Statista co-founder Dr Friedrich Schwandt in an interview about the power of facts
BY DR CLAUDIA PELZER
(Published in The Produktkulturmagazin issue 3 2018)
Anyone who has searched the Internet for statistics on topics relating to consumer behaviour, media or marketing before, will certainly have come across the industry service Statista. Since 2008, the Hamburg-based company has aggregated and published around one million graphics and statistics from more than 22,000 sources online. More and more premium content, such as studies and reports on particular industries, is added on top. The platform, which claims to have 1.5 million users, has hit a nerve, it appears. Meanwhile, a total of 550 employees, many having an editorial background, busily provide new data and facts on a daily basis.
Compared to other ventures, this quiet and considerate start-up clearly is a hidden champion of the industry. Less fuss and more content ready to share – this is the founders’ formula for growth. Statista co-founder Dr Friedrich Schwandt spoke to us about the company’s background and future course.
Would you give us a brief history of Statista? Big Data was anything but a hot topic back in 2007 in Germany. How did you come up with the idea of setting up a portal for statistics?
My co-founder and I have a background in management consulting and in particular have helped media companies to develop new business models. We quickly realised that there was not one central point of contact providing market data. Hence our big challenge was that we had to build an entirely new platform, without having a comparable service on the market where we could have looked at similar functionalities. We also started with very little venture capital as we invested our own money in the first few years – with maximum self-exploitation. Only later did we raise some additional capital. After two or three years, we had reached a stable size.
What exactly is the business case behind it, and what makes this so successful for you?
At the time, we knew from the outset that we would count on a paid content model as it is common in this sector to pay for industry data and studies. It simply is a market with budgets available. Our accounts are graded, a classic freemium model. Of course, enterprise accounts are becoming increasingly important for us. We have large accounts that deal in the six-digit range with customers such as Deutsche Telekom or Amazon. Of course, we had to provide the necessary amount of content on the platform first. You have to bear in mind that by now we have 22,000 partners, who supply us with data and content according to their contracts. What helped us extremely, even if only parts of it were planned: After
some time, Google became aware of this content also because we are relatively open to search engines. If users come to the platform, or if they have made the second or third click there, access becomes restricted and the user is asked to create an account. So most of the leads clearly come through Google. That accounts for about 2,000 new registrations per day.
Currently, we have about 15 or 16 million visitors per month, which corresponds to the level of the German newspaper ‘Handelsblatt’ and is a lot for a database or market research company. In the end, the content partners are always very happy to provide us their content. Because they find that if they want to be present in certain subject areas, we have actually become the decisive marketplace. And no longer just in Germany but worldwide.
It is good you mention this, because the current agenda includes further international expansion. Do you recognise any features or differences here, say with regard to the German and US markets, for example?
We get traffic and sales from 150 countries by now, i.e. there are accounts from the Faroe Islands to the Vatican State. Of course, this does not mean that we have sales teams everywhere. We only have them in the 50 largest countries. But once we realize that a market has potential, we gradually expand our offices there. In New York, for example, we already have around 90 employees. The next largest locations are London and, more recently, Paris with ten employees. However, our main traffic and the majority of our sales come from the USA nowadays.
In fact, the approach of the various markets differs greatly. You would think data are the same everywhere. But when I look at the topic of marketing and sales, for example, I can see distinct differences. In Germany, you usually communicate the benefits of a product if you want to sell; in the USA, however, reviews by other enterprises and users are more important to generate sales. Another example: While we can do a lot over the phone in Germany or the USA, we cannot get anywhere in Asia via this channel. There we use mobile messengers like WeChat instead. There are a lot of almost extreme differences, which one would not expect. But we will not be discouraged by this, we just test and learn and thus get to know the respective markets. So far, this has worked very well.
This success has led to the team growing over the years – a classic stumbling block for many start-ups. What were the biggest internal challenges? And how did you solve them?
Of course we had growing pains as well. For example, we never had to elaborate on our strategy internally in the past. We more or less all sat in the same room, saw each other every day and thus interacted, and that was a good thing. These days, though, my co-founder and I need to visit all the individual departments and communicate our next steps. A seemingly banal thing but one that helped us a lot was the introduction of our ‘News of the Day’ newsletter. Every day it delivers a message of success. This is a very simple instrument but has certainly become the most important one for us. We also use channels such as Slack or Microsoft Teams. We need this because we are much more dispersed now. Yet we continue trying to control as much as possible from Hamburg. We recruit all over Europe, but we bring people here if possible. You will encounter 50 different languages in this building. It is something you would probably never expect when it comes to data, but this “machine” Statista requires an incredibly large number of people in the background in order to function. This was also one of the most important learnings for us. We started out as a pure technology platform, and the portal was a catastrophe, because people were fed randomly instead of being offered curated content.
Let us take a look at the development of Statista’s portfolio. How has the range of services expanded over the years?
We distinguish different classes of content and products. One is statistics and forecasts. The second major category is reports, dossiers and sector analyses. And the third part are so-called expert tools. These categories form individual markets that one can break down further, say digital media or the advertising market, for example. This includes extensive background information or forecasts. The interesting thing is that in the end we built a tool that can be used in all industries and by almost any department within these sectors. Whether it is sales, controlling, or communication, they all use statistics. One uses data for pitching, the other to underscore the size of a market, yet everything is based on statistics.
Finally, a quick look to the future. Where should and will the journey lead Statista?
I always say that we are the Netflix for statistics. Like them, we are producing our own content and more and more so over time, so that in the end we will have a ratio of 50 per cent our own to 50 per cent external content. These contents will constantly be improved in terms of quality as well, of course. I am also thinking of expanding the Global Consumer Surveys, for example. And we aim to and will roll this out internationally. Is this something that changes the product fundamentally? No. I don’t think Netflix will change significantly in functionality over the next few years, except that the content will be broadened. The same is true for us. The platform model includes all this. At the present time, two thirds of our sales already come from abroad. My vision is that in future maybe five percent will come from the German market while the rest will be generated through international business.
DR FRIEDRICH SCHWANDT
Dr Friedrich Schwandt studied Economics with a specialisation in Econometrics. He has been the CEO of Statista GmbH since 2007. Furthermore, he has worked at Humboldt University in Berlin, the Organisation for Economic Co-operation and Development (OECD) and the Boston Consulting Group (BCG).
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