Last week, we launched our newest product, OfficerInsight (a.k.a., OI). The release of OI is significant for several reasons. First and foremost, this product addresses a major pain point for our clients—access to high quality pay data for their entire group of senior executives. While pay data is available in proxies for the Top 5, accessing reliable information for executives beyond the Top 5 is a different story. Additionally, the creation of OI helped us to expand the functionality of our online products. It’s not everyday that one gets excited about executive pay data, but I think we’ve built a very capable and cool product.
As a company, we discovered many lessons from our first foray into the survey business. Most importantly, we learned through our own work and the cautionary tales of others, that building a high quality survey is not an insignificant task (translation: “good luck”). Clearly, the biggest challenge is building trust with companies so that they will provide you with their data. It requires some of their time, a scarce resource, and also a lot of faith in the entity that is collecting the information. Obviously, you can’t have a survey without data. For a survey to be meaningful, you need a critical mass of companies to provide their data. A classic game theory exercise—”I’m not moving until someone else goes first”. Even if you have an All-Star technical team and an infinite amount of resources and capital, this does not guarantee that the survey you’re planning to build will be of value.
At the outset, I was fortunate to talk with several of our clients and friends who have had extensive experience in the survey business. Needless to say, their advice was invaluable. One suggestion was to form a client advisory board. Given that this was the first time we set out to build one, I was not sure what to expect. What I discovered was that we have a number of clients who are passionate about our services and were very excited that we were FINALLY setting up an advisory board.
I like to consider myself a somewhat humble person, but I have to share one statistic that I think is pretty impressive. The 26 companies on our advisory board have an aggregate market capitalization of over $1.6 trillion dollars. Yes, that is not a typo. I did not mean to say millions or billions. To put this into perspective, $1.6 trillion is larger than the GDPs of Russia, Spain, Canada and Brazil. The average market cap of our advisory board companies was $62 billion and, for those statisticians at home, the median market cap was $28 billion.
As you can see, this influential group works closely with executive teams and board members at America’s largest companies. When it comes to executive compensation, they are living and breathing it every day and know the subject matter better than I ever will. As we were designing OI, their feedback on what works well and doesn’t work well with existing executive compensation surveys was immensely valuable. With their candid feedback, they helped guide us down the right path and kept us focused on what our clients need.
In addition, through their introductions and support, we were able to successfully get a number of their peer companies to participate. Do you remember the shampoo commercial from the 70s where the person says “I told two friends and then they told two friends and then they told two friends and so on and so on…” (It’s amazing what is seared in one’s brain from childhood. Quick quiz—which shampoo was it? We all remember the commercial but we weren’t able to figure out the brand of shampoo.) While we aren’t quite selling shampoo, I couldn’t help but keep thinking of that commercial as we were building out the participation list. We wouldn’t have made it without their help in our own viral marketing campaign.
Equilar Advisory Board Members, thank you! We look forward to seeing all of you in September at our first ever Advisory Board Annual Meeting and celebrating our success. No need to worry. No withhold votes at our annual meeting. See you soon!
Softball Update – Yes, it’s that favorite time of the year at Equilar. The season started just over a month ago and we’re off to a “solid” start. Let’s just say that we’re at the 50th percentile. Right where you’d expect Equilar—at the median. This year, we have the pleasure of playing in the San Mateo Industrial D2 League. Since when has executive compensation research been considered “industrial”? What this means is that we have an “eclectic” mix of teams with a wide range of talent, everyone from players who would be on the Giants if it weren’t for drug testing (where’s Senator Mitchell when you need him?) to others who would have a hard time making my son’s kindergarten T-ball team. You know you’re going to have a challenging season when teams that you’re playing don’t even bother to have a website. They clearly don’t have a Web 2.0 strategy, let alone URL.
Here at Equilar, while we enjoy our softball, we hire for brains and cultural fit which makes for an interesting team. If athleticism is part of the package, that’s a huge plus. Occasionally, the softball gods will look down upon us and bless us with a former Cal baseball player (thanks Michael for saving our butts) but those are few and far between. Actually, he’s the only one. But we’re 2 – 2 and having a great time. Btw, big showdown with SuccessFactors this Wednesday. The only other team in our league where college degrees outnumber tattoos. More updates to come shortly.No tags for this post.