My guest today is Leonard Murphy, Author of the GreenBook Research Industry Trends (GRIT) Report, Partner in Gen2 Advisors, Director at Veriglif, Advisory Board member, Investor, and Change Agent.

GreenBook connects marketers and market researchers with people, information, and ideas that generate results. Through original research, events, content, and a directory, GreenBook provides the learning and inspiration insights professionals need to succeed.

Veriglif, is a private permission-based blockchain creating a data ecosystem around respondent data ownership increasing transparency and security. 

Find Leonard Online:

LinkedIn: www.linkedin.com/in/leonardfmurphy

Twitter: www.twitter.com/lennyism 

Website: www.greenbookblog.org 

Find Jamin Online:

Email: jamin@happymr.com 

LinkedIn: www.linkedin.com/in/jaminbrazil

Twitter: www.twitter.com/jaminbrazil 

Find Us Online: 

Twitter: www.twitter.com/happymrxp 

LinkedIn: www.linkedin.com/company/happymarketresearch 

Facebook: www.facebook.com/happymrxp 

Website: www.happymr.com 

This Episode’s Sponsor: 

This episode is brought to you by HubUx. HubUx reduces project management costs by 90%. Think of HubUx as your personal AI project manager, taking care of all your recruitment and interview coordination needs in the background. The platform connects you with the right providers and sample based on your research and project needs. For more information, please visit HubUx.com.


[00:00] 

In episode 239, I’m interviewing Lenny Murphy, author of Green Book Research Industry Trends, or the GRIT Report for short, but first a word from our sponsor.

[00:12]

This episode is brought to you by HubUx.  HubUx is a productivity tool for qualitative research.  It creates a seamless workflow across your tools and team.  Originally, came up with the idea as I was listening to research professionals in both the quant and qual space complain about and articulate the pain, I guess more succinctly, around managing qualitative research.  The one big problem with qualitative is it’s synchronous in nature, and it requires 100% of the attention of the respondent. This creates a big barrier, and, I believe, a tremendous opportunity inside of the marketplace.  So what we do is we take the tools that you use; we integrate them into a work flow so that, ultimately, you enter in your project details, that is, who it is that you want to talk to, when you want to talk to them, whether it’s a focus group, in-person, or virtual or IDI’s or ethnos; and we connect you to those right people in the times that you want to have those conversations or connections – Push-Button Qualitative Insights, HubUx.  If you have any questions, reach out to me directly. I would appreciate it. Jamin@HubUx.com   

[01:37]

Hi, I’m Jamin Brazil. You’re listening to the Happy Market Research Podcast. My guest today is Leonard Murphy, author of The GreenBook Research Industry Trends. That’s the GRIT Report. He’s partnered at G2 Advisors, Director at Veriglif, Advisory Board Member on many different startups and companies, investor and industry change agent. Started in 1962, The GreenBook is a wholly owned subsidiary of the New York American Marketing Association and is a worldwide directory of marketing research companies and focus group facilities. Veriglif is a private permission-based blockchain creating a data ecosystem around respondent data ownership, increasing transparency and security. Lenny, thank you so much for joining me on the Happy Market Research Podcast today. 

[02:26]

Thanks for having me.  Been looking forward to this for a long time. 

[02:29]

Let’s start a little bit with the origin story. I shouldn’t say, “Let’s start.” That’s not true. We’ve already started. Now let’s move on to the origin story of Leonard Murphy. Tell me a little bit about your parents and how that’s informed your career. 

[02:42]

My dad was military: so Air Force for 20 years. And then he went into government service, worked for the VA. So, they were older. So, my parents were depression era. My dad was served in World War II and in Korea—so different kind of value system. I was raised by the greatest generation parents. That was interesting. When I was a teenager, I thought that was awful. Now I’m far more grateful for it. When I was 17 and had a mohawk and thought that I was a Mr. Punk Rock, total rejection of those values. And, of course, like all of us do, by the time I was probably 20, realized, “Oh, well, actually, maybe they were smarter than I thought that they were.” And now, they’ve both passed away quite a few years ago. I certainly miss them. I wonder what they would think of the world that we live in today, but I like to think that at least I’d be proud of the life that I’ve built that’s far more aligned to the life they tried to build as well than anything else. 

[03:48]

Yeah, for sure. It’s funny you had that Depression Era, and that’s my grandparents’ framework, right? My grandmother would literally save Saran Wrap in the 80s. 

[04:01]

Yeah. Oh, my dad never threw anything away. 

[04:05]

Yeah, it’s crazy. Just like there’s like such different point of reference than us. and gosh, I like that. I’m a dad of teenage boys, and I like to think that on the outside of it, they’re going to look back and “Go, gosh, my dad wasn’t such an asshole.”  I don’t know.  

[04:23]

Well, so I have two 23-year-old daughters and a 21-year-old daughter and then we have 10-year old and 8-year old and 6-year old.

[04:29]

Full house, man.

[04:32]

It is, but the cool thing is that although the 23-year-olds were beginning to get to that point where maybe I’m not such an asshole that I was just a few years ago… (Now maybe that has something to do with they still depend on me to pay for their school.) But I haven’t been called an asshole by my older kids in a few years. I think that as doing something right ‘cause there was a time, there was a time where I was. 

[05:04]

Reflecting on your parents, then we’ll move on. Like what was one of the big lessons or core values that that generation imparted to you that you have sought to impart to your family? 

[05:16]

Help people. They were always trying to help other folks. My dad would give the shirt off his back. Now, he would make sure that you knew he was giving you the shirt off his back. But he still would go out of his way to try and help people. They were foster parents; so, we always had foster kids in the house and that was good and bad. But it was still a powerful lesson that you just try and help people. And that’s certainly something that we’ve tried to instill in our kids as well. 

[05:50]

Oh, I love that. And it’s funny how that’s like played out in our kind of preface of the episode piece into your career and core values and character. It’s interesting you bring that up. I haven’t thought about this in many years. My grandfather during World War II, he had some physical disabilities because he’d been shot and whatever. And so, he couldn’t go to war, and they started in our area a small group of small farmers. There was a large contingent of Japanese-owned farms. So, when they did the Japanese interment camps, then my grandfather helped lead a group of people (farmers) that wound up taking care of the farms of the Japanese people while they were away so that when they were later released, they were able to come back to working farms as opposed to desolation. And I think you’re right. That generation had… We’ve replaced that neighbor connection with a digital connection and then thinking about like the digital nomad, etc. kind of framework. And it’s going to be interesting to see. It’s just different. I’m not judging it as right or wrong. There’s definitely strength probably in both, but there’s definitely strength in a proximity-based relationship. 

[07:10]

I agree. We’ve made choices, both my wife’s family and my family. She’s an Atlanta native. I am not, but most of my family’s settled here, and we’ve just made the choice to be here, right? And a lot of that is so we can be close to family and help and be a part of their lives. And we value the stability of our kids growing up with lifelong friends and neighbors. And those are very purposeful decisions that we want them to have those real connections as well. Now, me personally, I’m probably far more digitally connected than anybody in my family. But I’ve tried to maintain that same at least sense of neighborliness, of helpfulness. It hasn’t been a substitute, but it does help. If I don’t have that connection to people of just being a part of their lives in some level, I really don’t feel good about myself. Yeah, that sucks. I don’t like that feeling of isolation. 

[08:16]

It’s so good. Having that self awareness is so important. So, I want to talk about the GRIT Report. All the people, including myself, we see the GRIT Report as this thing that is the herald of what’s coming. And it sits in a very powerful position right now inside of our industry with over approximately 600 different tools that touch market research or consumer insights in some way. Being the curator of that pile of spaghetti is really an important role at both from a brand and an agency perspective. But it didn’t start there. And I think that’s part of the story that most of us don’t hear. I would love to hear about that first, those early days of the GRIT Report and what that was like.

[09:03]

So, the original GRIT Report, I worked for a company called DialTek. I was a VP at DialTek, and they did IVR market research. And this was early 2000s at the beginning of the onset of online. And we wanted to understand the industry from a supplier standpoint. So I thought, “Well, you know, let’s do a survey of the industry.” And we realized that the only way we’re going to get people to tell us this is if we give them the data back. So, the very first iterations of that were really a very self-serving, kind of competitive intelligence survey for DialTek to see how the hell they compete in the online world when you’re utilizing IVR. And when I left DialTek, I took that with me to Rockhopper, and we kind of continued that but with a slightly more altruistic objective. We thought this is something that could be valuable. And that’s when I met Lou at GreenBook. He had seen the report, as primitive as it was. He says, “We’d like to help with this.” And that kind of established our relationship. So the first few years of it, (This was the early 2000s.) were kind of driven by that. Then when I had the opportunity to join GreenBook, we decided to turn that into what it is today. And that evolution really is purely altruistic at this point: do a report for the industry, by the industry and a content piece, etc., etc.

So it’s evolved since then and continues to evolve. We’re thrilled that so many people find value in it. We’re thrilled that people like The GRIT 50, the kind of brand tracker of innovative. And we’ve got big plans on what we’re going to do in the future. So we continue to focus on how to utilize the data in new ways. We’re exploring a platform right now called Inguo that is a causal analysis platform versus a correlation analysis platform. And we’ve got enough data that we think we can start doing some more interesting things that can become really useful tools for especially the supplier community: establish benchmarks for folks to be able to say if you do these things, this can drive you towards success, right? These are the common elements of successful businesses. So we’re experimenting with all that behind the scenes, but it’s fun and it’s kind of walking the talk since it’s about trying to identify what the future is and experimenting. Well, we keep experimenting. Sometimes we get right; sometimes we don’t. There’s things we could do better. We try and own that and keep on. So it’s fun and it keeps me busy. 

[12:01]

When you think about the things that you’ve done, like really, really well… By “you,” I don’t mean… I realize you’re a humble person; so, this is going to be hard for you. 

[12:14]

I won’t bet on that. There’s a lot of people that would totally disagree. My wife, especially, if she was here, she’d be saying, “What?”  

[12:20]

But when you think about with the GRIT Report in general, what has it done that’s like…? Where is its sweet spot? Where is it thriving and kicking ass and doing its best? 

[12:31]

I really think recently over the last few years we focused a lot more on a deeper level analysis of trying to understand the real drivers of change in the industry, both the client and the supplier side. So rather than just being a kind of a dump of information regarding trends… And there’s still certainly a lot of that in the report, but when you dive deeper, there’s a whole lot more around these are the hallmarks of successful organizations on both the supplier, the client side. These are the things they have in common. This is what that profile of organizational success looks like. And that’s been very predictive of changes that we’ve seen in the industry, the shift from full-service to technology-driven. So I think it’s understanding buzz topics and seeing those play out. Right? I mean some of the things that we were talking about years ago: mobile, AI, automation. Those were early indicators in GRIT a few years ago. Now they are major trends defining characteristics of the industry. So it’s been highly predictive of kind of looking at the road ahead and understanding this is what’s coming and this is how it’s going to impact business and then understanding these are how companies are adapting to those changes and being successful. And again, I think we can do a whole lot better than we are, but I’m not aware of any other report in any industry, but particularly in ours, that is that useful as a strategic planning tool. And that’s not taking anything away from the other great reports. The ESOMAR GMR, it’s a great report. I read it every year. Yeah, there’s lots of great stuff in it. Like this was just really focused on the pragmatic aspects of the business of the industry, whether you’re on the client side or the supplier side. 

[14:21]

When you think about starting a business in this space on the technology side specifically, fitting inside of the GRIT sort of scope, what do you see as the companies that are standing out and winning in that space? What is the differentiator there versus the other companies? Because there’s a lot of entrants… I counted, I don’t know, I counted over 75. I don’t know exactly if that’s the right number, but it was about 75 exhibitors in Austin at IIeX. It might have been more, but there’s a lot of people there. So, what is the hallmark? What are you seeing as the hallmark of the companies that are winning in the market? 

[15:06]

Yeah, that’s interesting. Certainly, on the surface what they all have in common is the cheaper, faster, better rubric. It’s the better part that is less easily definable. And I think that’s probably where the differentiation occurs. There’s lots of companies that can do cheaper and faster. The better part is not just the data, but it’s also the service. And that is where a lot of the tech companies really struggle because they’re tech companies. They don’t want to develop service. Right? We’re all chasing that Silicon Valley valuation model, and everybody’s taught, “Oh, you can’t have, you know, too much of a service component and the business can’t be valued as tech company.” And while that’s true; it’s accurate. But there is not a single company that has been successful in this industry selling to the client side (I should be clear on that.) that has not had to develop a significant service capability in some form or fashion. Right? 

[16:04]

I know exactly what you’re talking about. 

[16:08]

Yeah, they just haven’t had… even Qualtrics. We look at the Qualtrics valuation and at Qualtrics, they’ve got a very large service organization. Now, I’m not sure how that’s accounted for in the books.

[16:23]

It’s called goodwill. So, I just had a conversation yesterday with Steve CEO of Methodify on this exact topic. And that is the role of services in technology has to be in market research has to be coupled because customers need the support when they need the support, and that’s part of the whole product. But it’s not an excuse for bad UI. So the user experience side of things still needs to be… I still think you win there, but you have to have best-in-class, white-glove experience for the customer. 

[17:11]

Well, it’s interesting. So this is one of those, as we try to walk the talk, we saw this trend in the GreenBook site; we invested in building Savio because the thinking was, “All right, the best way to help technology companies just be technology companies but still deliver on the service was to create a marketplace component so that they could tap into the service on-demand.

[17:28]

Which for me makes perfect sense by the way. 

[17:230]

Me too. I still think I’m RIGHT, but the industry would not agree with me. Now, not that I wasn’t right, but from an adoption standpoint, it’s been a real challenge. I’ll be upfront about that. I still think that the time for Savio hasn’t quite arrived yet. It’s coming. We still continue to tweak the model. But that gig economy component, and I think this has just applied it to our industry has not reached full potential yet. Because I think the business sense is built by our partner and when it comes to service, it’s easier to build because you can manage the inputs more easily. So, when your business is dependent upon a service component and you outsource that, then you’d lose the control. So, therefore, quality can become a challenge and your differentiator can go away. So I think that still companies are just defaulting to, “I just have to build this and so we can manage it to make sure that the quality is there to deliver on the client’s need,” even though they don’t want to. So that was kind of the disconnect with Savio as well. I still think that logistically and pragmatically, it makes perfect sense and some companies have adapted it and others haven’t. But managing the quality control process is a challenge if you don’t own it internally. 

[18:51]

Yeah. And part of the challenge there too is I think… We’ll pick on Methodify. I don’t know very much about the business, so I’m completely blind here, but in the brief conversation that I had with them, you’ve got a technology. So that’s kind of the entrant into the transaction or the customer relationship, and then there’s this augment opportunity to help support. And so, it feels right now like it’s a little bit different if they’re you utilizing a platform like Methodify, then they want that support in context of that relationship as opposed to more of the lucid marketplace sort of framework. But I think where the standout is with like focus group procurement, which is this massively segmented space, even with Schlesinger, being probably the largest. Are they the largest network, you think? 

[19:49] 

I think now they are, yeah.

[19:53]

Anyway, in the top two, three, anyway. You still don’t have global coverage. So you know my point is that I think the marketplace framework works really well when there isn’t a whole product that exists for the consumer. 

[20:10]

So it’s interesting. Methodify actually is a really interesting company from a kind of a trend standpoint. They’re a company that I would call a kind of full stack. So the dichotomy that I’m seeing in the industry—we were talking about this in the last GRIT Report—is kind of full stack versus full process and I’ll explain where the difference is at.  ‘Cause they started with Delvinia… Delvinia is a full-service research company. They saw the automation trend coming along, and they wanted to tap into that, but they didn’t want to outsource it through, let’s say, Zappi. So they wanted to control the value chain themselves. So they created Methodify as an internal resource that they could also productize and externally sell. So they had multiple entry points for the client. You just want the kind of DIY automated solution, low cost, low barrier of entry? We’ve got that now. So you need something that has a service component, but not full service? Well, that’s great because they have a connection to Delvinia. So they can address that need internally from a service standpoint. Or you need full service, then they’ve got the Delvinia, which is very similar to what Periscope by McKinsey did. Right. So and, they built their whole framework of low-cost tools. And it’s what Kantar did when they pulled out of Zappi and launched their marketplace. So we’re seeing this evolution of companies that are trying to play on both sides in having the multiple tiers of points of entry for the business. And that’s kind of the full stack, right? Then the full process or now this other direction where we see companies like LRW, for instance, Hotspex, or even System1. We’re not necessarily going to go down that path much. They’ve done some things, but instead they want more of the marketing life cycle. So they’ve been expanding horizontally into taking agencies that the business of agencies and activation and pulling that into the research business, kind of like if WPP had really integrated Kantar across the board. But those seem to be the two defining styles that are happening overall with companies, kind of various points on the spectrum in that evolution between those two sides of the business. 

[22:23]

I didn’t listen to the startup pitch competition this last year in Austin, but do you remember who the winner was? In my defense, I was doing podcasts on site. It wasn’t like I was messing around. 

[22:38]

So UXReality by CoolTool.  

[22:41]

And I think that’s a really cool story. 

[22:45]

It is. Full disclosure, I’m an advisor. 

[22:48]

I didn’t know that. Incidentally, all the companies mentioned on this show are going to be completely surprised, hopefully delighted. So this is not like a paid placement. Bullshit like that, listeners… 

[23:03]

But I try and be transparent about those things. Yeah, they’re a company that…  They’ve pivoted so many times over the years. CoolTool. They’re from the Ukraine and super smart guys. And they started; early on, they had almost a Savio-type model. Then they had a Zappi-type model. And before these companies, I mean, they really saw the opportunities here, and then they took kind of the marketplace for non-conscious measurement, and they built a whole very sophisticated platform to do a variety of those things, but just couldn’t catch hold. They didn’t have the killer app.  So then, they built… UX reality is a very specific app to try and understand on mobile device, you know, everybody, your point of experience, eye-tracking and all that cool stuff. That just shows from it from an entrepreneurial standpoint, they just kept trying until they got it right. They entered the competition four times.

[23:59]

Did they really?  I did not know that.  Four times.  

[24:02]

Four times. And they just kept learning and getting it better and better and being very, very iterative. And it’s a powerful story of entrepreneurial success. 

[24:12]

I’ve got to get them on the show. I love, and it’s interesting. The four times is really interesting because I had a lot of people, at least a dozen, after that come by where I was doing the podcasting and they would talk about, “Wow, those guys are so smart. They’ve really figured it out.” And it sounded like they fell off the back of a truck and they had this really magically successful smart path. “And this is real clear and we’re just going nail it.” So, oh, it’s good to hear that.”

[24:40]

Yeah, years of trial and error and pivoting. And I think that’s an incredibly useful lesson for any entrepreneur. I’ve written so many business plans in my life that I realized the worthlessness of the exercise. I really recognized the value of the exercise. But I think it was a quote; I don’t remember it exactly, but something I think it was military, “Every plan is brilliant until you enter the battlefield.” 

[25:11]

Right, totally. Mike Tyson has a similar quote. 

[25:14]

OK. Yeah, that’s certainly an experience from that company and even my own experience at Savio. Thought did all the research, brilliant. We got it; we know what we’re going to do until you get into the market and realize, “Well, shit.” 

[25:29]

Nope.  You just got hit in the face.

[25:34]

Oh, OK, so we adapt, tweak. So anyway… 

[25:41]

For sure. So industry is going through a lot of transition, has gone through a lot of transition. What is one of the biggest themes that you’ve seen over the last couple of years inside of the market research space?

[25:52]

Well, there’s that dichotomy we’ve talked about before, kind of the new settling of how do we define the kind of the business models of the industry. Certainly consolidation. 

[26:02]

Oh, that’s been crazy lately. Let’s actually dig in on this point. Do you think we’re at the top of the curve, or do you feel like we’re going to plateau? It’s interesting to me having so much private equity and venture capital money. You’ve seen the data: market research is a hot topic. You and I, we were the nerds in the corner looking at the girls that we were… You know what I mean? There was nobody dancing. We were not dancing. We were afraid…

[26:33]

They were sitting there, laughing at us.

[26:35]

Exactly. There was like Michael J. Fox cool factor with us, right? We were definitely McFly, and now, all of a sudden, there’s a spotlight that’s on top of market research. You’ve seen these, in my opinion, remarkable valuations. Forget about Qualtrics. Just put that on the side. You have Dynata, which I’m not sure that they released it, but it was released. I saw it on Reuters; they’re over $3 billion valuation. I haven’t obviously seen the book or any private data there, but the word on the street is it’s about a $600 million business. Maybe more, maybe less.

[27:15]

More.

[27:16]

More? OK, great. So, the point being though that it’s a lot of pass through. You got incentive; you got recruitment. There’s a big cost basis in that side of the business for it to get that type of a multiple, right? 

[27:28]

Well, I mean they became a cash machine. I mean that… 

[27:31]

OK, so they are an ATM. That’s true. 

[27:33]

Yeah, the interesting thing is for the past… So I guess this is by-product of GRIT. We are approached by private equity and investors all of the time to consult or just run ideas past us, and it happens a lot. So, and we’ve even played ourselves in working through some different theses for private equity and investment. So I understand how that works. It’s a mature industry. So it was prime for disruption. I don’t think we’re at the top of the cycle. I think we’re seeing the largest players, obviously, go through that process now. You know we’re waiting to hear what happened to Nielsen any day now, but I think the only company that’s going to be left standing is Ipsos as far as kind of independent. Well, and they’re public and..  

[28:20]

They’re public in France.

 [28:22]

So, we’ll see. The big question is what happens when the companies are that large, and they go into private equity and private equity is always looking for an exit. I don’t know where the exit is for a private equity company to come into Dynata or into Kantar or GFK. Where do they go? I don’t see clarity on that yet, which is probably why I don’t work for a private equity company, right? Or they have a thesis on that. But when you’re going to pay, you know, what? I think Kantar is $6 billion, I think, $4 billion? Whatever the number is: a big ass number. But who are they going to sell to? I don’t see where that goes. And I have the same question about Dynata. I totally get they are a cash cow. They arbitrage the hell out of that business. When they merged with SSI and bought Critical Mix. Those were all arbitrage plays. They increase their EBITDA significantly. They’re spinning out tons of cash, and they look really attractive for private equity, but a $3 billion private equity investment, what happens then? So are they going to go public, right? I mean that’s what Bain did with Macromill. So maybe that’s the play. I personally think a strategic makes more sense and particularly a strategic like a Qualtrics sort of SurveyMonkey that has lot of cash but does not have a lot of data, but know they want to make a data play. That makes more sense to me. 

[29:45]

Maybe a Salesforce. 

[29:46]

I’ve thought about Salesforce many times, even a Microsoft or LinkedIn. Yeah. I think LinkedIn is going to get bought by somebody else anyway. 

[29:54]

Well, they’re already owned by Microsoft. 

[29:56]

That’s right. That’s right. That’s right. 

[29:57]

But I’m thinking about like they entered into the market research place and then obviously retracted a couple of years later. And everyone was terrified when they entered because there is no arguing they’re the best panel. 

[30:12]

I have heard there was a rumor…

[30:15]

For B to B 

[30:16]

…just a rumor that SurveyMonkey was working with them.

[30:21]

Yeah, I’ve heard that too. Not from you. But it is a rumor. This is not the conspiracy theory show, but… 

[30:30]

Right, right, right. It makes sense. They see the value, right? So we’ll see. But that consolidation at upper levels… There will be mid-market private equity companies that are already in play. We got LRW and etc., etc. There’ll be more plays like that as companies get to that $50 to $100 million range. The problem is there’s not that many companies in our space that are at that range; so, they’ll be the next platform, right?

[30:54]

Right, you’re absolutely right. And what’s interesting there’s really not that many companies, in general, that fit that mid-market $100-million- to buy a $500-million-type framework. It’s just not a lot of businesses that are sitting there. And to your point, I think those are very attractive if you can build them because, and that’s where Toluna is interesting for me is they’re still sitting out… Frederic’s done a beautiful job of navigating two decades or more than that of tumultuous times. (Well, actually two decades.) And that business has just continued to maintain, in my opinion, a heck of a lot of relevancy and cutting edge. They’ve pivoted their panel from panelists and respondents to influencers. And I thought that move–even though I don’t think marketing-wise, it needs to get touted more—has been just huge. I’m a member of probably all the panels as a respondent, and they do a really nice job, I think, on the management side of it.

[31:59] 

There’s a few diamonds in the rough for whatever it’s worth. I think the best kept secret. Toluna is one. I agree. AYTM is another and I am an advisor, but I’m advisor because they’re a great company. Yeah. Hotspex’s another and that’s not disparaging anybody else. These are just companies that I know really well and I think these have the potential and there’s more. I’m not going to rattle off the whole list, but 

[32:26]

They can find him in the GRIT Report. 

[33:27]

That’s right. A lot of the GRIT 50 that really has potential to get to that next level. And what holds them back is capital. How do you throw money at them? Most of them are organic.  Toluna’s not, but most of those other companies haven’t taken money; they’ve been bootstrapped. But they’ve grown nice, good size businesses, but they’re not really attractive to VCs yet because they’re not tech-based or fully tech-based. There’s a service component or they’ve decided just not to go down that route. They don’t want to sell their souls, which is my experience with venture capital. And they’re not big enough yet for private equity. So that in-between space where they’ve built really successful. They’re more than lifestyle businesses, but they haven’t quite reached the ability to become scalable yet. Again, Toluna is an exception; they’re a big business, right? But there’s still limits and where they can go. And that’s a disappointing aspect of the industry. These great companies with great operators, great leaders that have so much potential, but the numbers don’t always work. And I think hopefully that’s beginning to change with the interest in the industry, that folks recognize that there can be a lot more value produced.

[33:41]

Yeah, for sure. And I keep coming back to the recommendation and influencer marketing. They should be thinking about raising up themselves. People like you and I, who can be the voice boxes in a value way representing connected to their specific brands. Right. And I continue to believe that that is a big marketing opportunity for… AYTM is great example. They’re big enough where they could afford an extra head count and kill something like that.

[34:14]

This critical day with Ray Poynter for a while. 

[34:16]

Yes, I know. Exactly right. Ray Poynter’s a perfect example. If I was running a ship right now, which I’m not. Having market research, I am the ship. I’ve got Chueyee and that is my team. But you know what I mean? I’d be thinking like Ray Poynter for you would be an easy dollar to spend. You can’t post anything bad. Everything gets me back. 

[34:42]

I agree. And that’s part of the advisory roles that I take. There’s a little bit of that there. We’re trying to help folks, but… 

[34:51]

How will the market research space be…? Fast forward; private equity comes in; five years pass. You have a bunch of transactions in the next probably 12 months: probably some roll ups, probably some move into brands. So it’s going to create some additional white space inside of the market research world. What is your point of view of your crystal ball saying we’re going to look like in 2024, 2025?

[35:13]

I keep waiting for one of the big strategic consultancies to buy somebody in the space. They’re making plays. They have offerings for sure, but an acquisition and so I could see… 

[35:26]

Talking about like a Bain or McKinsey here. 

[35:30]

Yes, Accenture. They’re making data plays. They’re making marketing plays, but I haven’t seen them to do a research play other than Periscope. I think Deloitte has one as well, but I keep waiting to see that. Right. And it wouldn’t surprise me if, let’s say, an LRW, they probably would be a candidate for that. They’re reaching the end of their lifecycle from their private equity. Right. They grew big. So they could probably exit at $600, $700 million at this point. And that’s a pretty good bite for a company for one of the big consultancies. It’s not out of the realm. They can write the check, get a lot of value out of it. So that would be one thing that keep looking for them or more plays from the tech companies as well. 

Salesforce, they invested in SurveyMonkey when they went public. I keep waiting for them to buy somebody outright. Again, it wouldn’t surprise me if Salesforce made a play for Dynata. If Gregg Archibald, my partner in Gen2 was here, he’d say, “No, no, no, it’s going to be a Bain.” And maybe, but I still think it would make a lot of sense for it to be a Salesforce. So those two things. I think that that dichotomy between service and technology will continue, but the dominant players will be different than they are today. Right. We’ll look at the great big consultancies, great big tech companies. They will look a whole lot more like the drivers versus today’s the freestanding, the Nielsen, Kantar, Ipsos. 

[36:59]

What do you think from a technology point of view like 5G’s out? I don’t know if you’ve used it; I’ve used it; it’s amazing. I’ve been in different markets. I don’t live in one where it’s 5G but it’s crazy fast that enables VR in an augmented reality research. Do you think those types of technologies are going to play a role in the material world, not just like a disruptive, not just like, “Oh, that’s cute and neat.”? 

[37:28]

I think we’re still looking for the use cases. You know I’m a big tech geek. I love VR. I think it’s exciting. It hasn’t hit. We were talking before here. Virtual qual, it’s been around for 15 years, but it still has not hit big. It’s getting there, but it’s not big. So it’s taken 15 years for that technology to just become a quasi-disruptive force. So I don’t know where we are with… but mobile only took 5. So if VR or AR can hit the same adoption curves that mobile did, it will become an incredibly disruptive force in the next few years. We haven’t seen the killer use for consumers yet. When there is a full VR immersive TV that you can buy for less than a thousand bucks, and all the content is streamed in VR, maybe. That may be the killer out that then knocks everything down. But we haven’t seen that yet. So they we’re still a few years out, but 5G is important, right? The bandwidth is the limiter on that, just as mobile coverage was the limiter initially for mobile. So we’ll see. I don’t know what the next killer app tech is. It continues to be around for now efficiency, AI and automation, right? It’s just make things faster and cheaper until there’s something that changes the paradigm of how humans engage. 

[38:51]

Really, the biggest paradigm shift that we’ve seen in our careers, right, is from pen and paper/call centers to online. Mobile, I would argue, is really just kind of a variant or an augment of that transition. 

[39:05]

We changed the form factor. The form factor was a significant shift in mobile. 

[39:09] 

Yes, totally right. I completely agree with that. The interesting part about that disruption was that it was cost-neutral largely or even additive for the buyer. So it’s cheaper. So they’re already going to spend let’s say $100,000 on a survey and now it’s just a question of, “Do I want to spend it here, or do I want to spend it online?” There wasn’t any budget argument; it was just a methodological argument. And I think what I’m seeing in the space when you were talking about AI-empowered tools or a qual at-scale and all this kind of stuff, we don’t exactly have that direct comparable. Like the comparable is, “OK, I’m going to do a focus group or I’m in do ten focus groups, right. Or I’m going to go do, we’ll pick on Remesh sessions.” You know what I’m saying? And then, it doesn’t feel like it’s an apple-to-apple scenario. 

[40:04]

Yeah, I can envision a future where we have for ideation and new product development that is a virtual experience even connected to a 3D printer, right? And rapid, iterative prototyping of things. And I think that’s super cool. That gets me: my geek button all, “Ooh, that’d be great.” And that’s being done. There are companies doing that. And there are brands that are experimenting with that. It’s just kind of reaching critical mass across the board. The biggest issue though is, I think, data privacy. That will be something that we’ve had to pay attention to because of GDPR. But when the news hit yesterday that no surprise, the Department of Justice is going to do a big antitrust investigation of the big tech companies, data privacy is not the tip of the spear on that, but it will be an output of that. 

[40:54]

Absolutely right. And qual has been under a lot… (I don’t know why I’m picking on quality right now with you) but like focus groups, there’s a lot of them. I don’t know how many different facilities, thousands, maybe 1500, 2000, and so in that…

[41:09]

It’s 20% of the industry.

[41:09]

Yeah, it’s a big piece, but yet they’ve been under. Do you think that focus groups are going to continue to contract as a segment or spend or do you think there’s an opportunity for growth there? 

[41:21]

So, mentioned private equity. And two years ago, we had an investor come and say,

”What’s your thesis? And we’ll back it.” Well, it ended up all falling apart. But the thesis was that qual was stable, and it was going to remain stable. And I still believe that. So there’s no evidence yet that virtual has taken away from qual. I think it’s expanded the pie. There’s been some cannibalization, right? Of course, there’s been some, but most of the emphasis on online qual has now been about new use cases like Remesh, for example, or Invoke.  

[42:07]

Invoke is a great example. 

[42:08]

They’ve been around forever. So there’s no evidence that the traditional paradigm of a face-to-face qualitative session is going away. And I think facilities have to struggle to find new ways to repurpose their facilities. I think anytime you own a facility, any infrastructure, you’ve got to find ways to make that profitable. Same thing the phone centers had to do, right? But I don’t think it’s going to go away. I think there’s just, we’re going to see more and more use cases expand. We’ve seen now sensory. We’re nowhere near sensory being able to be done online yet. There is tech in its infancy to smell and baby taste. I haven’t seen that. 

[42:49]

Sounds terrifying.

[42:52]

Well, you know, 3-D Fred. 

[42:53]

Yeah, there you go. Oh, we’re at top of the hour. OK, listen, we’re going to cut this off right now. I have one last question for you. What is your personal motto?

[43:00]

My personal motto? Well, being a Star Wars geek, “Never tell me the odds.”

[43:06]

Ha, ha, ha! I love that. 

[43:10]

Yeah, “Never tell me the odds.” 

[43:13]

That’s great. That’s a good one to end on. That was perfect. My guest today has been Leonard Murphy, author of GreenBook Research Industry Trends. That’s the GRIT Report, partner in G2 Advisors, Director at Veriglif, Advisory Board Member (had to take a breath in there), investor and change agent. (Actually had to kind of cut it down quite a bit.) Thank you very much, Lenny, for joining me on the Happy Market Research Podcast today. 

[43:39]

Thanks, man. I appreciate it. We’ll talk soon. 

[43:41]

Hey, all of you who are listening, please take the time to screen capture, share this episode. I love the fact that our listenership is growing. We’ve exceeded well over 50,000 of you. Thanks. Keep it going. Have a great rest of your day. 

[43:59]

This episode is brought to you by HubUx.  HubUx is a productivity tool for qualitative research.  It creates a seamless workflow across your tools and team.  Originally, came up with the idea as I was listening to research professionals in both the quant and qual space complain about and articulate the pain, I guess more succinctly, around managing qualitative research.  The one big problem with qualitative is it’s synchronous in nature, and it requires 100% of the attention of the respondent. This creates a big barrier, and, I believe, a tremendous opportunity inside of the marketplace.  So what we do is we take the tools that you use; we integrate them into a work flow so that, ultimately, you enter in your project details, that is, who it is that you want to talk to, when you want to talk to them, whether it’s a focus group, in-person, or virtual or IDI’s or ethnos; and we connect you to those right people in the times that you want to have those conversations or connections – Push-Button Qualitative Insights, HubUx.  If you have any questions, reach out to me directly. I would appreciate it. Jamin@HubUx.com  Have a great rest of your day.