Initial Research

Initial Research

Module 6: Initial Research

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🎯 Our goal in this module is to clarify your Value Proposition and get the background information you need to move forward with interviewing Potential Customers and Industry Insiders.
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Here’s the approach we’ll take for getting from idea to moving forward with “opening your doors for business”:
  1. First, get your idea out of your head and into some visual form—your first prototype. (You have already done this part!)
  2. Research your idea quickly but effectively.
  3. Go out into the real world and test it by talking with potential customers and industry insiders.
  4. Consider any feedback and modify your idea if necessary.
  5. Then, repeat this process until you are convinced that you have found a high potential opportunity that you can successfully introduce to the market.

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To be clear, this is not “Academic Research”.

The research you will be doing here is the same kind of practical and useful research that has been a part of your daily life almost forever.

Question: If you are considering buying a new phone, what do you do? Answer: Research

Secondary Research: You go online and look for available phones and compare their features, warranties, and prices, etc.

  • You might start by browsing Amazon’s offerings before visiting the websites of specific phone manufacturers.
  • You might also check out product reviews and customer ratings on ConsumerReports.org or YouTube.

Primary Research: You will most likely talk with friends, family, and colleagues about their phones—what they like and don’t like.

  • You might ask about quality and customer service.
  • You will probably go by some stores to look at phones in person and talk to sales representatives.

At some point you will feel that you have enough information to make a decision.

Question: Why would you do all this research? Answer: To minimize your risk of getting the wrong phone and paying too much, and to maximize your chances for success in choosing the best phone for your needs at the best price.

These are the same reasons for doing Primary and Secondary Research before you make a decision to launch your business—minimizing your risk of failing and maximizing your potential for success.

As you research and test your idea with real people, you will likely learn ways to modify and improve your idea from them.

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By the time you are ready to launch your business, there is a very good chance that your idea will be significantly different (and better) than what you started out with.

Right now, you have an initial prototype (a picture or sketch of your idea) plus a clearly written description or explanation. These will help you to introduce your Value Proposition to potential customers and industry insiders and start getting feedback and ideas/suggestions for possible improvements.

However, before talking with people about your idea, let’s first do some Secondary Research to find out what’s going on out there in the marketplace where you will be operating your business.

This will prepare you to be able to get the most value out of your Primary Research later.

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Initially, you will need to know something about...
  • Your Industry
  • Your Competitors
  • Your Potential Customers

As you are conducting Secondary Research and making notes, you will need some way of organizing this information and filing it for future use.

If you are a good organizer and already have your own system for filing and retrieving information, that’s great. If not, then you might start by creating three folders on your computer (or on Google Drive, if you prefer):

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We’ll add a couple more folders later on. During your research, save any notes you take (in a Word Document or Google Doc, for example) in the corresponding folder to help organize your work.

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Warning: We all know how easy it is to get lost in Secondary Research from our experiences with buying a new phone, trying to figure out the right fitness and nutrition program, or selecting a good movie to watch. It’s no different with the research that you will be doing here. You don’t want to find yourself adrift in the sea of information out there.

We are not trying to become experts with this research—that would take forever—but we do need to be informed enough so that we can apply good judgement and make sound decisions.

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Remember: Perfect is the enemy of Good - Voltaire

Question: How much Secondary Research is enough for this initial preparation stage? Answer: My recommendation is, just enough to move forward with confidence.

“Just enough” will be somewhat subjective, but by following this process, you will be able to assess your level of confidence pretty accurately as you go.

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At this point, you need to make sure that you have a basic understanding of what’s going on in the marketplace/industry that you will be working in:
  • What companies are out there?
  • What are they doing?
  • Who do you think will be your customers?
  • What is the nature of the problem(s) that you are going to solve?

When you begin actually talking with potential customers and industry insiders, you will need to demonstrate that you are serious and sincere.

In the beginning, the best way to do this is by showing that you have put some effort into understanding the industry, the companies who are already operating in the marketplace, and the customers and their problems.

In order for people to trust your seriousness and sincerity, you will need to be able to show in your conversations with them that you have some knowledge of what you’re talking about within the context of the marketplace.

Another reason for spending a little bit of time, early on, learning about your industry, your competitors, and your potential customers, is that when you do move on to interviewing people in your industry, you will be able to follow these conversations more easily.

Most industries have specific “jargon” and terminology that will be helpful for you to recognize and understand. During your initial Secondary Research, you will begin to discover these industry-specific details.

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Warning: It is not uncommon at this early stage of Secondary Research to learn that someone else is already providing a product/service very similar to your idea.  Don't worry! Actually, this could be a good thing.

We’ll talk about this situation in the next module, after you complete your initial Secondary Research.

⚡Action Step 1

Go spend some time researching your Industry.

For now, you just need to get familiar with the industry that you will be operating in. You need to gather enough insight and knowledge to confirm that this is where you want to be, and that this is a place where your product/service might be able to thrive.

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You Need to Know:
  • The size of the industry—is it a million-dollar, billion-dollar, or even trillion-dollar industry?
  • Is the industry growing, stagnant, or declining?
  • What are the current trends and future predicted trends in the industry?
  • Who are the major competitors in your industry?
  • Is there a particular niche within your industry that looks promising?
  • How is business currently being conducted in your industry?

This will be enough for now. Within a day or so of research, you should be able to pull this information together, analyze it, and determine if this industry could be a good place for you with your product/service.

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Check out our “Resources” section (at the bottom of this page) to help you begin your initial research.

⚡Action Step 2

Go spend some time researching your Competitors.

What are some of the companies that are already doing business in your market sector? These companies could be potential competitors—they might even offer a product or service that looks very much like yours.

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Here are some things that you will want to know about your potential competitors:
  • Name of company
  • Size of company
  • Description of their products/services that may compete with what you will offer
  • Price of their products/services that may compete with what you will offer
  • Annual Sales of products or services like yours (this will help you to get an idea of the size of your opportunity)

A good way to start finding out what companies are already in the marketplace (potential competitors) is to just Google your product/service idea and see what comes up.

You can also go to online communities where your potential customers might be to discover what products/services they are currently using.

You can ask the community questions about popular products/services and the companies that produce them.

Joining these conversations will also help you in many more areas of your business.

Once you have identified your potential closest competitors, you should be able to find much of the information that you will need directly from their websites and social media.

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Check out our “Resources” section (at the bottom of this page) to help you begin your initial research.

⚡Action Step 3

Go spend some time researching your Potential Customers.

To start with, you will want to know who they are, where they are, and why they would be motivated to buy your product/service or do business with you.

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Here are some key things that you will need to clarify:
  • Who specifically will be your customers?
  • Are they individuals or businesses?
  • What do they have in common?
  • What circumstances are causing them to need a new product/service or business solution?
  • What problem(s) are they struggling with that your product/service/business might solve?
  • If there are multiple problems, what is their biggest challenge? Next biggest? Next biggest?
  • What are they doing right now to solve this problem?
  • How is that working for them?

A good way to either confirm or discover who and where your potential customers are, is to Google your product/service and see what comes up.

For example, you could search for something like: “who buys... [your product/service]”

When you identify potential target customer segments, you can visit online communities (such as Facebook groups) where these potential customers hang out to learn more about who they are and what problem(s) they are experiencing with whatever product/service they are currently using.

Visit the websites of companies who are selling similar products/services to your target market (or who have a similar business to what you are proposing) to see what you can learn about their customers.

You may identify target market niches that you hadn’t thought of.

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Check out our “Resources” section (at the bottom of this page) to help you begin your initial research.

⚡Action Step 4

OK, enough Secondary Research for now.

Take a look at your original idea sketch (or “prototype”) alongside your notes from the Secondary Research you have been doing so far.

Are there any changes that you need to make to your Value PropositionCustomer Segments, or Revenue Streams at this time?

If yes, go ahead and update it now (or create a new one), before moving on to Primary Research.

As you can see, investing time and effort into Secondary Research is essential to your preparation for launching a successful business. You are quickly becoming familiar with the playing field, the players, and the general rules of business within your industry.

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What if things aren’t looking so good for your idea?

If you discover that there already is a product/service/business in the marketplace that appears to be very similar to yours, don’t panic.

You will have the opportunity to learn more about this existing product/service directly from customers who are using it when you move into Primary Research (in the next module).

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Good News: If your potential customers are not happy with their current choices in the marketplace, they can tell you exactly what their frustrations are and what they are struggling with.

In this way, they can help you to design your product/service/business to actually solve the precise problem(s) that they are experiencing.

Or, on the other hand, if you learn that your potential customers are quite satisfied with the product/service/business that they are currently using, it will be good to find this out early on.

Your conversations with Potential Customers and Industry Insiders might, in fact, lead you to discover another problem that needs solving in this industry, which you may choose to pursue instead of your original idea.

Or, you may decide that it’s time to re-group and re-think your future.

If you have an entrepreneurial spirit, you will find another idea to pursue. And when that happens, you will know exactly how to start validating that it is, in fact, a high-potential opportunity worth building a business around.

🗂️ Resources

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Scroll left-to-right across the table below to view all columns. Click on any item in the leftmost column to open that specific resource page.

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Resources Core Database

All

4 views

All

Market Research

Competitor Research

Customer Research

ItemTagsURLPriceDescription
AnswerThePublic
Market ResearchCustomer Research
Free Trial AvailablePaid
Crayon
Competitor Research
PaidFree Version Available
Facebook Groups
Market ResearchCompetitor ResearchCustomer Research
Free
Free Patents Online
Market Research
Free
Google Trends
Market ResearchCompetitor ResearchCustomer Research
Free
LinkedIn Groups
Market ResearchCompetitor ResearchCustomer Research
PaidFree Version Available
Nielsen
Market ResearchCustomer Research
PaidFree Version Available
Owler
Competitor Research
PaidFree Version Available
Pew Research Center
Market ResearchCompetitor ResearchCustomer Research
Free
Quora
Market ResearchCompetitor ResearchCustomer Research
PaidFree Version Available
Salience Search Marketing
Market Research
PaidFree Version Available
SBA
Market ResearchCompetitor ResearchCustomer ResearchOperations
Free
SBDC Net
Market ResearchCompetitor Research
Free
Seeking Alpha
Market ResearchCompetitor Research
PaidFree Trial Available
Similarweb
Market ResearchCompetitor Research
PaidFree Trial Available
Small Business Development Center (SBDC)
Business ConsultingMarket ResearchCompetitor ResearchCustomer ResearchOperationsLegal
Free
SpyFu
Competitor Research
PaidFree Version Available
Statista
Market ResearchCompetitor ResearchCustomer Research
PaidFree Version Available
Think with Google
Market ResearchCustomer Research
Free
TrendWatching
Market Research
PaidFree Version Available
U.S. Copyright Catalog
Market Research
Free
Your Local Public (or University) Library
Market Research
Free
Ask a research librarian to help you access professional databases in their network.

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