I Love Equity Analysts

Research reports by investment banking are by far my favorite source of background research on companies and industries.  Thomson Research (formerly Investext) is the standard-bearer in this area, and I’ve made voracious use of it when I’ve had (highly expensive) access.  Finding a good “initiating coverage” report makes my day, for better or worse.

What makes them so good?

First, they’re much more in-depth than typical market research reports (DataMonitor, I’m looking at you).  When reading market research reports, I get the impression the analysts are filling out a template as quickly as possible.  The inevitable SWOT section tends to be extremely generic, to the point of uselessness.  Equity analysts, in contrast, do their homework.  They do channel and customer checks, even with difficult to reach constituencies like medical specialists.  They attend (and even organize) industry conferences.  They typically cover multiple leading companies in an industry segment and draw relevant comparisons between them. Continue reading I Love Equity Analysts

Why Is Good Business Information So Scarce?

I recently came across this O’Reilly post about CrunchBase, the open database of information on startup companies, asking whether CrunchBase will remain free in the long term.  While the post itself is interesting, the part that puzzles me is why there is so little business-oriented information freely available out there.  Data as a service has been generating a lot of excitement recently, and I think it’s well warranted.  However, the only prominent sources of open business information are the SEC’s Edgar database, LinkedIn, and CrunchBase.  After that, the field gets very thin.  Considering how much effort companies put into business intelligence and competitive intelligence, it seems like there should be a great profit motive for someone to provide a deeper business information layer.  So I don’t really understand why we’re in this situation, but it does seem like a big opportunity. Continue reading Why Is Good Business Information So Scarce?

The Hard Road to Good Customer Segmentation

Anthony Tjan’s Harvard Business Review blog post, Approximately Correct Is Better than Precisely Incorrect, perfectly illustrates the value of customer segmentation.  Your customers are different, and treating them all as if they were the same results in poorly targeted offers, lower sales, and dissatisfied customers.

The trick is that customer segmentation is hard.  Otherwise, everyone would be doing it well!  The ideal segments are cohesive (everyone in a segment has similar behavior and preferences) and actionable (you can identify which segment a customer is in and respond appropriately).  There are more or less three generic flavors of customer segmentation, and all of them have drawbacks. Continue reading The Hard Road to Good Customer Segmentation

The Problems with Market Research Reports

Have you ever looked at the table of contents for a $4,000 market research report?  It looks so enticing, like all of your questions about the market or competitors will be answered.  Market size, growth rate, competitive landscape, customer dynamics, etc. – it’s like 300 pages of candy for someone trying to write a business plan or get data on an industry.

Unfortunately, research reports almost never live up to the hype, for a number of reasons. Continue reading The Problems with Market Research Reports

Information Sources for Market Sizing

I described some general approaches to market sizing in a previous post, but one of the biggest challenges is not necessarily the overall process, but rather finding the right data.  This is true whether you’re doing top-down or bottom-up market sizing.  There are a number of valuable data sources out there, but for most US-centric market size analyses, the US Census is the best place to start.  They have a wealth of data both on US businesses and on population statistics.  The Bureau of Labor Statistics is also a great complement with its detailed information on consumer expenditures and time usage patterns. Continue reading Information Sources for Market Sizing