Steve Jobs was well known for his disdain of product development that is guided by focus groups. He believed that to develop truly revolutionary products, companies must think beyond current market demand and create things people want, before they know they want them. Apple’s track record developing some of the world’s most loved products demonstrates that they stood behind this philosophy and were wildly successful with it.
However, in our most recent Launchpad group seminar David Richardson, one of Korea’s leading market research executives, explained that doesn’t mean you don’t need market research.
“I have at least 70 connections on linkedIn, at Apple, that have ‘Market Research’ listed in their current job description. And I’m certainly not connected to the entire market research team at Apple. How can a company that doesn’t believe in market research employ that many people to do market research?”
David Richardson, President, DRA Korea
To understand customers so well well that you know what they want before they know themselves requires that you do market research. This is more important for startups than it is for large multinational corporations because mistakes can have a terminal impact on your company due to short runways and limited human resource.
Developing products people don’t know they want (but actually do) is very different from developing products that no one needs, or wants. To this point, the massive successes Apple enjoyed with the iPod and later the iPhone were certainly not just happy coincidences.
Startups are often founded by genius engineers that are exceptionally brilliant at developing tech-driven solutions. However, they are often woefully lacking when it comes to addressing a market opportunity, or identifying the right market to go after. “I think…..” or “We’re planning to go to the US because it’s a big market” are not compelling reasons to take a course of action. Some market research to validate your theses about a market opportunity can literally be the difference between success and failure.
How can startups do market research that delivers valuable insight and doesn’t cost the earth?
There are two types of research.
- Primary research, like surveys and focus groups. This type of research can be extremely expensive and in many cases is beyond the reach of startups. If you’re going down this route, be prepared and plan carefully, with clear business objectives in mind. Making a survey and getting some people to fill it in might sound easy, but it really isn’t. That’s because collecting enough of the right data to be able to make a sound business decision is definitely not as easy as it sounds. However, there are some handy tools to help:
- Ask a question on Quora or LinkedIn (it can take time to get answers, but sometimes the expert insights you get can be extremely valuable)
- Conduct a Facebook survey, or use another platform like Google Forms or Survey Monkey to get results quickly and cheaply
- Hold a monthly meetup with core users / customers (a bit more time and resource required, but still within a startup budget and there’s multiple benefits)
- Call a few customers each month and ask them what they think about your product/service (this may seem time consuming, but it’s a tactic used by many successful companies)
- If there are experts in your network that know your industry, customers or competitors, take them out for coffee and pick their brain
- Secondary research. This type of research can be done from your office, basically for free (interns can be an excellent resource to conduct this type of research). There are tons of extremely valuable resources online that provide rich data that can help startups make sound business decisions. Here’s a few examples.
- Government census data provides information about the population as well as trends and behaviours. Governments publish this data regularly.
- Governments also frequently commission specific studies. For example they need to be aware of which industries are impacting the economy. This data can be extremely detailed and relevant.
- Reports from research agencies like Nielsen and Ipsos are often published, as are those by major consultancies.
- Industry publications are often worth dipping into from time to time (or reading religiously). They usually feature the most knowledgable people in your industry talking about the most current trends and customer behaviours.
- Google, obviously!
- Other resources: Marketresearch.com has over 250,000 market research reports available. KnowThis.com has tons of market research materials you can use. BizMiners.com has over 30,000 market research reports on various industries in the USA.