Tony Hai of Florida is a CIO and consultant who has worked extensively with growing startups. In the article below, Tony Hai discusses how important the preliminary research is when a company is looking to find its niche.
According to Tony Hai of Florida, the lack of market interest and failing to fit into the market are the primary causes behind startup failures. While other reasons, such as poor marketing, issues with pricing, and lack of capital exist, many founders claim that underestimating the value of initial market research is as good as signing a business’ death sentence.
Tony Hai of Florida suggests startups begin with market research to mitigate these issues immediately. Understanding core segments, competitors, and the industry is the only way to ensure potential founders bring products or services with true value to the right audience.
Before dreaming big, it’s vital to learn the craft of market research for startups and appreciate its significance.
Startups and Market Research: An Overview
“Market research” refers to a business strategy performed at the conceptualization stage that includes:
- Getting to know the target market and its dynamics
- Understanding the attitude of potential consumers
- Discovering focus groups’ buying behaviors
- And much more
Tony Hai of Florida explains that the findings ensure burgeoning businesses make valuable decisions and craft launch plans accordingly. Not to mention it helps avoid problems and opens otherwise-unacknowledged doors.
When performed with the appropriate rigor, it has the potential to bestow success.
Two Main Market Research Types All Startups Should Be Doing
Entrepreneurs benefit significantly from understanding two main categories when planning market research.
#1 Primary Research
Tony Hai of Florida says that startups tend to perform primary research themselves. But hired professionals can be utilized to collect and handle the data expertly.
It’s perhaps the most thought-about market research type, as it involves asking questions to acquire the information. Often, it’s the first chance businesses get to interact directly with potential customers and understand their buying habits.
Founders note it helped them identify direct competitors and discover the latest industry trends, both of which allow them to establish a valuable USP prior to launch.
Primary research is usually conducted in the following ways:
- Perusing online forums related to the target market
- One-to-one interviews of a sample of potential customers
#2 Secondary Research
Tony Hai of Florida explains that secondary research is that which has already been aggregated and compiled, often by software. It’s nice in that it is less time-intensive than the digging and leg work involved with primary research, and often less costly. Some information will be freely available, while other consumer data may be accessible by a subscription or fee.
Entrepreneurs trying to stretch resources will appreciate what they can learn via secondary sources, but of course, Tony Hai of Florida explains that this data can occasionally be out-of-date or otherwise inaccurate so it’s very important to understand how and where this info is being sourced.
Defining The Purpose of Market Research
In essence, Tony Hai of Florida says business owners perform market research to reduce future risks. But founders should endeavor to set specific goals based on their startup’s orientation.
Examples of internal and external goals include:
- Market research for onboarding investors — As mentioned, market analysis is vital at the earliest development stage. Knowledge of competitive advantages and data decreases the likelihood of startup failure. Successfully attracting new investors involves studying the market during plan creation. Information received needs to be accurate and recent for the best results.
- Market research for establishing a new idea — More experts concur that workable ideas are formed by studying current issues faced by potential customers. Then, creating a product or service to solve the problem.
- Market research for testing already-formed ideas — Even with a formed business idea, market research is essential to properly understand USPs and the competition. From this, founders realize necessary achievements for overall success.
Choosing Market Research Methods for Startups
As startups define their purpose of market research and the type they wish to perform, Tony Hai of Florida explains that they can choose from the following methods:
- Surveys — They’re versatile and allow for many formats. Gathering information is straightforward and insightful, provided the correct target market is questioned.
- Focus groups — An organizer heads the discussion according to pre-determined questions and tries to obtain insights from participants’ answers.
- Social media listening — Social media provides an endless range of information. The content posted by potential customers definitely reflects their thoughts and feelings because posts are often spontaneous.
- Observation — It has a fantastic reputation for providing reliable results. It involves watching target audience members in their everyday environment.
- Interviews — It’s a personal market research method, allowing founders to dive deeply into the subject and communicate extensively with potential consumers.
Finding Startup Success with Market Research
Startups must conduct thorough market research to give their business the best chance of success according to Tony Hai of Florida. While there can be unforeseen happenings with blossoming companies, rigorous analysis helps founders predict and negate potential problems that would otherwise prevent them from stepping up a level.