This document discusses the growing importance of industry analyst endorsements for start-ups and how start-ups pitch to analysts to achieve endorsement. It finds that the pitch to analysts involves contrasting techniques - initially being confrontational but later unresponsive - and requires verifying claims through different frames including techno-economic, calculative, and moral frames. Success is framed as escalating levels of inclusion in the analysts' research and recommendations, including being discussed as exemplars or recommended to clients. The valuation process is found to be an interactive achievement centered around inclusion in the analysts' frameworks.

1. ENDORSEMENT ECONOMY:
VALUATION, AND THE
2ND MOST IMPORTANT PITCH
DUNCAN CHAPPLE
AND
NEIL POLLOCK
UNIVERSITY OF EDINBURGH
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2. INDUSTRY ANALYST ENDORSEMENT MATTERS
Forrester Wave
Chicago
Start-up
Chicago Start-up
Magic Quadrant
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3. Industry analysts
influence nearly
60%
of all enterprise
software sales
Institute of Industry Analyst
Relations (IIAR) study
(Dennington & Leforestier 2013)
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4. GROWING NUMBERS OF INDUSTRY ANALYST FIRMS
The “Big Three”
700 medium sized
and "boutique firms"
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5. RESEARCH QUESTIONS
What kind of ‘valuation’ 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?
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6. “Influencer relations”
who coach vendors
EMERGING 2ND PITCH
“INDUSTRY”
Pitchers
(tech entrepreneurs)
Coaches
(analyst relations agencies)
Analysts
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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???
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8. VALUATION STUDIES
•Value not intrinsic
•Different approaches to valuation:
•Bourdieu (1993) ‘critics consecrate’
•‘Evaluative cultures’ (interactional, practices, materiality)
(e.g. Lamont, MacKenzie, Espeland)
•What matters not so much who actors are but how well they
perform according to “established scale of valuation” (Aspers
2009)
•Analysts are “frame-makers” (Beunza & Garud 2007)
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9. “Entrepreneur starts a
company. It’s a software
firm. It’s challenging the
incumbents. It’s 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 space”
“They feel like the analysts are
under-representing them
[in their categories]; they
find that they are”.
“It starts with “Hey, how are you?
I’m glad I have the chance to talk
to you” and very quickly it goes to
“I don’t understand why
you don’t see this”
“So at once they assault [the
analyst’s] judgement, assault
their wisdom and assault their
integrity, and I don’t give that
less than 30 minutes. And this
happens every single
time”
(interview, AH)
HOW OPENING PITCH TYPICALLY GOES
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10. “So you try to
be there, be
cheerful, make
everyone at
ease…Make
sure the analyst
is listened to”.
TAKE HEAT OUT
“[A] good practice is
to be on Instant
Messenger with
your spokesperson if
you can’t be in the
same room [to] try to
calm him down...”.
“You 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 subjects”.
(LL, interview)08:06 17

11. IN LATER PITCHES, EVERYTHING CHANGES
“Most analysts would just stay quiet, and they are just going to sit there during [the pitch, and]
watch you move on to the next thing”
(W post pitch analysis).
Prepare pitcher for unresponsiveness:
“If you hear silence on the other end of the line it’s 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, it’s actually the opposite”
(comment Vk)
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12. ANY COMMENTS WHATSOEVER SEIZED UPON
After a pitch, a coacher discusses how:
“I didn’t get anything; and I don’t know what to talk about next [in
forthcoming pitches]”.
“She did mention that the metric piece was the ‘holy grail’. Does that
mean that she doesn’t believe it, or that we’re really onto something?”
(Wy demo)
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13. CALCULATIVE FRAMES
“the hardware ones are
the easiest I now realise,
and a lot of that is to do
with the fact there’s a lot
of facts that can be put
around hardware”.
“When 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 you’ve got are the
right type and how
you’re competing and
how you’re
differentiating”
(BB, webinar)
“When you get to
software it’s still
technical but it gets a lot
more subjective about
what the pricing should
be and what the channel
partners are like”.
Difficulty of evaluating A, Ease of measuring B
An analyst says:
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14. MORAL FRAMINGS
“We are quite cynical, and the reason we are quite cynical is that most people
are lying to us… So the question is how do you get behind the lies to find out
what is really going on.”
Analysts assume things dressed up
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15. (escalating scale of
endorsement)
• Getting to pitch again
• Physically meeting up
• Analysts talk about start-up on
stage
• Write about them as an exemplar
• Recommends them to a client
• Analysts compete internally to have
“their” start-up foregrounded
• Entwined with analyst career
WHAT IS SUCCESS IN THE 2ND PITCH?
INCLUSION IN FRAMES
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16. What is success in the 2nd Pitch?
Inclusion in Frames
(escalating scale of
endorsement)
• Getting to pitch again
• Physically meeting up
• Analysts talk about start-up on
stage
• Write about them as an exemplar
• Recommends them to a client
• Analysts compete internally to have
“their” their start-up foregrounded
• Entwined with analyst career
ANALYSTS TALK ABOUT START-
UPS ON STAGE
“Case studies like this are really helpful for us…as you write reports
we are always looking real examples. Everyone always talk theory, but
very concrete examples of what people are doing it’s really important
for our research. So one of the things I’d encourage [digital start-ups]
to do is really just keep us updated on interesting projects you’re doing
and new things that are coming out that we could potentially write
about”.
(analyst during a pitch)08:06 28

17. What is success in the 2nd Pitch?
Inclusion in Frames
(escalating scale of endorsement)
• Getting to pitch again
• Physically meeting up
• Analysts talk about start-up on stage
• Write about them as an exemplar
• Recommends them to a client
• Analysts compete internally to have
“their” their start-up foregrounded
• Entwined with analyst career
• Do you recommend Cool Vendors
to clients?
• "…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 more” (analyst webinar)
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18. What is success in the 2nd Pitch?
Inclusion in Frames
(escalating scale of endorsement)
• Getting to pitch again
• Physically meeting up
• Analysts talk about start-up on stage
• Write about them as an exemplar
• Recommends them to a client
• Analysts compete internally to have
“their” their start-up foregrounded
• Entwined with analyst career
“Let'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 yours” (analyst
webinar)
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19. WHAT KIND OF VALUATION IS 2ND PITCH?
• Interesting interaction (confrontational, then unresponsive).
• Preparing for pitch requires contrasting techniques (calm things down, then
draw analysts out)
Techno-economic
framings
Looking for proof
Treat pitch as ‘testimony’Calculative framings
• Interesting verification process (assume start-up is lying, go back over testimony)Moral framings
• tension between the analyst evaluating the start-up but also finding them a
‘interesting’ source for their research (escalating scale of endorsement)Inclusion in framings
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20. ENDORSEMENT
Endorsement – 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 (‘the liability of newness’) but allows the
start-up to develop (scaling, internationalisation)
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21. ENDORSEMENT + ECONOMY
▪Endorsements emerge out of “interactional arenas” (Sauder and Fine 2008)
▪Start-ups want to attract the analyst/Analysts looking for next big thing
▪Analysts talk about ventures in public and recommend them privately to
clients.
▪“Invest” their relationships in the start-up (champion the venture)
▪Vatin (2013) distinguishes between valuation (as ‘assessment’ of value) and
valorisation (as ‘production’ of value)
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