Startup ventures providing services to technology companies should engage with business analysts early and strategically to maximise their chances of success, research suggests.
Tech startups urged to contact analysts early

Positive, well-timed interaction with these important influencers enables young companies to gain market insight, increase buyer awareness, and fine-tune products, the study found.

Early engagement with analysts can also significantly improve fledgling companies’ valuation and marketplace success, according to research led by Professor Neil Pollock.

The study completed with two leading industry insiders and is based on an extensive survey (and follow-up conversations), which involved around 500 B2B technology firms, investors, mentors and industry analysts, based mostly in Europe and the US.

Researchers spoke to managers at startups and scaleups—firms in their first 10 years of growth—their networks of venture capitalists and mentors, and to more than 200 industry analysts.

Their findings contrast the expectations of startups with the real-life experience of analysts, whose role is to assess emerging technologies and how vendors are performing.

With this breadth and depth of insight, analysts help buyers make better-informed purchasing decisions and help vendors improve their strategies and offerings. It is a role that is vital to any technology vendor and moreso to startups aiming to break into a market.

Yet only 10% of startups think working with analysts will help them raise product awareness, but four out of five of analysts say they work with startups specifically to identify and recommend emerging vendors to buyers.

Two out of three startups think their product must be widely available to gain access to analysts, but most analysts want to hear from startups much earlier.

The study found that 57% of participating startups and 63% of venture capitalists and business mentors plan to intensify their activities with industry analysts in 2023.

“This research has been sorely needed in the startup community,” says lead researcher Professor Neil Pollock, of the University of Edinburgh Business School. “It might prove the most impactful research for startups this year.”

Previous research consistently ranks industry analysts among the three most powerful influencers of B2B technology strategy and purchasing decisions.

In startup-specific research, firms that were highlighted in leading analysts’ publications achieved 84% survival after four years—a significant improvement on the average of 50%.

Prominent venture capital firms like Sierra Ventures, Andreessen Horowitz and Sapphire Ventures Partners have long stressed the importance of industry analysts to B2B technology startups.

Hamburg-based analyst Chris Holscher, who took part in the study, emphasises that startups can get meaningful access to top-tier industry analysts much earlier than they assume.

“It can mean years of advantage in getting to product-market-fit, building brand reputation, de-risking investment and in effect strengthening the business valuation,” says Mr Holscher.

Given the impact of industry analysts in B2B technology markets, no vendor can afford to not use them, according New Jersey-based analyst Robin Schaffer, who also took part in the study.

“As a startup aiming to break into a market against established vendors, disrupt a market, or even create a new category, you should engage analysts early and strategically," says Ms Schaffer.

Neil Pollock is Professor of Innovation and Social Informatics and Head of the Entrepreneurship and Innovation Group.

More about the project can be found on the Analyst Observatory website.