Startup Market Research
“If I had asked my customer what they wanted, they would have said a faster horse”
– Henry Ford
Market Research for Startups
Market research for a startup will evaluate the market potential of a business idea. The study aims to determine the size, growth rate, overall market structure, and dynamics. Understanding market structure and dynamics are essential to startup success.
The challenge for startup founders in new and emerging markets is that the customer may not articulate their needs. Therefore you need to be a skilled detective to sort through the clues. I have more than a decade of startup experience working in new and emerging markets. I also have a track record of correctly identifying emerging trends and market opportunities.
You can read more about my startup experience here.
Startup Research in Emerging Markets
The most important attribute about how to do market research for startups is the researcher’s ability to gain insights when there is much uncertainty. Uncertainty is the detectives’ and entrepreneurs’ domain where natural curiosity and the ability to connect the dots are crucial to success. I have a decade of experience working in new and emerging markets. I also have a track record of spotting trends early and predicting the direction of market trends.
Components of Startup Market Research
- Competitive analysis
- Startup ecosystem mapping
- Value chain analysis
- Option analysis
- Report/presentation and recommendations
Frequently Asked Questions
How to do market research for a startup?
I use the following tools; competitive analysis, startup ecosystem mapping, and value chain analysis. These three tools provide an excellent framework for doing market research for a startup.
A competitive analysis is usually the best place to start. Everyone has competitors, and odds are they have already done a lot of the market analysis for you. If you think you don’t have competitors, you are either a genius or a fool. A genius like Einstein only comes along once in a decade, so the genius path seems less likely.
A startup ecosystem mapping shows how stakeholders within a business ecosystem interrelate. Ecosystem stakeholders include competitors, potential collaborators, and customers. When you understand stakeholder dynamics, it helps you make pragmatic decisions on the best path to market.
A value chain analysis will show you the financial dynamics of a market or a complex business ecosystem. Understanding the value chain is extremely important in determining where the money and margin are in an industry. Some of the best advice I ever received was “go where the money is.” If you know your industry value chain, you will see where the money is.
How would I use startup market research for my business idea?
I use startup market research to make informed and pragmatic decisions about launching into a new or emerging market. I use the research information and data to answer the following questions;
Who are your competitors, and what are their strengths & weaknesses?
How is the business ecosystem structured?
Where are the market opportunities and risks?
What are the overall trends, size, and prospects for the market?
Who is your target customer?
The answers to the questions above form the basis of your business plan’s assumptions. The assumptions inform your decisions when creating revenue forecasts. One of the essential elements of a business plan is the assumptions you use to generate your revenue forecasts. If you can understand and answer questions potential investors have about your revenue forecast will go a long way to building your credibility.
What are the outcomes of your startup market research?
The purpose of conducting a market research study is to gain insights into the opportunity’s size and scale for your idea. The study is usually a good first step to test if there is a market for your new product or service.
The market research study is a presentation/report (your call) that includes; a summary of competitors, partners, and the business ecosystem structure. You will have a good understanding of the overall business ecosystem dynamics, value chain, and potential paths to market. The presentation and report will provide an unbiased assessment to evaluate your business opportunity’s risk and uncertainty.
How much does your research cost?
I will work for my minimum base rate. Please contact me, and I would be happy to share the rate with you.