Micro answers to macro trends
Lab42 gets to the heart of how data can work for businesses
"Big data is great for identifying macro trends, but there's also a need for micro answers," says Gauri Sharma '09, chief executive officer of the Chicago-based custom market research company Lab42. "That's where we come in."
Businesses — from Fortune 500 companies to MBA students and other small-scale entrepreneurs — approach Lab42 with questions ranging from, "Would this product appeal to our target demographic?" to "Is there a market for my business idea?" The startup, which was launched in 2010 by the venture capital firm and startup foundry Sandbox Industries, not only helps refine those questions but also looks to its "publishing partners" to efficiently and inexpensively test them.
Lab42 seeks out these confidential partners — including shopping sites, gaming sites and blogs — to gain an in with the types of people attracted to them or their social media components. "There may be a gaming site, let's say, that we know targets men over 40," Sharma says. "We proactively make a relationship with that [site] to make sure we're able to tap into that demographic."
Potential respondents are enticed to take Lab42's surveys with virtual currency or online credits, but first they have to create a profile through Twitter or Facebook. The profiles help Lab42 determine whether a person really hits key demographics or psychographics and promote accurate matches to future surveys.
Altogether, it aids Lab42's relatively small team (the startup has 10 employees, soon to be 12) in managing quick turnaround times, which can be as short as two or three days. According to Sharma, that type of schedule is what attracts some of the company's biggest clients, many of which have their own research teams. "It can be five or six months before [a business or marketing group] can get research because their own research departments are spread so thin," Sharma says. "We enable them to do the research quickly and get the insights they want."
Lab42 saves clients money, in part, by asking pointed questions to pools of online volunteers that have already been vetted as relevant — rather than creating focus groups or searching for answers in large piles of data. The company also helps their clients avoid making expensive mistakes. Sharma cites a recent client that reported saving thousands of dollars for abandoning a plan to upgrade one of its existing product's packaging.
"They anticipated that a fancier-looking product would sell better," Sharma says, "but our research proved otherwise."