I have friends starting businesses all the time and since they are subject matter experts rather than marketers, they often ask me if they need market research. While I believe in them and am open to the possibility that they, like Steve Jobs, will be just fine without it (although that famous claim has recently been called into question), it’s never good to invest your life savings into an idea without any reliable market intelligence.
But do I think they need to retain the services of a Market Research Firm or form a co-creation community? Probably not right away. With a brilliant idea and a multitude of free or low-cost tools available, a balanced approach is key at this stage of launching a product. And honestly, more established companies should not overlook these resources either.
Unless you are creating the market, there should be existing reports on the size and scope of the industry you’re looking to get into. Absent formalized publications, consulting membership organizations around the industry is a good idea. For example, one friend is building a company around a piece of homebrewing equipment that meets a critical need (homebrewing is exploding here in San Diego and across the country). To figure out how many customers there might be for such a product, the local chapter of a homebrewing association was able to provide its membership size, which served as a conservative base for the target market, thus validating the production cost and expected profit margin. Pretty good for free, right?
Most people use Google Analytics to better match their marketing for an existing product to the searches people are already performing in order to increase their chances of getting discovered online. But those people are already one step behind … what if you could create or refine your product idea at the outset based on what people were already searching for, especially if there was an unmet need identified? The AdWords Keyword Planner lets you look up search volume for keywords associated with a product (or any keywords, really). Find a keyword with high search volume, but no one purveying that product, and you’ve possibly hit pay dirt.
We generally discuss co-creation in terms of ideation, but refinement and evaluation are also cornerstones of our CrowdWeaving® process. While it’s nice to have a fancy co-creation platform at your disposal, basic co-creation can be done at little cost and can reap the concept measurement new businesses need, either by capitalizing on the initial ideation, or by seeding ideas already in development (with the new ideas generated as food for thought). While it would take a little elbow grease to put together a challenge on a shoestring, some tools can be leased for as little as $1,000 per project and those trade associations mentioned above could potentially be leaned on for sample.
When these tools have paid dividends, investing in more robust market research is a logical next step to garner answers to the more specific questions that drive sustainable growth over the long haul.