by Jacob E. Dawson
In the startup world there exists the myth of the “perfect idea.” Many entrepreneurs become so caught up in pursuit of this mythical event that they never take any action on the seemingly mundane or unoriginal ideas that they do have. The problem with this approach is that there is no such thing as the perfect idea; most of the new companies that we see rocketing into the stratosphere are the product of approaching existing business models in new ways, improving them with new technology or repositioning a model for a different market segment.
But even after all of that, there is no guarantee that your idea, prototype or business will gain traction. Why? Because there is one unique factor that will decide whether your dream flourishes or dies: the customer.
All the supply in the world is worth absolutely nothing without demand. On the surface this concept seems so obvious as to be irrelevant, yet ask yourself; why do so many businesses fail each and every year? Because they neglected to conduct proper market research, both in terms of assessing the need for a particular product or service, or because they didn’t understand exactly what it was that customers were demanding.
The reality is that there is only one way to go about this process and reduce the risk of failing: you need to conduct market research. “I don’t have enough money to do market research,” I hear you say. Well, that’s why this article is going to take you through some of the best cheap market research methods to help you validate your assumptions!
Using Google to Conduct Market Research
There are a few different ways to use the ubiquitous search engine to research a market. The most obvious way is to search for phrases related to your idea. This is particularly useful to see if there are competitors (which are not necessarily a bad thing) and also to see if your particular market area has being written about recently. However, that’s not the only way
The social-networking giants targeted ad service is actually a great way to get a rough estimate of how many people are in your target market, even if it’s highly specific. By drilling down with demographics and psychographics, you can use the Facebook ad manager to get a fairly accurate, quantified estimate of your available market. The best thing about this is that you don’t actually have to purchase an ad in order to get the estimates.
Despite the simplicity of the underlying value proposition, Twitter can be immensely powerful when it comes to analyzing sentiment and conducting market research. Not only can it be used to contact users directly (with the aim of securing a longer-form chat), but Twitter’s search function (including advanced operators) enables you to do some sentiment analysis around a particular market and even specific brands. Trying doing an advanced search while adding in a filter to only collect the negative tweets and you’ll realize how useful it can be to assess where customer’s pain points are!
Forums are one of the best ways to access genuine customer insight about a particular market or product category. There are literally millions of forums online dedicated to the most esoteric of subjects, and 99% of them are free and easy to join. Once you’re a member, it’s entirely up to you whether you’d just like to scan threads related to your idea, or if you’re feeling brave you can decide to engage with the users. Keep in mind the (occasionally strict) etiquette of forum behavior and you’ll be surprised to find out how receptive most users are to sharing their opinions on a particular topic.
Arranging Online Interviews
While conducting market research online has made it easier and cheaper than ever, sometimes you have to bite the bullet and be prepared to spend a little bit of money, and more importantly, put in some extra effort. Conducting one-on-one customer interviews can be daunting for some people, but with VoIP platforms like Skype and Google Hangouts it’s no longer necessary to be face-to-face to get some really deep customer insights.
A simple way to secure interviews is to offer some kind of prize or reward for the customer’s time. If you visit an online community like Reddit, you can even offer respondents ‘Reddit Gold’ in return for a 10 – 15 minute interview. You’ll often find that the people you interview are happy to share their time for free, and you’ll learn more in 15 minutes of an open-ended conversation than you would in 10 hours of trawling the net.
To manage your interviews and collect responses, Google Drive is hard to beat, as you can create spreadsheets of completed and upcoming interviews as well as upload and share any recordings that you’ve made – all for free.
The final tip in this collection is to use Meetup.com to track upcoming events around a particular topic. If you browse the website you’ll find hundreds of meetups based around a variety of different topics, and most of them range from free to $10 to attend. At these meetups you’ll find people with a passion for a particular area that are generally happy to share their thoughts, experiences and ideas around your proposed product or service. It’s also great practice for networking, something you’ll need to do a lot more of if the market research you’ve conducted turns out to be positive!
Don’t be deterred if the responses from any of these tools aren’t positive. Maybe you’ll use Facebook Ad Manager and find out that you’re market is too small. Maybe you’ll trawl Twitter and find that there are 10 companies in the market that are successfully doing what you’d like to do. The key point here is to save yourself the pain and effort that goes into pursuing a business idea that doesn’t have a foundation of thorough market research underneath it. Take what you’ve learnt, apply it to your next attempt and eventually the market will yell out exactly what they need.
Jacob E. Dawson works with Delivery Hero, the online food delivery website and is an entrepreneur and inbound-marketing consultant with a passion for creating value! Follow Jacob on twitter @jacobedawson or at Google+.