Over the last decade the market research industry has been disrupted, our largest agencies are struggling to keep up as their customers turn to newer, faster and cheaper data sources, now we are on the edge of yet another market shift. Now is the time for us to reassert ourselves as the rudder of the brands we love. Thank you for tuning in to the Happy Market Research Podcast where we are charting the path for the future of market researchers and businesses. Hi, I’m Jamin Brazil and you’re listening to the Happy Market Research Podcast, today my guest is Frederic-Charles Petit, CEO and founder of Toluna, Toluna connects businesses with consumers to deliver real time insights. Under his leadership Toluna has had a successful and stories legacy, playing a key role in the market research space. Frederic, thank you very much for being on the Happy Market Research Podcast.
Thank you for inviting me, I’m thrilled.
So what did you parents do and how did that affect your career?
Yes, I think that’s a very good question, actually because my father which is a role model for me, was an entrepreneur, and across his career he had to change business, move countries, and I think I always looked at him as a very hard working person, always working hard and trying to show the example but also very low profile in terms of his talent or his authority or his interaction with people and I think that influenced me into wanting to build a business, and I think that’s the role model, clearly, and I saw the same with my mother, she was not working, but she was a very hard working person as well and she still is actually.
The subject of humility is interesting especially from contrasting the earlier generations to modern generation, there’s a lot of self promotion going on in social media now, myself included, I guess, how do you think the tension, or where is the tension between humility and at the same time talking about your whatever it is that you’re doing in order to promote your brand, your products and ultimately yourself, so that you can have a successful, modern career?
It’s a good question, I think that you can still be humble, the low profile for me is being humble, and you know having this mentality of a challenger, by that, I mean that the minute you believe that you are a leader and therefore you should have the status of a leader which I don’t know anyone who would think like that. I think you’ve already lost the envy, the traction, the appetite for growing and for change and I think being humble and passionate, I think these are tools that can follow you during all your career and you can still be humble and be proud of what you’ve achieved but I think that there is a fine line and clearly times have changed, but you can still be – try to accommodate the two.
Tell us about your transition from your early career in law to a start up of Toluna?
So yes, I wanted to be a lawyer and I became a lawyer, I did Corporate Law MA, I studied in France and at NYU, in the US, and I saw – I was in the US from 1995 to 1997 which doesn’t make me younger when I say that and I saw a lot of the startup and what we used to call the New Economy, and I came back to France, I started law and after – very quickly I understood that it was not a path for me, for the reason that we’re linked to my role model, my father, because I thought that law could be entrepreneurial as well, that I could create my own law firm and build a practice but with my expertise which was Corporate Law MA and the fact that I wanted to play with the large law firms, it was impossible. So I was very excited about the internet and the ability to start a business at that moment in time which I felt was unique, 1999-2000, there was uniqueness in that moment and I decided to move on and create that company.
It was a really interesting time in the US at that point in time for dot com based companies, in the middle of the Silicon Valley, it was just crazy, crazy, crazy everywhere you went, what was it like in Europe?
In Europe, I think things have changed a lot but I was leaving France by then, and in New York there was excitement and a feeling of being intrigued by the internet and startup culture, but it was much harder and especially in France at the time, it was harder to start a company, just starting a company even if you were not raising any funds was very hard, even if you had the funds, opening a bank account as a corporation, and all that, so there was a lot of excitement, people were a bit dubious about the reality of this business model, because a lot of the business model was how much cash do you burn, or how much hit on your homepage, and people weren’t seeing that much revenue, and it was not much so it was a dual feeling in terms of – but clearly things have changed, in France especially, it’s a much more entrepreneurial culture than it was back then.
Does it feel like the startup culture now is similar to what it was in 2000?
Do you mean in general, or – I think it has changed in a way, it’s much more sophisticated I think, I feel that although we were not the first one because I founded the company in 2000, so I was quite late if you compare to the US but I was in the first wave, I think that back then you could come with an idea and a business plan and start a company and raise the money, and that’s what exactly happened to me, I had an idea, we drafted a business plan and we went with that business plan along the back of that, not even having created a company, we raised the money, I think that with the dot-com boom and then the dot com burst, and the sophistication of the investor and things have changed and there is a much more organized process from when you start to when you raise your seed and your series A and series B and so on and so forth, so it has changed. I think it’s not easier today than it was back then.
How did you navigate Toluna to survive the 2001 dot com bust?
That’s a good one, I think all my friends were in law firm, they all said I think it’s great, what you’ve tried, why don’t you come back, and so it’s what we call B to C, back to consulting, and B to L, back to law, and I was very stubborn and I did believe that consumer opinion and the opinion of the consumer would change the interaction between brands and consumer and ecommerce and so I felt as well, which is very important, I felt a sense of responsibility in terms of commitment to the investor, that they had trusted me with that fundraising and my role was to fight very hard to survive during that period, which was really the – it was the winter of the internet economy in Europe, it was really awful, I have to say, because everywhere we were going was in the research industry at the time, and we were trying to explain that online, online was going to change the industry, just based on the data collection basis, everyone was very – most of the people I would say, not everyone, most of the people that we met at the time were very – I don’t know how to say that in English, they didn’t believe in it, they said we should come back ten years from now. And so it was very tough and so the way you survive in those moments is that you regroup, you stay focused on a very few items, you have to change your business plan, you have to change your ambition, sometimes it’s a day of reckoning, what you wanted to achieve versus what you can achieve within the period, and I was fortunate to meet a couple of people who were very, very nice with me, because I had to do my fundraising, at the time 2001, and one has become a friend so I was going to launch for us in France a massive ad campaign, for people to join the community, the Toluna community, and so I went to a number of agencies, big ones, a very big one, a small one, medium one, maybe had enough time, and agencies to get feedback and one agency, the one agency I chose came back after three weeks and we had the contract to sign and they said we have the recommendation for you, I said give me the recommendation, and he said it’s one word, don’t do anything right now, and I was very fortunate because I met these guys who basically helped me save the money to go through that very tough period.
I love the attitude and the mindset of conservative growth especially set in the backdrop of such a crazy economic period for startups, I’ve got this mantra, run to revenue, race to profit, it really tries to get to you need to build your core product and then get customers but as soon as that core product is in place you absolutely need to stop that burn ratio, and move the business to sustainability.
But it’s tough, it was tough, so a lot of good people, I have to say that I met during these years and it’s tough you have to make those choices and sometimes choices are imposed upon you.
In 2014, you acquired Harris Interactive, what was that acquisition thesis, the biggest challenges, and the outcome that you were most proud of?
So first of all, I’m the CEO of a company called ITWP, which mean In Touch With People, actually, and ITWP owns two companies, it owns Toluna and Harris Interactive, so in 2014 we acquired Harris Interactive Europe, France, UK and Germany from Nissan, and that was quite a transformational acquisition, the acquisition was on the basis that we believed that there was a thesis as you said for digitalizing an online research agency and by that I mean that you can be online, but you’re not digital, by digital I mean using technology to produce and deliver insight almost in real time or in real time, and so we felt at the time that Toluna had a lot of this end to end technology, DIY consumer data, communities and that we could use all this Toluna technology to help Harris Interactive digitalize itself because Harris culture was already online interactive and it was easier and it was really a business case, we said we’re going to take this agency in the market which is flat, or flattish, or even declining, for traditional research, custom, by using – by leveraging the expertise, by leveraging their relationship and leveraging the technology of Toluna, they are going to go ahead of the market. And that’s basically what we’ve done and that was very challenging so what I said initially to the team, I said this is the first year, I want you to keep 100% of the staff, and I want you to keep 100% of the clients and I’m not here to disrupt, I’m here to help on that digital joining, and basically we did it, we grew the second year, ahead of the market and since then we’ve – I believe we’ve bid under the market share after a year, and Harris Interactive has been, I believe the example of a digital research agency, building the agency of the 21st Century which is the combination of end to end technology, access to seamless, access in real time to either people’s opinion or behavior and consulting expertise, but not repeating tasks that you can replace by automation and technology, reinventing the wheel, project after project, because the market has changed dramatically and what I believe brands, the brand manager or the marketer wants, they want almost real time access to people’s opinion and behavior, and I think that means that you absolutely need the digitalization to deliver on that, so I think that it was a bold move but I think the move was right when looking back.
In every acquisition there is this one plus one equals three and you’ve got to figure out where that value is, more often than not what I see in the thesis is reductions in staff, at a minimum redundancies are removed, how did you handle that differently?
It was not a cost driven acquisition, it was really a gross [INAUDIBLE] acquisition, and the fact is that we needed the expertise of the researcher in order to basically go back to gross but we needed the staff, the members of the staff to do higher value engagement with clients and not the repetitive one that you can replace by the technology, so that’s really what was driving the rationale for keeping – the headline was 100% of the staff, 100% of the client, and I understand if you’re doing an acquisition of companies that are – where there is overlap, then obviously you need to act differently.
What steps would you take if you were trying to get hired in the market research industry today?
I’m sorry, if I’m going to reverse the question if I may, I think that – and please that’s my perception of the market right now, if I’m a recruiter within a research agency the question I would ask myself day in and day out would be what steps my organization should take to hire the talent out there that may decide to go somewhere else in research or in a research company, because there is so much choice for people who are data driven and so much choice for people who understand – who have to purchase and can use a variety of segment or vertical other or industry other than within the context of a market research industry, where they can go to consulting, where they can go to media, they could go to ecommerce, they could go to even brick and mortar, and do that, so I think that the challenge for the industry right now is to attract those talents and to culturally understand that the world has changed, that the code what a research company should be and what type of staff a research company should hire has changed and that we need an influx of fresh energy from the less traditional staff that the research companies have recruited, so I think that if I am – if I was a graduate and I had choices, cards in my hand, and I wanted to go to a research company, I would show my difference versus the traditional researcher, and by that I mean we need what I call traditional researcher, people who understand the formality, the rules of research, and the foundation of research but we also need these people who have, who are crunching data, people we call data scientists, engineers, people coming from different backgrounds, and who certainly have across the board the ability to do it themselves and have learned that and I think that’s – really I think that that is the larger challenge for the research industry to attract that talent, so I would – how can we make ourselves more attractive.
One of the themes that I’ve seen emerge over the last five years, even more than that, is this responsibility it seems for the entire organization to conduct research, not just the market researchers, and so it’s created an empowerment which is great for everybody from the intern to the CEO to be able to conduct research, but this democratization of access to insights is creating some level of confusion, and a good example is of an international, I have a relationship with an international tech company, they’ve got five full time market researchers and they have 40 full time UX researches, that are partnered with the product team, and those 40 people are fitting outside what is traditional market research however they actually are doing customer satisfaction segmentation, a lot of the same type of work, this is causing confusion across the organization because you’ll have sometimes conflicting results, customer satisfaction being one of the more obvious opportunities for conflict, so how are you seeing this materialize in the industry?
Yes, it’s very interesting what you are saying because you know we are founding members of the Insight on Demand Consortium, we have right now close to 150 companies who have joined the consortium, a lot of consumer brands and one of the streams of discussion in the consortium is how do we cope with the silos between consumer insights and CX and how do we make sure that maybe we create more link within, and it’s possible, within the organization between those two parties or those two departments because in a lot of instances they operate in silos and I think that’s an issue moving forward because you need a lot of the crossover or the joining those dots, I think that’s quite important.
What are the three characteristics of an all star employee at Toluna?
I think that we have a series of values and those values, we basically, it’s not just to put them on the wall, I do believe that the values of the company are you know what unite the staff and when the staff need to regroup when things are tough and the values make the staff and the company excel when things aren’t going in the right direction. So I think that the first thing is that if you’re working at Toluna, and I’ve learned that over the years, you need to show the values of the company and the values – a couple of the values are meritocracy which means that wherever you are, wherever you come from, you have a chance of building your career within the group and growing within the group, regardless of which region you are, which department you are, and that’s very important, rewarding talent. One other value is that we like bold moves, that’s what we like, we like making a move like the move that we make over the time, and those – and standing by the bold move, we like to act as one team that succeeds, not just being one team, but one team that succeeds, and these values come back to the early days of the company when we were like 15, 20, 50, so I think that’s the first thing and I’ve learned very – sometimes it was tough, I’ve learned that if you recruit someone that does not share the value of the organization of the company, it’s problematic, I think that you need to have obviously the expertise, but that’s – I would say that’s a given, if you recruit someone for the wrong role, it’s a mistake for both parties, so that’s a problem and you have to be passionate about your work, because I think passion is a tool that you can use to go faster, to win, and I think that there needs to be a sense of loyalty between the company and the individual back and forth and I think that sharing those values, having the right skill set and ensuring that we help people get to the position where they can excel, and also having loyalty back and forth, and so I think that a company has multiple constituencies and actually that was my thesis when I was a law student was the constituencies of a company and the constituencies are obviously the shareholder, we need to give back to the shareholder, the clients, the staff and the community in which you operate, so I think that we need to look at those things when we recruit someone and sometimes we make mistakes, we have to recon the mistake. I have, there were times when I was doing a lot of the recruitment, I made some mistake, I recruited people who were excellent in their job, fantastic, but didn’t share at all the value of the company, and so that was a problem and we have to recon that and it’s not reconning just for the company, for the benefit of the company, it’s for the benefit of the two parties, the individual and the company, and there are stars within Toluna, a lot of them that have gone very fast within the company because we trust people, we trust people are doing – want to do better, want to do their job better, and the trust that we’re giving them is I think critical to take bold moves to act as one team to not just satisfy clients but to delight them, to be the company and that’s all – I said that yesterday to the team, one of the first things I said when I founded this company was I said we want to be the company, it’s very simple, that answers the phone at 6pm on a Friday to a client that needs us because we’ll be the company that that client will call at 9am on a Monday. And that was very simple values, it was delight the customer, but at the time I didn’t need to put that on the board because we were only 25 people.
One of the benefits about being old is, for me, is I can look back over my career and see how different choices I’ve made have impacted where I am today and one specific example of this is working with Braden Johnstone, and a client on Christmas Eve in order to solve a particularly difficult project that was in field at that point, we worked Christmas Eve, we worked a little bit on Christmas Day, project wound up going great, and that particular client was Edwin Wong which was my very first brand interview that I did at Happy Market Research, so you’ve got to remember this is right, the early days of Decipher, in fact Holland Partners where he was working at the time was only five people, so this is super early in everybody’s careers, you fast forward and now he’s the head of Insights for a major brand, the decisions and the way that we act in those early days massively – there’s a big lever there that impacts our personal brand and how we’re viewed later on in our career and I believe that it’s a core tenet if you treat people well through your process then they’ll be there for you in the end.
Exactly, it’s – I remember once I had – we had to do an acquisition, we had someone there, a very nice person, and a client calls and it’s a true story, I sit in the office, it’s a Friday and the client called and the phone is ringing, and the guy doesn’t move, and I said are you answering the phone, yes but we need to educate the client that they can’t call us after an hour, and we just acquired that company, it was one of the – it was not one of the senior managers, it was one of the business managers of the company, a very nice guy actually, and I said no, wait a minute, I’m not teaching the client any lesson, that’s not the role, I try to work with clients, but we are here to serve the client so if they are calling at six or seven pm on a Friday it must be very important so that’s where I confronted myself a very long time ago to the fact that culture is key, you have to share the same culture. And you can be different, you can operate differently, but the fundamental set of values needs to be the same for success. Otherwise, because when things aren’t growing, when the overall market is growing, no one cares but that’s when the market gets tougher and if you don’t share a set of shared values, then it’s – I think that the overall organization is, the English would say, in sticky wicket.
What is one of the secrets that drives growth, profitability, or success for Toluna?
I think that we have to recognize that companies have cycles and so if I look at the current cycle, I think that where we are right now is [INAUDIBLE], the decision that we made four or five years ago, and the decision where very – looking back very simple, but at the time they were quite bold, we always invested in technology, we always had an understanding internally, more internally than externally, that Toluna was a technology company and that we believed very early on and it’s easy for me to say that now but that’s true, very early on we believed that technology would be the key driver of change within the research industry because there is such industry, it’s a fantastic service industry but if you want to scale it for the digital world you need more than having offices everywhere, you need a strong scalable technology that automates a lot of the tasks and makes data or insights in real time, and we really believed in that, and so we invested ahead of the market the same way I think we invested ahead of the market in 2000 for the transition from offline to online so the gross trajectory that we have right now in this market is really linked to the decisions we made and we stick to the decision so we believed in the decision, we checked for the signal that this was the right decision and we stick to this decision and we [INAUDIBLE] the overall company. We motivated all the staff around the technology investment, and in order to digitalize research and I think that’s – yesterday I was talking to the staff and I said our gross trajectory is linked to three words, digital, digital, digital, and that’s really what’s driving our gross right now, it’s delivering insight in real time to brands across the globe and automating research in order to make sure that our clients can get the results faster, make their decisions faster and be able to make research and deliver research at the speed of business decision. And that’s really – it’s not about three weeks, it’s not about two weeks, it’s not about three days, sometimes it’s a matter of hours, and we have to understand that, these are the ways decisions are made, within our organization, right now
You were very early in the mobile space, in fact, I think you had the very first mobile app for panelists, can you talk to us about what that – how that decision was made?
Yes, I think we came back so that there was two steps, step one, before the app, in 2006-2007 we looked at what we were doing and we said we need to reinvent the way we interact with our members, the members of our community and we were really a consumer opinion platform, a platform where people would give their opinion about product and services, and so on and so forth, and so we regrouped and going back to talent and we had a lot of sessions brainstorming, discussing, and so we came back with the concept of social voting, social voting meaning the ability for the consumer to create and exchange opinion through votes, so the ability for the consumer to almost build their own research. And so that’s when we decided to create, change the new Toluna and become a social voting community and then clearly we decided and in part of that we decided to create a DIY suite, we were already doing software as a service, convenience and things like that, but we decided to go very high speed into investing in DIY, so because we said the same way consumers will create their own vote and then currently exchanging votes online, at the time it was online the brands and the companies would do it themselves, some of them at least, and we need to give them that ability, and naturally we decided to build the app, but when we launched really the Toluna Quick Survey platform, more than the app actually, because the app was for consumers, so it was not so visible to the market, it was for the millions of members of our community, but when we launched Toluna Quick Survey there was enough which was a DIY, which is a DIY real time platform to generate consumer insight, a lot of the players in the market didn’t really consider that research, and so in a way we were very fortunate but we were also a bit questioning, why is it that we’re not the only one but we’re a few to understand that it’s going to be – it’s going to have to be delivered in real time and for that you need a community of consumers who can exchange votes on a real time basis and in the course of exchanging those votes and voting on subjects can basically be placed in front of the subject of the brand or the companies or the research companies or the consulting or media agencies and all that in real time. So I think that there was no difficultly in the decision because we tend not to, if we have a strong belief about a development for the company then we listen to the constituencies, the clients, the board members, but we tend not to listen to the rest of the ecosystem will usually, like us sometimes, will do the same thing for every day, for years, and may not see what’s happening next, so we try to keep that external view of where the market is heading and it’s hard because we’ve been in this market for 18 years.
What is Toluna doing right now that is getting a lot of traction?
I think that what we have is an end to end technology platform which really empowers user to be more agile, to adopt new research approaches, be able to do what I call do it yourself or assisted do it yourself research for the enterprise market, and that’s very important, so it’s not DIY, and by that I’m absolutely not negative, it’s not DIY for moms and pops, it’s DIY for the enterprise market. And so by [INAUDIBLE] the user to interact with the platform, interact with millions of consumers in real time, we give them the ability to make better and faster decisions, day in a day out. And so I think what’s why, that’s really what we’re bringing to our clients and there are a lot of stories like that of brands who are – have shifted from doing things that were taking weeks to doing things that now are taking hours. And I could give a lot of examples, there are so many examples, where we are seeing brands using our technology in real time to inform – be it their advertising campaign, their new concept, giving them the ability to iterate and the word iteration is absolutely important when it comes to launching new products or new ideas in the market or adopting new formats, and so that’s really where the company excels in terms of the digitization of research and it’s driving the gross of the company, and I think it’s very synchronized with that moment in time where we are.
My guest today has been Frederic-Charles Petit, CEO of Toluna, Frederic, thank you very much for being on the Happy Market Research podcast today.
Thank you very much for having me today.