Our guest is Matt Dusig, Co-founder and Managing Director at InnovateMR. InnovateMR is a panel provider which has created the Pegasus Sample Access Platform, allowing users to employ a DIY sampling solution. Prior to starting InnovateMR, Matt has founded and harvested 3 other companies and invested in many others.
In this interview, Matt covers building successful partnerships and teams in entrepreneurship, how he determines investment opportunities that works for him, and the what InnovateMR offers: quality, price, and trusted expertise. In hearing about his background, we learned particularly about staying ahead of the curve in technology and market research.
FIND MATT ONLINE:
FIND US ONLINE:
Hi, everyone, I’m Jamin Brazil and you’re listening to the Happy Market Research Podcast, today my guest is Matt Dusig, co-founder and managing director at Innovate MR, Innovate MR is a panel provider who has created the Pegasus Sample Access Platform which allows users to employ a DIY sampling solution. Prior to starting innovate MR, Matt has founded and harvested three other companies and has invested in many others. Matt, thanks very much for joining us today.
Thanks, Jamin, excited to be here.
So what did you parents do and how did that affect your early career?
Yeah, that’s a great question, so my dad has always been an entrepreneur all through growing up. He owned various businesses, and I think what I learned from him was mostly from being scrappy, when you’re running your own company you know it’s do or die, you have to be creative, there’s no safety net, and he was just, and is, he’s still alive, is just a super creative person, always looking for solutions to problems, which my wife might tell me I shouldn’t be solving all of her problems, but that’s a whole different story. And I just think that that was a key motivator that he started businesses, and that it was possible to do it, that was what I was going to do also.
That’s interesting so you knew you were an entrepreneur very early on in your career?
Yeah, I had, in college I had a side business doing graphic design for just companies and clients, and that was how I made extra money.
You have a co-founder who has been with you, gosh, since your early days, right, that’s Greg?
Four companies together. I mean, that’s insane.
It’s actually five, it depends on how you’re counting.
I’m apparently not counting well enough.
There have been some failures in between.
Wait, say that again?
I said we’ve had some failures in between that we don’t always talk about but there have been five companies and in fact if you go all the way back to college there was a sixth company. So Greg and I, our relationship goes back to being six or seven years old. Our families were friends growing up, on the block, and so we’ve known each other our whole lives. My sister, his brother were friends, and then when he joined the fraternity I was in in college, we became best friends again and then college roommates, and it was in college that we actually started one of our first businesses.
What year was that?
Now you want me to age myself, OK.
Well, yeah, I do want you to age yourself.
That was 1989 that we became roommates together. In order to launch the business, we had to promote it, and in promoting it we went down to CompUSA or Circuit City, one of those stores, it had a 30 day return policy and we bought a fax machine, and we used that fax machine to send out promotions to different clients that we were looking to solicit and when we didn’t make enough money within about 28 days, we took the fax machine back to Circuit City.
That’s brilliant. That’s brilliant, just classic entrepreneurs.
So 1999 you guys started GoZing [ph]
I believe, very, very, very early in not just the online sample space, but the internet in general, what was the motivation for starting GoZing?
In the late ‘90s, mid to late ‘90s of course the internet was booming, companies were going public, billionaires were being made overnight and Greg and I just looked at ourselves, we both had day jobs and we said, you know what, we should do that, we came up with this concept of doing advertising on mobile phones and at the time mobile phones could only receive text messages, so that was the only way you could send out a promotion, or we called it couponing, at the time, so you would send out coupons to your mobile phones, and we went to Greg’s mom with this concept, and his mom and dad decided to fund it, and so we decided to quite our jobs and said OK, here we go and of course we were way too early to mobile advertising at the time, probably ten years too early. At the same time while we were trying to get this business up and running we heard about a research agency here in Los Angeles where we’re located, that was interested in getting feedback from people as they were exiting theaters, but they wanted to collect the data mobile, instead of doing it on clipboards and paper and pencil and that was Shelly Zalis [ph]
and OTX and that was our first introduction to market research.
That’s so crazy to me, OTX has been, you’ve got Kristen Luck [ph]
of course who’s come out of that company, you’ve got Patrick Comer [ph]
and a few others, it’s interesting how OTX, and especially in the LA market has had such a broad, long term impact.
Absolutely, and Kristen and I joke about how in 2000 we were both in the trenches, basically doing the research and sampling project management, at all hours of the day, back and forth. My wife used to say on Friday nights that we couldn’t go out to dinner until Kristen told us we could go live with sample.
Man, if I had a nickel every time I’ve heard that, right? You’ve got to remember, so Kristen and I having worked together, in fact, she’s been on the podcast twice now, for so many years, she’s – there’s not a lot of people that have the work ethic that Kristen does, maybe say it that way, she gets it done, it’s amazing.
So fast forwarding to another start up of yours, Instantly, what technology challenges did you encounter?
Well, so after we sold GoZing in 2005 to Greenfield Online, Greg and I sat out of the industry for three years, we always knew we wanted to get back into online sampling, we felt like our job wasn’t done, and so the original name of Instantly was YouSamp [ph]
and the goal of YouSamp was as it sounds, was that you could sample yourself, and we were going to build the industry’s first DIY platform allowing research agencies to log on and access a sample companies panels, and a lot of people in the industry thought we were absolutely out of our mind, that that was never going to happen, and of course I knew looking at the trends of online ad buying that eventually online sampling would be automated and would be made DIY and/or API driven as well. And so that was the original impetus behind starting YouSamp and we knew we had to first build the core of a sampling business, we had to build technology that allowed us to procure and maintain panels and as well to run sampling projects. And only after that technology was built could we actually then layer on top of that a solution for clients to log on, and that was complex, you know, how do you price sample when a client is buying it themselves, what is they say it’s 100% incidence, but your job’s really five percent, what if the client says it’s a five minute survey but it’s really 50 minutes. Just all sorts of complexities like that that we have to solve for.
One of the interesting parts about this integrated or I’m calling it now the whole product and research, right, is the brand has a need and then they manifest that through a survey or something else, a discussion guide or what have you, that’s the methodology side of it, and then they get people to fill it out so there is a sampling component and then they have to do the analysis and ultimate reporting. So each one of these bricks that I just described through the market research process what’s happened in the last, honestly in the last probably 24 months and a lot more in the last 12 months is there’s through API there has been a lot of integration, you’re seeing it with Qualtrics [ph]
leading that charge, and other survey platforms, obviously the Zappy [ph]
model is playing out well. Do you think similar to GoZing, you guys were ahead of the curve maybe just a little bit too far with Instantly or YouSamp?
We definitely were, we were pushing a boulder up a hill, there was limited awareness about platforms, there was caution about whether the information and the data delivered would be representative and of high quality, and there’s – the sampling industry has been a little bit of a Wizard of Oz industry, there’s this giant curtain and behind the curtain there is a wizard pulling strings and I don’t think the world has really understood how sampling companies get the job done, just that they do. And so unveiling a platform that allowed a client to see all the switches, might have been a little bit daunting, but we had to educate a market so we were definitely a little bit early, now if you look at the industry we launched that platform in 2009, 2010.
So eight, nine years later, there’s probably ten platforms out there that you can log onto to buy sample from.
Yep. Yeah, exactly, right. So when you think about those lessons that you learned, the GoZing model, I didn’t actually realize that you started on mobile phone advertising and you’re exactly right, it was ten years too early, until you got real adoption and saturation in this space. Marketing research didn’t truly adopt it until about ten years ago, maybe less.
Yeah, so how do you apply that learning to Innovate MR?
Well, I think every time you start a business you have – you fail in certain ways and the only way you get better is by learning from those mistakes and trying not to do those again. So the number of times that me, Greg, and George, all the founders of Innovate, the number of times that we are looking to make a decision and we accept the concept that well, in this particular instance we might not know the best solutions, so let’s ask for some advice, let’s not just make a decision and you know, and screw it up, or we look at different scenarios and say well, we’ve done this before, we know that this – going along this path is not going to work well, because of various reasons, and so I think all of that experience over 20 years of really screwing up, has really helped us make Innovate more successful. We have had to be very scrappy, because in this business unlike GoZing and YouSamp, Instantly, we didn’t raise any institutional money from professional investors.
And so there’s been no safety net. We’ve had to be scrappy and careful and frugal. Really what the main focus for us has been around automation and efficiencies, and when we were building technology, even for our team, we count the number of clicks it takes for them to actually accomplish a goal and then we look at it and say is there a way we can remove steps and if we can, then our team just gets significantly more efficient. We actually recently removed off of sales force for tracking all of our bids and booked sample jobs and used our own internal tools for that now, and the team is just celebrating the amount of steps that were removed in the process, and so that just allows our team to be more efficient and hopefully allows us to run a more profitable business.
Yeah, I think this principle of eating your own dog food in our world, that is market research technology, is probably one of the things that has set the winners from the losers, Decipher, of course being my experience, it was entirely birthed out of my personal pain around marketing research process and just creating these short cuts whether it was a single click to a native PowerPoint presentation, right, to monitoring field and tab, efficiency gains are what has been the differentiator for companies like yours in this space, but I want to target – talk a little bit about, you mentioned advice, do you have, when you’re making big decisions or whether they’re strategic or just tactical in nature, do you get advice from the market, that is to say customers or do you have some trusted advisors, where do you go to for that.
Yeah, I’d say we, between the three founders here, we have a rolodex of people that we can reach out to for various situations, whether it’s banking and financing needs, or it’s technology questions, or operations decisions, so we all just have different people we can connect with, sometimes it’s inside the business, and sometimes it’s outside. We don’t profess to be experts in operations and sales and marketing and technology, we bring on people that we know that can facilitate whatever the need it. As founders we’ve broken up the company into divisions where our core competencies lie, so George focuses on sales and demand side, Greg’s core competency and relationships relied on the traffic and supply side of the business, while I over see technology, product and most of the corporate affairs of the business.
Do you think that delineation of responsibilities is one of the keys for the long term partnership success that you and Greg have had?
Yeah, I think it allows us to be – to not step on each other’s toes and to trust each other that I know that is Greg is the best at what he does and I know George is the best at what he does, and they trust me when it comes to technology and marketing and taking care of dealing with the lawyers and all the corporate stuff and I think when partners don’t trust each other to do the work, that’s when things start to fall apart.
You mentioned at the beginning of the conversation that you’ve had a couple failures, I think this is a really interesting topic for those who are either currently starting or have started or are thinking about starting a technology company or any company for that matter, how did you deal with that failure?
You know what, I’m a person who walks around with a glass half full. My perspective is, if you don’t try, you don’t get, so it’s OK to fail as long as you keep trying and you’ve exhausted all efforts. We have two businesses that Greg and I ran besides the three sample companies that we’ve launched and one business was in 2006, and it dealt with putting audio tours onto iPods, so that you could go to Paris and walk around the city with your iPod and go to different stops and hear a professional tour guide giving you information. Of course, this was before the iPhone, this was before GPS, and even before apps could be installed. So talk about being too early, GPS apps, location based services would all allow you to walk around with your iPhone and then the iPhone knows you’re standing under the Eiffel Tower and could actually start giving you a history lesson, so that business was just too early. We accepted the idea that it was just going to be difficult to scale, we kind of just shelved it. We had another business that in 2006 that we also were launching that dealt with online file storage, so think of the time, DropBox, and Box. net, and other online file storage solutions that were being built on top of Amazon’s S3 Storage Solution, we had investors tell us that we were crazy, that online file storage was dead, that it was never going to happen, that people weren’t going to trust storing files in the cloud, and yet we launched a business called File123, specifically to do that, and we missed the mark, we were right there at the time of DropBox and all of these other services, they were all in their infancy at the same time as us and the lesson that we had was that we built too big of a product. The product had too many features, we spent too much time in development, and the challenge was that it wasn’t what a lot of people call today a minimum viable product. It was a big giant cruise ship, and it was much harder to turn and pivot once we got client feedback on the solution, and so that was a big learning experience for us and we shelved that product. Luckily there was a business that came long called NeatReceipts [ph]
and NeatReceipts was a solution where you buy a scanner and you scanned your receipts into NeatReceipts and it produces expense reports for you. They actually wanted and online file storage platform, and they actually did buy the business from us, it wasn’t a billion dollar outcome of DropBox but at least it was better than just keeping the software on the shelf.
That’s the truth of it. That’s – it’s satisfying no matter what the exit, right. You’re right in terms of a multibillion dollar transaction would be taking on the helicopter ride, I’m still waiting.
That would have been a little bit better, yeah.
What three pieces of advice would you give CEOs of startups based on your experiences?
Well, having been what I’ve been through, with different relationships with investors across the first two sampling companies, I lean very heavily towards building more traditional businesses that have visibility around cash flow and client bases and can generate revenue, from the beginning. Well, I understand that some businesses are such a big concept that you have to go raise money, and you have to race against the competition in order to win. That’s not really something that appeals to me. So when I talked to young entrepreneurs about their business, I’m always trying to figure out if there’s a way that they can build their business, so lean and find clients that want to pay for the services so that they don’t have to raise money. So that one day, they can- if they want to raise money, then they can do it at their own terms because they’re already cash flow positive and profitable. So I don’t know what the three pieces of advice are specifically, but I try to guide young entrepreneurs that I talk to, into being realistic. Sometimes they come to me with financial projections, one, two and three years and they have this new idea for a business, they’ve maybe never launched a business before and in year two they’re going to be doing 30 million in revenue, and I just tell them to go back to the drawing board, think smaller, if not realistic, most businesses won’t do 30 million in their second year-
Or a million?
Or a million. And so, and the problem is that they base it in the amount of money that they have to raise, they based how many people they have to hire around that $30 million. And then what happens is, if they go raise money, they’re chasing cash burn and now you have a ticking time bomb. And if your investors don’t like your progress, then they’re going to oust you from your own business. And that happens time and time again, it even happened to us at uSell. We built a phenomenal business. That business was scaling very rapidly, from zero dollars in revenue, just me and Greg in the first year, to 50 million in annual revenue and 200 plus employees after five years. But surprisingly, the investors didn’t like the business. And by all accounts, it was one of the fastest growing companies in most of their portfolios, but they didn’t like it because they didn’t like the valuations of other sampling businesses at the time, and we had no control over that. You know, a big advice that I do give entrepreneurs who do raise money is, is around managing expectations and very carefully managing expectations of investors. It’s a different part of the job, than just running the business and knowing, oh I’m a sampling expert. I understand sampling and sampling platforms, better than anyone else. I’m not the greatest at managing investor expectations. That’s not my core competency. And it’s good to know, your strengths.
Yes, I’m with you a 100 percent on that. I think it goes to sort of the difference between institutional investor mentality, which is oftentimes more cautious, as opposed to the entrepreneurial. Which I mean, anybody that’s cautious as an entrepreneur is not an entrepreneur. At the end of the day, you just have to be almost data impervious, right, to step out and start something new.
Right. Yes. Well said Sir. Exactly right, blind optimism. I equate it to being, like a goalie in soccer. You have to literally believe that every time somebody is approaching to shoot, that there’s no way in hell they’re going to be able to score on you, right? And even though you’ve just been scored on three other times, it’s just like impossible. You just have to have that brain space. Blockchains coming up a lot, right? Especially in your space. Are you seeing that impacting Innovate MR?
I don’t think there’s any impact on the sampling industry yet, and I think a lot of companies are trying to discern, if it’s something real that we have to pay attention to. We joke internally here that every 12 to 18 months, there’s a new catchphrase that we’re all paying attention to. Maybe it was mobile a couple of years ago, many years ago it was AI, then now it’s blockchain. I know of a couple of companies, that are investing in different ways that blockchain can be used within the sampling industry. Either, to maintain better transparency and visibility or better pricing or to enhance quality, really understanding the nuances of buyers in this space. I’m still not yet seeing exactly where blockchain provides real value and so, I would say that we’re paying attention, but we’re not doing anything yet.
There’s so much hype around blockchain from just the automation of systems, the shortcuts there but then also, the other part of it is around the security or the comfort, that somebody is who they say they are. Like is there an opportunity for blockchain, to create improved quality of respondents?
Well, this kind of goes back to, what true sample was doing many years ago. Which is try to score panelists and provide peace of mind, to research sample buyers. The struggle there was that many of the biggest sample companies, if a billion dollars is spent in sampling the year across the industry, a majority of that call it 75% is probably represented by the big sample companies. And so if they don’t jump on board with a solution, then it becomes hard to provide kind of end to end value or, thorough value. So would sample companies being willing to put transactions into a public ledger or, a shared ledger? And those transactions were about who this panelist is, maybe without some PII, not exactly sure how PII would work with regards to that. But, are they willing to put transactional data and say, this is panelists Id, this is my panelists Id, One, two, three, four, and here’s the information about them. And then, another company B can do the same. And there could be comparisons so that everyone is- we’re trying to get to a point where, a panel can actually be scored. And say, you know what, I have a confidence because I can query the blockchain to know, that these panelists are more valuable than others, or more real than others or more transparent or consistent. But beyond that, I’m not exactly sure. I know that there are other people that have ideas, around pricing models and buying and selling of panelists within the blockchain. But I think on this one, with having had businesses like my podcast tour company or my online file storage business, or even various things we did at uSell, we were leading trends with regards to building mobile panels at the time, and the industry wasn’t ready for it. In this case, I’d rather be a fast follower. Let the market figure that out. Let other people figure that out. That’s not my core business. And if someone presents a solution that provides value to my business and to my clients, then we would love to explore it.
What is Innovate MR offering right now, that can add value to brands in market research companies?
Our primary client base, our market research agencies, they could be brands, corporations that have a research department. Innovate MR, is not a market research company. We’re a data collection and samplings solutions company. Businesses come to us to either help them program and host their surveys, but primarily to find audiences around the globe, to fill various needs. Whether it’s consumer or be with audiences, that’s our full service business, but what we’ve done with the platform that we recently released, which is called Pegasus. The goal of Pegasus is, to help brands and agencies get faster answers. And so in the same way that you can log onto Google AdWords, you can log onto Facebook ad manager or a twitter or other ads based solutions and you can log on and say, I’m looking for 18 to 34 men and women who live in California and let’s just say on Facebook like Starbucks. In the same way on Pegasus, clients can log on and do the same thing. Say I’m looking for, this demographic in this geographic with this psychographic attributes, and I want those people to take my survey. And how many people can you get me within what time frame, and much will it cost. And that’s the primary function of Pegasus today, but Pegasus is just the foundation of what could be Innovate MR in the future. If you want to build solutions that deliver faster insights to corporations, then the starting foundation of that platform has to be the delivery of audience sample, people that will actually provide those faster answers. Owning proprietary panels and then having a platform on top of it to deliver those panelists to surveys, is the first phase. The second phase of Innovate, is figuring out solutions that provide value to corporations, that can deliver on that thesis of faster answers.
What set you apart, from the other sample providers, is it Pegasus?
Well, Pegasus is definitely one of the key differentiators of the business. And having built, I’ve personally built and Pegasus was primarily built out of my concepts of where DIY sampling can go. I built seven or eight different sampling platforms, over 20 years. And so like we were saying earlier, when you build something and you screw it up, the next time you build it, you do it better, but then you screw something up. And so I think with Pegasus, we’ve really built a solution that solves a lot of the problems of the past and provides great value. So that’s a key differentiator. But I think that experience, there aren’t many founders or CEO’s in the sampling industry that have done it three times. And I have been doing it for 20 years. So if you look at the leaders in the sampling industry today, there’s probably only one other company whose leaders have been doing it equally, as long as us. So I think that experience and know how, is what is delivering success for our clients. Whether it’s through Pegasus, some threats are before full service sampling. Getting the job done, really comes down to experience and know how.
So are you seeing that as really buckled the trust factor, as one of the big drivers for the marketplace?
In order to provide good value and good quality, we can’t be the cheapest, and we don’t want to be the cheapest. There are solutions out there that are perfectly cheap, and you can go there and you get what you pay for, but I can’t provide the handholding that client’s needs at the lowest price. I also can’t build and buy the highest quality panels if I’m also the cheapest, but not the most expensive. Innovate is kind of a mid priced sampling company. We are aggressively creating proprietary panels, and that has a cost. If you’re business that’s just brokering or reselling other people’s panels, then that’s just an arbitrage play where you can make pennies on the dollar, and kind of buy and resell someone else’s panel asset. But we’re building this panel site called, Point Club. It’s actually on its second version. We call it internally Point club Two panel. But we’re inventing right now, and developing a third version of it, Point Club three point out. That really takes user experience to the next level. I think we all know that surveys are not easy, they’re not necessarily fun either. And while we like to think that people take surveys just to give their opinion, that’s really not the case when it comes to online sampling and online panels. People are doing it for rewards. Now, if you’re a frequent flyer of Delta and they send you a survey over email, and they want your opinion about a recent flight, yes, you’re going to do, you’re going to provide that survey because you believe in that brand and you want to provide feedback, to make the brand better and you don’t need a reward for it. But when you’re doing anonymous surveys for corporations and research agencies around the world, it’s all about the reward. And so, we’re building a great panel site. We can only control the experience before someone takes the survey and after they take a survey. And in order to create that great experience, it costs money. And when we do that and invest that money, it creates a better panel asset. And when we create a better panel asset, we believe that it provides better quality and better value, for our clients.
Yes. I feel like there’s tension right now in the market between the automated sample deployment piece, which largely blinds the ultimate consumer, the insights, data quality in favor of CPI versus what you’re describing, which is a higher, probably a higher level of service, much higher level of service and presumably higher level of quality in the sample, given that you’re paying more on the incentive side.
Yes, absolutely. And I don’t know if there’s even tension. I mean, I’m a huge believer in automating between different samples supply sources, at least on our team recently launched a blog series called, The dirty little Secrets Of Sampling. But the secret of sampling was always that, you would go to sample company A and they would then in order to facilitate enough sample and fill the quotas of the client, they would have to go to traffic company B, C, D and E, in order to get enough traffic screened, in order to find those audiences. And that was in the old days of sampling that was done over email. Email traffic company B and say, hey, can you deliver me 100 completes? I can only pay you a buck 50, that’s my budget. And they deliver traffic through your system, off to your client’s survey. Now, that whole process has been automated. I think nowadays clients are more concerned with- most clients are concerned with getting their quotas filled, at a reasonable price, on time and to a level of quality that they feel comfortable with. So of course, we always try to use our proprietary panel first. We’re investing in it and aggressively building it. But any sampling company that tells you that they don’t use partner traffic to help fill quotas, is not being truthful because I know everyone in the space and they all do it. And all we’ve done with automation is by streamline the delivery. And streamlining delivery, has actually meant that we can bring our prices down for our clients. So there’s been a benefit to clients, by automating delivery of traffic. And then, how each sampling company screens that traffic and provides layers of quality, before delivering that person into a survey. Is the nuance that allows a client to think, believe that you’re delivering quality.
Yes. One of the trends I’m seeing, with especially startups that have been in place for the last maybe 24 months, if visible in the last 12, is that they have their proprietary panel, right? So it’s like they’ll have a million people in the US. You launch your project through their system, their people take the survey or participate in the exercise or session or whatever it is, right? But in a lot of times, that’s happening in a faster time frame than in what would be necessary in traditional surveys. Are you seeing this as a channel strategy partnering with these types of companies, or is this not even a trend, that I’ve incorrectly recognized? Shouldn’t be the first time, by the way.
I am seeing a lot of businesses pop up that have different use cases, whether it’s polls or surveys or different types of chat solutions, that on this site they say that they have millions of access to millions of panelists. And the first thing I think of is that, they’re probably buying panelists from companies like mine or other marketplaces that exist, in order to find those audiences. So the evolution of creating automation around the delivery of panelists, whether it’s a marketplace or it’s a sample company like mine selling access to a panel, it means that businesses can create new and unique solutions on top of that foundation, but then sometimes they promote the panel as though it’s their own. And I tend to think that, a lot of those businesses are accessing third party sample, through automated sources.
My guest today has been Matt Dusig, Co founder and Managing Director at Innovate MR. Matt, thank you very much for your time today.