Many of you have an idea for a business or service that you want to offer. You might be at the point where you are considering ways to validate your idea and see if it is viable before taking the plunge and quitting your job. We spoke with Josh Melick, CEO and co-founder of Broadly.com (acquired by Smith Micro), about doing market research for a new business venture. He was nice enough to give us some time on a Sunday to discuss this topic with us. So without further ado, let’s jump into what Josh has to say:
What is Market Research?
Market research is the process of determining what people want while providing them with precisely that. When you start out doing market research, it is very important to talk to your potential customers and understand their problems. You can find these people through things like social media, networking events, or even picking up the phone book. Once you’ve found some people, start asking them questions. What is their biggest problem? Do they even have a problem you can fix with your product or service? Are they willing to pay for such a product or service? Some of the most crucial market research comes from listening and asking questions vs. talking and pitching ideas.
Although it may not seem like it at first, finding that first customer is the hardest part of market research, once you’ve found your first, second, and third customer, you will have learned all of the information you need to improve your product or service until you have a complete solution.
How Can Market Research Help You?
Market research can help with many things related to starting a new business venture. Here is a shortlist:
• Validate the problem and ensure there is a market for your product or service.
• Identify a place to launch and build relationships with potential customers.
• Determine how much it will cost to bring your product or service to market.
• Learn about competitors who are already in the market.
• Build your marketing efforts to ensure you are getting the word out about your product or service in an efficient manner.
Where Can You Find Clients?
One of the best ways to find customers is through other people. For example, if you are looking for customers in Denver, Colorado, it might be a good idea to talk to a large technology company in the area to see if they would be interested in your product or service. In this scenario, you might show them that by using your solution, they will have higher employee productivity which will help the company out over time. Unfortunately, finding customers who are willing to pay for your product or service can be very challenging. Still, sometimes other companies are willing to pay for your services before you have even started the business. This is because they are often looking for ways to improve their operations or find new customers, so if you can present them with a solution, you might be able to get on the ground floor of some great clients.
Any Final Advice to New Businesses?
It is important to remember that doing market research will require time and energy from everyone involved. For example, you might have to reach out to people who have no idea what your company does or why they should care. In addition, it can be difficult for some people to grasp the concept of listening instead of talking, which is another reason why market research is so difficult.