Who Should Do Your Market Research?
We are commonly asked, “Who can do my market research for me?” It’s very tempting for scientists and engineers with little or no exposure to an industry to want someone else to do their market research. But should they? You are the best source of that information. While you may be able to discern competitive product and benefits shortcomings, the interview process may also enable you to better understand important operational and economic aspects of an industry; this information may allow you to design a better product. As this is still your business, though, be sure to absorb all that you can to make the best decisions for your company.
Let’s make some assumptions before we address the question. First, we assume that you are a technical person with little business experience in your chosen or probable industry. Second, we assume that you are just embarking on your new venture. Third, we assume that you are operating on a shoestring. Lastly, we assume that, until you get capital or other funding, you are either the sole employee or perhaps you have one or two part-time technical people for the moment. These are very normal assumptions, by the way.
Given the assumptions, you cannot afford to pay a consultant to research the industry for you, to buy a market research report, or to allocate an employee in your company to do the research. Aside from the cost issues, however, there are compelling reasons for doing your own research. First and foremost, you need industry knowledge. You also need to validate product ideas. And, without much industry experience, you need to develop contacts in your field.
Industry knowledge is critical not only from the standpoint of starting and growing a successful business but also for obtaining venture capital. You need to research the market size, trends, and competition among other things. Yes, if you had the resources you could get someone else to do this, but you may miss out on some nuances that would impact your product that others may not see. Figuring out things on your own is better for learning than just reading someone else’s reports. (If you don’t know where to look for information, get to know the reference librarians at your local university or large public library.) Besides, if you are seeking any kind of funding, you need to be able to talk very intelligently about your industry and market opportunities; regurgitating an outsourced report is probably not the best knowledge solution. Some of the specifics that you will want to pay attention to are identifying movers and shakers, operational issues that impact, or are impacted by, your product, and trends and issues.
Conducting interviews for validating a product idea, especially if it might change current industry processes, is essential. Industry insiders will expect you to talk on their level, and if you’ve done your own basic research, you will be able to. You could outsource product validations with appropriate resources, but what happens if the interviewee asks a technical or operational question?
Establishing contacts in your field is another essential of getting to know your industry and becoming successful. By talking with industry people when doing your research, you will be building your Rolodex in addition to gaining market knowledge. This will give you a leg up when you are seeking beta test customers, advice or your first sales. As a MasterCard commercial might say, “Knowing people who can help my business: priceless.”
Think of all of this as a control issue. This is your business, or potential business. Do you want others telling you their version of the industry direction, or would you rather come up with your own conclusions and find the best fit for your product?
You may make mistakes, but outside resources are just as likely to make them as you. Besides, mistakes can be a good learning experience that can strengthen you and your company.
You can control your part of the world up to a point. At the point at which the world (or your company or your company’s revenues) gets bigger, you can start relinquishing some control in various operational areas, and market research is no different that any other functions. You probably will be continuing to monitor money carefully at this point, and with limited resources, one of the best solutions for primary research is to look at your local university’s MBA or undergraduate market research classes; they are often looking for real world projects. Keep in mind that you will need to provide the professor and the class adequate guidance and support on the issue that you need addressed and the goals of the research; this will help ensure that the work is done to your satisfaction. If you aren’t close to a university, look for non-profit business and economic development organizations for assistance or referrals to low-cost providers. You may have money to purchase a market research report for your industry at this point; just be sure to look at the contents to ensure it’s what you need before buying. Also, solicit information from your salespeople; you’ll find field feedback most useful.
Down the road, with some sales firmly in hand and a small but growing staff, you can add market research to the job function of hired employees or pay for custom market research.