CEO Series: How Lucid CEO Patrick Comer Plans To Transform Insights
About a month ago the insights world (or at least those of us who follow things like this!) was surprised when Techcrunch released this article: Lucid raises $60M as it plans to dominate market research. Why the surprise? Because a Series B round of $60M is significant for any company in any sector, but for a company in the research space it very quickly catapulted Lucid into the same level as companies like Qualtrics, SurveyMonkey and VisionCritical, three of the most recent recipients of such stellar venture capital funding rounds and companies widely seen as the stars of the insights tech world.
Investors don’t put that much money into a company unless they think they have the potential to be Unicorns (private companies with valuations of over $1 Billion) and can generate something like a 30x return upon some kind of exit event (going public or being acquired). Of course not every company that raises lots of money is successful and achieves those kind of returns, hence why the VC industry makes lots of bets and expects enormous returns on those that succeed (to cover the losses on those that don’t), but investors are smart folks and play the odds pretty well. And they picked a company that today is primarily a technology platform that makes the efficient and scalable delivery of sample happen within a marketplace structure. That is pretty telling.
The Techcrunch article includes some background and context it’s worth quoting here:
Founder and CEO Patrick Comer said that in the years between, he deliberately wanted Lucid to “run really, really lean and pour every dollar into growth of product.” Now, however, it’s no longer a question of finding product-market fit — the company says it’s used by more than 500 customers and that revenue has grown 70 percent year-over-year for the past three years.
“Once we move from a position of, ‘What is our product? Is it going to work and will our clients buy it?’ and now that it’s a global scale issue, then we can fund that scale through raising capital,” Comer said. “Because the market is already there — we built it.”
For Lucid, scale means expanding globally, where Comer said he wants to turn the company into the number one player in market research. He said the company’s surveys have international reach, but that’s mostly been thanks to US companies thinking globally. Now, Lucid is looking to establish a presence of its own in Europe, the Middle East and Africa (it already has offices in London and Delhi).
The company was originally known as Federated Sample but rebranded as Lucid in 2015 as its offerings expanded to include products like Fulcrum, its automated sample marketplace. Comer described Lucid as the market industry’s “programmatic disruptor” — by providing an automated way to test ads and survey consumers, he said the company is giving marketers access to unprecedented “speed and scale.”
It is also worth mentioning that Lucid is born and raised in New Orleans, not known as a hotbed of disruptive tech. It’s great to see companies attracting this level of attention outside of Silicon Valley or NYC.
Now full disclosure: I am often asked by investors to brief them and provide insight on certain aspects of our industry and last year there were several firms who reached out to discuss the sample side of our business (none were the eventual investors in this deal though). During those conversations I focused on the rapidly shifting automation trend in research on both the sample provisioning and data collection side and my general take was that any company that was able to deliver high quality data (which means high quality sample) in near real-time, globally, across the widest audience needs and at a fraction of the cost of traditional panels would win in the long run. Lucid fits that description perfectly, and obviously their investors arrived at similar conclusions.
To be sure there are others who are doing variations of the same things and doing it well, and of course the larger traditional panels are moving in this direction too, but Lucid now has a distinct advantage: money to fund growth.
What enhances the possibility of Lucid becoming the next insights-industry Unicorn even more is that they are not just limited to sample. They have very wisely been building out their data products as well which can be used to power or enhance more than surveys: attribution, marketing modelling, data mining, single-source data analytics, profiling, targeting, etc.. are all areas where they can play as a result of the very smart decision Patrick and his team have made to date.
So my take is that $60M was wisely bet, and my hope is that it will add to the increasing momentum of interest in the research technology space by venture capital funds, private equity, and large strategic acquirers who can help the many other companies who are embracing new thinking and new technology to deliver value across the insights ecosystem. There are many other Lucid’s in the making right now.
I reached out to Patrick Comer to invite him to do one of our CEO series interviews and he graciously accepted. I’ve know Patrick for several years but had never had the chance to chat with him in depth like this, so it was a treat for me to be able to sit down and talk with him during such an exciting time for he and his company and to be able to share that conversation with you as well. Patrick is smart, funny, passionate and focused and all of that come through in this interview. As usual with me it’s a wide ranging interview and we cover many topics that are important for folks in the industry to consider, especially if you are working in a tech company. Oh, and it also has a cameo by my four year old daughter trying to help daddy go viral like that BBC interview. It didn’t work, but her heart was in the right place.
Here is the interview, enjoy!