is actually not the only, piece
of content we're doing together because you are not
only advising startup how to get into
those reports, but you're also,
building knowledge? You you're doing surveys?
Yes. Yes. When I, made the decision to switch from the dark
side, the large mega players, to this to the bright side, to the start
ups, I, quickly found out that there is very little research on
the matter. I, had done
early research myself where I just found out that,
European startups were mentioned, a
lot less in, you know, in high profile
analyst publications compared to United States headquartered
vendors. So a comparison,
5 US companies versus 1 one European,
company that was quite stark. And that led me into
looking so how is this with, startup? And there was
very little research. So I approached the University of Edinburgh
Business School and, professor Neil Pollock there, who
leads their innovation, research, was quickly on board
to say, yes. Let's let's examine this. And we set
up, the what we call the state of startup with industry
analyst research. We immediately set it up as a research program that would
go forever. So we do this every 2 years.
We examine, the situation from 3 different
angles. So startup, of course, we are startups. How do you work
with analysts? Why? And what's what are the outcomes?
We asked investors, so
venture capital firms, but also their, the accelerator ecosystem.
So what is your engagement, with startup and industry analysts?
And what are your experiences? What are the outcomes that you see? And we
also ask the into, industry analysts themselves in how
do you work with startup ups from your end, and what are you recommending?
What is working? What is not working? And, what are the outcomes?
So we approach it from all three angles to get a 3 60 degree of
the of the matter. And we didn't only ask startup and
and, and, VCs and so who already knew about analyst
relations. We specifically also asked those players who had
no conception at all about analyst relations. So we really get the 3
60 degrees, of insight. And we had a couple
of, phenomenal findings there. So first of
all, European startup have no idea of the type of value that they
get. 73% of them
think that analysts' exposure to buyer
to buyers is rather low, where in reality,
79% of analysts, speak to startup ups
specifically to identify innovators that they can recommend to inquiring buyers.
And I told you earlier that, you know, a single analyst has a 1000 to
2000 buyer interactions every every year. So that's
huge. So 73% of startup think
that the the ability to get exposures to buyers is low,
but almost 8 in 10 analysts speak to start ups specifically
to identify innovators that they can recommend to inquiring buyers.
So massive mismatch tells you knowing about
this can get you a a leap ahead
of a huge portion of your rivals. Mhmm.
2nd finding was that, 2 thirds of
startup think they must have broad availability before industry analysts
are even open to these conversations as as we discussed earlier. But
the majority of analysts want to speak to you at beta or
even into a mobile product, stage. So enormous shift
there as well. So you can start much earlier. The interesting thing about that
is that, we found that professional analyst
relations, handling of analyst relations can pull
forward this qualified visibility through their market
reports or through direct recommendations to buyers
by as much as 4 years.
So the average the the mean age of, startups being mentioned in
reports was around 7 years in business. And if you do analyst
relations professionally and do it well, those
companies were able to pull that forward by as much as 3,
4 years. So they got mentioned in the 1st 3 years in
business. And that is, as you know, in in startup world, that is
literally a lifetime for many start ups, sadly. Mhmm. So that's
quite a that's quite a pull effect.
Now, then we also, you know, another example of
the research findings was that we asked analysts, so what type of
analyst relations handling, what type of organization,
makes analyst relations most effective in in your work with startup
ups. So if you work through marketing agency or if you have
analyst relations handled through your venture capital firm or, you
know, however, or through your strategy department or through your
marketing department or what. And, the finding there
was, it's, of course, best handled through AR specialist.
And, I'm not just saying this because I am a specialist, but because the difference
was so stark. Because analyst relation specialists were
were rated 50 points better
than if it was handled through a marketing agency or PR agency or
through your VC. In fact, PR agencies and VCs
had a net negative rating through the eyes
of, of the actual industry analysts who were supposed to
be, you know, addressed by these briefings. And they had a
net negative rating in terms of effectiveness. So
understanding that, again, gets you a leap
forward, in comparison, for for competitors who may
handle it intuitively and differently.
I I also have at the back of my mind that you will
share in the next episode a few more of your
learnings there, plus there is or there will be soon
another survey going on? Yes. Absolutely. So, we
as I said, we are we're doing this on a biannual basis, and the results
that I just shared were from the 2022 survey. And
we're, just, we've just launched a couple of weeks ago the
24 version of the same, research. We're not asking the exact same
questions again because we are adding puzzle piece by puzzle piece to our,
you know, comprehensive understanding of the matter. So
this year, it'll be all about how startup use analyst
relations, throughout, the organizations, different use cases,
which analyst firms are most used by startup and and which
are best rated as well. And then when in
your, maturity cycle do you best do what? When do you
start briefings, when you start inquiries, when you start to do
document reviews, when do you start to participate in events, and and
all those kinds of things. So when in your journey should you do what?
So a couple of really interesting puzzle pieces to our holistic understanding
of the matter. And we can we can by the way, we we
should put, links in the show notes for for people
to to contribute because, again, it does not matter whether you
have or have no understanding of analyst relations because, again,
we want into, collect the entire understanding from
all angles. And it only takes, like, 15 minutes.
Sounds pretty good. Everybody who'd like to learn more, you can go down
here in the show notes. There's link to your LinkedIn profile as
well as a link to the survey that you'll hopefully
show me after this recording. Definitely.
Definitely. Great. Chris, was a pleasure talking to you. Thank
you very much. Thanks for the opportunity. Thanks for the time. Thanks
for your all of your listeners tuning in. Thanks. Looking forward to have you
back. Bye bye. Speak soon. Bye.