Many new businesses, or businesses trying something new, think they’ve got the best idea since sliced bread.
Not only do they think it’s a great idea — something people just can’t live without — but their friends and family agree.
And, of course, they’re going to make a boatload of money off their new idea. It’s can’t miss, surefire, without a doubt, fool-proof, in the bag. Until it’s not.
Had these entrepreneurs only done some market research.
Coulda, shoulda, woulda.
Would you buy a car without a test drive? Marry without dating? Put your entire savings in Ponzi scheme?
It’s the same thing if you’re a startup selling a new product or service without first conducting adequate, impartial market research. Impartial as in not your friends and family — they’ll like whatever you come up with.
Undertaking market research will determine if there truly is a market for your idea.
- Can you identify the ideal customer/audience for your idea?
- Can you offer your idea at a price customers can afford and at which you will profit?
- Does your ideal customer like your product or service?
- Will they buy and use your idea?
- Will you be able to afford the promotion of your product to that audience?
The amount of market research you do will, of course, depend on the research budget you have. You may be able to present your idea to 20 people or to 200 — even more with the help of an outside vendor. Placing your idea on a crowdfunding site like Kickstarter or Indiegogo can give you plenty of feedback for a nominal investment.
Before you spend a ton of time and money developing a prototype, renting a hip office and staffing up, do your market research.
Every person who’s part of your research will offer you valuable information. This feedback will give you the opportunity to pivot and make necessary changes, scrap your idea or continue full speed ahead.