How The Altimeter Group Soared To The Social Stratosphere (And How It Landed Well)

This post was written by Giovanni Rodriguez, a regular contributor at Forbes. The post was originally posted on ForbesWe are grateful to Giovanni for giving us permission to share this blog post.

In the Spring of 2008, I sat down for lunch with Charlene Li – an industry analyst who had made a name for herself covering digital innovation for Forrester — at a place that would later seem prophetic.  It was the Sky Kitchen – my choice – a small diner that serves the pilots at the San Carlos airport in Silicon Valley.

Depending on your tastes — or how far back you can remember — The Sky Kitchen is reminiscent of the 1990s TV sitcom Wings, the 1940s film classic Casablanca, or the 1930s book-and-film classic Lost Horizon – three stories that revolve around airports, smooth takeoffs, and good landings.

But I say prophetic for three reasons.  First, Charlene — as she confided over sandwiches and fries — was getting ready to launch a new kind of analyst firm called Altimeter. Not sure she had quite yet decided on the name. But I like to believe San Carlos had something to do with it.

Second, when Charlene finally launched her new venture — several months later — she chose a hangar in San Mateo (close to San Carlos) for the occasion.  Nice touch, I thought.  She understood how to build on the metaphor.

Third — and most spooky to me, a consultant who revels in metaphors — Altimeter would get bought by a larger firm called Prophet, seven years after the launch.  Altimeter and Prophet announced the acquisition this past week.

That metaphors shape the narrative for both firms should not be surprising to anyone in the marketing biz.  Metaphors help businesses to imagine and project their long-term trajectories, and both Altimeter and Prophet are led by master storytellers.  For Altimeter, the narrative has been about tracking the rise of digital innovation.  For Prophet — I’m guessing, for I have not met the principals — the narrative has been about tracking the future (with “prophecies”).  In combination, the firms now have a more interesting narrative:  tracking what it takes to stay above and ahead of the competition in the fast-changing world of digital innovation.

But of course, narratives can sometime obscure some of the more important facts — key details that don’t quite fit the template of “the hero’s journey.”  I’ll try telling the Altimeter story from the perspective of a peer who actually witnessed the launch, and who’s watched the firm progress over the years.  To get where it is today, it needed to position, pivot, and ultimately pair with the right long-term partner.

Act I: position

At the start, Altimeter was faced with an interesting challenge: differentiating from the fast-growing pack of social technology consultancies. I was at one of those consultancies (The Conversation Group), and we were pretty early. But others — like Crayon, the Social Media Group, and many solo practices — had come to market, or were coming to market, with a variety of offerings.  Charlene’s first big decision was to partner only with senior people with large networks.  Among the first people were Jeremiah Owyang, a wildly influential web strategist who worked with Charlene at Forrester; R. Ray Wang, another influential at Forrester; and Deb Schultz, a digital tech maven whose first big win was running marketing for Six Apart, the creator of Typepad, the then-popular blogging platform.

As I noted at the top of this post, Altimeter originally branded itself as a new kind of analyst firm. But that was not what made them so interesting.  It was more that Altimeter was the first standalone analyst firm covering the wild and wooly world of social. That positioning helped them break fast from the peloton, and lead the way for at least one sector of the market that would become increasingly important: knowing what businesses were actually doing.  It’s knowledge that typically only analysts can obtain with scale and precision.

But Charlene made another critical decision:  to focus not just on social technology but other digital disruptions that mattered to the businesses Altimeter was interviewing. Keep in mind:  this was seven years ago, and practically every business in the world was wondering what to make of this thing called social.  But it was clear to a number of analysts and consultants that social was just the tip of an iceberg that would come crashing soon.

“Who knows what will matter next,” Jeremiah told me one year after Altimeter launched. “Maybe it will be mobile.”

But even in its first years, Charlene and her partners made sure the team was getting ahead of the curve by researching technology trends and adoption in areas that social tech was accelerating:  how to use and scale social; social CRM (remember that?); measuring social and ROI (return on investment), which no new technology movement can ignore for long. And Charlene didn’t let her foot off the gas when it came to personal thought leadership, the thing that has helped the principals at Altimeter to build global reputations.  In 2010 she published the book Open Leadership, a follow-up to Groundswell, the 2008 book she co-wrote with Forrester analyst Josh Bernoff that helped propel her to the stratosphere of social tech.

Act II: pivot

Word to the wise:  if you ever find yourself in the business of growing a business, try finding the time to write a frikkin book. It’s hard (trust me). In fact, lots of people swear by experience that there are higher priorities.  But as I have heard from Charlene and others on several occasions, books — despite their pre-digital cred and origins — truly matter if your product is helping businesses get the so-called 50,000-foot view (a gaze above from the cockpit).  It’s a burden, especially if you have other things to do.  But if you find the time, and you can do it well, it can make a big difference.

This has been Charlene’s bias for as long as I’ve known her. So I was not surprised when Brian Solis came on board in 2011.  Brian — a veritable one-man factory of business books — has somehow found the time to do well as a business advisor, do well as a writer, and deliver big keynotes across a range of industry and vertical conferences.

Brian is a beast — I say that admiringly — and he was perfect Altimeter material in the middle phase (at least).  Not all the first partners hung out for this transition — a few started successful businesses of their own, and a few have remained as fellows or advisors. In the meantime, Brian, along with new hires, kept lifting the Altimeter profile by producing research on new topics like social business (remember that?); governance; content strategy; and the new media mix (paid, owned, and earned).

Act III: pair

But there was a more interesting pivot in this middle period. Though Altimeter had differentiated itself in the early days by positioning as an analyst firm, Charlene saw an opportunity to compete for consulting dollars. Susan Etlinger, a former executive in corporate communications, became Altimeter’s first full-time consultant (though she later became an analyst).

It was not just a business decision, but a market signal. And Prophet, I’m guessing, received it. Because small smart planes like the one Altimeter has been flying might ultimately do better in a fleet.  Prophet today is known as a branding and consulting firm, competing for branding gigs with the likes of Interbrand, and competing for digital consulting with the likes of Boston Consulting Group, PwC, Deloitte Consulting (one of my alma maters), and yes, even McKinsey, the inventor of the famous horizons framework that helps businesses plan for present, mid-term, and long-term markets.

Having a respected analyst firm that can bleed into consulting could be a big advantage for Prophet, particularly at a time when businesses are looking well beyond the first musings of social. I caught up with Charlene over the weekend, and this is the lineup of research topics — and consulting services — we can expect from the paired firms:  innovation and cultural change; digital transformation across discrete corporate departments (sales, marketing, HR); ethical data strategies and privacy; the Internet of Things (IoT); employee engagement.

Other big firms are offering similar services.  But with Prophet/Altimeter’s dedication to research with people who have large networks, it may be tough to share their air space as they approach the next horizon.

Safe travels, everyone.

This post was written by Giovanni Rodriguez, a regular contributor at Forbes. The post was originally posted on ForbesWe are grateful to Giovanni for giving us permission to share this blog post.

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