Ep. 514 – Paul Gaudette, Founder & CEO of Dig Insights, on How the Demand for Sample is Changing is 2022

Our guest today is Paul Gaudette, Founder & CEO of Dig Insights.

Dig Insights was founded in 2010 and currently employs over 160 people. The business has four primary offerings delivering Market Insights, Data Science, Evaluation, and their proprietary ideation solution called Upsiide. 

Paul also serves as a council member of the Ted Rogers School of Management at Ryerson University.

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If you can’t commit to their full degree program, simply begin with one of their 3-course certificates: Insights Design or Insights Analysis. 

In addition to the certification, all the courses you complete will build toward your graduation.

If you are looking to achieve your full potential, check out MSMU’s programs at: broad.msu.edu/marketing

HubUX is a research operation platform for private panel management, qualitative automation including video audition questions, and surveys. 

For a limited time, user seats are free. If you’d like to learn more or create your own account, visit hubux.com.

Jamin Brazil: Hey, everyone. I’m Jamin. You’re listening to the Happy Market Research Podcast. Our guest today is Paul Gaudette, founder and CEO of Dig Insights. Dig Insights was founded in 2010 and currently employs over 160 people. The business has four primary offerings, delivering market insights, data science, evaluations, and a proprietary ideation solution that’s called Upsiide. That’s with two Is. Paul also serves as a council member of the Ted Rogers School of Management at Ryerson University. Paul, welcome to the Happy Market Research Podcast.

Paul Gaudette: Thanks very much for having me.

Jamin Brazil: Support for the Happy Market Research Podcast and the following message comes from Michigan State’s Marketing Research program and HubUX. The Michigan State University’s Master of Science in Marketing Research program delivers the number one-ranked Insights and Analytics degree in three formats: full-time on campus, full-time online, and part-time online. New for 2022, if you can’t commit to their full degree program, simply begin with one of their three course certifications: Insights Design or Insights Analysis. In addition to the certification, all the courses you complete will build towards your graduation. If you’re looking to achieve your full potential, check out MSU’s program at broad. msu. edu/marketing. Again, broad. msu. edu/marketing. HubUX is a research operations platform for private panel management, qualitative automation, including video audition questions, and surveys. For a limited time, user seats are free. If you’d like to learn more or create your own account, visit hubux.com. Let’s start with some context. Tell us a little bit about your parents and how they inform what you do today.

Paul Gaudette: Oh, going right into the parent question, eh?

Jamin Brazil: Mm-hmm.

Paul Gaudette: Wow. Some deep wounds you’re uncovering already.

Jamin Brazil: We have had people answer that question. It’s actually kind of interesting you bring up the deep wounds. Most of the time, it’s relatively surface level. I’m excited to hear how you’re going to answer it. There’s no wrong answer. And then sometimes, it gets super, super deep. One of our guests-

Paul Gaudette: Super deep.

Jamin Brazil: Not to go too dark, but answered it very abruptly with, “They’ve had no impact on my life,” or a negative impact, and then moved into telling the story of how his mom, when he was seven years old, sent him on an airplane ride, one-way ticket, to a city he had no context for, no family, no anything. And then he wound up growing up in the system. So it’s been an interesting opportunity for me to get to know market researchers like yourself.

Paul Gaudette: Wow.

Jamin Brazil: It’s crazy.

Paul Gaudette: I’ll take his response. I’ll use his response. I’m joking. It’s funny enough that you say at seven, he got sent on a one-way ticket. My parents got divorced when I was seven. That probably really informed my upbringing, I think, more than anything. I think, just to dive right in, my mom, a stay-at-home mom, she needed to go back to school to support me and my brother, and got a degree in HR, and then worked her way up, leading a Canadian HR division for a large construction company. She was extremely successful in her role, but I think that, itself- she really just took on that responsibility, and I learned a lot about sacrifice, and determination, and, I think, especially from the HR perspective, the empathy, which I really do believe it’s informed how I am as a leader in our company with that lens of empathy. Still obviously have a great relationship with my dad. My dad was not the primary caregiver. But he had been an entrepreneur all the way through, so he’s always learning, exploring, doing everything along the way, which also just really impacts in terms of having that drive and that desire to be successful, and also failing, and learning, and trying again- I think that aspect of it really instilled in me that motivation- and also just having to learn about everything. Even when I started this business with my three partners, having to learn everything, like legal, and accounting, and HR, and marketing, and all those things, I think I saw how my dad started his businesses and had to take on those responsibilities. And those are the parents. Now, my dad is now a deep [INAUDIBLE] living in Mexico after a massive near-death experience when I was around eight. So that’s where he’s based. And my mom’s now retired and close to my house and helps to care for my two kids.

Jamin Brazil: Wow. How did you wind up in market research?

Paul Gaudette: Funny story. I actually went to school more business side. I went to a BBA program here in Toronto at the Schulich School of Business, and then after that- it was a time when- it wasn’t as lucky as it is now to potentially get a job. At that time, it was very difficult to get a job when I graduated, so I decided to go back and get a Master’s in Strategic Management in France. And one of the reasons why I chose France was I wanted to travel, and my mom thought, “If you’re going to travel, you might as well get a degree.” And I thought that was a great idea, and so, “Where do I want to go?” South of France sounded amazing. It just so happened to have a great program there, so ended up in south of France in strategic management and, while I was there, got connected with a company who really focused on innovation. And that led me into the area of market research. So I wasn’t- sought out market research as a career to begin with. It was much more focused on strategic management, innovation, those aspects. And that naturally just evolved into a role in market research.

Jamin Brazil: Congratulations on 12 years of running a successful business. Why did you start Dig Insights?

Paul Gaudette: Oh, my God. Throwback. I think, at that time, it was 2010. We really just saw a need for insights to be much more of a business partner, really using data and analytics to understand how the changes in consumer behaviors could impact our clients’ business. And that really started with us leveraging things like conjoint, discrete choice, and other things like experimental designs and trade-off methods that really could help companies simulate the impact of- whether it’s an innovation or a change to a product or service- on those consumer behaviors. And so we had hitched our way onto those higher-end custom analytics aspects and spoke more of a business language- which, again, my business education, I think. And when I came into market research, I realized that it wasn’t just all about communicating Top 2 Box scores. It was really talking about, what’s going to be the incrementality? How do we optimize revenue? What’s going to be cannibalistic? Those are the types of things that we’re focused on. And I think it gave us a different perspective on how to speak a different language to our business clients, leveraging insights. And we saw there was a definite need for that, and that’s what we’ve been holding onto ever since.

Jamin Brazil: So one of the things I found very interesting is your adaptation, or creation and adaptation, of technology enablement to the actual market research that you deliver. When did that start?

Paul Gaudette: So we developed- basically, it was around- I want to say 2013, 2014, really was the time when we actively decided that we needed to go much more into technology. So right when we started-

Jamin Brazil: That was early Zappi days, right?

Paul Gaudette: Well, yeah. Yeah, right around then, actually. Right when we started, 2010, Qualtrics was just coming out. Vision Critical was there. And we knew we couldn’t compete on that, obviously, technology space. But we didn’t also want to compete in that low-end, commoditized, concept testing, consulting space. So we went higher-end. But in doing that, we had started creating our own and using our own technology, so we were creating our own experimental designs, which is really just a simulated shopping exercise online. And we were creating our own methodologies and approaches that we could stitch into larger surveys, so our own interfaces. And so the tools, and techniques, and the analytics that we were developing were really technology that we were developing. And we’d say, “Maybe there’s a way to develop a methodology that really spoke to consumers, how consumers are using technology today, with the devices that are in their hands. And can we come up with an approach or a method that really is a way of testing new innovations easily that consumers can actually get through pretty quickly?” And we came up with this approach called Upsiide, which really, at the core of it, was just a really easy way to screen early-stage ideas, leveraging swiping with some trade-off. Fast forward to 2017, 2018, we basically developed an app related to it. Spent a bunch of money doing that. That failed. And we had to start from square one to develop more of a web-based program. And today, it is actually now a fairly full innovation solution that is still focused on innovation testing, but comes with a whole battery of analytics built into an online dashboard that you can launch a survey right from that platform and get the results back in that platform in a short amount of time, and has integrations right through Lucid and built-in analytics that clients can use to understand the success or potential of an innovation. So it’s actually become a pretty key component of our being and how we not only enable our clients to use the same tools we do, but we also build products on top of that and deliver that to our clients.

Jamin Brazil: Give us a specific use case.

Paul Gaudette: So for example, Coca-Cola has a whole bunch of new innovations that they’re planning on launching in the next year, and they need to prioritize some of these innovations. So one could be if you’re launching a new- let’s just say the big thing is, “Let’s get rid of diet soda.” So now, it’s zero sugar sodas. If there’s a new brand or a new product they want to launch, let’s put it in context of all the other ones that are available in market and see how well it does. So this is just a very early-stage, quick swiping and preference mechanism. I’ll go through a whole bunch of different products on my screen, and I’ll swipe left and right on the ones I like or don’t like, choose which one I do prefer out of the ones I do like. And that’s a very simple way of screening through some early-stage ideas, but in a competitive context, so based on what’s available in market. And then out of that, we’ve actually been able to model a ton of data. So we actually have relational data. We have quadrant maps that show you the linkage between the trade-offs and the interest. We’ve got the scores that are correlated to market share. And so there’s a ton of stuff on the back end that shows if you have a specific new brand that you’re launching, a new product that you’re launching, how does it rate and how does it compare versus other products that are in market today? And really, it gives you the understanding of, where is it going to compete? How incremental is it? We can run TURF analysis on this data. We can run share of choice data on this data so we can understand that level of incrementality and cannibalization, so a lot of great stuff that comes out of a very, very easy way to actually assess innovations.

Jamin Brazil: Let’s talk a little bit about the failure. So you launched an app, and it didn’t do very well. Why not? What happened?

Paul Gaudette: Jamin, listen, I work with some extremely smart people. I think that’s the one benefit of having a company like ours, is that they are really, really, really smart. But we’re also very, very, very particular about how market research needs to be done. And the technology that we built is grounded in really robust market research and analytics. So we launched an app, and it had to be perfect. Everybody that joined the app needed to be properly representative, how we were going to create norms based on this. Every question had to be- there was just so much going into the logistics of, how do we actually analyze the data and make it so that we’re providing the best and highest-quality data? And we realized it was just not sustainable. It just wouldn’t be something that we could actually do. So we had to leverage external partners, and we had to make sure there were some things that we didn’t have to control for. And so even though we had an app launched- the app was in the app store, which had to have a different name versus Dig, so that’s why we ended up calling it Upsiide. People downloaded it, and it was a whole thing that we had to manage for a while. But the rigor wasn’t there, and so eventually, we said, “We need a better solution, and we’re going to scrap this whole app.” And didn’t have to worry about updates on people’s phones and all that type of stuff, and we’re just going to make it a web app instead.

Jamin Brazil: There’s, I believe it’s a Russian proverb, “No matter how far you’ve gone down the wrong path, turn around.”

Paul Gaudette: Exactly. And I wish we had turned around a little bit quicker, but at the same time, I think it allowed us to really focus and prioritize things and then find other solutions to help fill in the gaps.

Jamin Brazil: For sure. That’s exactly right. And you always are able to take- I find that successful companies and people specifically are able to take learning from failure, so it isn’t money lost. My previous business partner, Jayme Plunkett, and Kristin Luck, we used to frame it as an expensive education.

Paul Gaudette: That’s exactly right. That’s exactly right. Highly, very, very expensive.

Jamin Brazil: So let’s shift gears a little bit. Two thousand twenty-one’s behind us. It’s been a crazy couple of years. Two thousand twenty-two, we’re stepping into it as an industry, some of us strong, some of us weak, some businesses thriving, and some really struggling. It’s, in a lot of ways, a tale of two cities. What do you see as some key trends that are going to carry us into the new year?

Paul Gaudette: And I think there’s trends that are obviously directly related to insights, some that are maybe slightly outside of it. But I think, right now, from an economic perspective, definitely, there’s consumers becoming much more price sensitive as prices continue to increase. And that’s a question that, obviously, our clients are going to ask us about sensitivity for some of their products. But even though employment levels are almost at pre-pandemic levels, the prices for things are just drastically increasing, and I think that’s really going to impact consumer confidence. So that’s going to definitely be a big question, I think, for our clients going into 2022. I think, from even just a business perspective, it’s interesting because there’s going to be a much greater focus on automation, so partly driven- and again, this is related to insights, but also not- but partly driven by the need to get information and react so quickly to that information. But it’s also becoming really hard and difficult to hire people. It’s very, very hard to find talent. And I even wrote an article about this, actually, right at the beginning of the pandemic, about companies increasing automation efforts to pandemic-proof their business. And now, automation is actually because we can’t hire enough people to do the work. And so all these paths lead to that level of automation. And then that is interesting, how it relates to insights, because I think insights is going to be just as busy as it was in 2021. I think automation is going to be a big aspect of how we’re going to handle that type of growth, both from the client side, who is actually digesting and getting that data, but also from the supplier side as well. Our ability to actually turn around projects and data quicker is going to be much more important and be more efficient. I think there’s going to be some really great opportunities for those in that space who can definitely take advantage of that growing trend.

Jamin Brazil: What are you seeing with respect to samples? So SampleCon was in Southern California this year, July. Sima Vasa, of course, I believe she’s Chair of the Board of SampleCon. And in that state-of-the-industry event, it was very clear to us that we have a sample shortage. And it isn’t that it’s a shrinking sample. It’s that the demand side has been increasing so much over the last few years. And 2022 in the US is an election year, so that’s going to mean that you should see a bump of about 20% sample utilization, so again, further increasing the overall demand, which puts a lot of pressure on the overall ecosystem of panelists. And then to your point before, you do see this interesting relationship of cost. Our CPIs, when you think about when you started the business ten years ago- well, what was an average CPI for you ten or 12 years ago?

Paul Gaudette: God, I can’t remember, but you know what? The interesting thing is that though CPIs, I’d say, haven’t significantly increased, I’d actually say things have become a lot more efficient. And I think the different panel providers are using points in different ways that our direct costs probably have become actually cheaper [CROSSTALK].

Jamin Brazil: That’s exactly the point. It’s materially cheaper. I was paying six to eight dollars in 2010 on a CPI basis and then a fraction of that.

Paul Gaudette: But it’s counterintuitive. You would expect, over the course of the years, prices to increase, but yeah, with companies like Lucid, PeerSpectrum, anything that’s doing programmatic sampling, those who are doing ads inside of apps to attract talent- yeah, so there’s definitely- it has decreased, but yeah, to your point, does supply dry up? And as a result of that, what’s going to happen? The demand is there. The incentive isn’t yet or has never really been properly. So yeah, I think that incentive might actually increase, and prices might increase. People, they’re going to want to do surveys for something more than what they’re getting now or, at the same time, something that’s very, very quick and simple and is not really long and complicated, kind of like what we’ve been trying to preach with our Upsiide platform, so we know it’s very easy and intuitive. So there’s elements of both, but yeah, it’s going to be a- you’re absolutely right. Every partner we’ve spoken to, the demand is just crazy this year, and they’re seeing those pressures on- and especially being able to deliver projects to us.

Jamin Brazil: For me, it’s the scary thing. I’m seeing a lot of automation inside of the industry, and I think there’s a lot of room even for improvement on that point. And we’ve really black boxed the participant framework in terms of, to your point, multi-sourcing through the marketplaces. And now, I don’t know what you’re seeing, but at least on the stuff that I’ve been doing, I’ve been seeing a surprising amount of bad participants. And so my concern marching forward, especially in the automation framework, is making sure that we’re creating safety around the [CROSSTALK].

Paul Gaudette: For sure. For sure. But I think longer-term, this is where you start looking at how can you leverage, also, other data resources, passive data, behavioral data, transactional data, and start compiling these things. And we’re even doing the amazing data modeling on our side that allows us to do hierarchical Bayes analysis on a much-reduced sample size and be able to project things, so we don’t have to go and get 1,000 people. We can do it with a couple hundred. So we’re trying to figure out ways to be more efficient, but you’re absolutely right. You have to pay attention to the quality. Luckily, there are companies out there that that is also a solution that you can actually tap into. It’s definitely scary, but this is where I think the industry is going to have to evolve much more beyond just primary data collection and really incorporate those other data sources.

Jamin Brazil: I think your approach that you mentioned, regarding modeling small sample sizes so that they’re representative of a population, is exactly a right answer to the problem because that starts getting a little bit more realistic in terms of being able to compensate a smaller group of people because what we’re not going to see is a brand say, “Oh, yeah, it’s fine. Three- or five-X more expensive on my sample.” Nobody’s going to go for that. But they’ll pay the same, assuming high quality, for a smaller sample, as long as business answers are accurate.

Paul Gaudette: Definitely. Again, I think that’s going to be an ongoing trend just into 2022 and beyond. I just don’t see that coming down again.

Jamin Brazil: My last question: what is your personal motto?

Paul Gaudette: I think, really, it’s an interesting question. I think I have two. We referenced it before, about every failure being a learning experience. I think I speak for even my partners at Dig that we’ve been on this amazing journey, full of ups and downs, and I talked about launching an app and having to redo that, but every time we do fall, we do get right back up, and we learn from that failure. It sounds like you’re very much similar that way. An expensive lesson, yes, but we have that ability to do it quickly. And I think the fact that we’ve been able to learn and recover so quickly really has helped us maintain our success and our innovativeness. And then the other one I think is important, especially, I think, as we’re in this day and age of hiring people and building a great company culture, is really treating others the way you want to be treated. I think I get this from my mom, who was really a compassionate HR leader and did show me that importance of empathy and understanding. And I think, as we look back at the struggles of having everybody work from home, and having kids at home, and then trying to manage a family life with kids at home while also working, and I was going through the same very much similar things, and with all the awareness around mental health and positive mental health, that level of empathy is required. And so making sure you can understand the other person, but treating them in a very respectful and proper way, just as you’d want to be treated, to me, is the other motto I think that I continue to live by.

Jamin Brazil: Our guest today has been Paul Gaudette, founder and CEO of Dig Insights. Paul, thank you so much for joining me on the Happy Market Research Podcast.

Paul Gaudette: Thanks so much for having me.

Jamin Brazil: Everyone else, I hope you found some value and entertainment in today’s episode. If you did, please screenshot, share on social media, tag me, and I will send you a t-shirt. Have a great rest of your day.