CEO Monthly Reflection | May 2024 | Silver Linings and Business Cycles
Monthly Reflection | May 30, 2024
By Terence McCarron, CEO
Some big news hit MRX last week. It triggered real sensitivity and flooded my inbox with questions about what this may imply for our industry or the modern market research firm. I mean, I get it. But given my experiences, I can’t help but see this moment as a massive opportunity for our sector overall. I say that now, but admittedly I had a different first reaction.
Throughout my Memorial Day weekend in the US, I found myself reminiscing about my roller coaster run with Greenfield Online. I see some similarities and major differences in the case studies. If the past truly is prologue, I believe that MRX can use this as a catalyst for a new growth phase.
I joined Greenfield Online as a sales rep in early 2003. I didn’t understand it then, but Greenfield was rebuilding after a massive restructuring after the dot-com bubble burst. They just sold their MR division, representing a majority of the revenue. I was part of the new world, excited by the company plan- to become the only online data collection firm independent of any MR company.
How it started
The first two years were intense.
- 2003 was a massive boom year for our sales.
- 2004 continued wild sales growth and included an IPO in July. (SRVY is still an awesome ticker symbol.)
- That summer, the Stock surged from $13 to the $24 range. This headline from MarketWatch in late 2004 said it all “Greenfield Online’s dot-com glory.
- Leadership spent the capital on acquisitions including GoZing and Ciao.
- Through these investments, we globalized as a company, keen to lock up our dominance of this emerging category.
It’s hard for me to explain how exhilarating those days were. Some of my most treasured business relationships were forged under fire during that time. But as good as those days were, when things turned south, the velocity of our issues was hard to fathom.
Cracks in the Dam
M&A may have been a catalyst for problems. Here’s a great summary of the roller coaster that unfolded with the stock. Did we bite off more than we could chew at the time? Maybe. What is indisputable is how our quarterly public earnings became fuel for new competitors. The Street saw our numbers as evidence of an incredible business. Competitors did too, and were more than happy to take share.
Our incredible Gross Margins were used against us on so many bids. Other panel companies executed M&A deals with the benefit of wisdom learned from Greenfield’s first deals. As the pioneers in a new category, Greenfield was forging new ground in so many ways, and we had a captive audience willing to watch us take risks and then learn from our outcomes and mistakes each quarter.
Before we knew it, our stock was in the $4s, leadership was changing, and I was part of a group tasked with “fixing” sales. It was 2005, many people thought we were going to disappear.
Recovery & Sale
The late Al Angrisani was the key to the turnaround strategy that ultimately steadied us, our mission, and our execution. In my view, he gave the whole business room to breathe, experiment, but not wildly, and get back to a more transparent approach with the industry. Our wins were numerous and painstaking. Everything seemed to improve- sales, hiring, operations, methodology, technology, cost control, our transparency with the market. Management also led a cultural integration across our global offices to improve internal dynamics.
In 2008, Microsoft bought SRVY for nearly a half billion dollars. The exit represented a terrific 2008 valuation, even if it was about 30% below the stock price peak. Post-sale, Microsoft folded the Ciao “comparison shopping” unit into Bing and ultimately sold the survey business to ToLuna.
Personal Reflections
I remember there was a glee many felt when watching us falter. I vividly recall traveling to client meetings that turned into customers chastising me for our stock performance. I also remember, to this day, certain people who made a point of embarrassing me at public conferences because of the company struggles.
Some people kicked me personally when the company was down. But many others demonstrated their deep investment in our industry and Greenfield’s ultimate success. It was truly a 5-year stretch of growth in my career that I could never have picked up any way else.
What helped our recovery was a team built for purpose. We had an elite group of talented, industry-experienced leaders and managers who wanted to make things right for the company and clients simultaneously. We understood our impact on the market.
Ultimately, the Greenfield sale was strategic, and the online survey business stayed in MR hands. Many talented team members stayed with ToLuna after the transaction which led to a smooth client transition.
Applying Wisdom in 2024
Let’s explore if Greenfield’s story helps us forecast anything for our industry.
Dynata seems to have an army of industry support right now. Many leaders and entities are expressing optimism about the next phase. This will help them. Their debt maneuvers will certainly reduce strain on the business. This is also good news. In their filing, they promised to fulfill their payments to all unsecured creditors, which includes many other sample companies. This is vital to overall industry health and preventing collateral damage in the ecosystem. We can and should all celebrate that. Many questions remain, but there is cause for optimism.
Ultimately, with Greenfield Online, our tough days ended our dominant run as the clear market leader. We remained a top player for years, but our public struggles opened the door to a flattening of the competitive landscape. Many new companies emerged, and this competition drove more choice for sample buyers. Innovation also accelerated and new capital streamed into our industry. This helped Greenfield achieve its longer-term exit and led to a healthier market dynamic for MR companies.
While I recognize many differences in the case studies and their context, I believe this moment has the potential to spark competitive balance and innovation. Like it did years ago, I believe our current market would welcome this. For Dynata, the leadership and talent have a chance to author the next great turnaround story in MRX.
When I think like this, I get excited for us all.
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