Aite-Novarica Group advisors Stephanie Dalwin and Gilles Ubaghs have no shortage of experience working with technology startups in their respective verticals. In part one and part two of this three-part series, Stephanie and Gilles discussed key issues facing technology startups in their areas of coverage. Technology vendors in commercial banking and insurance are experiencing shifting market conditions, renewed focus on due diligence, and high levels of competition. They also talked about partnership models with financial institutions (FIs), onboarding, and product messaging.
Part three of my conversation with Stephanie and Gilles considers how startups can utilize analyst firms to solve some of their biggest challenges. Startups don’t need to be clients to get value out of analyst firms. Analyst firms provide research that a lot of insurers, banks, and potential vendor partners rely on for product development. In addition, through thousands of conversations with insurers, banks, and software vendors per year, analysts have a unique lens on what it takes to stand out in a competitive market. Here is what Stephanie and Gilles had to say about how a fintech or insuretech company can maximize its relationship with an analyst firm.
So, where do analyst firms fit in all this? How can startups work with analyst firms?
- Stephanie Dalwin: Advisory firms won’t help startups talk to insurers. We don’t sell leads, we don’t make introductions, and we don’t market platforms on a vendor’s behalf. Our value is that we can help companies understand the insurance industry. We have hundreds of conversations a month with insurance companies, financial institutions, and software vendors. We always have a finger on the pulse of the industry, and we’re uniquely positioned to help a company tailor its messaging or understand which parts of its platform will or won’t resonate with insurers. Just as insuretech companies can help insurers be better, advisory firms can help insuretech startups be better.
- Gilles Ubaghs: We can help fintech firms get visibility with banks and financial institutions. A big part of our job is helping our clients understand what’s going on out there and what vendors of all kinds are doing. Whenever I mention fintech research, some of the first questions that always crop up are what are you seeing and who should we be aware of. FIs want to know about technology trends and interesting new players; it’s the whole reason we started our Fintech Spotlight flagship series. The first step here for a fintech company is to give us briefings. We want to know what you’re up to, how it’s going, and what’s next. It doesn’t have to be formal, but we want to know who you are—so we can tell others about you. It doesn’t guarantee that we cover every fintech firm out there, as a big part of our job is cutting through the market noise, but not talking to analysts makes it harder for us to understand your business and lowers the chance that we mention you in research or to clients.
But isn’t working with analyst firms expensive?
- SD: Most analyst firms aren’t pay to play; we are objective, and we don’t rank vendors higher based on who pays us most. Instead, we provide advisory. Understandably, an advisory relationship is not financially possible for many early-stage companies. I personally don’t approach every conversation with startups expecting that they’ll become an advisory client. I’m more interested in keeping in touch with them and understanding what technology and business models they’re bringing to the industry. I’d also argue that startups can find a lot of value in keeping up with analyst firms. A frequent communication cadence helps startups stay on our radar for things like research and industry reports that insurers and established vendors will have eyes on.
- GU: Any decent analyst firm is not pay to play. If you come across implications from any firm that it will only write about you or feature you in its syndicated research if you pay, not only is that pretty professionally unethical, but it suggests that you are probably dealing with a pretty bad analyst firm with weak integrity. But do understand that does limit how open we can be in providing advice and guidance about the broader market back to you. All analyst firms also do bespoke research, which can vary from sponsored thought leadership to webinars to sponsoring events or doing internal research. The thing to understand, however, is that it still isn’t pay to play, as an analyst firm will retain editorial control. We won’t write falsehoods we disagree with or support messages we don’t believe. We also understand that a lot of fintech companies are still at an early stage and budgets are tight. That’s OK—we want to hear from you anyway. There are always benefits to nurturing these relationships, especially when so many fintech firms pivot, grow, and change over time.
What are some best practices for working with an analyst firm?
- SD: Startups are of growing interest to insurance companies, and it’s in both our and our clients’ best interest to know what’s happening in insuretech. With that in mind, I’m always willing to talk to new and emerging companies. Generally, it’s a good idea to keep up with analyst firms. I understand that startup resource bandwidth is often constrained, but even a quarterly or twice-yearly briefing can help keep companies on our radar for research and reports. Analyst firms can also provide some fantastic free coverage; it’s worthwhile to have an analyst relations contact on websites and LinkedIn pages. Our audience is largely institutional: insurers, financial services companies, etc. Participating in our reports has helped startups boost their signal and get on the radar of insurers.
- GU: The key thing is just to talk to us. If we reach out—respond. It doesn’t always have to be a big, formal presentation with 10 people on a call. Some of the best fintech conversations and briefings I’ve had have been off the cuff at events, sometimes even over a drink or two. It’s worth being responsive when you can, and even if you don’t want to answer all our questions (we understand commercial sensitivities) share with us what you can. I’d also advise any fintech company speaking to analysts to focus on your unique selling points. There are a lot of fintech firms out there, so what we want to understand is: What makes you stand out from the competition, and what problem do you solve? A constant question in the back of any analyst’s mind when writing pretty much anything is, “So what?” It’s easy to share data or facts, but the “so what,” that question of how is any of this relevant or interesting, is always what we really want. The more we can understand your “so what,” the more likely we are to feature you in research and mention you to clients.
What are best practices for working with an analyst firm as a client?
- SD: If you’re a client of an analyst firm, talk to the analysts frequently! We’re here to help, and we have a lot of knowledge that isn’t necessarily in our reports. When you sign up for research and advisory, you’re not simply signing up for a library of reports and data. Rather, this type of relationship is, well, a relationship. It provides face time with industry experts who can talk through questions and give feedback on solutions. It also provides a network of partners invested in a vendor’s success. Startup clients can think of analyst firms like a “phone a friend” lifeline for any questions or concerns they have.
- GU: Stephanie put it well—talk to us! The difference in being a client is we can go deep on the advisory services and really get more involved in helping you understand the nuances of what’s going on out there. The banking world and the fintech world are becoming closer, which is great, but there is still a pretty big cultural clash in many respects. We can help bridge that divide. Some fintech firms can become a bit too consumed by startup “techie” culture, and most bankers aren’t really thinking about the latest cutting-edge solutions day in and day out, so it pays to understand where both sides are at. But again, it doesn’t have to be formal. My favorite client questions are what I call shower thoughts. Random questions or musings—just a short poke to see if we have thoughts or any research on x, y, or z. It’s useful for us to know what your questions are as it help us guide the research, but most analysts also love to nerd out and get into it with clients. You just have to ask!
What Comes Next?
Advisory services can form an integral part of a tech startup’s go-to-market strategy. From providing assistance with market research and making critical introductions to insurers or banks to refining product development and honing marketing language, an advisory firm can offer crucial assistance to tech startups regardless of revenue size or product maturity. As clients, tech startups can access a team of experts, or they can initiate an advisory firm partnership through thought leadership, white papers, bespoke research, webinars, and a host of other services.
While part three concludes this series of blogs, be sure to check out some of our recent research in these spaces to get a sense of trends and the current landscapes. Our latest Commercial Banking Fintech Spotlight highlights data and analytics startups bringing new capabilities to the space. Our recent report Insuretech for Insurers: A Guide to 300 Startups provides an overview of market dynamics and insuretech solution providers in North America.
As I mentioned above, our team has a wide breadth of experience working with fintech and insuretech startups. Feel free to reach out to Gilles at [email protected] or myself at [email protected] for any questions about our work with commercial banking fintech companies. Stephanie can be reached at [email protected] if you’re interested in learning more about how we help insuretech startups.
