Market insights startup challenges big players with ‘quality and speed’

By Miguel Hanz L. Antivola

BRANDS, especially those operating in the online world, now recognize the crucial role that such data plays in shaping their decision-making processes, according to market insights technology startup Agile Data Solutions, Inc.

Today, the need for efficient and reliable data acquisition is more critical than ever, said Jason Christian B. Gaguan, co-founder and chairman of Agile Data Solutions, in an interview with BusinessWorld.

For market intelligence providers, this means embracing innovative technologies that can streamline the process of obtaining accurate and actionable data, he added.

Mr. Gaguan said that Agile Data Solutions employs a hyper-targeted customer modeling strategy in collecting data. “[W]e get data from people, and we tell them straightforward that we are paying for it.”

He noted that Hustle PH, the company’s data collection app, has gained an active user base of 50,000 acquired organically without any social media marketing spend since its beta version was released in 2021.

Two years later, the company announced an annual net revenue of P27 million, with cost of goods sold (COGS) margins at 37%, down from 50% when it started. “Our COGS margins will continue to decrease,” Mr. Gaguan said, projecting 18% by next year.

Mr. Gaguan noted that the few big long-time players in the market insights industry hold almost 90% of the market, while the smaller players occupy the remaining 10%. Big players include Kantar and Nielsen.

“Our proposition will just seem very weird if the client doesn’t try it,” he said regarding a typical project that costs around 80% less and completes 80% faster than other market players due to the company’s model. “Even if it starts from curiosity, they push through.”

Agile Data Solutions’ strategy, as per Mr. Gaguan, is centered around giving priority to data quality and speed for business clients. This required the company to innovate beyond the current industry practices in order to distinguish itself.

He said that data collection and projecting product distribution in market insights companies, particularly within the fast-moving consumer goods (FMCG) industry, were previously guided by outdated methods such as door-to-door interviews and tapered estimates.

“The lockdowns happened, so house-to-house interviews weren’t conducted,” he said on the COVID-19 pandemic marking a shift in operations. “The FMCGs were crying, ‘This is wrong data.’”

Coupled by a history of data privacy issues on Facebook where user information was used in the platform’s ad-targeting systems and other purposes without permission, transparency became a key concern to address, according to Mr. Gaguan.

Meta, the corporation behind Facebook, is being fined $98,500 per day until Nov. 3 from Aug. 14 by the Norwegian Data Protection Authority or Datatilsynet upon failing to address the privacy breaches the regulator had identified. In May, the Irish Data Protection Commission fined Meta $1.3 billion for data breaches.

“We connected the two problems: data maliciously acquired for free and market research practices,” Mr. Gaguan said on his founding team upon starting the business in June 2020.

Upon confronting deterrents to market research, the current challenge of Agile Data Solutions is to further scale its database according to different clients’ needs.

Mr. Gaguan said that the company is starting to transition to a system platform called software as a service or SAAS — harnessing its serialized database to provide client-specific insights rather than a manually prepared deck. This is aided by artificial intelligence tools which they have rented.

Expected to finish in the fourth quarter of this year, the shift is made to open up market insights to MSMEs (micro, small, and medium enterprises) and other startups, which used to be relatively inefficient, according to Mr. Gaguan.

With industry players catching up on digital ways and means, Mr. Gaguan said that he is hopeful for the startup ecosystem having the edge to navigate through priorities and opportunities for sustainable growth.

“I’m excited about it because everyone now is starting to innovate — good for the total ecosystem,” he said. “The big players are starting to do the right thing. Our challenge right now is to grow faster and faster so they can’t catch up.”

“The difference between a big company and a startup lies in execution. Even though they have the budget, big companies move a little slower,” he added.

“As a small team, we can immediately listen to our customers and change.”

LIMITED CAPITALMoving with a straightforward business approach, Agile Data Solutions has seen slow growth and a focus on sustainability given its limited capital.

“We consciously veered away from spending more than what we need,” Mr. Gaguan said, mentioning that the company started out using free online forms to check demand and only posted tasks for ‘hustlers’ upon a client’s request.

Moreover, it also did not have the money to spend on social media marketing — a head turner in this age of digital adoption and transformation.

“Organically, a lot of people and influencers with 500,000 subscribers are sharing our platform on YouTube for free,” Mr. Gaguan said. “We did not spend anything on marketing for those who would use the app.”

The company was also firm with its decision of not seeking initial investment funding upon learning from past startup experiences, according to Mr. Gaguan, who also pioneered business delivery platform Borzo Philippines (ex. MrSpeedy) and hotel booking site OYO Philippines.

“If we get money from investors, they will likely focus on fast growth through ‘sexy metrics’ like traffic and the number of app users and clients,” Mr. Gaguan said. “And they might ask us to discount our prices drastically.”

“It’s not sustainable, and focus on the value is lost,” he added.

“The first main pillar of our company is to give really fast and accurate data,” he said. “The second is to do it sustainably without throwing away money.”

PROPOSITION OVER METRICSMr. Gaguan noted an awakening in the business ecosystem, particularly among startups where local and global inflation have shifted priorities to proposition over metrics, given conservative responses to recessionary fears.

An ease in investment deal volume was found in Southeast Asia after an uptick in 2021, according to data from Deal Street Asia and estimates from Kickstart Ventures, Inc. The first quarter of 2022 saw approximately $5 billion in total deal value, from $8 billion in the fourth quarter of 2021, the highest reach of the industry.

This decrease is attributed to the moving threat of recession, following a global surge in oil and food prices caused by the Russia-Ukraine war, where people and investors put their money into safer instruments, Dan I. Siazon, co-founder and senior vice-president at Kickstart, said in an interview.

Incentive- and discount-driven business models have begun veering away from the scene, Mr. Gaguan said, realizing its pure focus on rapid growth as unsustainable and being forced to downsize. Resiliency and self-sufficiency are being seen as determining factors of success.

“During this shift, startups right now are going back to the basics where business proposition becomes the center of the conversation and not the ‘sexy metrics,’” he said.

“From all the previous excitement of ‘sexy metrics’ and hedging on a possible future, startups now are becoming more proposition-oriented, which I think is a good direction,” he added. “And smaller startups have a chance at getting funded.”