10 TOOLS FOR UNDERSTANDING AND DISSECTING AN INDUSTRY

Eze Vidra

General Partner, Google Ventures at Google

I remember the first time I met Mark Gerson, the founder of expert network company Gerson Lehrman Group (where I previously worked), as he described how Gerson Lehrman Group (GLG) first started. Investors (mainly hedge funds at the time), needed a way to quickly understand an industry they were going to invest in. One day could be pharma and the next, commercial real estate. Resources abound online, but the noise-to-signal ratio is high, and the content needs to be verified and curated. So he teamed up with a few PhDs and set off to write a book about each major vertical – Healthcare, Technology Media and Telecom, Energy and Industrials, Retail and Consumer Goods, etc.  A few hedge funds bought the books and Mark went to ask for feedback. The books are great, they said, but who has time to read them? They wished they could speak with THE person (or people) that can answer all their questions right now. GLG continued to build it’s expert consulting network in the years to follow to become one of the top primary research tools for institutional investors because they have helped their customers to make things simple quickly.

“Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.”
? Steve Jobs

Whether you’re a startup founder, angel investor or VC, you’ve probably had the need to quickly understand an industry. Dissect the supply and value chain, understand how money flows and what companies are playing in each category. Wouldn’t it be great if you could quickly understand what’s going in mobile gaming, SaaS, marketplaces, etc?

As Steve Jobs said, it’s hard work to make complex things simple, so I wanted to share a few resources that helped me simplify industries and verticals. There’s quite a range of information sources from curated reports to aggregated data.

1) Industry reports

Companies like Gartner, Forrester or eMarketer regularly produce reports about tech trends and verticals. These tend to be high quality, but expensive. Tip: many of the top business schools subscribe to these resources, so MBA students have access to these for free sometimes. Investment banks and financial services firms like EY, KPMG or Deloitte are also excellent sources for industry reports. Corporates offer great insights as well from time to time, but you may have to dig deep in their websites to find it. Here’s examples from Google Market insights, Cisco, Microsoft Research, IBM Research or this IHS report on Wearable tech. Usually, the information is high quality.

2) Infographics and LumaScapes

“LumaScapes”, the one-pager infographics created by consulting firm Luma Partners, provide a quick snapshot of the various parts of an industry and the logos of the companies playing in that space. Check out the Digital Capital LumaScape below. Other LumaScapes include  Content Marketing,  Gaming and several more, which were previously covered here on VC Cafe.

3) OnePagers.io

Yesterday I came across Onepagers, and was instantly intrigued. This new resource by Clement Vouillon aims to crowdsource the most relevant info on a certain vertical. Pages are already available for Marketplaces, SaaS and Security Software, with several others planned. I’ve asked Clement for his top sources and in his own words on ProductHunt:

The first stage is basically “search” only and requires time and effort. The sources are mainly Google, Twitter, Quora, industry and tech blogs for the resources and for the startups Angel List, Crunchbase and producthunt.

The second stage requires more “analysis” and the hardest thing is to get a clear picture based on hundreds of resources you’ve just read. The more you do it the more you get used to it actually. So for each trend I need to read a lot, to think about it a lot and then to stop completely for some time. Then it’s easier to have a clearer picture and to create the competitive landscape.

4) VentureScanner

Imagine you could hire a consulting analyst. VentureScanner effectively offers this as they provide sector focused analyst coverage on a range of sectors (from 3D printing to the future of TV). 30 days free trial then $99 a month.

“We start with a real-time market landscape, complete with a comprehensive map of companies categorized by sector, funding information, and curated articles from around the web.”

5) Evolita

Visualizing the data is half the battle. Israeli startup Evolita (still in alpha) takes a variety of publicly available resources and plots them on pleasantly looking graphs.

6) CB Insights

CB Insights regularly produces data-driven reports and analysis on venture capital, private equity, angel investment, mergers & acquisitions, IPOs and emerging high-growth industries. Also recommend checking out the research blog.

7) Mattermark

Mattermark’s goal is to track growth signals from all private tech, media and telecom companies. Mattermark assigns a score to private companies, determined by the growth of 6 signals: web traffic, mobile downloads, inbound links, Twitter followers, Facebook page likes and Linkedin followers.  Mattermark also ranks investors performance by tracking dozens of growth signals including web traffic, mobile downloads, inbound links, employees, and social media for more than 200,000 private companies. Using this service makes it easy to see where VC money is flowing and what companies are performing.

8) Clarity

Clarity.fm, similar to Google Helpouts, offers an on-demand expert network for startups. The San Francisco based startup offers a marketplace for expertise, where entrepreneurs are able to ‘consult’ with experts on a pre-determined price per-minute. Want to really understand an industry? There’s nothing like speaking to the people who are in it.

9) Quora

Quora offers a wealth of knowledge, where experts take the time to elaborate on a thoughtful response. The challenge is that quality varies and many great questions remain unanswered. So, if you want to build good karma, answer a few questions where you bring expertise and help this community grow. Here’s a good answer for the purpose of understanding industries: How does the TV industry work?  and here’s a poor one for comparison How does the Fashion industry work?

10) Google Data Explorer and Google Market Insights

Originally launched in 2010, the Google Data Explorer makes large, public-interest datasets easy to explore, visualize and communicate. The tool aggregates various publicly available datasets and helps you plot them on graphs (see example below). Google Insights shares the studies conducted by Google on various industries from high-level visions to deck-ready data points. 

Check out the Databoard for Research insights to get the up to date stats for your research or build your own infographic.

Bonus

11) Whale Path - 

Whale Path provides on-demand, fully customized market research and competitive analysis by letting the user define their research needs and outsourcing the research bit to a pool of qualified researchers. Quotes are provided within 48 hours.

Ultimately, you have to curate your resources. My recommendation is to use these in a mosaic approach, piecing together bits of information that will eventually create the big picture. It’s not enough to list the companies in the industry, or know who got funded, but if you’re able to understand the value and supply chain and add company information on top, you’re getting close. For that reason, OnePagers.io excites me the most. I look forward to seeing what will come out of it once it’s open to the crowd for curation.


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This is a repost of an article that appeared on vccafe.com on August 11, 2014