If you want to build your own ’boutique’ advisory business, then it is useful to have a good template. We discussed Mako in this vein, and another seems to be Mercator. A friend of mine has been following them closely, and tells me that a few years back, they:
- 1. Decided payments sector was going to be a hot growing global market where (like wireless) Europe-USA-Asia Pac would want to learn from each other;
- 2. Produced their first report in this space (sold via online channel eg., market research store);
- 3. Successful first report encouraged them to produce more reports (sold via online channel);
- 4. Sub-divided reports by domain (eg., credit, debit and emerging tech) into advisory services (ie., a bundling of reports) with enquiry time;
- 5. Offered each advisory service, sold by their direct salesforce and Mercator analysts, at about half the price of Gartner Group and Tower Group alternatives to become a ‘complementary’ rather than ‘subsitute’ offering;
- 6. Offered lucrative and highly profitable bespoke consulting on top of advisory services;
- 7. Expanded initial geographic research focus (North America) to cover also Europe and Asia Pacific.
with the effect that:
- 1. They receive more revenue from ‘buyers’ of technology (e.g., banks) than ‘vendors’ (e.g., Microsoft);
- 2. Probabaly, they will eventually be acquired by Gartner or Tower Group (in turn owned by Mastercard)?
It’s not quite as simple as it sounds, because execution is everything. However, it illustrative of the challenging market that large analyst firms face, and of why there is permanent pressure for new firms to set up, something we call the water cycle.