Analyst Vendor Briefings

Fuelled by a twitter conversation both Adrian Sanabria and Anton Chuvakin posted articles here and here, sharing some good tips on what makes a good briefing and common pitfalls to avoid.

As a former (recovering?) analyst, I thought it only right that I jump on the bandwagon and share my thoughts on the topic.

What is a vendor briefing?

If you’re not familiar with vendor briefings, it’s basically where a vendor will speak to an analyst and explain what their product does, how the company is structured, financials, and so forth. The analyst will then, depending on how the analyst firm operates, will either write up a piece on the company, reference it as part of a broader piece of research, or maintain the details in their database of companies they are tracking.

Analyst tips

Both Anton and Adrian were very thorough in their advice to vendors on how to deliver a good briefing. But I’d like to shift focus and point out a few things analysts could be mindful of during such briefings.

1. You don’t know everything. Yes, you speak to very smart people every day and your reports are widely read. But it’s very easy to get on a high horse and think you are all-seeing all-knowing. If that were the case you’d have raised millions in funding and solved all technology problems by now.

2. Let the vendor make their point. You may not agree with them, but let them present their perspective and give the courtesy of hearing them out.

3. A briefing isn’t a fight – it’s not an argument that needs to be “won”. If putting others down makes you sleep better at night that’s cool. But chill out a little, you’re meant to be impartial and balanced.

4. Set expectations – let the vendor know up front what you are hoping to get out of the call. Be open about whether you’re more interested in the product, or the company strategy, or the numbers. Vendors aren’t mind-readers.

5. One of the most useful phrase I learnt as an analyst was, “Can you help me to understand…” It’s a simple and effective line that can mean so many things such as, “I don’t believe you”, “too many buzzwords”, “maybe you need to think this through”. Whatever it may mean, it doesn’t come across as confrontational – it puts you on the same page trying to work through a problem.

6. Be organised – be on time, have your notes in order, don’t just blunder through the briefing. Yes, you’re a busy analyst that has to do many of these a week – but a little organisation can go a long way.

7. Share your plans – be clear as to what the vendor can expect. Do you plan on covering their company, will you include them in a larger piece of research. How frequently would you like them to keep in touch with you. All this can go a long way in ensuring a long and meaningful relationship.

The numbers don’t lie

If I were to add to Adrian and Antons respective blogs as a tip to vendors, that is that while an analyst may disagree on the effectiveness of your product, or its value, the numbers don’t lie. Analysts have a lot of numbers – they spend a lot of time sizing markets, analysing competitors growth projections and targets, most will be able to analyse your numbers, or infer them very quickly. So please don’t try and impress by claiming huge numbers or ridiculous growth. Don’t claim your TAM is your SAM or SOM.

I’ll digress and give an example of what I mean.

Say you are a producer of bottled water.

Every human needs to drink water, so the total available market (TAM) is around 7 billion.

But you’re restricted by geographical reach. Say you can only ship your bottled water to the whole of England , then that is your serviceable available market (SAM).

However, there are other competitors in England, and there are many people who won’t buy bottled water, maybe they drink tap water, or boil their own water, or have their own water filters. So, in reality you’re looking at a much smaller serviceable obtainable market (SOM).

Maybe you’re a vendor that secures IoT devices. Don’t start your pitch by saying that your market is 22billion devices (or whatever the number of estimated IoT devices is) because it’s not. That may be the TAM, but your SOM will be much smaller. So think about how you will convince the analyst your product has the right strategy to get there.

In my opinion, recklessly throwing around numbers is worse than buzzword bingo – you could end up in the vapour-ware category of my vendor heirarchy pyramid.

Market sizing

Seeing as I’ve kicked the hornets nest about numbers – I guess it’s a good time to talk about market sizing. I see a lot of weird and wonderful numbers thrown about and sometimes I’m left scratchiing my rapidly-balding head as to how markets are sized up. Many times I’ll see claims that the {small infosec segment} industry will be worth {huge} billions by 2020 according to {analyst firm}.

I have typically been drawn more towards the bottom-up approach to market sizing, it can be more time consuming, but gives a more sane answer.

It’s rather simple in that you basically take the collective revenue of the current vendors in a given market segment to get todays market size. If you know the rate at which each of the vendors is growing, or predicting to grow, you can estimate how large the market will be in the future.

For example, if you take a list of security awareness providers and calculate their turnover (I’ll save that for another post), and add it all together, maybe the answer will be $200m (as an example). So that’s our market size.

On average, all the companies may be growing sales at 25% every year. Which means that, barrign any major disruptions, in two years time – the market size would grow to $300m.

So, if a new security awareness vendor comes onto the scene, they shouldn’t make claims that the market is worth 5bn because every employee in every company in the world needs training, or that they plan on growing to $500m in revenue in five years – an analyst will be justified in rolling their eye and being skeptical.

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