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Creating a New Technology Category

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In early 2012, a former colleague asked if I had …

In early 2012, a former colleague asked if I had
experience creating a new category with
technology analyst firms, specifically Gartner.
I said I had, and I knew, firsthand, that inclusion in
a Gartner report was the "Holy Grail" for many technology startups. However, if you don't fit one of the preexisting Magic Quadrants, you have to convince Gartner to create a new technology category—and this is not easy or simple.

In 2005 and 2006, I worked with a security software firm that had a unique technological approach to passively monitor Web application traffic, compare user activity from the most recent session with historical activity, and alert security personnel to anomalies in user behavior that indicated fraudulent access. But it did not fit any of the established network security categories, such as firewall, anti-virus protection, intrusion detection and prevention. In nine months, we were able to create new data security categories of Transaction Anomaly Detection with Gartner and Online Fraud Risk Monitoring with Forrester.

Here’s how we did it, and what I learned in the process.

Published in: Technology, Economy & Finance
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  • 1.  © 2012 BRUCE PHARR
  • 2. BACKGROUND AND INTRODUCTIONIn early 2012, a former colleague asked if I hadexperience creating a new category withtechnology analyst firms, specifically Gartner.I said I had, and I knew, firsthand, that inclusion ina Gartner report was the "Holy Grail" for many technology startups. However, if you dontfit one of the preexisting Magic Quadrants, you have to convince Gartner to create a newtechnology category—and this is not easy or simple.In 2005 and 2006, I worked with a security software firm that had a unique technologicalapproach to passively monitor Web application traffic, compare user activity from the mostrecent session with historical activity, and alert security personnel to anomalies in userbehavior that indicated fraudulent access. But it did not fit any of the established networksecurity categories, such as firewall, anti-virus protection, intrusion detection and prevention.In nine months, we were able to create new data security categories of TransactionAnomaly Detection with Gartner and Online Fraud Risk Monitoring with Forrester.Here’s how we did it, and what I learned in the process. CREATING A NEW TECHNOLOGY CATEGORY | 2 
  • 3. USE SPECIALTY ANALYST FIRMS AS ADVISORSBefore briefing Gartner and Forrester, the majortechnology analyst firms, we met with TowerGroup, aleading global financial services research and advisory firm,and Javelin Strategy & Research, a quantitative and qualitative research firm focused onglobal financial services. We described our technological approach and our belief that itcomplied with security measures recommended in a recent update to Federal FinancialInstitutions Examination Council (FFEIC) guidelines on online customer authenticationby financial institutions.Both firms agreed, and provided more insight into the probable impact on regulatorycompliance for online banking and financial services, which led us to establish online frauddetection, identity theft protection, and regulatory compliance as our value proposition.Furthermore, they provided information on the number of financial institutions affected bythe guidelines (market size) and other companies with similar security approaches. Thishelped us develop two items that were critical to creating a new information securitytechnology category. CREATING A NEW TECHNOLOGY CATEGORY | 3 
  • 4. DEVELOP A MARKET MODEL AND COMPETITIVE LANDSCAPEGartner, Forrester, Frost & Sullivan, and other analyst firms makemoney by selling research and advisory services. Many of theircustomers are the very companies their analysts cover.Therefore, one of the factors that influence the creationof a new category is whether it is big enough andvaluable enough to create new customers forthe analyst firm.We developed a market modelthat showed U.S. financialinstitutions could spendover $1B tocomply withthe new guidelines,and that at least four newand four established companies would compete in the new space. CREATING A NEW TECHNOLOGY CATEGORY | 4 
  • 5. LAND A MARQUEE ACCOUNTDespite a unique technological approach that did not fit an existingcategory, a compelling value proposition, a relatively large totalavailable market (TAM), and a considerable competitive landscape,one last element was missing. An analyst told me: I would love towrite a research note on you and this new space, but you need toland a marquee account—either a top bank or brokerage. As Ipressed the analyst on this factor, noting that we had severalfinancial service customers, he said we needed more: I don’t care if you give the product to alarge bank or brokerage, as long as they install and use it. That will legitimize the categoryand position you as a credible competitor. So over the next six months, we worked to land atop U. S. bank. But rather than give away a product, we expanded our basic offering (a pointsolution) to meet the bank’s enterprise needs.In the end, we landed a marquee account and positioned ourselves as a noteworthycompetitor in new categories created by major technology analyst firms: TransactionAnomaly Detection with Gartner, and Online-Fraud Risk Monitoring with Forrester. CREATING A NEW TECHNOLOGY CATEGORY | 5 
  • 6. ABOUT THE AUTHORBruce Pharr lives in the San Francisco Bay Area with his wife andson. He umpires little league baseball, hikes in the Santa CruzMountains, eats good food, drinks good wine, reads, and indulgesa passion for the arts.As a marketing executive, he has a track record of increasing enterprise value bydeveloping and executing successful product and marketing strategies, andmanaging technological and organizational change. He has held lead marketingpositions at several private and public corporations, and he founded and led atechnology marketing consulting firm for over a decade.He records ideas, experiences and reviews on his blog MarketingMuses. CREATING A NEW TECHNOLOGY CATEGORY | 6 

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