We. Can. Do. Better! (1/3)
I admire European Startups’ brilliance, expertise and energy. Yet only 15% of large exits happen in Europe but over 70% in the US. European Startups do not generally fail more than US Startups, but their peers across the pond tend to advance more often, grow faster and exit more successfully. Why is that?
Well there are many explanations. Some are hard to change. But as an Industry Analyst Relations specialist one observation stands out to me where we actually can do better.
Industry Analysts play a key role in communicating with b2b tech buyers, vendors and investors, but the European Startup ecosystem lags behind the US in using them to help unlock target markets and win the growth race.
If, as a founder, you don’t recognise and appreciate this part of the playing field, then you may get outplayed by those who do, without you even noticing where, when and how.
This 3-part series includes 1) a reality check on startups and industry analysts, 2) tactical guidance and 3) actionable advice to get going, close the gap and reclaim the race.
Enjoy the read, spread the word, and ask me anything.
Many studies lay out how European startups are trailing their US peers. McKinsey found a 30% lower likelihood of success in recent years. In b2b tech „success“ is much about becoming synonymous with an innovative solution and then be trusted over your competitors. Building such awareness and trust requires resources. But data shows that European startups historically have had bigger problems in raising later-stage funding than US competitors.
We know that there is no lack of great ideas, expertise or energy in European startups. But there is a weakness in converting all this to traction and to success.
Success in the daily life of startups depends much on:
making bolder and better decisions faster than others, and
overcoming risk perceptions with buyers’ professional decision makers.
But how do companies actually make decisions? Whether you look at provider selection, M&A scoping, partnering, investment, etc. - the subject matters in b2b tech are typically too deep, the offerings are too many, the markets too dynamic and the consequences are too critical for decision makers, to navigate without guidance from industry analysts who specialise in the particular area. They depend on impartial insights. Sometimes it is even mandatory for decision makers to involve analysts' expertise.
The data is clear:
While in b2c some 70% of buying decisions are primarily influenced by a vendors website, in b2b tech markets 75% of shortlist placements are primarily influenced by a vendors positioning in leading industry analysts’ publications.
Tech buyers look for impartial, trustable guidance to avoid costly mistakes and to speed up decision processes - and pay for it.
Tech vendors look to use analysts unparalleled breadth and depth of qualified anonymised feedback and to gain relevance in the same analysts’ direct guidance to buyers' decision makers. They invest in analyst relations programs.
VCs with experience (and track record) in b2b tech markets understand this highly influential role of industry analysts and leverage it for their mentees.
Top houses like Andreessen Horowitz, Sierra Ventures, Crane Venture Partners or Sapphire Ventures advise startups in b2b tech segments to start IAR programs early and go ahead strategically. In terms of the mentioned success factors, this means:
leverage analysts’ unvarnished insights from their many end-customer conversations to enable startups make bolder decisions faster, and
leverage analysts reach and reputation to overcome professional buyers risk perceptions and turn the expert validation into shortlist placements.
Bottom line: Startup-tailored analyst engagement de-risks and amplifies the value of VCs' best investments and accelerates their path to success.
The results of IAR-savvy VCs prove them right.
I cannot count how often analysts have told me that they’d love to speak more to startups as innovation drivers.
At the same time research deadlines are pressing and capacities are limited so that analysts must prioritise briefings with companies where they are sure to get the information - and the type of conversation - that they need. Unfortunately many (European) startups do not know how to handle and use an analyst briefing. They often just re-use some sort of pitch decks or PR copy and are stuck in a tech- or a sales mindset.
None of this helps an analyst. In which case both, their time and the startups opportunity are wasted.
I’ve also been in touch with dozens of founders and investors, with startup advisors and innovation hubs in Europe. No offence: We need to spread IAR understanding.
Startup and scaleup event agendas and programs are packed with topics that circle around MVP, SEO, SCRUM, PR, VC pitching - which is all good and necessary. But for the b2b tech segment these agendas are missing a critical bit:
We need to get founders closer to where and how decisions are actually made by b2b tech buyers. We need to educate our founders about the role of industry analysts and how to use that role effectively.
We don’t even need to invent anything new. We can use proven knowhow and experience. It’s available with IAR specialists right here in Europe.
The good news is: Now you know. And we can do better.
> Part 2 in this series will answer typical questions about Industry Analyst Relations specifically for startups and scaleups.
> Part 3 will contain actionable advice to get going in the right direction.
Stay tuned and if you can’t wait, just DM me.