Entrepreneurship Success Formula Series Episode 7: Market Research

How can you expect to sell a service or product if you don’t know for a fact that there is a demand for it?

Short answer – you probably can’t. If you’re going to spend the time and money developing something you plan to eventually sell, shouldn’t you do your homework first and make sure there’s a market for it?

It sounds simple, but you’d be surprised how rare market research is in the startup community – and that’s precisely what we talk about on episode 7 of the Entrepreneurship Success Formula Series:

Why Is Market Research So Important For Startups?

Nexus IT Consultants CEO Earl Foote was joined by Lindsey Ivie, Director of Strategic Partners, to talk about this critical challenge encountered by so many startups. As active members of the local tech industry, Earl and Lindsey have interacted with plenty of new businesses entering the marketplace – many of which fail to do their homework.

“I’ve met with quite a few startups,” says Lindsey. “What I’ve seen in the community is that there’s a lot of excitement behind starting your own company, so a lot of people use that excitement to get their company up and going. To their surprise, no one wants to buy [what they’re selling]. They struggle with that because they haven’t done their market research.”

The unfortunate reality is that, even in a thriving economy, no sale is necessarily guaranteed. No matter what work has gone into launching a company, and no matter how great the product or service is, it’s not guaranteed to sell.

“This is really a critical error that happens oftentimes with startups,” says Earl. “It’s misunderstanding the market, and if there’s a demand for the product or service that you want to put out there.”

What Should Market Research Help You Determine?

The feasibility of your service or product comes down to answering a number of key questions:

  • Is my service or product marketable?
  • Is my service or product attractive?
  • Does my service or product solve a problem?

If you don’t know the answers to these questions, then you’re taking on a lot of risking developing a service or product. This is one area where you can’t afford to put the cart before the horse.

“Otherwise, you’re not going to find people who want to consume that,” says Earl.

How Should You Approach Market Research?

Not sure where to begin?

Fortunately, the business community has a number of resources and best practices available for you to gain more information about the viability of a given service or product:

  • Attend pitch events like 1 Million Cups
  • Develop pitch decks and business plans and seek feedback
  • Invest in target group research from a firm that specializes in it
  • Get your name and face into the market by increasing your presence – use LinkedIn and create content

“You really need to do your research beforehand,” says Earl. “Check into what demand is.”

The bottom line is that you can’t make any assumptions. Don’t go to the trouble of starting a business just to have to shutter a few months later because no one wanted what you were offering. Start by finding a real need, and then meet it.

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