November 11, 2014 | 7-minute read (1224 words)
Guest post contributed by Jesal Trivedi, Founding Partner at The Phat Startup.
I get it.
an entrepreneur, spending time doing market research is not the most fun thing you could be doing for your business. Not only does it eat away at your precious time, but you begin to question whether you’ve been doing too much research (analysis paralysis) or not enough. How much market research do you need to do before launching your product or service? Where do you even start?
If you fail to plan, you plan to fail
This pretty much goes without saying. You NEED a basic plan of attack before you start moving. You can change it up later on, but at the beginning you need to have a basic strategy direction. You wouldn’t drive to the mall without knowing where it was, but if you knew which roads to take and saw that there was an accident, you’d figure out a way around it.
Same thing with your business.
Let’s get into it.
Understand your Customer
What does your customer want?
I can tell you right now: your customer will tell you one thing and do another. I’ve seen entrepreneurs get tripped up because they had so many people tell them that they would buy their product, but after months of product development, were only able to convert 2 potentials into actual buyers. When I asked how some entrepreneurs how they knew if people were interested in their products, they told me they sent out a survey monkey.
SURVEYS DON’T WORK!
I wouldn’t recommend using surveys for market research at its initial stages. You’re most likely sending the links to your friends, who will have a natural bias toward giving answers you might want to hear. I would personally only recommend using surveys when you have a core group of potential customers you're trying to get information from. Quality over quantity. There’s too many bullshitters out there that you don’t have time for.
First, I HIGHLY recommend getting OUT OF THE BUILDING (to quote the lean man himself, Steve Blank)!
Find your customers. Observe your customers. Talk to your customers.
This is where you play detective.
Write down 3 questions that you need to ask potential customers to achieve a better product-market fit. Although you can send out emails, LinkedIn and FB messages, having face-to-face conversations is much more valuable. You’re able to use the intricacies of a personal interaction to seek information on the the problems your potential customers are facing. It’s also a dope idea to observe them doing a particular activity that you seek to solve, so you can pinpoint exactly where the problem stems from. Nothing beats human interaction :)
I wrote a more detailed post on the customer development process here.
Be a Stalker
The internet is a gold mine. Find out where your customers are chillin’ by searching for relevant people, groups, comments, companies and hashtags on Facebook, Twitter, Instagram, and LinkedIn. Follow them and read everything. Post your thoughts and retweet the ones that best align with your brand. This is how you will build credibility in the space you are trying to disrupt. LinkedIn discussions are a good place to see how people are talking about potential topics relevant to your startup. Observe for a bit before you engage.
Subscribe to relevant newsletters and skim blogs in your space. They will give you a better idea of the types of customers out there and will become the core element of the media list you use to spread the word about your product or service.
Understand your Market>
What is the competition doing?
Some entrepreneurs get easily discouraged. Giving up on their idea as soon as they come across a competitor.
THIS IS A HUGE MISTAKE.
Why? Well, this is where you have to spend some time and find out exactly who is in this space. Qualified competitors provide market validation. It’s your job to find out what they're failing at and exploit the hell out of it!!
The best way to find this out is by the customer experience for yourself. Sign up for their service or product email list. Find out people who are using your competitor’s products/services. The goal is to understand what your competitors are doing and how they are going about doing it. Maybe their service sucks, their products have design flaws, or you’ve figured out a way to do things better, smarter, more cost-effectively. You won’t know until you try it out for yourself.
Find your unique selling point, because that will be at the core of your marketing message. It will be what sets you apart from the pack and drives those customers to you.
Test, Test, Test
EPSON scanner image
Testing and iterating is crucial for the success of your product. You don’t want to spend weeks on research that won’t guide you to a better answer. You have to put your product out there in it’s simplest form, observe what happens with it, analyze the results, make changes, and test it again.
Think of 3 product features you can test. Since I'm talking about the assumptions you’ve built into your product or service, this might require you to take a step back and really dive into what it takes to make your idea work at its most basic level.
Let’s take Zipcar as a brief example. Zipcar has several assumptions built into its business model:
These three assumptions are relatively easy to test by observing the market. When the time is right, start small. Have one car (it can be yours!) to make available for anyone who wants to use it. See how people interact with it. See what problems they run into. This works with software too. Observe your customers as they use your product or service and make notes of the areas where they get stuck or confused. You know your product or service so well, you might think everything about it is obvious, but from the perspective of someone starting from scratch, you may have overlooked several things (ease of navigation, user flow, missing features).
- People are willing to share a car with others.
- People who ‘rent’ a car will do so for short periods of time.
- People who will use Zipcar the most live in urban areas
Remember, you want to get to the execution phase fast, but don’t shortcut basic market research to get there. Have a focus, learn, then pull the trigger. You can pretty much do all the initial research you need to start over the course of one weekend. So what are you waiting for?
Jesal Trivedi is a Founding Partner and Director of Creative Development at The Phat Startup. His previous roles include providing strategic advice to Fortune 100 companies while at The Medici Group. Jesal's areas of expertise include brand strategy, product development, and design. Connect with him on Twitter at @jesaltriv.
Have questions or comments? Tell us about it in the comments section below or contact Early Growth Financial Services for a free 30 minute financial consultation.
Liked this post? Subscribe to our newsletter to get our posts on startups sent directly to your inbox.