Market Research & Metrics
Market research is tedious work. Some startup founders love doing it, but most try to cut corners on this all-important step. You can’t just do a few Google searches and call it good. You have to know more about your market — your customers and your competition — than anyone else. It’s one thing to collect data on your market by doing some secondary research, but you must really “know” your target customers by doing primary research. The only way to do that is to get face-to-face with them and LET THEM DO MOST OF THE TALKING.
Things to Think About and Decide
What market do you plan to serve? How can the market be segmented? Is the market big enough? Is it growing or shrinking?
Have you profiled the “typical” customer as to their demographics, geographics and psychographics? What are the other characteristics of your target market and how does your solution fit these characteristics?
Who are the competitors? What share of the market do they have? Can you grab some of this share, or do you plan to grab new share as the market grows?
Do you “love” this market? Do you have some special insight into the needs, behaviors or trends of the market, that others do not have? Is this market really where you want to spend the next five to ten years of your life?
Things To Do
Estimate the annual revenues generated by the total market and the market segment for your solution.
Produce one “top down” revenue figure by finding key market research, and produce a second “bottom up” revenue figure by estimating the number of users or buyers, the average price and the average amount spent on purchases per year.
Find (and If necessary purchase) a recent research report on your market by a reputable research vendor.
Summarize your market: (1) How old is the market? (2) How many companies (or consumers) are in the market? (3) How many people work in the field? (4) How large is the market in terms of annual revenues and number of units sold? (5) Who are the chief competitors and which ones have gone public or sold in the last three year?
List the top two or three conferences for the industry and try to watch videos of the events, attend a webinar, or attend a conference in person.
Read the websites, online information and sales presentations of the top three competitors in your market. Hint: check Scribd, YouTube and Slideshare.
Create a User Persona that describes the wants/needs of your typical customer; how this customer learns about your product, and how this customer goes about buying and using your product.
Run a mini ad campaign on Google AdWords, Facebook, and/or Linkedin using keywords that describe your target market. Find out what other companies are paying to dominate those keywords.
Recommended Readings and Resources
The Nuts and Bolts of Market Research
Vladimir Blagojevic <firstname.lastname@example.org>
Customer Development is Not a Focus Group
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