4. GROWING NUMBERS OF INDUSTRY ANALYST FIRMS
The āBig Threeā
700 medium sized
and "boutique firms"
08:06 8
5. RESEARCH QUESTIONS
What kind of āvaluationā is the pitch?
-What are its major aspects?
-What are the practices and skills start-ups use?
-What techniques do analysts use to evaluate pitches?
-What do start-ups and analysts get out of it?
How is endorsement achieved through the pitch?
08:06 10
7. SIMILARITIES
BETWEEN PITCHES
GIVEN TO VC AND
ANALYSTS, BUT
ALSO DIFFERENCES
VC pitch
High stakes
Powerpoint
Mostly face-to-face
Affect (charisma, passion)
Interaction (high)
Individual pitcher
One-off event
Valuation???
Analyst pitch
High stakes
Powerpoint
Increasingly virtual
Affect
(bad temper)
Interaction (unresponsive)
Team who pitches
Multiple pitches
Valuation???
08:06 12
8. VALUATION STUDIES
ā¢Value not intrinsic
ā¢Different approaches to valuation:
ā¢Bourdieu (1993) ācritics consecrateā
ā¢āEvaluative culturesā (interactional, practices, materiality)
(e.g. Lamont, MacKenzie, Espeland)
ā¢What matters not so much who actors are but how well they
perform according to āestablished scale of valuationā (Aspers
2009)
ā¢Analysts are āframe-makersā (Beunza & Garud 2007)
08:06 14
9. āEntrepreneur starts a
company. Itās a software
firm. Itās challenging the
incumbents. Itās been
relatively successful. They
believe they are
approaching the problem in
a completely new way, they
feel like they are a
valuable, viable, in
fact, superior option
in the spaceā
āThey feel like the analysts are
under-representing them
[in their categories]; they
find that they areā.
āIt starts with āHey, how are you?
Iām glad I have the chance to talk
to youā and very quickly it goes to
āI donāt understand why
you donāt see thisā
āSo at once they assault [the
analystās] judgement, assault
their wisdom and assault their
integrity, and I donāt give that
less than 30 minutes. And this
happens every single
timeā
(interview, AH)
HOW OPENING PITCH TYPICALLY GOES
08:06 16
10. āSo you try to
be there, be
cheerful, make
everyone at
easeā¦Make
sure the analyst
is listened toā.
TAKE HEAT OUT
ā[A] good practice is
to be on Instant
Messenger with
your spokesperson if
you canāt be in the
same room [to] try to
calm him down...ā.
āYou need to moderate that. Make sure that the debate goes
okay. If they start fighting you need to rebase it, so
you need to stop, acknowledge that there is a disagreement,
propose to move on to other subjectsā.
(LL, interview)08:06 17
11. IN LATER PITCHES, EVERYTHING CHANGES
āMost analysts would just stay quiet, and they are just going to sit there during [the pitch, and]
watch you move on to the next thingā
(W post pitch analysis).
Prepare pitcher for unresponsiveness:
āIf you hear silence on the other end of the line itās a good thing. [The analyst] takes a lot of notes and he doesn't feel the need
to say, uhuh uhuh uhuh. So, if you're making a point feel free to take a moment and pause and he'll catch up with you but if he
doesn't seem extremely engaged, itās actually the oppositeā
(comment Vk)
08:06 18
12. ANY COMMENTS WHATSOEVER SEIZED UPON
After a pitch, a coacher discusses how:
āI didnāt get anything; and I donāt know what to talk about next [in
forthcoming pitches]ā.
āShe did mention that the metric piece was the āholy grailā. Does that
mean that she doesnāt believe it, or that weāre really onto something?ā
(Wy demo)
08:06 19
13. CALCULATIVE FRAMES
āthe hardware ones are
the easiest I now realise,
and a lot of that is to do
with the fact thereās a lot
of facts that can be put
around hardwareā.
āWhen you get to
services it becomes
even more tricky
because it becomes
even more subjective
about what your skills
level is and how many
skills youāve got are the
right type and how
youāre competing and
how youāre
differentiatingā
(BB, webinar)
āWhen you get to
software itās still
technical but it gets a lot
more subjective about
what the pricing should
be and what the channel
partners are likeā.
Difficulty of evaluating A, Ease of measuring B
An analyst says:
08:06 21
14. MORAL FRAMINGS
āWe are quite cynical, and the reason we are quite cynical is that most people
are lying to usā¦ So the question is how do you get behind the lies to find out
what is really going on.ā
Analysts assume things dressed up
08:06 24
15. (escalating scale of
endorsement)
ā¢ Getting to pitch again
ā¢ Physically meeting up
ā¢ Analysts talk about start-up on
stage
ā¢ Write about them as an exemplar
ā¢ Recommends them to a client
ā¢ Analysts compete internally to have
ātheirā start-up foregrounded
ā¢ Entwined with analyst career
WHAT IS SUCCESS IN THE 2ND PITCH?
INCLUSION IN FRAMES
08:06 27
16. What is success in the 2nd Pitch?
Inclusion in Frames
(escalating scale of
endorsement)
ā¢ Getting to pitch again
ā¢ Physically meeting up
ā¢ Analysts talk about start-up on
stage
ā¢ Write about them as an exemplar
ā¢ Recommends them to a client
ā¢ Analysts compete internally to have
ātheirā their start-up foregrounded
ā¢ Entwined with analyst career
ANALYSTS TALK ABOUT START-
UPS ON STAGE
āCase studies like this are really helpful for usā¦as you write reports
we are always looking real examples. Everyone always talk theory, but
very concrete examples of what people are doing itās really important
for our research. So one of the things Iād encourage [digital start-ups]
to do is really just keep us updated on interesting projects youāre doing
and new things that are coming out that we could potentially write
aboutā.
(analyst during a pitch)08:06 28
17. What is success in the 2nd Pitch?
Inclusion in Frames
(escalating scale of endorsement)
ā¢ Getting to pitch again
ā¢ Physically meeting up
ā¢ Analysts talk about start-up on stage
ā¢ Write about them as an exemplar
ā¢ Recommends them to a client
ā¢ Analysts compete internally to have
ātheirā their start-up foregrounded
ā¢ Entwined with analyst career
ā¢ Do you recommend Cool Vendors
to clients?
ā¢ "ā¦there is whole notion that if
you are on somebody's radar
then psychologically your name
will bubble up in conversations
more. So an analyst nominates
and successfully publishes a
vendor as a Cool Vendor well
then there is a psychological buy-
in to the business problem that
they are trying to solve and the
uniqueness that they bring. So
they would come to the lips of the
analyst a little moreā (analyst webinar)
08:06 29
18. What is success in the 2nd Pitch?
Inclusion in Frames
(escalating scale of endorsement)
ā¢ Getting to pitch again
ā¢ Physically meeting up
ā¢ Analysts talk about start-up on stage
ā¢ Write about them as an exemplar
ā¢ Recommends them to a client
ā¢ Analysts compete internally to have
ātheirā their start-up foregrounded
ā¢ Entwined with analyst career
āLet's say there are 10 analysts on a
team and there only 5 vendors that are
going to be written about and
everybody is encouraged to submit a
Cool Vendor. Well then there is going
to be some back and forth saying my
Cool Vendor is different and more
unique or impactful than yoursā (analyst
webinar)
08:06 30
19. WHAT KIND OF VALUATION IS 2ND PITCH?
ā¢ Interesting interaction (confrontational, then unresponsive).
ā¢ Preparing for pitch requires contrasting techniques (calm things down, then
draw analysts out)
Techno-economic
framings
Looking for proof
Treat pitch as ātestimonyāCalculative framings
ā¢ Interesting verification process (assume start-up is lying, go back over testimony)Moral framings
ā¢ tension between the analyst evaluating the start-up but also finding them a
āinterestingā source for their research (escalating scale of endorsement)Inclusion in framings
08:06 31
20. ENDORSEMENT
Endorsement ā overlooked fundamental ingredient of market transactions
The situated constitution of endorsement: How endorsement is achieved through the
pitch and mediated by various frames
Endorsement relates to an inherent problem (āthe liability of newnessā) but allows the
start-up to develop (scaling, internationalisation)
08:06 32
21. ENDORSEMENT + ECONOMY
āŖEndorsements emerge out of āinteractional arenasā (Sauder and Fine 2008)
āŖStart-ups want to attract the analyst/Analysts looking for next big thing
āŖAnalysts talk about ventures in public and recommend them privately to
clients.
āŖāInvestā their relationships in the start-up (champion the venture)
āŖVatin (2013) distinguishes between valuation (as āassessmentā of value) and
valorisation (as āproductionā of value)
08:06 33