Building an analyst firm one tweet at a time

I was taking a quick peek into my twiver last week and saw this update

from Forrester Analyst Jeremiah Owyang
This got me to thinking over the weekend about the state of the industry analyst industry (say that three times fast).  I have been engaging with a number of analysts in the past few weeks and most of them are outside of the traditional ‘PLM’ or ‘Manufacturing’ practice leads that I normally talk with.  All of them are really smart in their topic areas and I always do learn something or gain a new way of looking at something each time I talk with them.  
What occurred to me though is that analysts really cater to the early / late majority of the adoption curve.  This may seem rather obvious, after all that’s where most of the customers are.  But it does represent a particular challenge when your at a company that is traditionally very conservative and part of the late majority at best and are trying to move earlier in the curve: one of the first things you get asked by the senior execs you are pitching is “where is the Industry Analyst research to back up what you are proposing?”  Well, there is none.  This is the cutting edge and by the time it gets to the pages of an industry analyst, its already ‘old news’ and ‘everyone’ will be doing it.  It sort of reminds me what a professor once told me about his stock broker friends that never read the WSJ (which was at the time my bible of all business goings on): “real brokers never trade on news in the WSJ – by the time it gets there its no longer trading on the future, which is the basis for having any advantage.”
Now, don’t misread what I am saying: there are a lot of very progressive and cutting edge analysts out there (I have run into many of them in the last few weeks).  Its just that the reports they produce are answering questions that I already generally have an idea of the answer – they just add the data to confirm what I already thought.  Generally they are adding confidence – not new discoveries.
The real question is: is this just the way it has to be?  Are the resources required for primary research and market analysis such that the only way to amortize the cost is to focus on the center of the bell curve? Or is it more of a research material question?  In other words in this case there is no chicken / egg problem: there has to be the chicken of enough people / companies doing something before it represents the egg of something that is possible to track / analyze and report on, creating more chickens later on up the curve.
Or is there a real opportunity for a niche / focused analyst to find a following amongst the early adopters?  Is there a big enough market there to make a business out of and more than just a flash in the pan?  If so, it would have to be analysis that was very quick to react and be based on very small sample sizes.  It would ave to be a firm built to respond to their clients’ questions via Twitter.  Maybe a new practice / subscritption service for someone to build out…





7 responses to “Building an analyst firm one tweet at a time”

  1. Barbara French Avatar

    Chris, Interesting observations. There’s a much stronger tradition of industry analysts focusing on the hazy space between the “bleeding edge” and “tipping point” in the main tech areas outside software — e.g. networking, security, semiconductors, sensors, nanotech, displays, CE. Recently, even services and support analysts are digging into this territory more often.
    Today, the analyst choices are pretty much larger research companies handling this via private research inquiries and consulting — or –smaller, more agile companies looking for a niche.
    I think what’s going to be hardest for people entering this space is finding the right balance of rigorous research disciplines + rapid, low cost turnaround + ability to scale. The “good enough” culture of bloggers can’t carry over into decision support research.

  2. […] course, analysts could turn this momentum to their advantage. Chris Kelley suggests that analysts interested in the early adopter markets could use microblogging tools like […]

  3. Jonathan Yarmis Avatar

    It has long been a maxim cited by we analysts that we only write about 10% of the stuff we really think and TALK about. If you’re relying merely on the written research, (1) of course that’s going to be written for the bell curve and, more importantly, (2) you’re paying for a VERY expensive newsletter. Most of us talk to clients across the whole curve of adoption and phone dialogues and other forms of interaction are we make our recommendations specific to *you.* We all know this isn’t a perfect situation: it places the onus for satisfaction largely on the client, and we analyst firms all wish we could do more to increase our proactive value, and we think about that every day. But at the end of the day, the smart client can drive a dramatically increased value proposition through intelligent interaction beyond our written word.

  4. Chris Avatar

    Jonathon – good point. Perhaps there is something broken (or at least sub-optimal) in the way that we use research, but 9 times out of 10, unless there is a report or at least a chart I can point to from an analyst, new ideas have a hard way to go. Maybe I should start inviting analysts to the pitches and let you guys speak for yourselves, so I can get that good upfront 50% you’re thinking and talking but not writing about?

  5. Jonathan Yarmis Avatar

    If you integrate us like that, two good things happen:
    1. You get the value of our feedback.
    2. Frankly, our opinions about you are going to be more well-informed and probably more favorable. When I was on the AR side, I always said “an engaged analyst is an influenceable analyst.”
    There. Our secrets are out.

  6. Chris Avatar

    The power of blogging wins again. Not sure I can handle all this transparency.

  7. Barbara French Avatar

    Be a little bit cautious with how far you take the idea of getting market insight by inviting analysts to pitches. Analysts are willing to share insight during briefings within reason. Two cautions:
    – Generally, you’re going to get a deeper level of insight by using the analyst access bundled into your annual contract. That’s what I was referring to when I said private inquiries or custom consulting.
    – Don’t go to the well too often.
    Find how much direct access to analysts or “inquiry” time is included in your company’s contract with each analyst company. Some offer unlimited analyst access, others not.
    Check on NDA policies as well. They’re also different with each firm.

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