Let's Stop Talking About ResTech.

Time to stop apologizing for selling services.

No one has yet tried fitting a jet engine onto a tricycle, it might look fast, but it’s not built for that kind of ride. That’s what the research industry keeps doing with ResTech. We keep dressing up what is, at its core, a services business and trying to sell it as a SaaS rocket ship. Don’t get me wrong, technology has a huge role to play in our industry, but the current obsession with positioning ourselves as "tech-first" is leading us down a path that ignores what clients actually want and how this industry really operates.

Let’s start with the good: ResTech sounds amazing to investors. They hear "tech" and immediately see scalable margins, recurring revenue, and some mythical path to a unicorn valuation. The pitch goes something like: "We’re like Salesforce, but for surveys." But here’s the dirty little secret: most of the so-called ResTech companies? They’re still getting around half their revenue from services.

The ResTech Frenzy

It's not hard to see when the concept of ResTech became interesting to investors. It started with SurveyMonkey. This little DIY survey platform had a dozen employees, cared little about selling to big Fortune 500 clients, and was still clearing millions a month. They were the epitome of ResTech, a pure-play SaaS platform for research with the discipline to focus on just building the tech.

Next was Qualtrics who did the same thing but bigger with more enterprise features and a massive inside sales operation. They shot to the moon on the back of double-digit growth. With an IPO in sight, SAP decided they needed the company as part of their portfolio and bought it for $8B in 2018. Three years later, they spun it off to complete that IPO with a new $15B market cap.

ResTech was validated and something to pursue, and something drawing the eye of venture and private equity investors. In the wake of the Qualtrics acquisition, we saw Cint jump from privately funded to an IPO in 2019 on the Swedish stock exchange that pegged its market cap at $1.2B, definitely a tech valuation. Then in late December 2021, Cint bought out their biggest competitor Lucid for around $1.1B in cash and stock. This took their market cap up to around $1.6B.

Clearly, market research was fertile ground for investment and over the past 20 years we've seen some interesting companies started on the back of this unlocking of capital (Suzy, Zappi, etc.). However, just like any good hero's journey, our hero (ResTech) was hit with a series of trials.

Clients Love DIY Pricing, Hate Doing the Work

Procurement and finance teams loved the new round of SaaS vendors. They were easier to buy, more cost-effective, the accounting was predictable (in theory), and felt more turnkey. That said, it turns out when you give clients the tools to do the job themselves, a surprising number of them say, "Thanks, but can you actually just do it for me?" We’ve seen this again and again. Self-serve tools drive down price expectations, and then the same clients turn around and ask for managed services on top. It's a weird hybrid model where the margin math doesn’t really work unless you’ve got tight controls and stellar execution.

The only ResTech vendor I've ever seen knock the SaaS model out of the park was SurveyMonkey back in the day. However, they too were not immune to the call of easy money. In 2009, they took money from Bain and Spectrum Equity, went public in 2018 at a valuation of $2B, and renamed themselves Momentive in 2021. By January of the year following IPO, they'd fallen to a $1.7B market cap and eventually were taken private again in 2023 by STG at a $1.5B valuation. Rinse and repeat for all the high fliers. All things considered SurveyMonkey and Qualtrics are successful businesses but that’s because they pivoted to become MarTech vendors.

And yet, we keep building for the mythical SaaS client. We keep staffing up customer success teams to do what was once called "account service." We’re pretending this is product-led growth, when it’s really people-led delivery, just with prettier dashboards.

What Clients Actually Want: Outcomes, Not Interfaces

Instead of obsessing over how much of our business is tech vs. services, we should be asking a different question: What problem is the client trying to solve? Not, "How do we get them to adopt our platform," but, "What outcome are they desperate for, and how can we get them there faster?"

This is where a use-case-first approach makes way more sense. Clients don’t care if it’s a fancy dashboard or a scrappy team of analysts behind the scenes. What they do care about is getting help from their insights teams:

• Understanding what their consumers think

• Getting to an insight faster than their competitor

• Making smart decisions before the next board meeting

Client-side insights teams have to be jacks of all trades and they're unlikely to be experts in the best way to run ad tests, concept tests, segmentation, or how to understand the methodological nuances of a syndicated service. This doesn't mean they're not smart, in fact, the opposite is often true, however, their roles are such that they need support from specialty research vendors to help make them smarter. If the answer involves a survey tool, great. If it involves a strategic workshop and a follow-up call, also great, but the core of what they want is a trusted team backing them up and making their workload lighter.

The Services Core Is Not a Bug, It’s the Feature.

Given this, we need to stop apologizing for and hiding the services side of this industry. The best firms have strong human capital because that’s what clients are really buying, expertise. Sure, we can't thrive on outdated technology and our platforms should make us more efficient and create some leverage, but most of the meaningful differentiation still happens in how smart people solve tough problems. The danger is in trying to build like a tech company while still selling like a consultancy.

I've been part of many companies that struggle with where to put the next dollar; into tech for a payoff in 2 years that's not guaranteed, or into another person selling an existing service to the big clients. Doing the former requires conviction from the entire management team and buy-in from investors. Doing the latter drives short-term growth. What do you think always happens?

So instead of asking, "How do we increase ARR," let’s ask, "How do we deliver scalable services that align with what clients are actually willing to pay for?"

A Better Way to Think About the Industry

What if we flipped the script? What if we stopped categorizing firms by whether they are "tech" or "traditional," and started mapping them to the use cases they serve? Think of categories like:

• Companies that help you find and target audiences

• Companies that help you ask better questions and analyze responses

• Companies that help you make decisions and predict outcomes

Then group firms by the client problems they solve, not by whether they call themselves a platform or research technology.

Let Investors Keep Us Honest

This isn’t an argument to ignore business model innovation or take a lower multiple on valuation. Staffing-based businesses have growth ceilings and investors have every right to push for more scalable models. But scalability doesn’t mean everything has to be SaaS. Every founder loves the idea of building something once and selling it to millions of customers, but that's not a great fit for the insights space.

There’s such a thing as scalable services, and now with Agentic AI we're on the doorstep of a huge boom in AI-powered managed services. This new business model isn't chasing annual recurring revenue (ARR), but average customer value (ACV). Traditionally, this model might be considered less attractive, but with Agentic AI powering the back end, the cost model scales similarly to SaaS.

Now I can hear some of you calling me out here, "yeah but, an agentic AI powered insights firm is still technically ResTech isn't it?" Short answer, yes. An automated managed services business can't do what they do without technology. However, the fundamental distinction I'm making with my argument is that with ResTech we're assuming ARR is king and adding staff is bad. Not true with a services business. Most ResTech founders looking at an exit will do everything in their power to describe their business as a tech business (higher multiple) vs a services business (lower multiple). I think we need to re-engineer this narrative and make services attractive again, and yes, we'll need tech to get there.

A great step forward for the industry would be to stop chasing the mirage of being SaaS and embrace the underlying need by building businesses that actually help make clients smarter not just give them a new fancy dashboard.