Forrester Research have been doing some interesting market studies on the innovation space. One of their analysts, Chris Townsend, has started a blog on the topic. Incidentally we invited Chris to Imaginatik’s European User Forum in London in November this year – he got to hear case studies from our clients including Reed Elseiver, Pfizer, Royal Mail, Bombardier Aerospace and CSC.
I was just reading his recent post on his hesitation to NOT make a prediction on market size for the innovation management space. His points make great reading (I agree with many of them) – I added my comment in, which I posted below here for fun.
First I would like to comend you highly for your stance in this matter. Whilst I am pretty sure I was not one of those vendor CEOs asking for a market forecast [early disclosure: I am the CEO of Imaginatik, as you know], I can see why people want one, and how easy it would be to make something up.
You have picked out the major points right on the head. This is an immature, tiny market place with buy and sell side immaturity.
In addition we are going into an aggressive downturn in the economy which will turn the taps off a lot of private equity and VC investment, which in turn is likely to disrupt if not kill outright a bunch of attractive looking start-ups. Incidentally, even in a good economy, there is an 85% kill-rate for start-ups within 18 months, so in this ‘new’ industry, I would not give newecommers much hope of surviving (note to buyers).
Just one comment on one statement you made on the sell-side immaturity section: “…Further, only one pure-play is a public company, and to my knowledge none of the vendors have yet cracked $5 million in annual revenues.”
-> Imaginatik plc [LSE: imtk.L] is the public company, listed on the London Stock Exchange AIM market (with an ADR in the US OTC market)
-> as a public company we disclose our revenues, and last year we made over $6m in revenues – with a market expectation of significant growth this year.
Also an historic note. Back in 2002 I was interviewed by Information Week who did a very early piece on the area (stored here on our web site: http://www.imaginatik.com/webdoc_comp_news_1008). The market analysts prediction of a $3m market at the time was over-blown then, although the numbers are creeping up. What the numbers DID do is hurt people looking for money. Any VC worth their salt will do a modicum of due diligence research, and yes, they found this article. This market prediction STOPPED a lot of firms from getting capital (fine for Imaginatik, not so great for them). Of course what start-ups in this area would desperately love would be for you to stick your neck out and predict a $200m market in two years time, plenty to convince some VC to drop a few million a start-ups way. Will it help? No.
Many thanks, and let’s all have a great 2009.
Mark Turrell CEO, Imaginatik