Where do product professionals fit in with analysts?
Analysts have two sources of information. We spend most of the time on the phone with end-user clients, talking about very narrow market areas. Typical analysts have about 400-500 end-user client interactions each year to learn about what works and what doesn’t, what problems people have, what people have tried and under what conditions they work.
Vendor product professionals are the second source, with about 20-30 percent of the information we use coming from them and other people at the vendor organizations. We understand that they have a strong perspective, as they should, so we validate what we learn from them with the end-user clients.
What can you tell us about the analyst mentality?
Analysts come from both end-user and vendor environments, and many have been product managers, engineering and technology vice presidents or CIOs. They tend to have 20-plus years of experience in the space they’re covering. For better or for worse, that global expertise can occasionally be perceived as being a bit arrogant. Some of that is from experience; some is because the job gives them the ability to have that personality.
We are at a transition point right now where, for the first time in history, tech analysts are retiring—not quitting for some other job. And they are being replaced with new blood, which makes for an interesting transition. Over the next 5-10 years, we could see some significant changes in the analyst community—as well as throughout IT.
Instead of looking only at people with 20 years of experience, we’re creating junior analyst positions that require closer to 10 years. These people tend to be aggressive learners who want to make a splash and really show what they can do. They’re the ideal people for you to come across. If you can convince them that your view of the market is the correct one and they can validate it through their interactions with end-user clients, they can become a proponent for your world view—and that can be incredibly helpful within any market segment.
What challenges do you face in dealing with product professionals?
Within the IT industry, the Magic Quadrant is a very familiar document type that was created by Gartner. It is a summary document that shows the relative positions of all of the vendors in a specific defined market space. The two parameters, X and Y, are “ability to execute” and “vision.” Ability to execute is about whether you can deliver what you promise and are able to actually get there from where you are now. The vision is about whether you understand long term where the market is going and how you’re going to service it. Those two things are crucial, because your customer isn’t buying a product that they’re going to install and ignore. They’re going to use it for at least a product lifetime, and they’re going to expect a relationship with you as a vendor. They have to know that where you’re going is the same place they need to go to.
There’s a tremendous amount of emotional connection to what Gartner has to say in a Magic Quadrant. We frequently hear entrepreneurs question how Gartner operates and how honest and ethical Gartner is, because we don’t agree with their view of the market and what their prospects actually want from them. We get most of our information from the end users who are buying the products, so we believe we have a good basis for what we say. That’s not always going to convince someone who spent every penny of their family’s money plus a few million of venture capital on an approach that the analyst simply doesn’t agree with.
What advice can you offer product professionals in dealing with these situations?
Out of hundreds of client interactions in a year, analysts really can see patterns in market demand and in fulfillment of that demand, so we can provide good information to entrepreneurs who are open to accepting it. Look for information that you can make use of from analysts, even if you disagree with them.
Also, we ask for client references and get a lot of our information from those. You’d be amazed, though, at the number of complaints that come from the references. I suspect that companies call their client base, and the clients give nice, positive answers so they can be left alone. So the vendor really has to make sure that their references are going to give the analyst honest answers, but ones that are positive. For the most part, that’s a matter of giving such strong customer service that your customers will view you as great. No one expects any software product or hardware product to be perfect, but if they don’t get good service, they’re really willing to talk about that.
How do you start to build a relationship with analysts?
First, don’t start by insulting the analyst. You’d be amazed how many people would benefit from hearing that piece of advice. Your own experience as a product professional or entrepreneur is certainly valid, but you’re not going to be able to touch on anywhere near the number of clients or the variety of prospects that an analyst does. So you can be 100-percent right and still not match the broader market, simply because you don’t have the inputs that the analyst has.
Knowing how the analyst sees your market can help immensely in positioning your offering to build a positive relationship. Reading up on the analyst’s insights gives you inside knowledge of how they see the world and how they have reported on you and your competitors.
Also, compete with your competitors. You’re going to be positioned against them within some form of a mental matrix, even if it’s not as a part of a Magic Quadrant. An analyst who is very familiar with vendors in your space is going to know how they position products, how successful that is and whether that positioning is the same way end-user customers see the vendor. When you’re talking with the analyst, using those reference points can be very useful, and contrasting yourself with your competitors is a good idea. Demonstrating a slightly different world view or slightly different approach to the market is also good.
You also need to have a clear vision. Your prospects and customers are very reliant on your vision and where you’re taking your company and your product over the 3-5 year time frame. The analyst is going to judge whether or not you have such a vision, whether you can articulate it and then whether or not it’s reasonable and conforms to the analyst’s view of the market.
How do you continue to build those relationships long term?
Most vendor/analyst relationships start out with the vendor in heavy selling mode, selling their position. There’s nothing wrong with that. But as you develop that relationship, you become more able to influence the analyst’s overall views, because you absorb some of what they’re saying and because they become more knowledgeable of your abilities and how you’re servicing your customers.
There’s a market segment called governance risk and compliance (GRC). Five years ago, it didn’t exist and five years from now, it will be very different. The analysts on my team who cover that space are constantly refining, updating, shifting boundaries and changing exactly how it’s viewed. And they’re seeing that customers are using the products in this class differently now than they were two years ago. They’re learning a lot from the vendors, just as they’re learning a lot from the end users. And some of the vendors are actually ahead of the end users on understanding where things are going. These vendors have the opportunity to build really strong relationships with the analysts that may benefit both sides for the next 10 years.
Building relationships takes time. If you’re in product management or are an individual entrepreneur, you’re competing for analyst attention, for mind space. The analyst is charged with identifying who the most effective competitors are, so we want you to compete. We want you to talk to us and tell us what’s going on, and to try and convince us that you’re right. But we’re also going to map it against what we know from the end users who are interested in products like yours. We may know why they are not returning your salespeople’s calls. It may have something to do with how you’re positioning or how your sales force is behaving or some element of your reputation. Chances are the analyst has a pretty good feel for what’s going on in the market segment they cover. Learn from them, as they learn from you.