How Important Is Market Research for Entrepreneurs? [Podcast]
What comes first, the market or the idea? Text Request director of sales James Dawson teams up with entrepreneur, investor, and consultant Alex Lavidge to discuss the role of market research in a startup's development.
In this Business RadioX segment, James and Alex discuss the importance of conducting market research as an entrepreneur, and how you can do it effectively without breaking the bank.
Click below for the podcast, or keep scrolling for the highlights.
How important is market research?
The biggest pitfall entrepreneurs make when launching a startup is not knowing the difference between assumption and fact. Without market research, everything is guesswork.
Entrepreneurs often work closely with their first customers so they can understand how to make the product better, which is definitely a good thing to do. But often you need to cast a much bigger net to get the full scope of a market.
The biggest pitfall entrepreneurs make when launching a startup is not knowing the difference between assumption and fact.
What Information Should You Look For?
There are two kinds of research you need: primary research, and secondary research.
Primary research is conducting surveys or experiments yourself, and collecting data from the market that isn't available to anyone else yet. It's proprietary.
Secondary research is the stuff you find in reports, online, in case studies, in the news, etc. Someone else has done the data collection, and you're using them as your source.
If you're finding secondary market research anywhere, it means someone is ahead of you. It doesn't mean that your idea isn't good, or that you can't still be successful. It just means someone got there first.
It's in entrepreneurs' nature to just go and do. But market research is foundational to everything that follows! If you take the time and do the research, everything else is going to be more valuable.
Market research is foundational to everything that follows!
Here's a short list of things you need to know:
- What's the total addressable market?
- What are all of your targets' demographics?
- What are their psychographics?
- Why do they need or want to buy your product?
- Where do they spend their time and why?
You have to be able to understand what your market is able to do, and what they prefer to do.
If you take the time and money (a few months, a few grand) to put in the right market research, you're going to have a lot more fun, and a much more successful journey of building a business.