By Fernando Berrocal
To ensure your startup will succeed, you must conduct different types of research. Market research is the most crucial type of analysis entrepreneurs can pursue. This is the procedure for assessing a new product's viability through research with potential clients. The majority of entrepreneurs struggle to gain much value from it. Although there are several reasons why this happens, the most frequent one is that they don't know what they're searching for.
It is commonplace for startup founders to perceive market research as expensive and challenging. However, conducting this research is an essential first step in establishing a new business. You are attempting to accomplish an objective that you cannot see if you don't first thoroughly research your target market. Fortunately for business owners, there are a few efficient and affordable alternatives to get the business data—regardless of industry—you need to accomplish this important task.
So, what do you need to understand as a business owner? The main reason why many entrepreneurs find it difficult to benefit significantly from market research is that they don't truly know what they're searching for. When you’re first conducting market research, it's simple to persuade yourself that you have a brilliant concept. Simply ask several coworkers and trusted friends for their opinions on your startup idea. Most likely, you'll select those you already believe will be enthusiastic about your concept.
There's nothing wrong with having some of that. It can boost your self-assurance, and the people you talk with might provide some insightful advice. However, thorough market research can and must accomplish more than just boosting your confidence. Getting a realistic picture of what success in your market looks like, demonstrating proof of concept to potential investors, comprehending the potential value of your business, and learning how to reach a larger consumer base are some crucial objectives. You'll have to explore outside of your immediate network to achieve any of these objectives. Thankfully, there are methods to accomplish this without spending a fortune on consulting services. Here are a few effective and focused methods to gather market data.
- Analyze your competitors. There are instances when your adversaries can instruct you more than friends. We are not suggesting that you seek guidance from them–simply look at what individuals are saying about them. Search for online comments and ratings of other businesses. A straightforward method is to visit their LinkedIn or Google pages and read the reviews. What are the benefits users highlight? What issues do unhappy customers bring up? This is an ideal place to begin learning about the qualities that make a business well-known in your industry. For instance, Product Hunt is a good resource; it displays user ratings and comments for a wide range of products, along with rankings and comments from the user community. Look at the top and bottom-ranked products to compare the differences. Do users appear to favor a straightforward User Interface (UI) or a large dashboard with adjustable settings? Do integrations exist between popular products and apps? Do clients voice complaints about response times? This type of research is instantaneous, very simple, and entirely free. It may be quite helpful in assisting you in understanding what customers are looking for in a product.
- Run the figures. Nowadays, there is a huge amount of public data on market segmentation, consumer spending, and market trends. You may use this information to define your target market and develop a credible business strategy–or to persuade investors during pitches. Speaking of investors, you can find a variety of data online to help you assess your business. Consider your rivals once more; a great resource for this is AngelList. Many businesses will publish information about their investors and the amount of funding they have raised. Some individuals even exchange pitch decks, which offer even more specific information. If your startup idea is quite specialized, you might have to look further to identify similar businesses. But you should still be able to identify persons operating in a comparable business or selling to similar target demographics. You can include all of that information in your presentations to investors. Another wonderful place to look is Mattermark, which is a sizable database of business research. Unlike AngelList, it is not entirely devoted to startups. This makes it particularly helpful if you're doing business-to-business (B2B) transactions.
- Ask strangers. Asking customers is the most effective technique to learn what they want. Engage in dialogue with your clients as much as possible. If you don’t have customers yet, talk to people in the market segments you’re targeting. Ask them about the features they desire .or the aspects of the product that they find unpleasant. Although this practice can be intimidating, it's crucial in the pursuit of augmenting your customer base. Note: thorough market research does not have to involve paying for focus groups. Small-group discussions or casual interactions can reveal lots of information. Contrary to common belief, people are frequently more receptive to sharing their preferences. When you ask them about the issues your product is meant to address, they will share both the good–and the bad–aspects of previous solutions they have tried.
In retrospect, be sure that your market research originates from the objectives you have in mind. If you want to convince potential partners that your idea is viable, look online for evaluations and statistics on similar competitors. Search for investment data on specialized websites such as AngelList and Mattermark to determine your startup’s target funding. Finally, the most important step is to speak with potential clients directly. Pay particular attention to the direct comments made by your potential clients. This is how you learn what they expect from your business. By doing this, you will break into new potential markets.
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