September 2009 – Online Insights: Emerging Technologies

Reading Your Customers’ Minds

By René Dechamps Otamendi

Some 20 years ago Joseph Carrabis, the founder of NextStage, started working on a new field of technology at the nexus of four well-established disciplines: anthropology, linguistics, neuroscience and mathematics. During this 20-year time span, he not only developed the theory of his “mind-reading technology,” he also refined it through a series of working prototypes that were tested in both academic and small business settings.

NextStage’s Evolution Technology (ET) is now a patented field of “basic” technology that early investors have described as being similar to plastic. Like plastic, ET can shape itself to whatever a client’s needs are. As one early investor says:

“Plastic can do anything and everything from protecting your small child dropping a bottle of juice on the floor (it just bounces away) to delivering life-saving medicine or nutrients to a person in the hospital getting an IV. But it’s not really about the plastic, it’s how you apply it. It’s a base, a start. What you can do with it is limited only by your imagination.”

What is it that ET can do that makes it like plastic? It allows any programmable device to understand and respond to how somebody is thinking.

One application, for example, can be found on websites. A javascript tag is installed that monitors mouse and keyboard activity. With this data, NextStage systems are able to not only predict socio-demographic information about visitors, but also how they feel. ET can tell online retailers what their visitors think about their products, prices, etc. without having to poll them. A few months ago, we undertook an independent test to gauge the accuracy of our predictions. The age and gender of 300 people were predicted by our systems with an accuracy of 98 and 99 percent, respectively.

ET allows clients to understand how their audience is thinking (not merely what they are thinking) and does so without interfering with or interrupting the audience’s browsing behavior with forms, surveys, panels or any other intrusive action. It exists anonymously, so site visitors are free to browse without concern. Industry analysts have labeled ET a “mind-reading technology,” although we certainly do not make that claim.

NextStage’s Evolution Technology is a self-learning engine that gathers the experiences it has with users and keeps a “memory” of its encounters so it can predict the reactions of similar users it meets down the road. Through this methodology, ET is able to predict with high accuracy how members of a given audience will respond to any stimuli or experience.

Another application of this technology is NextStage Advertising Intelligence, a marketing optimizer engine. You can take any marketing collateral online or off (e.g., print ads, online banners, TV ads, etc.) and upload it into our systems. After you define your target audience, our system predicts the level of effectiveness that the marketing material will have with that audience. In addition, it provides suggestions for improving the material to make it more successful.

The applications of this technology are endless and we hope to develop many of them in the future. Here’s a small sampling of a few that could be easily accomplished:

By identifying age, gender and other characteristics, ATMs and online payment systems could recognize users, dramatically reducing card fraud; children’s forums could alert moderators about the presence of adults with immoral intentions; and websites could automatically adapt themselves to better interact with visitors via true one-to-one experiences, ensuring maximum satisfaction.

Years ago, Carrabis spoke at an MIT Enterprise Forum. What follows is an anecdote from “Reading Virtual Minds,” Carrabis’s next book, about that experience and ET’s prediction capabilities:

One of the people attending the MIT Enterprise Forum was Hans Reimar, president and CEO of Market-Vantage. Hans was one of the people who came up to me enthusiastically to talk after that presentation, and we did. We also followed up that conversation with a plan to meet for lunch at his office one day the following week.

It might help at this point to know that NextStage is self-funded, which means I was always looking for creative ways to have ET learn about people. I wanted ET to be exposed to specific types of people for controlled periods of time so that it could learn what makes one group of people different from another. The way I chose to do this was to sign up for contests: Submit your site to a contest for “best website” and you’re going to be browsed by lots of website designers. Submit your company to a business plan competition run by a bunch of venture capital firms and you’re going to be browsed by venture capitalists. Submit your company to an MIT Enterprise Forum and, well–you get the idea. When ET found a new set of psycho-motor behavioral cues and we knew the majority of new visitors were coming to the site based on some contest we’d entered, those behavioral cues were by definition indicative of the people most involved in that contest.

So ET, by this point in time, had learned a great deal about how different people thought, made decisions, learned, remembered, so on and so forth. In fact, ET had learned enough that it could determine what kind of job a visitor would be best suited for should this visitor be searching for a job. No need to submit a resume; no need to fill out a form. ET would automatically make a decision regarding aptitudes and abilities and, if such a position was available at NextStage, that position would be offered to you.

Hans, when we met, had this wry smile while we talked. It was a pleasant meeting and he had some of the other folks in his office come in to say hello. Hans introduced me as the fellow who’d come up with that interesting ET stuff on the website he’d asked them to browse. I noticed that everyone looked at me a little strangely and I wondered if somehow I had once again transformed into Kafka’s bug à la “Metamorphosis.’

Finally Hans told me that he’d visited our jobs page.

‘”Oh?”

“Your site offered me a job.”

I wasn’t sure what to say. “Did you take it?”

He laughed. “It offered me a job in sales.”

I thought for a second. “Isn’t that what you’re doing here?”

Then he really laughed.

Hans noted that his actual title at was director of business development, but everybody knows that means “glorified sales rep.”

One of the people whom Hans introduced me to had also gone to our Jobs page. She was leaving her present position to go to another firm. ET had offered her a position in research and development, something she’d always been interested in. What was she going to be doing at the new firm? R&D.

Now that Joseph has asked me to run his company, I face a great challenge: to productize his technology. The first tools are already in alpha version and currently being testing with clients. If you’re interested in this technology and want to learn more, please visit my blog www.makingmarketingactionable.com).

René Dechamps Otamendi is CEO of NextStage Analytics. He can be reached at rdechamps@nextstagevolution.com.