Brains against brawn
Article Date: Sep 08 2006
Once sheer survival was no longer the order of the day, Kearon could concentrate on BrainJuicer’s expansion. The challenge was, and remains, double-edged: to win the all important new business, Kearon has to change attitudes and accepted practice among the buyers of market research, especially in Europe; and he also needs to drive the company’s expansion into overseas markets – some of which, like the US, are far more receptive to the company’s new techniques than European markets.
Kearon is under no illusions about the size of the task ahead. “The more traditional market research buyers find BrainJuicer challenging, and to some extent our clients are self-selecting – they tend to be pioneering, open-minded and able to take on new concepts. Traditional buyers don’t believe that online research is representative, and don’t like our name because it doesn’t sound like an insurance policy. It depends whether they want market research to solve problems, or to provide insurance,” Kearon says.
Kearon continues: “We know the industry has to change – everybody does. It needs someone to be a catalyst, to be prepared to put their head above the parapet. But then they have to be smart enough to survive and grow. For example, it was Freddy Laker who started the cheap airline revolution, but he ended up going bust. We need to be more like easyJet – brave, yes, but then commercially smart enough to ride the wave, and adapt as the industry changes.
The recently won contract from Philips in Holland has given a boost to the process of overseas expansion. “This is almost as significant for us as Nike,” Kearon says. “It gives us enormous confidence in the same way. We beat off four of the leading international market research consultancies – Millward Brown, TNS, Ipsos and Research International – the ‘usual suspects’. Philips has taken a leap of faith, stepping back from accepted practice – it’s a big step for them, too, and we really didn’t expect to win. You live for those moments – just when you are wondering if you’ll ever get there.”
The next target is to achieve the same results in the US, initially through the New York office. “The US is crucially important to us. We have to succeed there to be a credible global player,” Kearon says. “My only worry about going into the US was whether we would be seen as novel enough – the US is much further ahead than Europe as a market for online research. But our innovativeness is understood and well regarded in the US market, and the fact that online research as a concept is completely accepted there gives us the opportunity to grow very quickly.”
Kearon had considered both India and China for the next step. “Both countries are important emerging markets and both have very low internet penetration. But India has an old, well established research industry using traditional pen and paper techniques. China, almost by definition, has none since it has only just emerged from a communist past with no history of consumerism. We feel there is enormous opportunity there for us to introduce our research methodology from day one. It’s analogous to telecommunications in recently developed countries with no historic infrastructure of landlines – they are going straight to the new technology, using satellite and mobile communications.”
Kearon explains: “The blue-chip companies which will be our target clients in China are primarily interested in the urban, young and affluent ‘new consumers’. Those consumers are going to be part of the five per cent of Chinese citizens who have internet access. It’s important to bear in mind, though, that those five per cent are numerically greater than the total number of people with internet access across the whole of the US, and China also has the largest online research panel in the world – some four million people.
“We don’t expect great profits from China, at least early on, but we feel we really should be there. To be a global research company you have to have an international background, and we are intent on building one ourselves. For the next stage we are going to be back in Europe, the fairly obvious markets such as Germany, Spain, Italy and France; after that Latin America. We are really following the natural order of countries where market research demand is located,” Kearon says.
“There are many new issues you need to take account of when expanding overseas, of course, including taxation and legal structures. We have set up as a ‘BV’ in Holland and as a Delaware corporation in the US. In China we will need to apply for a specific licence in order to be authorised to conduct market research. But it hasn’t been an inhibiting factor. We have gone for specialist advice when planning our overseas growth – it really pays to get the right advice early on, and it helps to get a partner that understands your ambition and works with you.
