Startups often overlook market research, specifically the market-in approach, but it is a crucial component of a successful, sustainable growth strategy. You can’t grow if you don’t know.
Too many founders, especially those who come from a technical background, take a product-out approach to building their offering and scaling their company. They create a product that they think meets a need, based on their own experience, and then they try to bring it to market.
But if you don’t conduct market research to learn everything possible about your competitors, comparators and customers, you’re not putting your company in the best position to succeed. In-depth market research and analysis is necessary for startups to identify opportunities, develop strategies to take advantage of those opportunities, and then execute.
Relying on data to inform your product development, go-to-market and even marketing strategies is the opposite of the product-out approach. It is the market-in approach, and it’s the key to effectively growing your business.
In-depth market research and analysis is necessary for startups to identify opportunities, develop strategies to take advantage of those opportunities, and then execute.
Why take a market-in approach?
The second reason startups fail is because there is no market need for their product, according to research firm CB Insights. (The No. 1 reason is because they run out of money, which is often a direct result of No. 2.)
Startups that make market research data and analysis a core part of their growth strategy know if there’s a need for their product. And if there’s not, they have information about what the market does need, and they can pivot in that direction before it’s too late.
The market-in approach isn’t just about giving the market what it needs, though. It’s about doing so in a way that sets your company apart. It doesn’t matter that you’re meeting a market need if there are already a dozen companies meeting that same need in the same way.
By relying on market research data, you can build a differentiated product and speak to customers with a differentiated message.
The market-in approach is great for companies that are just starting out and those struggling to find product market fit. But it’s beneficial throughout the startup lifecycle — from idea to launch to scaling and growth — and beyond. Even large, established leaders need to stay on top of changing dynamics and emerging companies that may disrupt their market.
How to conduct market research
To conduct market research, focus on these four areas that can most effectively help you take a market-in approach:
Customer segments
What types of companies (or individuals) are the buyers for your product? How big are these customers and what industries are they in? The answers to these questions can help you set your go-to-market strategy and pricing structure.
Market size
How many potential customers are there? How much are they willing to pay? And are you realistically able to acquire and retain enough of them to support and scale your business? The answers to these questions indicate how big of an opportunity your company has (or doesn’t have, depending on the data).
Market dynamics
Who are the players? How — and how much — do customers pay them? What tools does everyone use? By examining these questions, you can identify areas that are ripe for disruption. A successful startup doesn’t need to have a completely new product. A new way of doing things can work just as well.
Direct competitors
What companies are trying to do the same thing you’re doing? Most startups view market incumbents as their competition, but in reality it’s usually other startups you need to overcome first. Keep close tabs on their product news, funding announcements and thought leadership so you can stay one step ahead.
Benefits of market research for startups
The market-in approach not only helps you build a better product and bring it to market more effectively. It comes with additional soft benefits that can help entrepreneurs and operators every day.
When you make research and analysis a regular part of your workflow, you’ll generate market insights that will build up your credibility with potential partners, advisers, investors and other strategic contacts.
When you make research and analysis a regular part of your workflow, you’ll generate market insights that will build up your credibility with potential partners, advisers, investors and other strategic contacts. More doors will open for you because you can demonstrate in-depth knowledge and expertise, and you’ll be better equipped to handle whatever startup life throws at you.
Your credibility will also help you be a better marketer. Lots of founders can talk effectively about their product. But can you talk about broader market trends and how your company fits into them? And can you do so in a compelling way? That’s the only way to rise above the noise in today’s media landscape and have your voice be heard.
As a startup founder, your company is the center of your world. To succeed, you need to make it the center of your customers’ world. The market-in approach will equip you to do just that.
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The post How to Conduct Market Research for Startups: The Market-In Approach appeared first on StartupNation.
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October 7, 2021 at 12:04AM by Colin Steele, Khareem Sudlow
