4 Reasons Why Market Research Is Crucial To Starting Up

You’ve thought up an idea. Maybe you woke up and an awesome idea/invention popped into your head, maybe you’ve been thinking about this for a while, maybe this is an idea that keeps popping into your head time and time again. You think you’ve got a brilliant idea (and it probably is) that could make you the next Facebook, Super Soaker, Urban Outfitters, or that famous Pizzeria in your city. Whatever your big picture is, this is your moment and you just want to see this idea happen.

So you decide to talk to a consultant or advisor or someone you think could potentially help you make this happen. You tell them about the idea, super enthusiastic, super passionate, super ready to get this going. The person may or may not match your excitement, but asks “So who is your customer? Why them? Why do you think they want what you have? Where do they currently get what you have or similar? What influences their buying decisions in this space? Is your end user the same as the customer you sell to? Who are your competitors? Why can’t they just do what you are doing because they have the money or what’s stopping them from doing what you are doing? What are they doing that is working or is a problem? How big is your market?”

As you hear these questions, you start getting agitated, you feel like they just don’t get what you are saying and that people actually want what you are offering. You begin to wonder if the person wants you to succeed or is suggesting your idea sucks or you can’t do this. Everything you thought you were going to achieve out of the meeting, now feels like a lot of homework that is dragging. Your next step is to gather all this information for this person and honestly, you don’t see the point. “What has this got to do with actually figuring out where I can get my product manufactured for these customers you are asking me about?” “I just need money to get inventory or pay x & y and then I have my business running. Tell me where to do that; not all this homework.”

You may be right, and you may be wrong, but you should really ask yourself “Why don’t I know at least half the answers to these questions?”

Doing your research will give you:

  1. A better understanding of the industry you are entering, who exactly your customer is, and how to best attract them

Wouldn’t it be nice if you knew exactly who will buy your product in a heartbeat, what they look out for in your product, how often they buy your kind of product, what their lifestyle looks like to make them need your product or service, what influences their decision making when purchasing something like your product/service?

Having answers(and not made up answers) to the questions above will help you figure out the various checkpoints you should consider hitting to make your product/service as attractive as possible to your customer, or to know how many possible customers are out there. So why not? Why not understand what your customer wants, and give it to them?

  1. A better understanding of the competition, what’s works for them, and what doesn’t

You get asked who your competitor is and you either get really defensive, or deny that you have any. Let’s take a moment to think about ourselves. Is there someone you compare yourself to or try to be better than? Your brother, your sister, best friend, friend, cousin, neighbor, classmate, the list goes on. Or perhaps you don’t even know it, but someone out there has decided you are their competition and they want to beat you at everything. It may be obvious or subliminal. Either way, you always have direct or indirect competition. The same goes for business. If you are providing customers with a variation of something they already had access to, you are competing with that other company’s product. If you have invented something new that achieves purpose x but people already get x done without your product, you have competition. The fact that you have competition doesn’t mean it’s over so pack up. It forces you to face your fears and be honest with yourself about if your battle (this business) is worth fighting.

What is your competition doing that their customers currently like? What are they doing that still creates a pain for the customer? Why is yours the better option and why are they not doing it? Does yours bring in something they can’t come up with in a short time? If they do come up with it, and start selling through all the channels they have already established, what’s your next move?

This doesn’t mean pack up your idea but it definitely lets you face your fears and figure out if it’s worth pursuing or not and if you are ready for it.

 

  1. A better understanding on your go to market/distribution strategy

Now that you have figured out who your customer is, or what they like, or what influences their buying decisions when it comes to things like your product/service, or where they go to find things like what you offer, you now know exactly how to attract them. You know where you should be advertising, or what events you should be attending to promote yourself, what kind of language to use in marketing, or what topics are relevant enough to engage your target audience. You essentially know what to do to attract your customer. Why wouldn’t you want that?

 

  1. Knowledge and ammo to shoot down all questions/ critics because you understand the why. Why you chose this method over that method.

There comes a time in every entrepreneur’s life, when they have to sell someone on their idea or business. Having done your research gives you all the ammunition you need to put your critics in check. Good research to back your idea involves, in depth industry analysis, surveying your customer and also actually approaching your customer to sell your product or service, taking note of their reaction, finding out the why, making the necessary changes, and getting back out there to see if your customer wants it. After you’ve toiled through all that, and arrived at your prefect product, you’ve got it. You essentially understand what works for you and what doesn’t. You understand why you chose method (a) over method (b) and you’ve proved it. Your critics would now just want to see it being executed like you said it would.

At the end of the day, you don’t want to get too far along before you realize you wasted time and money. If a venture is worth pursuing, you will get the research you need to back it up. You will be more confident and more invested in what you do because you know you definitely have something worth pursuing. Plus doing your research is always attractive to lenders and investors.

So anytime you feel like someone is trying to crush your idea with all these research questions, take a moment and ask yourself honestly: “Why can’t I answer all this?”

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