Having an idea for a business is great. However, in order to confirm if your product/service is needed by anyone and will sell, you must conduct some market research.
Market research is collecting information about your potential customers, competition, and overall industry. This helps you to determine your target customers that you will advertise to, the products similar to yours already in the market, and determine how to better tailor your product to its intended use. In addition, doing good market research and presenting it to investors can help you get funding.
How to do Market Research:
You must determine what kind of information you are looking for. In other words, this means posing a question that you want to have answered. To further focus the research, you create a hypothesis that predicts the answer to this question.
Example:
Depending on your hypothesis, you can determine the type and method of your research.
Types:
Primary Research:
Creates a buyer persona and specific needs from the customer by collecting information directly from the target market and specific customers. It includes surveys and interviews.
If pursuing this type of research, subjects involved should be directly relevant to your research goals. Recruitment methods include social media posts, the addition of third-party market research firms, word of mouth, and certain incentives. Make sure to have a way to confirm, such as a screener survey, that they are the specific demographic you want.
Secondary Research:
Creates an overall industry overview by analyzing existing data from other companies, public databases, news media, and other third party resources.
Methods:
Quantitative:
Large numerical datasets used in statistical analysis used to determine industry trends. Methods include: surveys, polls, social media monitoring, and questionnaires.
Qualitative:
Identifies customer buying habits and determines the reasons for their overall behaviors. Important for direct consumer feedback on product and brand awareness. Methods include: focus groups, in-depth interviews, observations of people on your website, and online bulletin boards.
It is crucial to reduce bias as much as possible while conducting the research, so having someone not deeply involved in project planning conduct interviews or focus groups is important. Use neutral language in your questions and vary the order of options in multiple choice questions.
Find patterns and trends in your data; even if some of it is more qualitative, you can quantify your data by using the ratios of responses. By quantifying data, you can create actionable insights that can improve your startup.
Example:
Qualitative Data:
Many respondents said that the product broke easily.
Quantify it:
6 out of 7 respondents said this; statistically, most people will have a product that breaks easily.
Actionable Insights:
The startup should reevaluate the quality of their products and implement necessary upgrades.
Market research may seem like a lengthy, arduous process that simply prolongs the time before you can make any money. However, it is absolutely crucial to ensure that all your hard work does not go to waste. Selling your product to the wrong, or even a nonexistent market is fatal for your startup.
https://online.hbs.edu/blog/post/how-to-do-market-research-for-a-startup
https://online.hbs.edu/blog/post/data-collection-methods
https://www.hubspot.com/startups/resources/market-research-for-startups
