Micro-multinationals

By Author: Ken Arch
Total Articles: 3
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Emergence of new breed of entrepreneurs who are using internet, SaaS and Outsourcing to establish market research businesses that are global from inception
Cross-Tab Marketing Services

How many times in the past few years have you heard, “I need some research done faster, cheaper and with higher quality using the latest research techniques” from your clients? How many times internally have you heard, “how are we supposed to get this done at that cost and still maintain a profit and some research integrity?” How have businesses in the MR industry been able to supply this demand? Are the established multi-national research companies (the Honomichl top 50) the gold standard in the market research business model? Are they really able to keep up with the demands of modern market research or are the rising micro – multinationals (not as large and as established) becoming the improved business model for the market research industry?

What are micro multinationals, what do they look like, how are they defined and how are they changing the face of modern day market research?

When most people ...
... hear the phrase “multinational corporation,” they think of large, established firms with subsidiaries in major markets around the world. But a new breed of entrepreneurs is now creating “micro-multinationals” that are global from day one. Vast.com, for example, has 25 employees across five time zones, four nations and two continents. Its executive team is in San Francisco, its CTO is a Serbian who lives in the Dominican Republic, and its development team is in Belgrade. According to the CEO of Vast, “We are building a company in a way that wouldn’t have been possible even two years ago.”

What differentiates micro-multinationals from the large MNCs is the fact that they are small businesses. They have beenable to perfect the mix of in-house, off the shelf and outsourcing ingredients very early (in some cases within a few weeks) as compared to MNCs who took nearly a decade to prune operations costs and develop organization structures tosupport the changing environment. Powered by Internet and low cost SaaS suites and a new species of market researchsupport firms the research industry has seen an explosion of micro-multinationals.

Hal Varian, Chief Economist at Google and a professor of information economics at U.C. Berkeley, puts this trend inperspective, "Immigration today, thanks to the Web, means something very different than it used to mean. There's nolonger a brain drain but brain circulation. People now doing startups understand what opportunities are available to them around the world and work to harness it from a distance rather than move people from one place to another."

Since the .com boom in the United States in the late 1990s and early 2000s technology has become the backbone of manymarket research firms as well as many research techniques. In keeping with that, company structures and organizations have adapted to meet these changing conditions. Ten years ago if you said you were a global company you might have to work for a company with 1,000 or more employees. Today however, the internet has changed the way we organize our businesses. Many new global companies start with two to ten employees all connected through the internet in virtual offices across the globe.

Traditionally a business would grow, set its research processes up as best practice, establish itself in a particular geographic area and then start to branch out either by merger/acquisition or by choosing the next best profitable location and expanding out, expanding its global footprint as it was called. Applying their sometimes rigid and change adverse processes to other geographic locations with little to no consideration for how that work force functions differently.

As we become a global workforce, more and more countries come online and branch out. What we used to refer to as outsourcing has changed the game … no longer are they outsourcing, they are now partnering to build fast and efficient business models. The focus is on changing business conditions, flexibility and the ability to be nimble and open to the changing research conditions. Imagine a company with a 24 hour shift passing work seamlessly from one time zone to the next in an organization with only a handful of workers all working on the project and attacking the project from different angles. Adding value and achieving tasks at a cost that even the small businesses can afford.

Somewhere in research organizations the institution grew too big to service their customers. The operation costs are too high in a large organization to service every project and every client. Teaching the latest technology or research advance and the benefits and day to day implementation becomes difficult to roll out across large organizations and often by the time they make it out, they are already out of date. So now it's easy for small groups of individuals across the globe to link together and form a cohesive company and bypass a lot of the larger organizational problems associated with a large business model.

CASE STUDY

A consulting firm with staff in multiple locations in the United States works with Cross-Tab, a Business Market Research firm, for all their operational requirements. Our team in the United States and India manage all operational and project management aspects of client’smarket research projects from scripting to reporting and advanced analytics. We started working with them literally within two to three months of their opening shop and have since built a large team to support their requirements.

A classic case of how using a young company has managed exponential growth in three years by bringing together various specialist actors across the globe.
Client size & operations –12-14 people spread across the United States
Cross-Tab support teams - in San Jose, New York, Mumbai and Bangalore
Data collection – via various online partners across the globe; project managed by Cross-Tab

Client’s Speak

“Cross-Tab has been an invaluable partner for our company. The breadth and scale of their services has allowed us to focus on research design, client consultancy, and providing strategic insights for clients such as HTC, Yahoo!, Lexus, BBC America, Hyundai, and Visa. The responsiveness and expertise of the Cross-Tab team has made it possible for us to deliver on our best in class promise to our clients.”

BENEFITS

The benefits that the micro-multinational business has over traditional multinationals are that they:

• Take out costs from the system – minimize bureaucracy and overhead;

• Provide increasing value to clients through consistent high-quality services;

• Ability to deploy scarce resources in critical (client-facing) areas;

• Substantially decrease turnaround time, become more nimble, agile and a better partner to the business;

• Reduce management burden, still holding decision making power;

• Continue to benefit from the latest advances in technology;

• Build the capability to experiment and innovate with a very low cost of failure.