In this interview, Nico Peruzzi, the co-founder of Elucidate, a quantitative product and marketing research company, shared his journey of how he ended up starting his own company. He started with a Bachelor's degree in biological sciences and worked in a laboratory for a year before realizing that it wasn't for him. He then pursued a PhD in clinical psychology and found an aptitude for research methods and statistics. He worked for a telehealth startup, a marketing research company, and eventually started his own company Elucidate, with two partners.

Elucidate helps other businesses answer their questions using primary research data. They usually begin by conducting a survey of the client's customers and prospects to gather data, analyze it using advanced methods, and create reports with statistical validity to provide the client with the best course of action to take.

SCWorks: Welcome Nico. Where did you start? What sparked your company?

Nico Peruzzi: My bachelor's degree was in biological sciences.  After college. I worked in a laboratory doing plant molecular genetics for a year and soon realized that I didn't want to work in a laboratory. I took the next few years figuring out what that next thing was. And that led me to psychology, where I got my PhD in clinical psychology.  At that time, I thought I was going to be a clinician or a psychotherapist. I did a lot of research work in a scientist-practitioner program, where we did both science and clinical practice. During that phase, I found I had an aptitude for research methods and statistics. I started doing a little consulting here and there, dipping my toe into that world. Late 90s, everyone's doing a startup in the Bay Area. So I joined a telehealth startup: Hemisphere Healthcare. Breakthrough idea, right? At Hemisphere Healthcare I did clinical informatics, building content behind modules for people to do some self-service computer work around mental health issues. In the late 90s, it went bankrupt, as did many .com companies. I suddenly found myself unemployed, and my wife was pregnant with twins. So I had a kind of a new decision point: I could go do my postdoc in psychology – which is the traditional route – which usually pays about $18,000 a year to work in a clinic or hospital or something. That was 1999. I rejected that path, moved back to the Bay Area and applied at several tech companies including Sun Microsystems.  They asked what I could do at Sun with a PhD in clinical psychology. Sales?  I didn't get the job there. I ended up with a job at a marketing research company. They looked at my PhD research experience and said, “yeah, we need you. You understand research. That's great. We'll give you a business development job”. So in 2000, I got a business development job at a company called Survey.com, and I worked there for nearly 2 years. And then my entrepreneurial-self jumped back out and said, “I can do this myself. What am I doing working for somebody else”? I created the business I have today with two other partners, including Drew Canapary Phd.

SCWorks: Tell us about your company's mission and what it does?

Nico Peruzzi: We are a quantitative product and marketing research company. We work with companies to help them answer their business questions using primary research data.

SCWorks: Can you describe your research process?

Nico Peruzzi: It usually begins with a client in product management or in marketing working on their offering, for example, doing a new version of software. Perhaps you (the client) have some customers using it and you're trying to retain customers. You probably come upon the question of what are the key new features to implement, how to stay at the forefront, how to understand what people are needing, how they're using it, et cetera. We take a survey based approach - a survey of the client’s customers and often prospects. We work with the client to put together a research instrument - typically an online survey - to get at those answers.  We want to get a good representative sample of people in order to give the client directions they can take that have a high likelihood of success. We collect the data and then start into data analysis. Depending on the types of questions that are being asked, we might use more advanced analytical methods to try and understand what people want - something like conjoint analysis or maximum difference scaling - techniques that can help us better collect quantitative data in a way that gets around response biases and the scale biases that simple surveys have. Pull in that data, do some data modeling on it, and then create reports that answer those initial questions, with some statistical validity and some probabilistic looks at outcomes. The result - the top tier of actions to take that are most likely slam dunks. 

SCWorks: Can you give us an example of work you have done?

Nico Peruzzi: One of our clients is a medical equipment manufacturer in the Bay Area. They are focused on building products that are used primarily in hospitals in the pharmacy unit to distribute medications. They have hardware and software that keeps track of inventory and what's called diversion. Diversion monitors people stealing medications from hospitals, primarily controlled substances. The client wanted to improve their million dollar robot that goes into a pharmacy, automates inventory tracking, etc.  But first they wanted to understand a new potential pricing model. For example, should the robot be offered as a capital expenditure, or a rent-to-own type service, annual subscription or what. So begins our discovery with target customers: pharmacy managers, in this case.  We surveyed using a method called conjoint analysis, where in essence, we create an experimental design where people are looking at full product profiles of potential products together with a price. Target customers might see a couple of things next to each other, such as storage capacity and software features together with price as an upfront capital expenditure or an annual fee model, along with five-year total cost of ownership. And so it puts the respondent into a scenario where they need to make trade-offs, which of these options works better or worse for their business.  We collect that data, analyze it, push a report back to the client that makes recommendations, and create a market simulation model - a dashboard simulator that allows them to move levers and say, what if we go at this price? Or use this pricing model? Or include these features? We create price elasticity curves for them to look at and ultimately look at what we call the “share of preference” - how attractive is this product if we offer it in comparison to some competitive set? We present our findings to stakeholders and executives, along with our recommendations.  In the end, they take that information and that goes right into their product launch and their go to market strategy.

SCWorks: Who is your ideal customer? 

Nico Peruzzi: Our ideal customer is large enough to have a budget and understand that this work takes money to do well. So number one, they've got the budget. Number two, they come in with some ideas but are open to hearing ideas and particularly allowing us to show them how a certain research methodology could answer the question in the most reliable and valid way possible. So deferring to our expertise where we're experts, staying engaged in the process and having good dialogue when the reporting comes out so that all stakeholders get what they need. Stakeholders might include a director of pricing,  a VP of marketing,  a person in project management, or the C-suite.

SCWorks: I believe that you also work with one of our favorite local companies: MERGE4

Nico Peruzzi: MERGE4 - love them! I am also on their board. Elucidate provides MERGE4 with the marketing research services that my company does. For them, this includes, what are customers looking for moving forward in the future? What types of socks are they buying? Are they buying athletic socks? Are they buying specific functionality based socks? What length of socks are people interested in? What are the most popular socks and why? Are they looking for particular collaborations? We track the key attributes of socks – comfort, fit, durability, design - all of which MERGE4 excels at. We also track customer interest in other attributes like MERGE4 as a B corporation, their give back program - how appealing is that to them? We provide MERGE4 with the most meaningful voice of the customer information possible so they can make better business decisions. 

Case Study 

(see more case studies at CASE STUDIES)

A Product Design Firm Needing A Quantitative Research Partner

Client/Background: A product design firm with qualitative research expertise asked us to support a project for a large consumer electronics firm. The goal was to combine qualitative and quantitative findings to answer questions about tablet use. Based on poor previous experience, the client was concerned about awarding the project to two separate firms, and wanted some assurances that there would be a unified approach.

Business Problem: Perform a quantitative survey that validates qualitative findings and drilled down into specific topic areas.  Provide integrated solutions/recommendations for the end-client.

Our Solution: In order for us to be as integrated as possible, we were heavily involved in the project proposal and sale, we provided feedback on the qualitative instrument, and we attended some of the qualitative sessions.

While analyzing the findings, we first completed our analyses. We then had multiple working sessions, where we focused on identifying findings that were consistent across the qualitative and quantitative work, and noted findings that were contradictory. During working sessions, every client business question was addressed through a combined view of the qualitative and quantitative work.

Outcome: It was clear prior to even presenting the data, that we had discovered some very valuable conclusions. Presenting findings to the end-client confirmed this value.

The design firm looked good in the end-client’s eyes, and a strong partnership was developed.  It is clear that the end-client will reach out to this partnership for combined qualitative/quantitative research projects in the future.