Big data gets visual and visionary with help from Lab42
With everybody and their geeky brother chasing big data, a Chicago startup is offering companies fast, cheap access to a wealth of consumer research.
“We exist to make sure market research is accessible to everyone,” said Gauri Sharma, 30, CEO of Lab42, a company birthed by Chicago incubator and venture-capital firm Sandbox Industries. Lab42 works out of Sandbox headquarters at 213 N. Racine Ave.
Lab42 taps into social media to turn around research results in three to five business days for small companies that otherwise couldn’t afford the research and for big companies squeezed to meet a quick deadline. Lab42 can drill down to a granular level, like pinpointing the top three products women bought in a particular Target store’s pharmacy department in the past three months, for example.
The company uses a research platform to survey people while they are on a networking site, playing a social game or interacting in a social way. As an incentive to take the survey, respondents are offered online credits, virtual goods and virtual currencies such as tokens, points, premium upgrades and bigger bandwidth and storage capacities.
More companies are demanding analytics services because they cannot keep up with their own customer data, research shows. In a January survey by Chicago-based IT staffing firm Robert Half Technology 76 percent of chief information officers said their companies failed to gather customer data such as demographics or buying habits. Of those that do gather that data, 53 percent said they lack the staff to access or analyze it.
Sharma, a native of New Delhi who came to the United States in 2001 to attend college, was recruited to the CEO job 17 months ago, after she had worked at Viewpoints Network helping launch online communities for Viewpoints’ e-commerce partners.
Groupon wanna-be DashMob, which started as a real-time, location-based deal service, reconfigured its business model based on Lab42’s research. It’s now called doggyloot.
“When we weren’t seeing the results we wanted, we looked at the ‘deal’ space and saw an opportunity with dogs,” said Ryan Schoop, co-founder and chief operating officer of doggyloot, which, like Lab42, has been fully funded so far by Sandbox Industries, which describes itself as a “startup foundry” that chooses its own startup companies and invests in the most successful ones.
Lab42’s research showed doggyloot could be a quick success if it seized a niche in engaging pet owners by giving them useful insights into being good pet parents, and offering high-quality products at “deal” prices.
Lab42 also helped higi, a Chicago health-information startup, figure out the best way to ask people about their health, and to find out how strongly people wanted to gauge and act on the results.
Higi’s proprietary algorithm measures a “life” score that combines a person’s basic medical information such as weight, height and pulse with their lifestyles and community interactions.
Lab42’s research showed that 83 percent of people polled would subscribe to a free service that measured their progress on looking, living and feeling better. Thus convinced, Higi has moved ahead, setting up 1,000 self-serve kiosks, called higi stations, in grocery and drugstores, mostly on the East Coast, but including 50 CVS, Kmart and Jewel-Osco stores in the Chicago area.Higi also offers a free mobile app so people can track their status online.
Dr. Khan Siddiqui, higi’s CEO, says the Lab42 research saved him the $120,000 it would have cost to do the work in-house. “What they did was save us one senior developer and get us to market significantly earlier,” he says.
Higi is funded by Wrapports LLC Chairman Michael Ferro Jr. and private equity firm Merrick Ventures. Wrapports is the parent company of Sun-Times Media and owner of the Chicago Sun-Times and Grid.
The big-data movement put some roots down in Chicago last year, when the Obama campaign recruited dozens of programmers to its headquarters and assigned them to help the re-election effort by crunching voter statistics.
Dhiraj Rajaram, CEO of data analytics consulting firm Mu Sigma, said Chicago is fertile ground for big data companies. “There is a lot of talent, and the city has a good ecosystem for entrepreneurs,” he said.
Photo by Tom Cruze