PART III: When 1 + 1 Can Equal Something Greater Than 2
We met at Wild Ginger for the first time in December, 2009. Misia Tramp and I talked about leveraging the available social media data for market research projects. She obviously knew her subject matter as she had been providing market research services through her company, Intrepid, for more than 11 years.
Misia had charisma that was further enhanced by her proper British accent. I was intrigued about the rigor of market research methods that could be used with social media data to gain truly useful insights. We left that lunch with just a promise to reconnect, but my mind was already racing ahead about the possibilities.
Lift9 had expertise around social media data and analytics. We had an improving team of cost-effective analysts at our research center in Ho Chi Minh. Intrepid had agro rhythms, methods and rigor from market research projects that could potentially be applied to social data. They had a bigger revenue base, but struggled with margins that would be improved with Lift9’s cost structure and focus on accessible digital information.
My first proposal was to merge Lift9 with only the US entity of Intrepid. In the end, however, we decided to merge both the UK and US operations of Intrepid with Lift9. Misia’s business partner, Liz High, had been running Intrepid UK.
We put together an operations agreement in late January, 2010 to test whether we could merge the two companies’ products. Meanwhile, we concurrently kicked off the due diligence of the deal.
The signs were encouraging from the start. Misia was able to get more attention from her client base by incorporating social elements into her pitch. In many cases we were able to deliver faster, better and more cost-effective outputs right away.
The biggest challenges were at the speed we needed to improve our cash flow, which had been a deteriorating issue for Intrepid, and how to effectively merge the two different cultures into working cohesively together. We allowed some turnover of people in the beginning, and focused on driving sales and improving margins and cash flow.
On May 3, 2010, we finalized the merger with Lift9 taking controlling interest, but keeping the Intrepid brand. From there, the financial performance began to improve so dramatically, I started to think about raising capital to acquire additional boutique market research companies that had solid client bases. We now had tangible proof that combining social elements with traditional market research methods provided compelling insights that resulted in better sales traction and improved financial results.
The management team approved plans to raise money for acquisitions, which included up to 11 potential transactions within a three-year period.
Right about then, I received a call from an Alterian senior executive about a possible service partnering deal using its social media monitoring tool, SM2. When he asked to come visit us, I had an inkling our world was about to change yet again.
My advice to entrepreneurs is to keep improving your companies’ stories through different possibilities. Don’t get too stuck in just what you are trying to do with your current resources. Understand what’s happening in the market around you and find ways to improve your story within that context.