October 2021

Founders, Portfolio

David Rangel

Founder Spotlight: Aaron of TapResearch

In this Founder Spotlight, we talk with Aaron Platshon, CEO and co-founder of TapResearch.

TapResearch is changing the world of market research by allowing agencies and brands to connect to tens of millions of people and get the market insights they need in a much faster and nimble way.

Aaron talks about:

  • His background in mobility (Tesla, Founder of Wheelz) and how that led to identifying the problem that TapResearch addresses

  • How TapResearch is changing how companies do market research, massively expanding the supply of people participating in surveys and making the process much more efficient

  • TapResearch's business model and the challenges in building a two-sided network

We hope you enjoy the conversation, and let us know if you have any feedback!

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The full conversation transcript is below (lightly edited for clarity).


David: Aaron, thank you for doing this with us, the founder spotlight. We're excited to talk about your background and TapResearch and, thanks again for taking the time. So how about if we could start with, just tell us a little bit about your background and everything, not everything, but a good overview of things before TapResearch and, and what led you to the company.

Aaron: Sure. So my background, originally studied economics, and some philosophy and came out of school, kind of your typical liberal arts education and came out of school and joined an investment bank and spent a very brief stint in banking. Silicon Valley Bank owned an investment bank back then. And so I did about six months of investment banking. Analyst stuff. So basically I created schedules for meetings more than anything.

David: And working super, super hard, I imagine.

Aaron: Super hard. And I got recruited into a little company called Tesla back in 2006, which was at that point a 40 person company in San Carlos.

David: Was this pre- Musk, because he came in later if I remember correctly?

Aaron: Musk was an investor, but the CEO at the time was Martin Eberhard and Marc Tarpenning the founders. And I joined as effectively, one of the very first non core engineering hires. So I ended up working on, I was hired into a supply chain management role, figuring out how to ship battery packs and power electronics around the world when we were manufacturing them in Thailand and the Philippines, and very quickly, so I joined about a month or two before the public unveiling of the Tesla Roadster. And when that happened, I basically got sucked into sales and marketing. And helping launch the car. So I joined the kind of sales, marketing, and service organization there. And it was a wild ride spent about a year as the, as a product manager for the Roadster, helping do some of the final fit and finish, like picking the head unit and designing sounds for the car and things like that. I had come from a big car, kind of a hobbyist background. So I was into cars, but this was a much cooler tech startup focused on cars. So I thought that was pretty amazing. And when I went through all the different CEOs there, eventually Elon had taken over and he wanted to start selling cars in Europe and looked around the room and said, who can go start selling cars tomorrow in Europe? And I was 25 and, you know, I can go. And so he said, all right, go to the airport tomorrow, you know. And I came back only a couple of times over the next year, and basically helped launch Tesla Europe, setting up retail stores and hiring country managers, and, was stationed out of the factory at Lotus up in, up in England.

David: Oh, because it was based on the Lotus. I don't know, drivetrain.

Aaron: The Lotus chassis and was using the Lotus factory as a contract manufacturer. So that was a wild experience. And then I was kind of ready for my next thing. The next path at Tesla would have been to go to Asia and help launch Tesla in Asia. But I was, I believed that Tesla had catalyzed the electric vehicle movement and all the big manufacturers were talking about building electric cars. And I was really kind of tantalized by the idea that Shai Agassi was working on with a company called BetterPlace. To do electric vehicle infrastructure at very large scale. And when he raised, I think $200 million series A, which was pretty crazy for a 2008, 2009 timeframe, I reached out to them and they said, oh, you're one of the few people that actually has experience in this market, so I joined them doing a product marketing, and spent a couple of years there, was really bought into the sustainable transportation revolution that I believed was inevitable. And ultimately that company, if you know, the story raised a lot of capital, did not really get anywhere. But I met some amazing people, it was an incredible team and left there to found a company called Wheelz, which was a peer-to-peer car sharing marketplace. So Airbnb for cars. Okay. And we had a particular take on it, but we were competing with a company called RelayRides mostly, and after a few years we had raised money from Zipcar and it launched on college campuses throughout California and into downtown LA and San Francisco. Built telematics hardware for the cars and had a pretty cool service, but the two companies were kind of fighting each other pretty hard in a market that had not really kind of materialized yet. Yeah. And so that we, the two companies merged and that became what is today, Turo. And I spent a little while there but some of the experience there is what led to teaming up with some of my fellow engineers from Wheelz to start TapResearch.

David: Got it. Well, this is fascinating. You know, anyone would've thought you would've stayed in mobility somehow. Because every everything says other than, than the bank seems to have been around the electrical mobility or mobility of some sort. But that's fascinating. Before we get into TapResearch. Quick question. Going back to when you were at Tesla, did you, could you have imagined that would have gotten to. It's not that big, but, but the, the, the mindshare Tesla has is, is amazing nowadays. Could you have, did you foresee that, like, did you think they would have gone there when you were there?

Aaron: No, I did my back of the envelope math. You know, are my stock options going to be worth it? Is this all worth it? And, you know, I sort of imagined, what if this could be a $1 billion company? And that just the day-to-day execution challenges associated with what, what Tesla is doing are so immense that when you're sitting there in a room with 40 people, and like, there is no way we can compete with BMW and Mercedes. But I think it's a testament to the talent that they're able to attract, and Elon's very unique ability, that they've done it. So I did not. I was not a true believer, but I'm the biggest fan and always will be. And yeah, it's sort of amazing.

David: Well, more than anything, it's the mind share he manages to attract that's that's mind boggling anyway. Let's, let's move on. So, so you, you left mobility and so TapResearch. So, you know, tell, tell us I kind of have a sense for it, for them all what it is, but please, you know, sort of give us a sense. It's like this relatively complicated model. So we'd love to hear about TapResearch and how it came about as well.

Aaron: Yeah. So obviously the switch from mobility to consumer insights and market research is not necessarily a logical one. But when we were at Wheelz, we had lots of questions about how to develop our marketplace, how to answer, go-to-market questions what the user experience should look like what the economics should be for the renter and the owner. And most of our questions were really focused on the car owner side of the equation. That was the side of the marketplace, where it was a new behavior. People were not used to listing their car and interacting with strangers renting it.

David: These were ordinary consumers, right?

Aaron: Just ordinary consumers. And so we endeavored to do some research. We started out our initial launch market was Stanford's campus, and that was very easy for us. It was connected to our, to our networks. We did focus groups with small groups of people to get insight about how they would think about it. But we recognized that the Stanford student body is probably not representative of a nationwide or global ambition. So we wanted to talk to representative customers in, in all of the markets that we cared about as we contemplated how to build the service and how to expand.

And so we talked to traditional market researchers to figure out, you know, how do you design questions and how do you engage the target audiences in a way that will be statistically significant and we can believe in the results. And what we encountered was an industry that was really not made for consumers like us, like startup operators who needed to make a lot of rapid decisions. And we wanted to iterate on the decisions we were making. And not do one study over six months and be done. We wanted a way to cost-effectively do quick turn insights so that we could always be informing our decisions. And what we found was, you know, six figure bills and multi-month timeframes, heavily driven by one, the need for expertise. So you need expert market research consultants, or agencies to work with you, and then you need a mechanism to reach the audiences that you care about. And so we got exposed to this market research data collection or panel industry that we found is extremely small scale. And quite expensive to access.

David: And probably they, they would do most things manually, I presume. Right. It's just like these agencies and just do, do everything the old way, you know?

Aaron: It's all. Yes, this was all the old way. You know, this even predates some of what SurveyMonkey and other more software based insights tools are doing more recently and the panel side are, you know, an evolution of phone dialing. So they're just online panels of people that say: Hey, I want to take a survey. And a lot of people were willing to take surveys on their desktop computer from invitations to their email back in the 2000s. But as our time and attention are the, the competition for our attention and the things we can do online have really blossomed people's interest in taking long painful surveys in front of their computer has really dwindled.

So the addressable audience to, to reach for your research has really gotten a lot smaller. And the quality is very questionable on who you're reaching. So our, our belief coming out of that was that market research being already a very large industry, $60, $80 billion industry, is only scratching the surface of the types of decisions that should be able to inform, and that if you could build better software tools around the kind of question design and the distribution and the way you engage the target consumers and the analysis to remove the kind of high bar for expertise. As well as make reaching target audiences much faster and much less expensive, then you could build something where research could be iterative, could be something where you're sitting in a meeting going, you know, what, how do Chinese teenagers think about the pricing of our product or where do they shop for shoes?

And you could just ask a thousand in the meeting you're sitting in and have the results all analyzed right before your eyes. And we thought that, bringing together my co-founders expertise with marketplaces and with mobile apps and gaming, that we could build a way to reach consumers at a vastly larger scale.

And then power the research needs of all market research agencies, all insights teams at brands, all of the survey software platforms all of the syndicated research companies and give them a way to do much better, higher quality and more granular research. That was, you know, an important piece of the insights stack that it was very stagnant.

David: Yeah, no, that seems obviously super useful. And I think the last set of things you said, maybe get us to your model. You have several entities that are stakeholders here. And if I remember correctly, you're not replacing the agency. You're not trying to replace the market research agencies, correct?

Aaron: No, we're, we're not trying to replace any of the kind of important gray matter that goes into how to do research and all the methodological rigor and expertise there. It's about this piece where, so you've defined some research right now. How do you reach the people? We said, we need to reach car owners in the top 50 cities. How the heck do you do that? If the panels don't have the option, what we have is reach to people where they're already spending their time in mobile apps, where we can offer them an interesting value exchange, where they can earn toward their subscription in an app, or earn currency in their mobile game or whatever the, or a dollar off their Uber ride, whatever the relevant kind of currency is for them in that moment if they'll answer some questions.

David: Right. Okay. Got it. So, so as we think of, as we look at your model today, you've got two sides. You've got the entity doing the market research, which could be, is it usually these agencies or could it be the company that wants the info directly or it could be one or the other?

Aaron: It can be both. So it can be SurveyMonkey or Qualtrics themselves as like a tech platform, facilitating insights for the end user. It could be a market research agency who has a brand as their client, or it could be the brand themselves. And then on the other side, we're integrated with mobile app publishers, which is how we interface with the audiences that they need to reach.

David: The consumers. So you get all the consumers through these mobile ad networks.

Aaron: Not ad networks. Directly in the apps themselves. So they, the like Zynga, for example, integrate our SDK and we're a direct, a direct relationship with the app.

David: Your SDK is in the app, even presumably it's a bunch of apps that have a bunch of reach, correct? Correct. Got it. Is the consumer side, is that global at this point or certain geographies or how, how does that look?

Aaron: Yeah, right. The nature of the integrations that we do on what we call the supply side of our business, where we reach the consumers is sort of global by nature. So when you integrate a big app, it has users all over the world with a different breakdown depending on the app. So right now we're in 25 countries. The top 10 are really pretty big, pretty high volume. And we plan to add a lot more countries. It's just a matter of, kind of localizing our experience and standing up enough survey and task and other demand to fulfill the needs of those users.

David: Got it. And I'm assuming you have enough, whatever that means, but some, some amount of data on these consumers so that the market research people can slice and dice and segment that. Say they want to talk to teenagers in certain countries or people of a certain age and maybe interests. Like what, what, what is the flexibility?

Aaron: Yeah, it's quite, it's quite amazing. So it's all first party data. So we're, we're not connecting the data with external data sets. We are asking each person, you know, who are you? What's your birthday? What's your income? Not associated with a name or an email address. But we build a profile of each user based on questions that we're asking them and it's hundreds of different targeting attributes that can be leveraged everything from what game consoles do you use to, when do you anticipate buying a car and, you know, how many investment assets do you have? Do you own pets? Do you have kids? What's your education level? All kinds of things. And then the researcher themselves can ask whatever questions they want without re-asking all of the basic profile information, which comes along with the research for free.

David: Got it. Okay, great. So in some ways by using you, I am, I am benefiting from the fact that you've queried these people in some fashion in the past, like there's a lot of potential data I might get there in addition to this basic data, in addition to what I'm asking?

Aaron: That's right.

David: Got it. That's fascinating. And so, yeah, this is, you know, this is essentially a two-sided two-sided marketplace, which I don't know if it's a naive question, which has been more challenging to develop or have both sort of come up with the same time, or I think which, which one drives, which one? That's always a big question. Which one drives the other and in this sort of specific example.

Aaron: Yeah, it's a, it's a great question. Each market for us has its own chicken and egg problem. So to begin with, getting it stood up sort of both were a problem, right? You don't have, you don't have reached to consumers, you don't have customers, so you don't really have a proposition for either side. So that's sort of the harrowing side that requires some creative solutions to get initial scale and liquidity. From there what has materialized over time is, at first, it was harder to prove ourselves to the researchers that this is a high quality, diverse approach that we had enough consumers to make it worth their while to start working with us. And so that was the hard part. As we developed our platform and proved ourselves and developed a reputation, the market also changed and the pendulum has completely swung, where we are now in a place where the entire research industry is supply constrained. There are not enough respondents for the demand for consumer insights. And we've seen that dramatically accelerate through the pandemic. As people shifted, research budgets online, and more people want to do research because everyone knows their customer has changed. So how have they changed? What does that mean for their marketing? What does that mean for their next product launch?

So at this point supply, we are more supply constrained, for sure, but there's always room to have better, more completable surveys in our network. And if you look at a per country basis, the situation can be different. So we might zoom into a market like India, and we are wildly demand constrained. In a market like the United States or the UK, we are very supply constrained. So that has implications for exactly what our investments look like and our efforts on the go-to-market side, how do we get more users in certain places? And how do we get more of the right customers in other places. And that's a lot of what we're looking at on a day to day basis.

David: Got it. Yeah. So country by country, which side to emphasize, which side to invest in can vary. And I was about to ask, so this is a related question. I think it's especially interesting for a two-sided business like this. On a day-to-day basis, just operationally, what are the key metrics you look at to sort of get a sense for that health, could be the health of that mix, but other important sort of metrics that you, that you care about?

Aaron: Yeah. So it's been a journey of figuring out what are the right KPIs to operate the business by, and ultimately where we, where we ended up was basically defining a formula that describes our business. And what that looks like is: how many daily active users are in the, the network. So we have our SDK, we see every time one of our apps boots up and initializes. So we know exactly how many daily active users comprise the entire audience of potentially reachable users. So that's our daily active users. That's one, and you can slice that by country and any which way, but so daily active users, and then you multiply that times the opt-in rate. So how many of those users on a daily basis are willing to participate in the tasks and surveys within our system? And right now that's about a couple percent, it's pretty low. So how, how do we increase that? What's the right way to think about that on a per country basis with each app partner. But that's a big place that we focus is how do you optimize opt-in rate? And then third, which kind of encompasses the respondent user experience and the health of the demand, how much do we have enough customers in a particular market, is the revenue per engaged user that we have. So if you multiply those three things together, revenue falls out the other side, but those give us very actionable, top level KPIs, underneath which there are hundreds of more KPIs that matter. But those are sort of the guiding KPIs that define our business and that we kind of orient our strategy around.

David: Got it. Okay. Super interesting. One last question on this really on the demand side, I'm assuming that at least for some of your customers / users on the demand side, Is that an enterprise sale as well? Like some of these big agencies or big brands, does that look like an enterprise sale where you're taking a few months to sort of get in there and get them to use you, and then it's a big contract? Or how does that look?

Aaron: Yeah, both sides actually ended up looking like enterprise sales. Not all, not all of them. There are more customer segments, but for the, the big ones on both sides, which is a big part of our focus, they do take time. So they first typically have quality benchmarks and other things that they, they run some tests effectively, a pilot phase. And then it turns into a recurring relationship where they're, they're either buying through our self-service interface and it rolls out to their teams and everybody gets a login and they set budgets and can run, or they do a programmatic integration with us, where they are programmatically buying and nobody has to touch anything once we sort of do the initial integration.

It typically does take a few months of sort of building up the confidence and doing the technical work and the training and the rollout. And on the publisher side, it's similar where we, we work through and we collect data from them. You know what, what's the app footprint look like? Who are your users? We know our typical revenue benchmarks by user and by type of, you know, what's the app genre that you're in. And what's the strength of the currency in your economy. It's a lot of inputs that we plug in to figure out a revenue forecast. And then they figure out when that's going to fit into their development queue to get integrated either into a centralized tech stack that they use to power all their monetization or direct app integration into a particular studio or a particular app. And then they roll it out. Sometimes it's 5% exposure, then 25% exposure, then 50% exposure and measure the user cohorts, and are they actually making more money or not? Is there cannibalization, are they're getting, what type of user feedback are they getting? There's quite a lot that goes into the initial sale and the account management on both sides.

David: Got it. Yeah. No, you've got a ton of moving parts to think about. It's fascinating. So my last question is more around where you see things in, in, let's say three years and, and, and I'll sort of set that up. You started by talking about how, at least when you started, it was these big projects and they were painful and you couldn't iterate on them and stuff. And you're facilitating a huge change to enable that. I guess with that in mind, do you see the industry changing a lot, like people now that they see, like, can you do it like this? It's like, I can imagine that they're like, this is amazing. I can't go back to just these single month-long studies that I can't iterate on. Right?

Aaron: What we've seen just one, one data point that I think is representative, the median length of a survey in our, over the last five years in our system has gone from 20 minutes, which is miserable for a respondent, has gone to five minutes as of 2021. So that's a much better experience, that a lot more people are willing to engage with and a big part of what's driving that is the kind of growth of agile research that's more democratized and it's product managers and marketers directly doing surveys themselves via tech tools, versus the traditional market research agency approach. And I think that that's in the very early innings. I think that is the, that is the growth segment of market research. And I think that is set to, to grow huge amounts. I think it could be multiples of the whole, of the whole industry. I think it's a massive market expansion opportunity. And so I see our growth sort of in line with that. The types of surveys that the industry wants to run are becoming more appropriate for the types of supply. Partly because you need the supply, so your research methods must adapt to what your consumer is willing to participate in. So for us, that means, you know, how do we do all the customer development to make sure we're the solution powering every use case that makes sense. And how do we deliver the supply required so that things that we can deliver in a day now, we can deliver in an hour in a year or two, and that's all about scale. So right now we have something like 15 or 20 million daily active users in our network. If you think about the overall landscape of mobile app users, it's the tip of the iceberg. So that should be hundreds and hundreds of millions of people that are reachable.

And when we have a survey project, that makes sense for that particular person that we can sort of on demand, reach out and they can participate for relevant reward.

David: No, that makes a ton of sense. And then to your point, the there's so much activity now happening on mobile and so quickly in the age of TikTok that, that just the, the, the demand that people, once they realize that there's so much more data to have, it should, it, maybe it expands the size of the industry by an order of magnitude. There's just so much more to know and do.

Aaron: Totally agree with that.

David: That's fantastic. Well, Aaron, we're already at time, so thank you very much for taking the time for this. It was super interesting. And we appreciate the time. Thank you.

Aaron: Awesome. Thanks David.