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. But before we get into that, a little message from our partner.
Did you know that on average, a blog post gets you way more traffic than a social media post? We have a special deal with moderniq's dotcom where startup rate dot a o listeners can create 2 free SEO optimized blog posts per month for eternity, in less than a minute. You'll get 2 free posts for your blog each month only when you use the link in the show notes. This is exclusive for our audience, and just click on link in the show notes and use this to subscribe. If you go back and forth,
you won't get the 2 pieces. Sorry. That 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.