Conduct Initial Market Research
Conduct initial market research by going back to the basics and succeed at identifying untapped opportunities on the market. This is one of the most important steps when getting started. If done right, you’ll save yourself lots of headaches down the road and who knows? you could also make it big. Let’s develop our observation skills.
There are two approaches you could take here, and by the way there is not a sure swinner here, but it’s very important to know how to approach your initial market research.
Hopefully based on what we’ll discuss next, you’ll be able to make an informed decision. Just remember that sometimes the higher the risk, the greater the reward.
1) The Fast-Easy Way -> What’s Already On The Market (Low Risk).
The first easy approach is to look for products that people are already buying and try to find a gap on the market or look at what competitors are delivering or not. Some would say that this a sure bet because this means there’s demand for this product or service.
It’s important to be careful here, because even though there might be good demand, it doesn’t mean there’s not supply. In fact, there could be plenty of supply which means lots of competition. This is why it’s clearly important to look at both demand and supply.
If you find that supply is high but of low quality, you’ve found a potential market. You could also offer a specialty product or service inside this particular market that would fill a gap on the current offerings (niche market).
This is probably the most common approach taken by most startups. It has been found that entrepreneurs that have taken this approach and done it correctly tend to be the most successful.
Why? because even though there is demand and supply for some of these markets, they have found a unique way of targeting such markets with a different spin than what’s already on the market and that meets a remaining need or want. This is much easier and more achievable than the next approach.
This what’s called Innovation. So, for our purposes here, we’ll say that this approach is semi-innovation, and as its mentioned in Wikipedia, innovation is doing something different rather than doing the same thing better. The next (2) approach is truly Innovation at Full Sprint.
Before moving to next approach, let see a cliche-classic example of the first approach: McDonald’s. We can all agree that anyone in the world can make a much better burger. So, why is it so successful? How have they managed to stand up from competitors? When they started, their business was not a novelty nor strikingly original.
Some of the factors that have made McDonald’s successful is for starters that they pioneered the fast food concept, then their excellent-constant marketing, great service, innovation, and their mastering of the franchise model.
2) The Slow-Hard Way -> New Invention -> Innovation At Full Sprint (High Risk).
Do you have a totally new innovative idea? This is wonderful! Now, all you need to do is find the demand for it, or create it. Then, you’ll need to try it, test it, refine it, and you’re ready to launch it to market!
Wow! this is so difficult and takes a lot of time. We don’t want to discourage you in any way. However, as you would tell a good friend, we’re just being realistic. Having said that, this is totally doable. It just needs a practical and focused approach, a strong network, and resources (investors, advisors, consultants, friends, familiy, and money.)
Of course, it all depends on the type of product you’re planning to launch. For instance, if it’s a digital product is so much easier. If it’s a physical product is of course much harder and requires many more resources.
Taking the Slow-hard way also has its rewards as it involves much higher risks and you’ll have to put everything on the line. This is not for the faint-hearted, however, anyone is totally capable of finding a truly innovative ideas without the need of being a rocket scientist. Most of the biggest problems in the world have very simple solutions.
A great example of the hard but very successful way, although not as hard as it did not take so long to succeed is Sara Blakely’s Spanx invention. She turned five thousand dollars into a one billion adventure. Spanx slips owner into billionaire – CNN.com. Retrieved December 5, 2012
Ruchika Tulshyan, for CNN says “The inspiration behind her privately-held company is like no other — her own rear.” “I just did not like the way it (her underwear) looked in white pants,” says Blakely. “That moment inspired Spanx. I had been doing some soul searching and visualization of my life to create a product that I could sell to millions of people.”
There you have it. By now we should be ready to decide which approach we’ll take to conduct our initial market research. Then decide the purpose or goals of you research. Since this is an exploratory type of research, you are not yet trying to prove a thesis or hypothesis.
You just want to start getting to know whether there are some gaps, problems, or identify an opportunity on the market that you could meet with your biz offering.
Looking and analyzing trends also gives an insight into the future. This activity also helps tune in with our observations skills. Try to look at the information you’ll see from a different angle turning things upside down. Finally, ask yourself lots of questions while observing people’s behaviors.
Tip: One key factors when observing and conducting initial market research is to go back to the basics. What we mean by this is that by observing the basic human needs, we’ll re-discover what appeals and motivates human behavior.
From now on, as you find statistics related to what humans do, either on this site and at other places online watch them carefully. It’ll be clearly obvious that everything people does is motivated by their human needs, wants and desires. Perhaps we all deep down knew this, but don’t keep it mind when conducting market research.
Let’s hear advice from an authority on this matter: “Peter Diamandis: Want to Be a Billionaire? Solve a Billion-Person Problem” – Inc.com – Retrieved June 13, 2014
To reminds us of or to learn about Maslow’s Hierarchy Of Needs, here’s an illustration:
Next and based on what you just learned start reading reports, articles, news and other materials about market trends to see what’s new and what’s going on in the world. Keep an eye on what motivates people’s behavior. Here are some great places to start:*