Market Research for Startups – Types & Step-by-Step Guide

It takes a lot to bring a business idea to life, and conducting sufficient and comprehensive market research beforehand is one of them. You may not be aware but launching a service or product without knowing the target market is like digging your grave.

Yes, you read that right. Failure to conduct market research on your focus groups and prospects in advance is one of the top five reasons for a startup to fall into the business world.

We have the confidence to quote this from a recent study by Bill Gross, a leading entrepreneur. Extensive market research and marketing gives the emerging business the ability to recognize certain essential aspects like launch timing, unique features to include and many others and customize the launch accordingly.

So before you dream of flying high for your business, study the art and science of market research for start-ups and its significance. Well, we present to you this article with the same purpose.

In 2019, e The rate of failure of startups was around 90%. The study concludes that 21.5% of start-ups fail in the first year, 30% in the second year, 50% in the fifth year and 70% in the 10th year.

According to business owners, the reasons for failure include running out of money, being in the wrong market, Lack of research, Bad partnerships, ineffective marketing, and not being an industry expert.

Source: www.investopedia.com

What is a market research for a start-up

In general, market research is a business strategy that is deployed at the beginning of the conceptualization of a business idea, which includes knowing the target market, its dynamics, the attitude of potential customers, buying behavior of focus groups and other factors.

The findings of market research are used to make business focused decisions and plan the business launch accordingly. When done and implemented with the desired diligence, market research holds the power to leverage the success of a startup.

Market research is so widely used that it is one of the fastest growing global industries and has crossed the threshold $74.3 Billion in 2019. While good market research is essential for any business, it plays a significant role in launching a start-up as it ensures a winning look and doubles the chances of success.

The statistics illustrate the harsh reality of startups. Most new companies fail. The positive is that entrepreneurs’ belief in their success is greater than the statistics. That’s why new companies are being created all the time. || Source: https://medium.com/glassdollar/estimating-the-number-of-startups-in-europe-5d28286307f8

What types of market research can start-ups do?

Market research is one of the few measures that enable businesses to improve their decision-making ability and survive in today’s competitive world. It is used to ensure the best productivity from the efforts invested in product development, marketing and service expansion.

While you are planning to conduct market research, knowing the types offered is essential. Here are two types of market research that startups can use.

Main search

Preliminary research is conducted by the startup itself or by a leased resource and deals with referring directly to the data source to gather relevant information. The information gathered is done by asking questions. This is the most common type of research.

The main market research is most appropriate when a start-up:

  • Want to know about the average spending ability of customers on a particular service or product;
  • He has no idea about the perception and attitude of customers to the brand;
  • We need to understand customer views about improving service.

Based on the requirements, startups can register relative questions and create direct interaction with customers.

Apart from the above, you can identify direct competitors and the latest trends among small businesses to gather reliable consumer insights.

Most start-up owners get information about their new business by collecting survey data, online communities related to their target market, and one-on-one interviews of several prospects during the main research phase.

Example

Digital service delivery surveys you receive after using the service.

Benefits

  • More authentic digital marketing strategies
  • A startup has the exclusive right to data and findings

Disadvantages

  • It has many resources, extensive and time consuming.
  • As a startup will bear all the responsibility, acquiring appropriate resources and maintaining quality standards becomes hard work.

Secondary research

Secondary research is done by a third party and has no direct involvement of startups and customers. It all starts from doing research to finding a compilation if done by the third party. Basically, it is used by start-ups with limited resources because it does not involve a large direct investment.

Through secondary market research for start-ups, you can understand:

  • The total market value of a specific industry;
  • Current market situation and future growth forecast;
  • Recent market trends and evolving technologies.

Example

Government studies on a particular field / field offered to everyone can be called secondary research studies to the market.

Benefits

  • Cost benefit
  • Provides the required data immediately
  • Covers additional areas and conducts large-scale research. Therefore, data accessed will be more useful.

Disadvantages

You need to make peace with all the data you have. No custom fields or research on a particular domain can be obtained.

Brainstorming, feasibility analysis and critical thinking can be your few cost-effective ways to derive success from market insight data.

The step-by-step guide to conducting market research for start-ups

Conducting market research is tedious work for everyone. Start-ups get a little more involved because they lack investment, resources and talent. Still, they can succeed in the market research game if due diligence is paid on the points mentioned below.

Level 1: Understand the purpose of market research

Before you prepare to invest in the difficulties required by market research, find out the reason behind it. What problem did you want to solve through research? Where will the findings be used? Will you run it internally or externally?

These are some of the questions that need to be answered when conducting market research. Solving these questions gives direct market research and increases its credibility.

level2: Select the appropriate research methodology

We have already explained the two standard methods for conducting market research. You have to choose one. So, take some time out, weigh the pros and cons of both procedures and make a decision since without concluding on this front, you can not move forward.

Step 3: Familiar with the target market

Once the purpose of conducting market research has become clear, the next step is to become well acquainted with the market. There are many reliable research methods for this.

To acquire the required knowledge of the target market, we offer the help of industry experts, read relevant reports on the target market and keep an eye on market trends. Once you know the market well, you are ready to plan your research strategy.

Step 4: He asked, ‘What is crucial?’

Most of the efforts invested in market research can be made if they ask the right questions. With specific basic questions, you can gather relevant data and point in the right direction.

Some of the key questions to include in an impressive market research program are:

  • Who are all your direct and indirect competitors, and what is their market worth?
  • What particular feature can make my service stand out?
  • What is the scope of my service / product in the target market?
  • What are the current trends in the market?
  • How is the buying behavior of customers in your target market?

Including all of these questions will make your research worthwhile. However, do not limit yourself to these questions.

If you have decided to go the main research path, then you have the freedom of the whole world to create 100% question templates. Just dig deep to figure out what all the information you need and develop questions accordingly.

Step 5: Select the correct tool type

Data collection is one thing and accurate analysis is another. In fact, the success of your market research depends on the integrity achieved in the last part. Data analysis is a tedious job that requires attention on every front.

Fortunately, there is no shortage of surgical tools. There are market research tools, data analysis tools and reporting tools to assist in research. All you have to do is make a wise choice. We can make your job easier by providing specific reliability options.

Google Alerts, Google Trends, Simpleweb, Statistics, And Herpes Are some tools to help learn industry and brand specific trends.

Step 6: Analyze the data and use the findings

Using the tools, analyze the data. Let’s clarify one thing. It’s not going to be easy. To streamline the process, decide on different KPIs and analyze your results based on those KPIs. View the data collected and analyzed in the report and use as you wish or as you wish.

New unicorns 2021

2021 is a record year for new unicorns, companies worth more than $ 1 billion. || Source: https://news.crunchbase.com/news/unicorn-startup-investors-2021-tiger-global/

How to analyze the results and who should participate in the analysis?

Analyzing the results of market research is a difficult task. There are several ways to do this, and we provide you with a clear overview of them.

Theoretical statistical methods for quantitative data

To conduct market research for startups and exploit its full potential, the focus is on variables and their median, state, average and variance to understand the data.

The inferential statistical process for quantitative data

For a detailed assessment of summary data, the inference statistical method is helpful. This includes processes like factor analysis, regression analysis, distinguishing analysis and clusters. This technique is used for data inclusion.

Speaking of the professionals involved in this role, the Vice President, the target market analysis team, the CEO and the head of the marketing team should be included in the process. However, there are no strict rules in this regard. Startups can involve the professionals in procedures as needed.

Real-world examples of success that results from accurate market research

We know that market research is exhaustive. However, it is worth your time and effort since, when done right, it definitely ignites success. We brought a list of some start-ups that experienced praise only in the beginning. All thanks to market research.

Great potato games

It has managed to attract the attention of more and more gamers with professional execution Consumer research and target market.

Audio to Twitter

Odeo, a podcast platform, struggled hard at first. However, they did not lose hope and re-examined the target market. They made decisions based on market research findings and Came back with Twitter. Rest is history.

YouTube dating app

Aim, connect Launched as a video dating site and has not been an extraordinary success. They did market research and reinvented it a bit. Now converted to YouTube And owned by Google, the product needs no introduction.

Summary

While launching a startup is on your list, we suggest you do not go ahead without conducting a reliable market research. With its help, you learn to recognize tons of critical factors for businesses like competitors, market trends, consumer buying behavior and future scope.

An early understanding of all of these allows the startup to make wise decisions and sign off on the success of the startup. This is why this job does not seem difficult, do not give up market research. You can take the help of experts and valuable tools to reduce the efforts required by market research.

call for action

When you are developing a digital product, you should make sure that you have the right business strategy. As a technology company, we have experience in consulting in the very early stages of product development. Schedule a free consultation and see how we can help you get your idea up and running.


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