Conducting marketing research

Balderton Capital, one of Europe’s largest venture capital firms, has recruited a group of teenagers to advise it on the latest technology trends. Balderton, based in London, has invested in Bebo, Betfair and Codemasters. It manages $1.9bn (£1.3bn) in committed funds. Last month, the venture firm invited 11 15-year-olds to an hour-long private trip on the London Eye for an inaugural meeting. The teenagers named themselves ‘Prestige 11’, after the top accolade in a video game, and were given iTunes vouchers as a thank-you. They plan to meet every two or three months and continue to chat and swap ideas on a Facebook group. Balderton hopes to understand how the teenagers of today will spend their time and money as the adults of tomorrow. ‘We think very long term,’ said Roberto Bonanzinga, the Balderton partner leading the scheme, who argues few VCs use the services in which they invest. Mr Bonanzinga has two objectives: discovering new services before they hit the media or investor radar; and testing new ideas pitched by entrepreneurs. Information gleaned could be particularly useful in Balderton’s early stage investments, he says. ‘Understanding how consumer behaviour is evolving is super important.’ For now, YouTube and Facebook remain by far the most popular websites among the group. Facebook has completely replaced other email and instant-messaging services. Immediacy is critical. ‘Three hours not replying to a text message would be really rude,’ said Tomas Albert, of west London, one of the Prestige 11. Few pay for music, with many using filesharing networks, believing that artists and labels ‘make enough money’. Movies are usually rented from a DVD outlet rather than from the Internet, but only because downloading takes too long. ‘They don’t collect things,’ said Mr Bonanzinga. ‘They don’t have the need of owning; they have the need of using.’ As a result, teenagers’ bedrooms are more likely to be stacked with boxes of video games than the records that adorned their parents’ or even older siblings’ rooms. A majority use the Internet on their mobile phones, with several using smartphones such as the iPhone and BlackBerry. Many are prepared to spend up to £10 ($15) to buy an application for mobiles or an iPod touch, particularly for games, but the lifespan of an app is short. ‘We don’t stick to anything much longer than a couple of weeks,’ said Tomas

1 What type of customer information is Balderton trying to uncover?

2 What other methods could Balderton use to gather this type of information?

3 What stages should Balderton use in conducting marketing research?


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