Write a summary paragraph: In about a paragraph, describe what problem you are solving, how many people are experiencing the problem, and what your solution is.
NeuroSpire equips market research firms with a technological platform for conducting neuromarketing studies. Neuromarketing is an innovative approach to market research that utilizes brain-imaging technology to uncover the covert preferences and perceptions of target demographics. Measures of brain activity elicited in response to various forms of media are interpreted so as to maximize the effectiveness of advertising, branding, product design, and more. In only the past few years, dozens of major corporations have flocked to neuromarketing as a vital market research tool. Proponents include Wal-Mart, Disney, Intel, PayPal, Microsoft, Frito-Lay, and Procter & Gamble, with more joining the trend every day. These top enterprises reap significant rewards from the advanced neuromarketing studies they commission. However, a typical neuromarketing research project will cost $500,000 or more and is therefore inaccessible and impractical to even some of the world’s largest companies. At the same time, market research firms around the world are actively seeking ways to innovate and differentiate their service offerings, which include focus groups, interviews and surveys. NeuroSpire solves these problems by integrating a cost-effective platform for conducting neuromarketing studies directly into existing market research firms. We streamline the neuromarketing process, cut costs dramatically, and make neuromarketing available and affordable to companies of all sizes.
Tell us more about the problem you are solving. Why is it a problem and how big of a problem is it?
Finding more accurate and more efficient ways of conducting market research is a fundamental challenge for every firm. There isn’t a company in existence that wouldn’t like to know more about their customers’ preferences. For the past century, market research techniques have relied primarily on focus groups, personal interviews, and surveys. These methods, while each effective to an extent, are flawed and riddled with potential biases. People often cannot or will not verbally express their true thoughts, feelings, emotions, and visceral reactions to subject matter. You don’t always know how you feel about an advertisement you just saw, for example, nor are you capable of judging the likelihood of remembering that same ad two weeks from now. The world’s largest corporations have found a way of addressing these difficulties with neuromarketing. However, neuromarketing solutions are offered by only a handful of firms around the world and are extremely expensive and in short supply. Without extreme innovation, this situation seems unlikely to change in the near future. The existing neuromarketing companies run an oligopoly in the nascent industry and are protected by large corporate contracts and (seemingly) high barriers to entry. Thus, they have no incentive to scale their business model, increase supply, cut costs, and lower prices.
Who do you think your target customers are and how many are there?
NeuroSpire’s initial target market consists of the 1000+ market research firms in the United States that conduct focus group studies, and by extension the tens of thousands of enterprises that do business with these firms. We are targeting market research firms that offer focus groups because these companies already have in place the facilities and human subject recruitment mechanisms required to conduct neuromarketing research. There are 17 such market research companies in North Carolina alone, and these will serve as the primary focus of our initial client acquisition efforts.
In March of 2012, we initiated a pilot of our platform with one of the largest market research firms in the Triangle.
Do you think your customers are looking for a solution?
Both market research firms and their clients are actively seeking superior methods of understanding consumer behavior. The focus group industry, for one, is highly competitive and suffers from very low profit margins. They are actively seeking ways in which they can differentiate their services, attract more clients, and earn higher profits. NeuroSpire’s platform offers market research firms a huge technological advantage over their competitors and allows for product differentiation.
At the same time, their end clients are well aware of the successes larger entities have had with neuromarketing and have expressed a strong desire to utilize these services if they were more widely available and affordable.
Tell us about your solution. How does it work and what are the benefits?
NeuroSpire solves the problems faced by market research firms and their clients by equipping firms with a platform for conducting neuromarketing studies. Our platform consist of both hardware and software components.
First, we provide firms with EEG devices from Emotiv, which require no training to operate and are built for commercial use. These devices consist of a wireless headset fitted with 16 electrodes that measure fluctuations in electrical current flow around the skull. Subjects can be “capped” in under 5 minutes and recorded brain wave signals are sent at a sampling rate of 128 Hz via Bluetooth technology from the cap to a USB device plugged into any computer.
We then license to firms our easy-to-use proprietary software platform for designing and performing neuromarketing experiments, called NeuroSpire TestRoom. The TestRoom walks nonspecialists through the process of conducting a neuromarketing study, and automatically matches brainwave data from the EEG headset to presented marketing materials, be they images, audio, video, or live content.
On our end, we have compiled a set of analysis algorithms derived from the past four decades of neuroscience research and incorporated these into our analysis software, NeuroSpire Neurolytix. The Neurolytix software suite enables us to automatically interpret the raw brainwave data into actionable insights as to how marketing stimuli affect consumers’ emotional engagement, attention, and memory. By automating this process, NeuroSpire is equipped to handle several dozen studies a day, even with no additional personnel.
NeuroSpire charges firms a $10,000 fee for the implementation of this platform along with fees for the design and interpretation/analysis of individual studies, which will sell for $5,000 to $50,000 depending on the size and complexity of the project.
Since we utilize the manpower, facilities and client outreach of existing partner market research firms, NeuroSpire is only responsible for the design and interpretation of studies. With less time and investment in labor, and with the use of our automated NeuroLytix software, our company can deliver a more cost-effective solution than what is currently available.
In addition, the market research firms we work with operate in a fiercely competitive environment and have a tremendous incentive to drive the sale of neuromarketing services to the end clients.
Through this model, we are able to scale neuromarketing services to a large market quickly while keeping costs low.
What's your plan for developing your product or service including some dates and milestones?
NeuroSpire has finished its development and testing phase and is now in the process of launching its full service offerings. NeuroSpire is currently piloting its neuromarketing platform with a Raleigh-based market research firm. After completing successful studies with this group, NeuroSpire will look to expand its partnerships to the 12 market research firms located in the Charlotte area, beginning in May of 2012. By the end of June 2012, NeuroSpire will have acquired at least 5 additional market research partners. Assuming a positive trajectory, NeuroSpire will begin raising an angel round of approximately $250,000 at this time. Following that, NeuroSpire will add team members and begin a large scale expansion to national and international markets. We plan to acquire 50 partnership agreements before the end of 2012.
How much funding to get to a company exit?
NeuroSpire will need only $1.5 million in funding to get to an exit. We plan to use initial funding to grow our team through the addition of software developers and sales representatives, and from there our growth can be achieved organically through our profits.
Tell us about yourselves (Who is on your team, what are you studying, what year are you)
Jake Stauch, founder and CEO of NeuroSpire, is a Junior (T ’13) studying neurobiology and economics. He works as a research assistant in the Duke University Center for Cognitive Neuroscience where he has spent the past 2 years researching neuromarketing, neuroeconomics, and the cognitive neuroscience of attention. Jake is a member of the DUhatch student business incubator and is a founding member of the entrepreneurship-oriented selective living group InCube.
Jeroen Kools leads software development at NeuroSpire and is a Masters student studying computer science and artificial intelligence at the University of Amsterdam. He works as a software developer for the BeTA (Brain & Technology Amsterdam) Lab, a teaching lab that provides “a platform for the exchange of ideas between students and scientists from both cognitive neuroscience and computer science.” While working for the BeTA Lab, Jeroen created Experiment Wizard, an application that helps undergraduates to design and conduct experiments in cognitive neuroscience.
Use of Funds - if you won $50,000 how would you use it?
The $50,000 would be instrumental in bringing NeuroSpire to the next stage.
The funds would first allow NeuroSpire to purchase an enterprise-grade license ($7,500) that allows us to acquire additional EEG devices from Emotiv, which are $750 each.
The funds would also enable us to hire another developer to help polish and improve the NeuroSpire TestRoom and NeuroLytix software packages.
In addition, we would like to explore the integration of eye-tracking technology with our EEG platform, which some potential clients have requested. The funds would allow us to purchase a Mirametrix eye-tracking device ($5,000) for testing and software development, and eventual integration within our pilot firm in Raleigh.
Anything else you would like to share with us?
I have so far been vague on the exact nature of neuromarketing studies, so I’ll provide a brief explanation as to how they precisely work. Typically the brain activity of 20 or more subjects is recorded using EEG while they view images, video, or audio stimuli relating to a given product, design, or advertisement. The studies vary in design based on the complexity of the research question, and some may include a task, i.e. detecting a target stimulus or reacting to a given word in a series. The brain’s reactions to live events, for example a prosecutor delivering his opening remarks, can also be probed using webcam recordings that are time-matched to the raw EEG data. Analysis involves looking at patterns in brain activity that corresponds to emotional engagement (approach/withdrawal tendencies), attentional focus, and likelihood of remembrance. More details are available on request.
All studies conducted by NeuroSpire have precedence and support from peer-reviewed neuroscience research, some of which can be found on our website (www.neurospire.com/blog.html).
In addition to the support of several leading corporations, the Advertising Research Foundation that published an independent, peer-reviewed report on the field has affirmed the validity of neuromarketing research. The authors concluded that to disregard neuromarketing research would amount to “competitive folly.” The report can be found here (https://thearf-org-aux-assets.s3.amazonaws.com/research/NeuroStandards_WhitePaper_Oct262011_Pre-Production_Version.pdf).
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