Collecting user feedback gives companies a new way to step back and see the product through the eyes of its users. For product companies, this is often done at home through what’s called in-home usage tests (IHUT). Falling under market research, this typically involves a market research company, that’s contracted by the brand, to work together to send product samples to users to collect reactions to scents, tastes, effectiveness, and even packaging. However, unlike other forms of market surveys, this segment hasn’t adopted much technology or digitized. Highlight is on a mission to change that with its end-to-end in-home product testing platform handling test design, recruitment, logistics, feedback collection, and associated analysis. By modernizing the process with attention to software and design, the platform differentiates itself by offering more sophisticated targeting, streamlining the process by reducing the time needed for testing and analysis, and by offering increased completion rates. Consumer brands are also able to get to market faster with more confidence and Highlight has already worked with top names like Pepsi, P&G, Nestle, Mondelez, and Colgate.
AlleyWatch caught up with Highlight Cofounders Dana Kim and Ethan Kellough to learn more about the inspiration for the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $8.2M, and much, much more…
Who were your investors and how much did you raise?
First Round Capital led the $7 million seed round funding with participation from HearstLab, Sixers Innovation Lab, Scribble Ventures, Operator Partners, and angel investors Zander Lurie (CEO of Momentive, fka SurveyMonkey), Max Mullen (Founder of Instacart), Richard Thornton (former CEO of Cint), and Tom Bernthal (CEO of Kelton).
Tell us about the product or service that Highlight offers.
Online user research has transformed in recent years, but the tools and processes available to physical product developers remain largely the same as they were in 1980 – think mall intercepts and sterile focus groups. These methods are expensive, hard to coordinate, and not all that reflective of how people use products in real life. As a result, products get rushed out the door with inadequate research and 90% of the 30,000 new products launched every year fail.
Highlight exists to help products exceed the rising bar we have for them with an in-home product testing platform that lets you do good research fast. We streamline everything from recruit to data set, including all the logistics of getting your product to your target customers. Whether you’re targeting kitten-owning millennials or retinol-using women over 50 in California, with Highlight you can get projects moving with just a few clicks and receive insights in days and weeks, not months.
Highlight’s clients have tested products in early development, blind-tested products against the competition, and benchmarked in-market products for category insight. Well-designed and executed product tests can provide reliable data on a broad range of products, from cookies to hand sanitizer to CBD products, setting them up for success.
Since launch in 2021, Highlight has grown explosively and powered agile product testing services for over 100 partners, tested hundreds of products, sent thousands of boxes, and completed tens of thousands of surveys. Early-stage and growth-stage brands that use Highlight’s service include Partake, Avec, Love Corn, and Sakara. Enterprise CPG companies, including Nestle, P&G, and Estee Lauder, have also turned to Highlight for product testing.
What inspired the start of Highlight?
We met when they were both studying at UPenn for their Master’s degrees. Dana went back to school as a market research veteran with a vision to make product testing more efficient. For years she had worked in the market research industry and saw firsthand how quantitative and qualitative research was getting better and faster via digital tools, but physical product testing was still so incredibly difficult.
Enter Ethan, the yin to her yang. With his engineering and product development background, he understood the existing problems from the other much-needed perspective. They shared the same drive to bring the inefficient 1980s processes of market research into the 21st century.
How is Highlight different?
- Physical product research for the 21st century: We streamline everything from recruit to data set, including all the logistics of getting your product to your target customers.
- Target your audience: That streamlining isn’t at the sacrifice of research customization; get useful feedback from your audience, whether it’s kitten-owning millennials to retinol-using women over 50 in California,
- Cut time to insight in half: With Highlight you can get projects moving in a few clicks and receive insights in weeks with unmatched 90% completion rates.
What market does Highlight target and how big is it?
Highlight’s platform supports research and development, innovation, and marketing at consumer product companies; we estimate this to be a $228 billion market opportunity.
What’s your business model?
Highlight is a SaaS business selling licenses to conduct in-home usage testing at various volumes and tiers, including access to a proprietary tester community.
What are your post-COVID office plans??
We’ll remain a remote-first company for the foreseeable future. We are fortunate to have office space in New York, so our team members in New York have the option of meeting in person and working out of an office, but we’ll likely be optionally hybrid at most!
What was the funding process like?
Fortunately, raising in COVID allowed us to meet investors and partners without the constraint of location and having to travel around to pitch all over. This allowed us to have many conversations with potential value-adding partners and really hone in on the partners that we knew would bring much more than just capital to the table.
Fortunately, raising in COVID allowed us to meet investors and partners without the constraint of location and having to travel around to pitch all over. This allowed us to have many conversations with potential value-adding partners and really hone in on the partners that we knew would bring much more than just capital to the table.
What are the biggest challenges that you faced while raising capital?
That same dynamic of ‘pitching from home’ that allowed for efficiency also made it harder to truly get to know our investors while having these important conversations. Our best conversations involved digging deeper and having genuine, human conversations with our investors.
What factors about your business led your investors to write the check?
We launched in 2021 and saw tremendous receptivity from the market. In year 1, we were able to secure some of our dream logos – Pepsi, P&G, Nestle, Mondelez, Colgate… the list goes on. With that, we were able to bring in meaningful revenue and prove that there truly is a need for our product out in the market, in just our first year of business.
What are the milestones you plan to achieve in the next six months?
Our biggest investment is technology, and building a client portal that will not only make the process easier and faster but better is critical in creating value in our space. To get there, we have tremendous team growth across all departments, but especially engineering, product, and design.
Our biggest investment is technology, and building a client portal that will not only make the process easier and faster but better is critical in creating value in our space. To get there, we have tremendous team growth across all departments, but especially engineering, product, and design.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Prioritize the highest ROI, value-creating activities as a business, set those milestones and build out your OKRs, and figure out the path of least resistance (and least cash) to get there.
Where do you see the company going now over the near term?
We’re just starting with innovating against the in-home usage test. IHUTs are a wedge into a much larger product testing market and we have a much larger vision for how to ensure brands are able to build better products.
What’s your favorite outdoor dining restaurant in NYC?
Musket Room!
