Building a standalone AI product as a competitive advantage for his $3.6M/yr service business

Daniel Dunose built a market research company that brings in $3.6M/yr. Now, he's building an AI product called Brainactive that makes market research cheaper and faster.

Instead of allowing this to cannibalize his service business, he plans to leverage the product as a competitive advantage.

Here's Daniel on how he's doing it. 👇

A $3.6M/yr leap of faith

I have been working in the market research industry for the past 18+ years. I started out as a junior sales rep and worked my way up the ladder until I led business development at various companies.

In 2015, I started my own digital market research company, DataDiggers. Our current annual revenue is approximately $3.6 million.

Then, in August 2023, I cofounded Brainactive, a research technology company. Brainactive automates the entire process of market research, from objectives to final report, with assistance from conversational and generative AI.

It’s a revolutionary idea that attempts to simplify a rather tedious and expensive process, significantly cutting the usual costs and time to insights at the same time. It’s also a highly versatile solution, as it can serve both the end customers of market research and the agencies that only need a part of the process done.

Brainactive primarily uses a SaaS model with four tiers. We also make money through the selling of audiences (access to respondents), which we treat as upsell, and transactional revenue for human-assisted sales.

It's currently pre-revenue.

Bootstrapping and funding

We started DataDiggers with nothing and almost no funding, spending as much as we gained for a long time. It took time to earn some awareness, and reputation was built very, very slowly.

Needless to say, my cofounder and I did not take any money out for 1.5 years. We reinvested everything. It was a leap of faith that paid off.

And along the way, I learned how to handle many things myself — building the first version of the website, accounting, marketing, HR, and much, much more.

As for Brainactive, it was a merging of skills — market research, sales, tech, AI, and design — brought together by highly experienced people. So, a totally different story than DataDiggers. We bootstrapped the product 100% until it was ready for market, then we got initial funding from friends and family, and we are currently looking to raise a pre-seed round.

We also got a $325,000 grant in credits from Google to cover hosting and AI expenses. It took nearly 10 months to get to MVP and we are now around 14 months total into the project.

Expanding into a global market

At DataDiggers, the biggest challenge was to build our relevance in an ocean of similar offers. We had to offer higher flexibility in operations and sales to differentiate ourselves. We also had better prices overall and bulk discounts on larger volumes.   

Our most successful growth tactic has been promoting at offline industry events — mostly exhibiting our capabilities with stands and live presentations. We also sent cold emails in the beginning and leveraged our networks.

Going global also had a huge impact too. It started as a supplier of respondents in the CEE (Central and Eastern Europe) region. But we eventually extended our focus outside the CEE region, and changed our offering from exclusively market research to supporting just about any type of need.

As soon as we pivoted in the global direction we started to get significantly more attention and revenue, which gave us time to fine-tune our market approach. 

At Brainactive, the biggest challenge so far is to convince the market that there is a better alternative to the process they’re so accustomed to, and do that in a timely manner, with a close eye on controlling the available resources.

We're doing that through thought leadership, blogging, and PR.

Not a walk in the park

I think one of the most important pieces of advice I can give to anyone who is just starting out is to be ready to get out of your comfort zone. It’s almost never a walk in the park.

You need the resilience to always move forward, the willingness to work hard without a clear positive outcome, the stubbornness to continuously educate yourself, the humility to learn from mistakes, and the courage to take risks. Those traits are what have helped me the most.

Also, make sure the problem you are fixing is:

1. A real one, preferably witnessed by you.

2. Large enough.

What's next

Our goal is to reach $100M in revenue within the first 10 years at Brainactive, capitalizing on the inevitable changes brought by technology in the market research industry.

You can follow along on LinkedIn. And check out Brainactive!