Are you a startup founder with a great idea? You're not alone. There are millions of great ideas out there. But what separates the successful startups from the unsuccessful ones?
Market research is the process of gathering information about your target market, your competitors, and the industry you're in. It's essential for startups because it helps you validate your idea, identify your target market, and develop a winning strategy.
We sat down with Gideon Barker, who’s the charismatic founder behind Customer IQ, to gather his insights and tips on how to conduct market research effectively. Whether you're a first-time founder or you're looking to take your startup to the next level, read on to learn more about the importance of market research.
“At its most simple, market research is the process of collecting and analysing data about markets and customers in order to increase understanding of both and make better decisions for business. Often this involves asking questions of people but the data can be what's already available, often for free and often online.”
“I guess due to the fact that most often, startups are trying something new, perhaps something unique or something that's not been done before in quite the same way. That obviously carries a lot of risk and it's my belief that the most effective founders seek ways of mitigating risk in what is already a high risk environment - i.e. great founders love market and customer research!”
“The range of techniques and data sources which collectively come under 'market research' is really broad and this is in some part a factor in making market research confusing and difficult to access for many startups.
My take is 'right tool for the right job' so I always advise to start with objectives first and then the type of research you need is much easier to identify. Figure out what information your business needs, what questions it needs answering first.
As an example, if you want to gauge the size of a market, it's unlikely you'll use customer interviews - you would need to use a technique that quantifies - maybe a survey with a really solid sample or maybe some existing market data that you can find or buy.”
“The more standard way to think about this is that it's all about reducing and mitigating risk. Sounds like you're selling insurance and in some ways you are. I think it's the job of a founder to find as many ways as possible to mitigate risk in the high-risk environment of early stage business.
But for me there's another exciting way that research can be used and that's in finding new opportunities and providing stimulus for new ideas. For example, understanding more about a problem you're looking to solve or seeing people interact with your MVP or product can often give you loads of new ideas about how you can develop your business. It's this more creative, idea-generation aspect of market research which is probably far less appreciated generally. But for me, this is such a buzz.”
“Challenges with market research? I guess the obvious one is the cost. Research can be expensive if viewed as a cost. But if seen as an investment that pays back, I think the cost is the least of the challenges. And, with a new coaching service launching in September for DIY research, we're taking the cost barrier away for all founders.
It's also a confusing industry - sometimes I think deliberately so. It's a very, very mature industry in the UK which many, many suppliers who often specialise in certain types of research, certain audiences or industries. So navigating the world of research can be difficult. There is no easy starting point - maybe you try Googling or asking around for recommendations. I'd happily help here - get in touch and if I can't help you then I will definitely know someone who can.”
“I would read around the topic of things like 'customer discovery' or 'product-market fit' - read books like ‘The Mom Test’ (Rob Fitzpatrick) or most definitely get in touch with me. I won't be selling you anything that isn't 100% right for you and always happy to give you some free advice. I put on a free webinar most months which tries to unravel and demystify market research for founders.”
“As well as those mentioned above, I would speak with other founders and find out what they did. But be open-minded and avoid the advice that's too prescriptive, telling you 'don't do X' or 'you must do Y'. There are a lot of myths circulating about market research (as well as everything else!) so definitely keep an open mind.”
“100% start by writing down your objectives - firstly what are the business objectives for research and then how do these translate into research objectives. Don't worry about making them perfect but definitely do have some clear objectives. Too often we jump ahead to asking questions and collecting data but if they're the wrong questions to the wrong people then our data won't be very good and we'll make poor decisions on the back of our research.”
For more information and to get in touch with Gideon himself, click here, or get in touch for a personal introduction.