Accelovation, which was founded in 2003 and is based one block away from Google in Mountain View, Calif., has been operating in stealth mode until this week, when it began briefing reporters. Company officials say they have two dozen customers in the Fortune 500, including 3M, Procter & Gamble, General Mills and Clorox. The idea is to find new technologies for existing market needs or new markets for existing technologies.
The Accelovation market-discovery software crawls 3 billion Web pages, and has identified a billion market needs and 1.7 billion potential solutions to those needs, according to Jens Tellefsen, vice president of products.
Publicly available content, such as blog postings and customer forums, are among the information sources. Accelovation also has an agreement to crawl information from Reed Elsevier, which owns LexisNexis and has databases of peer-reviewed journals and patents.
"We will identify any statement that talks about a need for something, or a claim or solution for something," Tellefsen says. "That can be an individual talking about how annoying it is to cook, or to use a particular product, to people that are dying or suffering from some disease . . . to companies that are looking for new ways to do something."
The technology isn't cheap. Customers "pay anywhere from US$50,000 to $75,000 for a few sets of searches, to hundreds of thousands of dollars for a yearly subscription," he says.
Momentive Performance Materials, a former division of GE, was willing to pay the price to identify potential new applications and markets for a wetting technology it makes for the agricultural industry. The technology today is used with solutions containing pesticides and water, and causes water to penetrate leaves deeply instead of just rolling off the surface.
Based on Accelovation search results, Momentive is developing a new version of its technology aimed at a different market, according to Mary Gum, leader of Momentive's innovation council.
"The one thing I was impressed at was the quality of the hits," she says. "What we did is put in all the technical strengths or benefits of our technology. They do their magic in the black box and out come all their hits."
Gum did not identify the new product Momentive is making, because it is still being developed. What Accelovation allowed the company to do is find a problem its technology could solve and pick the market and application with which it would have the highest probability of success, she says.
In addition to using Accelovation, Momentive speaks with customers and buys industry market studies to uncover this type of information. Often, those market studies are dated by the time they are released, Gum says. These traditional market studies and internal assessments are still necessary in addition to Accelovation, however, because the search software does not identify the size of a market, she says.
The per-search cost of Accelovation also raises a concern for officials at Momentive, she says. Momentive completed a number of searches and is not currently using the product. Gum says Accelovation may allow them to take the technology in-house at a different price structure, but the company is still struggling to figure out whether to continue with the vendor.
"Longer term, there has to be a different business case than the one we originally started with," she says.
Accelovation is working on packaging its product in different ways that are more cost-effective for customers, Tellefsen says. Currently, the product requires users to undergo a few days of training. But the company plans to make searches easier to complete with fill-in-the-blank questions, lowering the cost of delivery.
"We're rapidly moving forward with new offerings that will be more suited to small- and medium-sized companies, and be more automated and packaged in a way that makes sense to them," Tellefsen says. The market-discovery software works like an online search engine, but requires customers to enter logon information.
Accelovation was started by chief innovation officer Michael Osofsky, who founded the MIT Innovation Club and earned an MBA from the MIT Sloan School of Management, and CEO Jonathan Spier, who was attending Harvard Business School when he met Osofsky.
The two men wanted to find a way to quickly do market research and market discovery, to find new emerging technologies and evaluate whether they address a real market need.
"They realized that the Web actually has a phenomenal amount of content to actually answer these questions," Tellefsen says. "At the MIT Media Lab, they got one of the MIT computer science guys to hack up some software to start to kind of break this problem down and address it. Since then, we've had three Ph.D guys in linguistics who are building a lot of the algorithms."
Keyword searches, such as the ones done by Google, don't work well in market discovery, according to Tellefsen, because the point is to find trends that haven't yet hit prime time.
A few years ago, Tellefsen says, some people lost their jobs because they failed to identify the emergence of the Atkins Diet. By the time Atkins became incredibly popular, it was very late to roll out a new product, because that can take a year or two, he says.
While Google did a great job identifying anything related to Atkins once the fad peaked, Tellefsen argues that Accelovation can identify new trends, such as Atkins, before they are clearly defined.
The technology is complicated because language is complicated. The expression of a need can be worded in tens of thousands of ways, Tellefsen says. The field of computational linguistics helps Accelovation tease out the intricate meanings of language and catalog the pain caused by a problem, potential solutions and who would benefit from them.
"This stuff is completely under the radar for Google," Tellefsen says. "They live in the world of keywords, and they're making a lot of money doing it."
Coincidentally, Accelovation headquarters are right near Google's. Company executives picked the location because it's in a relatively inexpensive office complex, not because it's near the Web search giant.
"It is kind of coincidental," Tellefsen says. "I drive by Google every day on my way to work."
This story, "Accelovation Identifies Market Trends" was originally published by Network World.