Starting a business is an exciting but risky venture. According to Investopedia, in the US, 20% of small businesses fail after one year, 50% fail within five years, and over 65% don’t make it past the 10-year mark. Failory estimates that 9 out of 10 startups will fail, and just 1% become household names, such as Uber or Airbnb.
It’s not easy for startups to make it, but it is possible. Today we will talk about a very crucial step for success that many underestimate or overlook completely – market research.
What is market research?
Market research is a process that precedes product development and involves collecting vast information on the market’s current state and potential, target audiences’ needs and wants, and existing competition.
Why is market research important?
Extensive and high-quality market research lays a solid ground for all further product development stages. It gives companies data that is used in the creation of the most relevant and desired solution.
Reduces business risks
Product development is hard and expensive. The fewer errors you make, the better chances you have of succeeding. And thorough research will help you avoid many mistakes and miscalculations that less prepared people will bump into. Most of all, market research helps avoid the biggest risk – building something the market doesn’t need.
Helps build good products faster
Not all companies that skip market research fail. However, many of them end up wasting too much time, finances, and manpower on figuring out the right product formula. Learning by doing is a concept that is widely praised by universities. But when it comes to a business – it’s best to learn fast and from someone else’s mistakes. And that’s what market research provides.
Helps you stand out from the competition
If you don’t research your competitors, then how can you know that you are not following in their footsteps? Launching a new product is all about differentiating yourself from what is already available on the market.
Enables effective marketing campaigns
When conducting market research, we learn all about clients – their preferences, behaviour patterns, and unmet demands. Knowing all that helps create and run marketing activities that are highly effective and help the business faster.
Market research factors to pay special attention to
We will not go through all steps of market research today but rather point out the things that are often overlooked. Take them into account when researching prior to starting work with an MVP, and you will be able to optimise your expenses by wasting less.
- Micro and macro economy. As you’re looking at a specific market, make sure you consider the macro economy of the country. The niche market may be doing extremely well right now, but if the country is heading for a recession, your plans will have to be readjusted.
- Trends and fads. Look into current market trends versus fads. A fad is something that will only be popular for a short while becoming redundant soon after. Trends are long-term and are much safer in terms of basing your business around them. For example, a certain clothing style that blew up on TikTok is likely to be a fad, whereas electrification of vehicles is a long-term trend in the automaking industry.
- Purchasing patterns. Many startups first launch a payment system that doesn’t appeal to their target audience and then have to pivot, causing delays and having to rebuild the solution.
- Potential scalability. The initial opportunity that companies start with has a different scalability potential. If you plan to eventually grow into a billion-dollar enterprise, but the potential scalability is only allowing you to bring in $200K a year, then something has to change.
Let Emphasoft help you with market research
Emphasoft specialises in startup and new product development. We work with clients from all kinds of markets and niches, and we’ve been doing research for them for years. Our team has perfected the algorithm for conducting market research, meaning that you will get better results and you will get them fast.
Besides knowing A to Z of the market research process, we are able to run A/B testing, do proof of concepts, prototyping, and create MVPs too. It means that you can safely outsource those tasks to us and focus on other areas of business without wasting time.
Reach out to us today, and we will come up with the best plan to make your vision come to life. And if you want to keep market research in-house, we are happy to provide you with professional consulting services to make sure you run the research seamlessly and achieve accurate results within your timeframe.