The qualitative user research field might have reached a significant milestone today on its path to mainstream. Techcrunch, the place-to-go for news about start-ups, published today:
“Denver-based GutCheck is trying to offer a self-described do-it-yourself platform for qualitative market research. [...] The startup, founded by CEO Matt Warta, Carl Rossow and Jen Drolet, has just raised $2 million in a Series A round led by Highway 12 Ventures. [...] GutCheck’s goal is to be the SurveyMonkey for qualitative research by simplifying the process and bringing it all online.”
Wow. A $2 million investment for a qualitative user research tool. What is going on here? Have venture capitalists completely ran out of ideas about where to put their money? Did Gutcheck founders simply pitched the right product to the right VCs (actually they have an advantage here: one of the founders is actually a former VC)? Is Gutcheck sensing something no one else is?
Let’s look at what is under the hood: the app basically provides marketers with a service to identify research subjects based on a target demographic from a large database (populated by revenue-sharing partners) and the communication tools to interview them by means of an online chat.
Looking at the features, there is nothing revolutionary from a mainstream marketing methodology point of view but surely an incremental shift that will appeal to many marketing managers willing to try something different, but not that different. Not sure how many social researchers would call this a ‘qualitative research’ tool (maybe the label ‘real time interactive survey’ would apply better?), but there is something in there for new product development projects that care about empathizing with users at some basic level.
Why VCs are starting to invest just now in this area if the widespread buzz around user-centric innovation has been around for a while now (the famous BusinessWeek special 'Get Creative'on innovation dates back from August 2005)? What took them so long?
One explanation could be the fact that people are now sharing online more than ever and marketers realized the power of online media to have easier and faster access to consumers. Sentiment analysis tools for blogs and public tweets are just the tip of the iceberg. The amount of information of each one of us in the internet is only going to get bigger,and marketers can't wait to have access to all this information.
So what is next in the VCs investing pipeline? Is this the start of a trend? Are on-demand solutions so fast, so cheap, and so hot nowadays that we are going to have an explosion of applications related to finally truly understand users and markets?
Maybe Gutcheck's case would lead us to believe that we are witnessing the nascent of a new product category of solutions. But it may be surprising to some to know that this application space has already existed for a while. Yes. Even before VCs or marketers looked at it.
In the last years, more and more innovation consultants, design strategists, ethnographers, researchers, etc.. all over the world who have been practicing for years and had been frustrated by the shortcomings of existing digital tools, have decided to stop complaining and to apply their own knowledge to build the tools that would help them and many other user researchers get their job done better. First 'scratch your own itch' and then (since the cost of bringing to market an on-demand app to the whole world is so low...) why not try to make a business out of it! As an example, here a handful of solutions I have been looking at in the last years, and in some cases test-driven or even used:
- Revelation, an “online qualitative research software to help your market research project capture reality” developed by Steve August “after many frustrating years of using blogs to do ethnographic-inspired online qualitative research”
- Guapovideo, an “online video collaboration for market research pros” developed also from Chicago and used and endorsed by ID IIT professor Chris Conley
- Piipl, a tool to “easily gain insights by involving piipl [sic] in innovation processes” is developed in Denmark by an ex-Jump Associates consultant
- Ethnoken, a "visual market intelligence" tool developed from Chicago and “created by ethnographic researchers for ethnographic researchers”
- 7daysinmylife, an "online research environment in the form of a diary’ started by Dutch consultancy Zilver innovation
The level of product maturity in many of them is still not 100% market ready but there is not a lack of great product ideas out there. And the interest and money to be made with this kind of apps is only going to grow. And VCs will surely follow.
It would be very interesting to follow how this market evolves in the next years. Will bootstrapped startups sell part of their business to VCs for faster growth? Will they try to do it solo and grow their business without backseat-driving investors dictating the pace of development and the features that have to be released first? Will they have a huge expertise advantage over entrepreneurs coming from traditional quantitative marketing simply becoming entrepreneurs to make a fast buck? Will established design consultancies (that rely on quality user research) develop similar tools to increase output, productivity and (most importantly) margins? How long before larger, more powerful and better funded marketing companies start swallowing these startups as they mature their offerings and increase their user base?
Update: Matt Warta, CEO of GutCheck has shared in the comments section extra insightful bits about the vision behind his product and the potential reasons why VCs are interested in the space. Additionaly he has also provided some additional examples of related solutions in the online market research application space:
- Markettools, the same creators of the early Zoomerang , provides a full and diverse range of “software and services for Enterprise Feedback Management (EFM) and Market Research”. The company has been around for quite a bit now and it definitely seems one of the bigger and more mature ones out there. (Based in San Francisco and 471 employees according to Linkedin)
- Communispace. Claiming to be “The Leader in Online Consumer Insights”, Communispace story has been covered by the popular book Groundswell written by Forrester analysts. They pitch themselves to potential clients not as a technology company but more as a ‘strategic partner’ probably alluding to the fact they offer strategic expertise through professional services. Check their multimedia area for an interview with CEO Diane Hessan. (Based in Massachusets and 281 employees according to Linkedin)
- uSamp . With a more traditional survey methodology approach, uSamp’s strong points are (according to them) better subject matching, higher data quality, and a large pool of subjects. We can already see a numbers 'battle' going on between competitors: uSamp talks about “3.1 million actively engaged panelists” while Gutcheck promises a pool with “roughly 4 million subjects”. (Based in California and 61 employees according to Linkedin)
- Vovici Offers basic online survey capabilities with additional analysis reporting tools. (Based in Virginia and 98 employees according to Linkedin)
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Great post. I think you make a lot of great points in your blog as to why a new wave of technology-enabled methodologies are rolling out. The key one for us is certainly the need for MR methodologies which are more real-time than traditional methodologies. Waiting weeks for answers doesn't sit well these days. The other key theme we are trying to leverage is the ability to offer a methodology in a more efficient and cost effective way. I think there is an elasticity function at play in MR, and if we can provide a quality methodology for a fraction of the cost, marketers are going to do more research and come up with better insights. Lastly, methodologies need to be more flexible, and provide the ability to ebb and flow along with the results and data marketers are receiving on a daily basis.
ReplyDeleteAs for the VC interest, there are a lot of things to like about MR from an entrepreneurial standpoint. It is a huge industry which has historically been represented by smaller, bootstrapped firms which provided a service. So, no huge incumbent to create a lot of issues for you. There are also numerous niches where disruption can happen which creates a nice entry point for newcomers. I don't think this interest is all that new. If you look at companies like Communispace, uSamp, Vovici, MarketTools, etc, you'll likely find a board member or two who is a VC.
Really nice job.
Matt Warta
Co-Founder and CEO
GutCheck
Matt, thanks for sharing with us the vision behind your solution and congratulations for venturing to bring such a product for any company willing to get closer to their customers.
ReplyDeleteThanks for highlighting one of the more interesting areas of innovation in the research field. Revelation has been at it since 2007, and it's gratifying to see the increased interest by researchers, end clients and VCs in qualitative research and tools.
ReplyDeleteBut even 3 years in, based on the workshops I've given and the questions we encounter from new customers, I think the movement towards qualitative research innovation is still in its early days. There's a lot more to come.
One parting note - I'd like to speak to your comment regarding maturity levels of some of the companies you listed.
To clarify, Revelation has been out since 2007 and has been used by hundreds of researchers and thousands of study participants globally (we support projects in 15 different languages). While we are still a young, growing company, we are definitely past the beta stage. :)
Thanks again for a great post.
Steve August
CEO Revelation
www.revelationglobal.com