5 Tips to Conduct Market Research in no time – The Quick Guide
Learning how to research the market is an essential entrepreneurship skill and part of every successful entrepreneur’s business model. Today, I’ am going to show you exactly how to develop market research skill and become a successful entrepreneur.
AND MOST IMPORTANTLY, I’ll be virtually holding you by the hand and teaching you entrepreneurship capabilities that you need and give you the insider knowledge to develop the entrepreneurship skills you need to run your startup successfully, STEP BY STEP.
To begin with, I will share with you the significance of market research and defining quality. I will also show you the exact steps you should take and the tools you can use to perform a comparative market analysis and position your startup in a better position.
let’s jump right into it and help you learn how to conduct market research.
I suggest you to download this worksheet before you dive deeper to the topic and complete the activities when you see the elephant icon. I call this moment “Let’s feed the elephant“, it means its practice time.
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How to conduct Market Research
“THE STEP BY STEP APPROACH”
I will get to the great details of “How to conduct market research” from marketing perspective in next chapters, but today I want to teach a unique and significant entrepreneurship skill: How to define and improve the quality of your products or service. This technique is rarely found on the internet.
Before we start digging deep about how to define and improve quality, let’s do an exercise.
To gauge your understanding about quality, I suggest to give yourself only 1 minute to define quality in 1 short sentence that makes sense to everyone.
Don’t worry about your answer. At this point, there is no wrong or right answer. simply write it in your terms.
If you could not do it, it means you have not defined quality criteria for your startup and that’s a dangerous sign. Either way, keep reading because in a moment you will learn the most easiest way to perform market analysis as well as practical strategies to define quality for your startup.
[You can use the worksheet to record your results, they will be as you read on]
First Rule: Quality is a very broad concept, especially in startups. Don’t be deceived by what do you think about quality.
You need to clearly answer this question: “What does quality mean to me, my prospective and existing customers?” Be as specific as possible and don’t write an essay. In one sentence, you should be able to clearly explain what is quality to a stranger.
The first step towards your startup business success is learning how to conduct a comprehensive market research. That shows you what are the quality indicators in your niche and how should you measure your progress.
Feed the Elephant (It’s Practice Time)
Use the worksheet you have downloaded and write down the first 3 criteria about quality that come to your mind.
In a moment, I will show you how to improve the quality of your product and service and consequently take your startup to the next level, but Before you scroll down I want you to take a moment and complete this exercise.
First Step: Find out where do you stand among Competitors.
This helps you have a good idea about where to start and how to compare your startup with the industry bench-mark.
At first, list down the top 5 competitors and 5 big players that have the highest degree of influence in your industry or niche.
Narrow down your list and divide them into 2 categories:
1) Select the competitors that havehighest revenue and position them in one group.
2) Sort the other group based on highest customer satisfactionfeedback.
To do so, you can use google search and search for this keyword: Keyword: Big Players in ” YOUR INDUSTRY”
Select your industry, Then go through the first 20 result of google results and list down all players that are close to what your startup will offer. Select the top 5 among your top 20 result.
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Discover your competitor’s revenue contributor products.
Depending on the startup business model, companies may offer a few products but not all products generate the same amount of revenue. For Example, Microsoft has dozens of products but non of them generate revenue as much as Microsoft office does.
How do I know?
In this Case study, I’ve explained every strategy I’ve implemented to helped Microsoft increase their revenue by239% in 3 months.
Now, to find the revenue contributors you can use free tools like this link on Wikipedia, which is updated every day. You should list down your players and sort them based on their total revenue.
Then, find out top 3 products that generate the highest revenue for them.
You can figure this out by considering many factors such as :
- The number of subscribers your competitor has,
- Number of applications installed by users,
- How many of users they acquire per year,
- Number of companies they serve,
If you want to search broader, you can use Fortune 500 website. Simply search for company’s name and filter your search results based on years. You’ll find out amazing market results.
If you could not find the revenue of your competitor in those tools, try to search for:
- Their published interviews,
- Financial statement,
- Press releases
- Forums that their employees are active on
- You can use social engineering technique and ask their sales people. That costs you only a coffee or a beer.
Although being precise is the key, at this stage you can look for an estimated revenue and cash flow record for the past 2 years.
If your startup has a similar product that makes you a direct competitor, you should use the excel sheet below and list your product and your competitors product to perform market analysis.
This is how it should look like.
Understand your Customer’s Behavior.
This step is very Important in performing accurate market research:
Now that you have an idea about your competitors financial situation, it’s time to understand their customer’s behavior. Explore the top 15 attributes that their customers consider “high quality factor” and highlight them in your list.
Then, in your worksheet, you should assign relevant scores from 1 to 5 to segregate the high impacts and low impact factors.
One of the best free tools for startups to perform market research and analyse customer behavior is twitter search trends and of course Google trend.
Google trend allows you to narrow down your search results by industry and year.
As soon as you have your customer feedback and revenue contributor’s data, it’s time to sort your market research result from highest score to the lowest and rank them against your product features.
I have prepared an example to show you ho should your list look like. You can use google docs or Microsoft excel to sort them in this format.
Your complete list should look like this.
This format should give you a list of quality measurements you should consider for your startup.
Be careful, There is more to this entrepreneurship skill!
This list gives you a good idea about quality criteria that you need to meet especially when you compete against big players, Don’t overlook the smaller competitors that you have to beat. Remember: In a nutshell, “Quality” in startups and business means, satisfying your customer’s requirement, need and desires.
Here is the truth:
In order to strengthen your entrepreneurship skills such as market research, don’t try to duplicate what big players do as you will probably either launch very late or very immature.
Focus on your Business model and use the correct business pattern. You need to use your 4 Quadrant competitive analysis and study your direct competitors to capture the market quickly. Using lean startup, you should also learn to focus on building high quality “minimum viable product” known as MVP.
Don’t worry, I’ve explained them all in next chapters.
Here is what to do Next:
It’s time to feed the elephant. Use your worksheet and complete the “Define Quality” activity. The more honest you are, the better your result will be.