By Lorna Garey, executive editor at Brainyard
⏰ 8-minute read
- Professional prognosticators gonna prognosticate. Of all the 2020 predictions from big analyst firms, here are our picks for insights founders can use.
- Both Gartner and Forrester advise companies to keep a laser focus on customer intimacy and experience — generally a strong point for startups.
- Don’t assume that you need to pay big bucks for analyst insights like these as the year goes on. Both firms offer summaries of research as well as webinars, while you can often find licensed versions of product recommendations too.
What’s that? You haven’t budgeted for five-figure accounts with the Big 4 analyst firms? Not to worry. Every month, starting now, Grow Wire will curate recommendations, predictions and market insights from Gartner, Forrester, IDC, Ovum and smaller-but-no-less-insightful firms, along with some of our own data from Brainyard, our sister site.
First up: 2020 predictions from Gartner and Forrester and the overall vibe these firms are sending out. In January, we’ll circle back to IDC and Ovum for more technical and global insights.
👉 For the newbs: Analyst and advisory firms have deep insights into markets, tech vendor roadmaps and their enterprise consulting clients’ plans.
Though most reports are not free, founders of still-growing startups can gain insights from press releases and occasional gratis content. See the Resources box for helpful links.
Gartner zeitgeist: The only constant is change
“In 2020 and beyond, virtually every enterprise will experience a market transformation or other crisis that requires a fundamental change in how they do business.” –Gartner’s "Top Insights for the C-Suite 2019-2020"
For his column in Gartner’s Top Insights for the C-Suite 2019-2020 report, Mark Harris, EVP of research & advisory, agreed with execs at this year’s
EY Corporate Development Conference, who say the economy could, and should, continue to hum along, but that there are indicators decision-makers need to monitor. Like what? Levels of capital inefficiency, employee power in the labor market, competition and business transformation/M&A are all converging at the highest point they’ve been in a long time.
Founders who lived through 2008 and 2009 may be tempted to hide the rest of their venture cash under the Casper mattress, but Harris warns against a bunker mentality. The kids who only know about TARP from B-school aren’t about to slow their rolls. The better course, he says, is to be proactive and prepared for potential rough going.
Here are three top predictions from Gartner’s report, plus our takeaways for founders.
📊 Gartner predicts: According to the Gartner 2018 Customer Experience Business Partners Survey, “47% of business leaders want to offer better customer experience than the competition, and 38% want to be ‘world-class.’” Regarding the focus of CX projects, the survey also provides that “2 out of 3 focus on fixing existing experiences. 1 out of 3 focuses on building new, innovative experiences.“
According to the report, “a survey of more than 4,000 B2C and B2B customers found that CX factors explained 66% of loyalty, with the remainder driven by brand perception and price considerations.”
This echoes the findings of our sister site’s latest CFO survey, which publishes next month: The focus is on improving existing products and guaranteeing customer satisfaction. Adding new goods and services comes down the list.
🌱 Our takeaway: Startups know the cardinal rule of CX: It’s not about selling a product. It’s about connecting with your customers. (OK, there are a few other rules.) But at the end of the biz cycle, from unboxing your product to content strategy, connections are king. Keep honing those as 2020 kicks off.
And what’s up with the 62% of businesses that aren’t even aspiring to have world-class customer experiences? We digress.
📊 Gartner predicts: “By 2022, 90% of corporate strategies will explicitly mention information as a critical enterprise asset and analytics as an essential competency” and “by 2022, 30% of chief data officers will partner with their CFOs to formally value the organization’s information assets for improved information management and benefits.”
The report also states that “in most organizations, business leaders don’t really understand exactly how D&A (data and analytics) supports their work, and D&A professionals lack sufficient understanding of business context.”
🌱 Our takeaway: Our soon-to-be-released CFO survey confirms that collecting better data, and then wringing more out of it, are high priorities. Startups that prioritize data analytics and management best practices, embed database and analytics experts in the business and assign value to data from the get-go can gain a competitive advantage while avoiding the need to circle back and fix problems later.
👉 Gartner coined the term “infonomics” to explain how companies should measure, monitor and monetize their data. Here’s how to get started.
Gartner also predicts that “by 2020, 25% of large organizations will be either sellers or buyers of data via formal online data marketplaces.”
While this is a very new phenomenon, data marketplaces, including Ocean Protocol, The DX Network, Streamr and Datawallet, can make well-managed information a potential source of new revenue. In one example, The DX Network is helping Forward Fooding with its mission to connect food industry entrepreneurs with large agri-businesses. More use cases are here.
No matter your business, startup founders should think about their data as a tangible and valuable asset, no different from physical inventory. That mindset will serve your company well.
📊 Gartner predicts: According to the 2019 Gartner New Product Development Process Benchmark Survey, “41.8% of R&D professionals aren’t sure that their company’s NPD [new product development] processes generally improve a product’s likelihood of success.” Further, “product failures can often be traced to poor customer understanding, NPD process mismanagement and poor hand-offs/mistimed launches. Additionally, it’s difficult for R&D NPD teams to know the key drivers of product success and subsequently to increase their hit rate for newly launched products, especially in today’s demand-constricted environment.”
“Out of all the activities that Gartner examined, one had an outsized impact on product success: Taking a “challenging posture” to customer insight and understanding — specifically scrutinizing the quality of customer data and considering different approaches to solving customer problems.”
🌱 Our takeaway: As small companies become big, it can be difficult to keep a virtual finger on the pulse of what customers want. Serial entrepreneur Marcia Kilgore’s advice for coming up with a string of successful concepts includes using the “so what?” test and only selling products you’d buy.
Continually analyzing business data is a more formalized and scalable version of that concept. Ask: Is our data fresh, complete and high quality? Does it show ways we could work smarter? How could we use it to rigorously “pressure-test” assumptions?
Forrester zeitgeist: Grounded in reality
“In one scenario, 2020 becomes the year companies convert on the potential energy built up in 2019 to move from prudent investments to breakout growth. In another scenario, recessionary fears become reality.” –Forrester, Predictions 2020: On the Precipice of Far-Reaching Change report
In its Predictions 2020 report, Forrester keeps itself honest by looking back on its 2019 advice, which amounted to advising big, slow, tech-averse companies to “step back and double down on the hard work of building a strategic, operational, and technical foundation able to adapt.”
The firm admits that enterprises that took this advice may have given nimble new rivals a clear field to take advantage of a strong economy. You can hear more insights from analysts on the accompanying free webinar in January.
📊 Forrester predicts: “In 2020, venture capitalists will increase their scrutiny of startups. Expect downward pressure on deal sizes as investors seek out the new hottest thing in Silicon Valley: profitability … Investors are growing weary of razzle-dazzle and disruptor lingo. “
🌱 Our takeaway: Startups know that VC firms are choosier and want not just profitability but, as we discuss, the potential to grow quickly in a durable industry, develop category-creating products and deliver a successful IPO or acquisition. We agree with Forrester that startups should double down on these attributes in the coming year vs. talking a big game about achievements they might not realistically carry out.
Speaking of IPOs, public markets are cognizant of private investors substituting vision and promises for revenue and profit margins. Last year, 44 companies withdrew their IPO registrations; that level is up almost 50% over 2018 and the highest since 2016. If you’re contemplating an IPO, check out our lessons from 2019 to heed in 2020.
📊 Forrester predicts: “In 2020, the top CMOs will be responsible for all that surrounds the customer. They’ll recognize that the best mechanism to drive growth is a strategically planned ecosystem that delivers value to customers throughout their lifecycle.”
🌱 Our takeaway: That’s a bold statement, and we don’t see many founders handing the keys to their marketing leads. Still, Gartner agrees with Forrester that marketing’s clout is on the upswing, and our new CFO survey shows marketing is slated for more new investment in 2020 than sales, production or customer support.
But founders must beware of letting the tail wag the dog. What do we mean? A few years ago, Hubspot CEO Kipp Bodnar shook some trees with a
rant blog titled “Marketers: This Is Why We Can’t Have Nice Things.” Bodnar called out the tendency of marketers to succumb to “a low-grade fever to solve for short-term needs.” An example is when CMOs spend time and money on SEO contortions to try and game Google rather than just making excellent, well-focused content.
Forrester gets that and says that “smart CMOs will begin pulling back on strategies that drive short-term gains at the expense of customer affinity.” The firm advises against manipulative marketing strategies, like using dark patterns that trick customers into taking actions they may not want to. One example is using misleading wording to get email opt-ins.
The report suggests spending more on creative, including good content and unique branding, instead.
📊 Forrester predicts: “Automation will replace, on net, 1.06 million jobs from cubicle, coordinator, and function-specific knowledge worker personas in 2020. By contrast, work personas that require intuition, empathy, and physical and mental agility, including cross-domain knowledge workers, teachers/explainers, and digital elites, will add 331,500 net jobs in 2020.”
🌱 Our takeaway: As presidential candidate Andrew Yang likes to tell us, automation is coming, slowly but surely, with societal consequences that we’re just starting to think about. First, it was hardware store employees and truck drivers. Now, says Forrester, technology could soon displace knowledge workers, like programmers and (gulp) editors.
The flip side for startups is that you may never need to employ, then shed, large support-staff workforces, like, for example, dozens or hundreds of call-center agents — AirAsia recently replaced all of its agents with chatbots and voice AI. As technology emerges to perform rote task, you can prioritize hiring for those intuitive, empathetic roles that are likely to remain un-automated for years to come.
(Also, we didn’t know that “digital elite” was a job, but we may want to apply.)
📚 More resources
Gartner’s 2,000-plus research analysts focus on technology as well as HR, finance, sales and marketing and procurement. Its “Magic Quadrants” are an important benchmark for tech vendors, with the “upper right quadrant” most coveted. Often, vendors included in the MQ will license and freely share them.
Find press releases with highlights of new Gartner research here.
Looking for recommendations on tech products and services? Gartner’s free Peer Insights site offers, well, peer insights on more than 5,700 software products in hundreds of categories. You can also find complementary webinars.
Gartner releases annual strategic technology predictions. Among its 2020 insights: AI-driven emotion-detection and recognition technologies for use in advertising (not creepy at all) will grow to a $24 billion market, while blockchain will support more use of mobile cryptocurrency and help us spot “deep fakes.”
Forrester works with both B2B and B2C companies and has about 250 research analysts globally. It focuses heavily on tech and customer experience and publishes “Waves” to rate vendor product and service offerings.
Find press releases with highlights of new Forrester research here.
As with Gartner MQs, companies will frequently license Forrester Waves. And, the company offers a variety of free webinars featuring its analysts. This one on CX is worth a look.