Gut Feelings Are Not Enough

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Gut Feelings Are Not Enough
Gideon Lopez Managing Director IDC Israel
28 January 2007
BizTEC07 Workshop 2 - How to Start Up
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Gut Feelings Are Not Enough

• Defining Business Intelligence
• The Business Plan
• Working with IDC Research
• Essential Guidance

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The Quest for Business Intelligence

• Business success is ultimately the result of
  correct managerial decision making
• Correct decisions are based on TIMELY and
  RELEVANT information

Internal Business Intelligence (BI) Developed
on the basis of internal databases and considered
today a necessary management tool
External Market Research The need is as old
as business itself little systematic approach
difficult to budget
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Where Decisions Are Usually Made
For centuries man has made his most critical
decisions here
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DIY Vs. Professional Intelligence
Do It Yourself Intelligence
Professional Intelligence

• Cheap!
• The effort fallacy
• No standards
• No vendor RD
• No stealth-mode
• Happy forecasts

• Expensive!
• Industry standard
• Saves time
• Realistic competition
• Realistic forecast

Impacts how the management team is perceived
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I Did It My Way
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Gut Feelings Are Not Enough

• Defining Business Intelligence
• The Business Plan
• Working with IDC Research
• Essential Guidance

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Types of Investors, or Who Reads My Business Plan
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Financial Investment Risk Vs. Gain
The Risks
Market research
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Business Plan Structure Research

• Executive Summary
• Company Description
• Market
• Competition
• Operations
• Management Team
• Financial Projections

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Startups The Research Questions

• Is the technology viable? Some wheels have been
  invented, others failed
• What is the business opportunity? What technology
  am I replacing? What technology am I dependant
  on?
• Who are the competitors? What are their
  strengths? Will I be able to build on their
  weaknesses?
• What are the users planning? How much will demand
  grow? What forces will affect demand?

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Sources for Positioning

• IDC Technology Taxonomies
• Evolutionary research documents
• Views on major relevant RD efforts
• Views on vendor technology roadmaps
• Research on user trends and vertical segmentation
• Relevant startup activity

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Sources for Market Sizing and Forecast

• WWW first impressions confused inconsistent
  but gives some initial ideas
• Market studies provide both market share analysis
  and forecasts
• Technology trends reports provide a deeper
  perspective of forecasts
• IDC white papers on vendor sites often provide
  more focused analyses
• Look at adjacent markets Dont forget the
  ecosystem

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Sources for Competition

• For established vendors/ISVs
• IDC Taxonomies Market studies
• Analyses of vendor product roadmaps
• Analyses of recent MA activity
• For other startups (often goes unnoticed)
• IDC Analysts
• Investor publications
• Blogs
• May require paid sources or make do with the
  risk

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Gut Feelings Are Not Enough

• Defining Business Intelligence
• The Business Plan
• Working with IDC Research
• Essential Guidance

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Working With IDC Research Database

• Stage I Search for relevant taxonomy (e.g.
  Software, Grid, Virtualization, etc.) and
  identify the space in which you are working

Stage II Once identified, search for specific
market to capture spending levels, channel
structure, competition, geographies, and forecast
Lets illustrate with an example
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Virtual Server Example Taxonomy
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Virtual Server Example Research Drilldown
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Gut Feelings Are Not Enough

• Defining Business Intelligence
• The Business Plan
• Working with IDC Research
• Essential Guidance

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Evolution of External Research Needs
Possible cost 30K-100K
Established

• Geographic Expansion
• Channel Tuning
• MA
• RD

• Business Partners
• Marketing
• White Paper
• Competitive Focus

Possible cost 15K-40K

• Positioning
• Technology Evaluation
• Market Sizing
• Competitive Landscape

Possible cost 2K-10K
Startup
Time
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Essential Guidance

• Despite the special relations we have with our
  guts nothing replaces systematic research
• The WWW is a rich source of information about
  many things it does not replace systematic
  research
• No doubt your idea will change the world
  bouncing it on some industry analysts may give
  you some surprises
• Understanding the way technologies evolve will
  help you better focus your RD efforts
• Market research is not (only) about numbers
  look at the technology ecosystems at marketing
  strategies, partnerships, vertical segments,
  regulatory trends look far and wide

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And Finally

• Use the IDC library as an opportunity to
  understand the scope, depth, and limitations of
  professional market research you will need it
  throughout your professional career.

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Thank You!
Please email me at glopez_at_idc.com
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