Market Research for Startup Leaders

Natalie Nathanson

May 2013

Developed for a course at:

Market research for start-ups is essential. Understanding the needs and wants of your target market can be the difference between success and failure.

Agenda

• Market research 101

• Qualitative startup market research

• Project framework

• Getting started on your own

WHAT IS MARKET RESEARCH?

Process of systematically investigating the market for a given product or service, gathering and analyzing data regarding the number and location of customers; customers’ interests, preferences, and buying habits; and pricing and price sensitivity of demand. …For the purpose of gaining insight about a market to help a company formulate its business and marketing strategy.

SOURCE: http://www.startups.co/information/go-big-dictionary/market-research-definition

Categories of Market Research

In a Startup Environment…

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Behavioral research

In-person surveys

Secondary Research

1:1 interviews Focus group

Web or social surveys

QUALITATIVE STARTUP MARKET RESEARCH

When and where is it used?

Concept Alpha Beta MVP Launch Scale Break-even Exit

Market validation

Market segmentation

Price analysis Competitive analysis

Customer resonance

Revisit from concept for target market expansion

Lifecycle of a Startup

Revenue/

A few examples above…

• Market validation • Market segmentation • Pain point articulation • Target market prioritization • Marketing planning • Competitive analysis • Price analysis • Customer resonance • Product development • Trend identification • Influencer & media landscape

What can market research help your startup determine?

PROJECT PLANNING & EXECUTION FRAMEWORK

PHASE I Planning

PHASE II Implementation Preparation

PHASE III Fieldwork

PHASE IV Analysis

PHASE V Action Plan

Identify goals 2ndary research

Develop interview questions Recruit interviewees

Conduct interviews Collect & summarize data

Review findings Develop conclusions

Decide what to do differently Implement!

5 Steps to Conduct Qualitative Market Research

Research Differences: B2B vs. B2C

Category Consumers (B2C) Business Users (B2B)

User Type Responder is an end-user Responder is engaging as part of profession

Population Larger sample population (generally)

More defined targets

Decision-making Approvals come from self (or spouse?)

Approvals come from multiple stakeholders

Interview language Simple, everyday language is used during the interviews.

Knowledge of industry terms may be needed

Step 1: Planning

Confirm the questions we are trying to answer, flesh out methodology, approach, and desired outcome.

Activities include: Secondary research (online & founder insights) Select target audience & qualification criteria Prioritize your goals, questions to answer

Step 2: Implementation Preparation

Create all needed materials for the primary research, build & test list of questions (discussion guide).

Activities include: Build and test discussion guide Build target interviewee list Schedule interviews

Discussion Guide Question Types

Warm Up Questions

E.g. Tell me about your background Best for: Starting an interview! Example Use: General market knowledge

Example Questions

E.g. Give me an example of… Best for: Complexities - Leading questions, disruptive technologies, etc. Example Use: Purchase decisions, product development

Direct Questions

E.g. Where do you go for… Best for: Factual questions and/or you need a very concrete answer Example Use: Competitive analysis, influencer identification

Indirect Questions

E.g. What are the biggest challenges you face around… Best for: Need to understand their world, want to see language they use Example Use: Pain point articulation, target market prioritization

Step 3: Fieldwork

Activities include:

Conduct interviews (record, record, record)

Review early insights midstream

Summarize interviews

This is where the rubber hits the road—conduct interviews!

Step 4: Analysis

Activities include:

Analysis summary

Bring in broader group

Review analysis & implications

Develop implications on ‘questions to answer’

Aggregate data into findings, review patterns in the data, glean insights.

Step 5: Build Action Plan

Activities include:

Decide what new hypotheses & realizations you have

Agree on what to do differently

Implement!

Don’t sit on the insights—do something about it!

GETTING STARTED ON YOUR OWN

What to Remember

1. Record the conversation. Don’t transcribe into your own words.

2. Interviews won’t go as planned. Each interview will be different.

3. Recruitment isn’t easy. Give yourself enough time, prepare.

4. Don’t forget your original goals... It’s easy to get caught up in the conversation.

5. …but be open minded to new insights. Take everything in, but don’t jump to conclusions.

Where to go from here

Approach Pro’s Con’s

Do-it-yourself Least $ expenditure Your time is precious Responses will be more biased

Custom educational workshop*

Expert guidance More confidence in results Learn to do it

Still have responder bias Still takes time

Targeted support*

Get help where you need in most

Beware of disconnects

Full outsourcing*

Proven methodology, objectivity Spend your time wisely

Most costly in terms of hard $’s

• Always be talking to customers (and documenting it!)

• Determine your highest priority goals

• A few ways to get started…

*Services offered by Magnetude Consulting

How do we break down our marketing services?

What’s YOUR next step?

natalie@magnetudeconsulting.com

@_Magnetude

www.magnetudeconsulting.com