The second-most important pitch for start-ups, after the investor pitch, is the analyst briefing. These are the formal oral presentations that are more or less mandatory for any new solution coming to the IT or telecoms markets. In November and December 2014, over 100 professionals who take part in pitches shared their stories about what actually happens.
The first significant fact is that preparing for the analyst pitch is not like the investor pitch: that’s especially bad news for start-ups who send to the analysts a team prepared for their elevator pitch to venture capitalists. The chart above gives you a few headlines. It compares the views of participants in analyst pitches with those in investor pitches. The age and gender of attendees are way more important when meeting investors: around 50% more important. But there is one critical factor that analysts expect more of: challenging the participants’ ideas about market categories.
It’s an old problem for firms with new solutions. If your solution isn’t new, why would anyone want it? And, similar, if your solution doesn’t map on to an existing category of solutions, doesn’t that mean there’s no market for it? So vendors have a difficult dance: either they have to tear down the way the analyst looks at the market (risky) or they have to accept, but then slightly redefine the market (recommended). This matters not only in analyst briefings but also in social and market research more broadly. One respondent said:
“When a Google employee presented a new product (Google Trends) and its potential benefits for social studies to a group of social scientists. The scientists, however, asked critical questions about how the categories of the trends were defined. The presenter began to stumble, as he explained that its engineers who defined the categories (such as love, fun, holiday, etc.) and missed to convince the audience. In hindsight, he should have adapted his pitch/presentation better to his audience.”
Compared to meeting investors, or to most pitches generally, information sent in advance of analyst briefings is often less important. Respondents to our survey often complained when presenters focussed on a sales pitch about their solution, or used one-sided information about the market environment.
Pitches to analysts need to be as adaptable a conversation: that requires serious preparation to give an honest view of the demand for the solution, the competition and the market context while listening to comments, looking for non-verbal cues and encouraging discussion around the analysts’ market viewpoint.
In 2015, I’ll be deepening this thread of research around the pitch, working with colleagues at the University of Edinburgh Business School. Please contact me if you’d like to find out more.