A Note to Public Relations: Be Credible and Check Your Math
I stumbled into this press release during my morning reading (ParAccel Triples Revenue, Doubles Customers and Appoints New Executive Team in 2010) and felt an overwhelming and immediate need to use it as an educational example in public relations (PR).
CAMPBELL, Calif.--(BUSINESS WIRE)--ParAccel, Inc., provider of the world’s fastest analytic database, today announced that it achieved record financial performance in 2010 with 300 percent revenue growth over 2009. The company doubled its customer base with key enterprise wins, launched ParAccel Analytic Database (PADB) 3.0, and continued to expand partnerships with leading platform, storage and analytics vendors. To keep pace with its growth, the company hired key new executives and moved its corporate headquarters to a larger facility located in Campbell – the heart of Silicon Valley.
Here are my comments on this release:
Make supportable claims. The "world's fastest analytic database" claim strikes me as both unsupported and unsupportable. Different databases are good at different things and there are many analytic database competitors in the market. It is not credible that any one DBMS could be fastest at all of them. But this is supposed to be a PR , not a product marketing, post so I won't drill further.
If you're going to talk growth, then provide real numbers. Tripling revenue sounds very nice, but from what to what? Many private companies now make these number-free growth claims, but they're hard to take seriously. Either release real numbers or avoid talking about growth.
If you're going to talk about growth, do the math correctly. Tripling revenue does not equal 300% growth. Think about it: 100% growth = doubling revenue, 200% growth = tripling revenue, so 300% growth = quadrupling revenue. This is a serious credibility blunder and sadly it's not uncommon. Get a finance person to review press releases with numbers in them.
If you're doubling customers and tripling revenues, then you've got me asking questions. People will cross-check your numbers, particularly when you're providing only pieces of the puzzle and have already made one math blunder. I think they mean to say that they tripled annual revenues and doubled the cumulative size of the installed base (i.e., number of customers). Since I'm not sure what to make of that, I made a little model in Excel. I think what the model tells me is that, ceteris paribus, when you are on a strong growth trajectory doubling the installed base is not enough to triple revenues. I'm sure there are better ways to analyze this, but that's not my point. My point is, as a marketer, when you are providing only pieces of the puzzle you are hanging yourself out to dry if those pieces are inconsistent or provide a clue to a less rosy bigger picture.
By the way, my guess, based on playing with the model below, is that the company had a weak trajectory in 2006-2009 and then had a nice 2010.
“The data warehouse market, and specifically the market for high-performance analytic databases, is growing and evolving at an exponential rate;
Don't say "exponential growth" if you don't know what it means. I love the data warehousing market. It is large, growing, and healthy -- but it is not growing exponentially. Exponential growth has a precise meaning. The data warehouse market is growing at a 12% (linear) rate and will $13.2B by 2013. That's huge and wonderful already. Saying the growth is exponential just damages credibility and undermines an otherwise very strong message.
Say "Appoints New Executives," not "Appoints New Executive Team." The new CEO joined in August, so that's not news. The company has appointed a new COO, CMO, and VP of International. Those are important roles and should be announced. But the headline makes it sound like the board blew out the entire executive staff and replaced them in one shot. This is not only a non sequitur (i.e., "we're doing so well we fired everyone"), it's also inaccurate.
“With this new, energized executive team in place, strategic partnerships with NetApp, ... and leading business intelligence vendors, combined with ... ParAccel is poised for an even more impressive 2011.”
Be careful in expectations management. While I just love the "energized" comment (i.e., were the old guys tired?) my real issue is that the company is saying that 2011 will be better than 2010. They shouldn't say this unless they plan to more than triple revenues in 2011 and more than double the installed base. Logically, anything less would then be a disappointment.
To keep pace with its growth, the company hired key new executives and moved its corporate headquarters to a larger facility located in Campbell – the heart of Silicon Valley.
Be credible. Unless I somehow misplaced Bill and Dave's Garage, Palo Alto is the heart of Silicon Valley. In 25 years in and around Silicon Valley, never before have I heard Campbell referred to as its heart. C'mon.
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