Tom Webster, writing and speaking

The Future of the Analyst Business

Added on by Tom Webster.

This is such a great article about the problems facing the "analyst" industry in the age of social media. I've worked on both sides of the industry analyst business over the past 15 years or so, and I can confidently say two things: 1) For some firms, the analyst business has turned into a complete *racket.* You pay them to be a client, you get "coverage." Full stop.

2) The research/methodology standards of some analyst firms have also slipped, which makes these firms more dependent on their "rock stars." I used to be able to rely upon primary research from analyst firms, but primary research of quality is getting more and more expensive. Some firms continue to do the work; however, others rely upon what is really qualitative research (i.e., interviewing their clients) masquerading as quantitative.  This forces clients to trust the judgement of their "rock star" analyst, when what companies should be doing is paying for quality research and insights, and hiring their own "rock stars" to interpret it.

It's just not possible for *any* industry analyst to have the best interests of all of their clients at heart. Think about that for a moment.

Pay for the best primary research data, and hire your own stars. Failing that, hire an industry analyst based upon the quality of their data, not their personalities. Those are the only two paths to sustained, knowledge-based competitive advantage.