How to do your market research as a startup
Before you get to head up a successful business you need to do your market research. It might seem like a drag, but in the long run a good base of research will give you the tools to get ahead better than your hunches and instincts. Set time aside to do this properly as part of your journey and don’t cut corners. It’s great if you have an amazing idea or the perfect product, but it is essential to rigorously check whether the market for it is definitely out there.
It can be tempting to bypass this less exciting part of building a business and aim straight for the launch date. However, remember the frighteningly high statistics of startups that fail and have a think about whether you really want to take that chance. Instead, turn your attention towards a foundation of primary and secondary research.
Market research will be helpful on so many levels, either because it can help you find flaws in your business plan that need correcting, or because it means your investor pitch will gain some serious weight. It can also save you thousands in the long run, as you will have more information to back activities such as marketing. Ultimately you want to be able to pinpoint your customer and know exactly why your product or service will change their life for the better. The more you know about this crucial point, the better equipped you will be to make a profit out of it.
Before you begin you should write out a formulaic list of what you want to achieve with your market research. What information you are seeking and how you think it will help your long term goals. Put down your expectations for what will come of the research in order to compare and contrast with the results at the end. Decide how you will go about collecting research data before you begin, whether through primary, secondary, or a mixture of both.
Primary research will include any information gained directly from consumers or potential customers. Secondary is anything you can learn from existing resources such as reports, studies, statistics etc. Both are equally valuable and form important parts of the process, so a combination of both methods is usually preferable.
Primary research can be a great way to understand what your consumer really wants from your business. Explore their needs and expectations thoroughly in order to discover whether you will be meeting them head on or missing them completely. Look at what they are gaining from your competitors and where they think something is amiss. Primary research might include interviews, surveys or focus groups – anything that involves direct responses from a selected group. Ensure the questions that you are asking are ones that delve deeply to draw out thoughtful and considered responses. As a word of caution – don’t make the mistake of only asking the people you know, or a group that is unrepresentative of your target market.
Primary research is often the best way to gather qualitative data – the more detailed kind that is tricky to analyse. This is vital for assessing attitudes and behaviours through other’s thoughts and opinions. Really extensive interviews or focus groups will take longer, so be sure to allow plenty of time in order to give you room to discuss ideas back and forth and get the best quality information that you can.
Quantitative data is more easily gleaned from secondary research, as it deals with hard facts rather than opinions. Statistical data is a great tool for analysing the market at arms-length and seeing exactly where your time and resources will be best placed. You should also be able to identify key trends and therefore have a good idea of how to predict where your business is likely to sit in the future.
Secondary research is arguably simpler to collect than primary as it can be obtained from a variety of locations and sources, from the library to the internet, in books or government statistics. There is such a large amount of information available on the internet, so you have no excuse for skimping on secondary research. Use this method to get clued up on your competitors and discover what they are doing right and what could be improved. The more information you can gather together the better equipped you will be. Secondary research is fast and effective in getting a solid overview of your target business space, however be wary of focusing solely on secondary research as it can quickly become outdated – nothing beats real-time responses from potential customers.
Don’t forget that market research is not only useful at the very beginning of your startup journey. Once you have a few key techniques down and smooth out the process it can be a valuable part of your business plan going forward. Any new marketing campaigns, new products, new promotions or services will benefit from a reasoned approach backed by significant market research. You are more likely to see success if you go into any new venture with your eyes wide open.
If you really hate doing market research (like, really hate it), then remember you can always hire a third party to do it for you. Outsourced market research is still going to have a positive effect on your startup, but there is a lot to be said for the DIY method.
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