Before you invest your time, money, and resources into pursuing a new start-up idea, you need to find out the following information:
- Who is your target market?
- Is your product or service in demand?
- How much are people willing to pay for your product or service?
Why is it important to get answers to these questions?
For starters, you’ll find out if people are interested in your idea. Secondly, you’ll know if there’s a large enough pool of prospects who’re willing to pay for your product or service. Finally, you may uncover areas where the competition is lagging behind, which you can use to your advantage to stand out from the rest.
Without this hard data, you risk sinking a lot of time, money, and resources into a start-up idea that may never take off. Even worse, without this data, you may never know why the idea failed either – giving you no guidance on where to go next.
To increase the odds of your start-up idea being a success, you need to conduct market research. Of course, you need to gather the right information in order to move ahead with confidence. Here’s how to do that.
Of course, money can be tight during the early start-up phase. While you may not have the funds to enlist the help of a full service market research agency, companies like Start Up Wise offer an effective and affordable way for start-ups like yourself to get the answers you need to move ahead with confidence.
Key Takeaways From Your Market Research
Below are the three most crucial details you should collect from your market research.
Know who your target market is (and what they want)
Many start-ups make the mistake of targeting an audience that is too vague.
Take this example. Let’s say you want to launch a new job seeking platform targeting IT professionals. You might initially say, “My target market is young IT professionals between the ages of 21 to 30.”
Unfortunately, this target market is too vague. Why?
For one, IT is a massive industry. One full of many sub-sectors ranging from Mobile App Development and DevOps through to Customer Relations Management software. Will your job seeking platform be able to help IT professionals across all these fields find and connect with potential employers? If so, great! If not, you need to specify that.
Secondly, what platforms are your job seekers already using? You can probably assume they already use the big names like Seek, Career One, and Indeed. But what if you found out your target market was dissatisfied with these services? You could promote your service as one where employers are highly vetted and job seekers are given the extra help they need to pursue their ideal career path.
After asking these questions, you may realise that the scope of your idea has changed. For instance, you may find out that the unemployment rate is higher for older IT professionals, as opposed to young people just coming out of school.
With this newly found information, your new target audience could be:
‘IT professionals between the ages of 30 to 45 who have a minimum of 5 years working in the IT industry, who have recently lost their jobs and are struggling to find the right employment with the current job seeking platforms.’
Is your product or service in demand?
Unfortunately, just because your product or service can ‘technically’ solve a problem, that doesn’t mean the demand is there.
For instance, your research may indicate that a problem does indeed exist. However, your respondents may not perceive the problem to be a big enough issue in order to justify buying your product or service.
Depending on the circumstances, there may not be much you can do about this. Indeed, the problem may be so miniscule or insignificant that people just don’t think it’s important to justify buying your product or service.
But, on the other hand, your respondents may not be aware of what the consequences are if they don’t solve this particular problem. Or, they may not fully understand the benefits of having this problem solved in a quick, easy, and affordable way.
If you find yourself in any of the above situations, you may need to further educate your respondents first. This way they will have a greater understanding of your product or service and how it can benefit them. Otherwise, you risk jumping to conclusions, and giving up on an idea that may have true commercial viability.
Are people willing to pay for your product or service?
You have a clear understanding of your target market. You know that people are genuinely interested in your product or service. Now comes the big question: Are people willing to give you their hard-earned money in order to get what you’re offering? And if so, for how much?
To get the answers you need, you must ask your respondents the following questions:
- How much can they afford to pay for your product or service?
- Would they be willing to pay more for a better quality product or service?
- In what way would they like an existing product or service to be better (i.e. speedier delivery, higher quality materials, longer lasting lifespan)?
- What kind of tangible or intangible value do your customers get from your product or service? More importantly, do they feel that the price you’re asking is in line with what the product or service is worth to them?
By answering these questions, you’ll have a better idea of what your prospects are willing to pay for, and what they hope to get in return for buying your product or service.
As a result, you can position the price of your product or service in a way that your target market is comfortable paying for.
How to get affordable and reliable market research on your start-up
Of course, all the valuable insight in the world won’t replace the fact that market research costs money.
And one of the biggest challenges that start-ups face is a lack of capital. Simply put, some start-ups don’t have the money to enlist the help of a full service market research company. On top of this, many start-ups try to take the DIY approach, which increases the risk of gathering poor or misleading data.
Fortunately, companies like Start Up Wise offer a smart and cost-effective way to get the answers you need.
Start Up Wise is one of the few boutique market research providers who cater specifically to the start-up market. We provide a range of market research services designed to help start-ups discover the true potential of their idea. This involves reaching out to relevant potential customers and asking them the right questions in order to help you get the answers you need – before you proceed with your idea.
Every step of the way, you’re guided through the process, Such as the establishment of your market research goals, the design and creation of your survey, analysing the statistical and analytical reports, and offering you helpful advice based on the results to help you make the next move.
Best of all? You only have to wait a few days for the results. So you won’t have to wait long to get the answers you need to move forward with confidence.
Thank you for taking the time to read this blog post. If you found this post informative, and you’d like to learn more about what it takes to begin your own start-up, then consider reading the 10 Vital Start-Up Questions guide.
This 24-page guide will provide valuable insight into the experiences of Start Up Wise founder Richard Milne, and give you practical advice on how to develop your idea, determine if your idea has commercial viability, and how to avoid the most common start-up mistakes.
Best of all? This is a FREE download. All you need to do is provide your email address. And within a few seconds this helpful and informative guide is yours to own. Download the FREE 10 Vital Start-Up Questions guide today!