Sramana: What was your process of collecting the individual data that your master database comprised?
Matt Dusig: We would go to an affiliate and pay them a dollar for each person who signed up on our website. As the people signed up on our website, we had them fill out profiling surveys.
Sramana: When consumers filled out the profiling surveys, did they get paid anything as well, or was it just the affiliate sites?
Matt Dusig: Long story short, we sold that business, sat out the non-compete, and then built a similar business. Today people get rewarded for signing up and for filling out bits of information on the site. They get most of their rewards by taking real surveys that are provided by our clients.
Sramana: So, expectations are set up front that these people are recruited to fill out customer surveys from various companies?
Matt Dusig: Absolutely. The market research industry has run an incredible amount of research on research to verify that people who are being rewarded for surveys do not skew data as opposed to someone who is rewarded. Market research has always been a reward-based program, and 20 years ago if J.D. Power were to ask you to fill out a survey they would have sent you a dollar or a quarter in the mail along with the request. If you wanted to put someone in a focus group, you would have had to give them $100 and a slice of pizza. There has always been a monetary reason that people do this. Nobody wants to fill out surveys for fun.
Sramana: How long did it take to get the business off the ground? What kind of revenue milestones did you have in 2001 and 2002?
Matt Dusig: We did everything through organic growth. We have never raised any additional money. We did a few hundred thousand dollars of revenue, but the tricky part is that we had two different business trajectories at that time. We also went into the wireless arena when we started working with some wireless carriers and their online marketing programs. They would pay us up to $300 to find someone to sign up for their plan. This was before the world was saturated with cell phones. There was a Wild West of cell phones online between 2000 and 2004.
We actually made a lot of money selling cell phones online. In 2001 we did $500,000 in sales and in 2002 we did $3.5 million in sales, of which $1 million was research surveys. The cell phone was not a high margin, but the research surveys were. There was more profit in that $1 million. In 2003 we did $9 million in sales, of which $3 million was cell phones and $6 million was surveys. In 2004 we did $13 million in sales. In early 2005 we sold the company for $30 million, cash.