After a period of rapid expansion, Talkwalker has closed its Australia office and axed 15% of staff. Newly appointed CEO Lokdeep Singh talked to Silicon Luxembourg about the social listening firm’s new operating model and consolidation exercise.
How did you first encounter Talkwalker?
I’ve been in Luxembourg now with my family for 12 years. Prior to this, I had the opportunity to live in six different places. I’ve always been a big fan of Talkwalker. I first heard about it through a common friend and I’ve followed them since then, because it’s been a Luxembourgish success story in the startup world.
You succeed Todd Nielsen, who was in the role for one year. What’s the reason for the rapid change in leadership?
The three main reasons for the change were that we felt that we needed a leader who was more hands on, especially on the product and technology side. And that’s my background. I’ve been CTO and GMS of the business and I’m closer to technology. What made Talkwalker successful was the technology and so we should continue to push that.
Reason number two is we felt that we needed the leader to be local given that the core of Talkwalker continues to be in Luxembourg. But, we also needed someone with a global perspective. I lived in the US, I still have a house there and part of my family lives there. I understand the culture and the work environment. It was also felt that even though I’ll be here, I can build the bridges to the US, which is the growth area growth market for us. I have also done extensive business in Japan and in APAC.
The third reason is that the markets have changed over the last six to nine months at a macro level. We know the markets are depressed, inflation is rising, interest rates are rising and there is talk of recession. Six to nine months ago, the performance benchmark for companies like us was all about growth, growth, growth. And now we believe that the performance benchmark has changed. Of course growth is important, but so is profitability or a path to profitability so that we can prepare ourselves and get the right cost structure for the next 12-18 months and still continue to grow.
This changing market and the impact it has, especially on the tech space, is quite severe. The tech sector has lost about 3 trillion in valuations over the last six months right. So we need to be more hands on and this is where my past experience comes in handy. I have the experience of not just growing companies but growing them profitably.
“Social continues to be an important channel. I think that’s not going away. However, it is just one part of the picture.”Lokdeep Singh, CEO of Talkwalker
What will be your personal priority in this new role?
One of the reasons why I’ve always been a big fan of Talkwalker is that the platform or the tech was always very easy to use. But as we’ve now started to grow, what happens at this scale is that you have more and more processes and the teams are bigger. And sometimes you can lose the absolute focus that you must have on the needs of the customer. So one change that you will see with me is that we want to be almost obsessive about the customer’s needs and everything that we do. So I’ve made that sort of a core value for the company, that they think about the customer first, put their needs first and then design the product around that not all the way around.
Is Talkwalker looking to develop new products or diversify existing products?
Social continues to be an important channel. I think that’s not going away. However, it is just one part of the picture. Customers tell us that they want the listening or the monitoring to be omnichannel. So the products are evolving. The majority of our revenue today comes from social, but the second area is called customer intelligence. Here we take non social data, often from the customer directly from their CRM systems, to complete the picture of what exactly is the consumer feedback for our customers. And then we apply AI and data science technology on top of that. That’s one form of evolution, diversifying the data sources so that we can do better analysis.
The second is that our users are becoming more and more sophisticated. And they not only want to know what happened, but they also want to know what is likely to happen. We’ve just launched a product that we call predictive analytics. In terms of engagement and voice of the consumer, where are you likely to trend over the next 180 days, if you’re a brand like PepsiCo or Ferrero? Knowing what happened and what is likely to happen is important, but they also want us to deliver recommendations on what they could do about it. Talkwalker has traditionally not been what I would call a system of action, meaning the insights that we drive from social may tell you, here is a way to improve your marketing campaign. But we don’t have the tool sets to run the campaigns. And we don’t want to go there. However, we will focus on product, on easier integrations with the partners so that with our partners, we can deliver the whole across the whole value chain
You mentioned the looming recession, and a lot of companies are now tightening their belts. Social listening has never been that mainstream. How is this impacting your customers?
Within our customer base some customers are more impacted than others. Because some aspects of our value proposition actually help our customers to be more optimal, in terms of their cost allocation effectiveness of their campaigns, we think that our product, and the value proposition is actually even more relevant under the current circumstances. Then we have companies that are in healthcare and pharmaceuticals and here we are actually seeing an increase in spend. But when it comes to perhaps the more CPG traditional marketing campaigns, they want the campaigns to be more effective. So, it’s a mixed bag.
“What we should think about is getting the right cost structure and a new operating model where we consolidated some teams so that they can be more effective.”Lokdeep Singh, CEO of Talkwalker
I read that the Australia office has closed. Tell me about this decision?
Our expansion strategy was based on the previous performance benchmark that I spoke about: growth at all costs. And I think in certain areas, we went too fast and spread our resources too thin. So for example, in APAC, JPAC, we ended up with three offices, and I think a company of our scale doesn’t need that. So this was one of the lessons learned. It’s an important market, but we will do that through Singapore, as well as Japan because Japan you know, culturally speaking as well as work environment, language requirements there are very unique. So we will continue our presence in Japan, but rest of the opportunity in JAPAC region will be addressed through Singapore.
Are there any other office closures planned?
The COVID situation has changed how employees want to work and so in certain areas we will go to a hybrid workplace. It is what the employees want anyway, and it also helps us optimise some costs. But there are no other office closures.
We hear that Talkwalker has axed 15% of its workforce as part of its cost restructuring. Where are the redundancies located?
In certain areas it’s sort of a natural one-to-one correlation. So for example, if you’re going to close the office in Australia, those employees will be impacted. We want to continue our investment and the majority of the folks that we have in Luxembourg are technology and product teams. So that as a function is the least impacted. But essentially, what we should think about is getting the right cost structure and a new operating model where we consolidated some teams so that they can be more effective.
We also hear that the firm is hiring. Which profiles is Talkwalker recruiting and in which geographies?
The US and Europe will continue to be our growth markets and it will be in these two areas that we will hire. We want to continue our investment in product and innovation. So it’ll be based on the geography and on the function. We are not hiring across the board. We will be more selective. Now that we have the right cost structure in place, we will continue to invest in the workforce and in the platform.