The Ultimate Guide to Startup Market Research

This Friday -> Strategic Market Research: A Guide to Conducting Research that Drives Businesses" by Anne E. Beall Pt. 2 [3 min reading]

Hey, it’s Fede!

Last week, we talked about how important market research is for building, launching, and growing a startup. This week, let’s dive deeper and explore some insights tailored just for startups.

“Strategic Market Research: A Guide to Conducting Research that Drives Businesses" by Anne E. Beall has plenty of great tips, but it’s mainly written for established companies that have databases, customers, and budgets to work with. Startups are different, they have to make things work with fewer resources. That’s why I’m adding some extra insights from my experience in the next paragraphs, just for startups.

Three Things to Focus On:

1. Is there demand?
   Does anyone need what you’re building? For new or revolutionary products, this can be tricky, people might not even realize they need it yet. In such cases, look for similar products they already know and use those as a reference point to gauge interest.

2. Who is your target market?
   Age? Gender? Location? These details are essential to understanding your audience. However, avoid collecting unnecessary information. Personal questions like these should be placed toward the end of your survey, as asking too many upfronts might discourage people from completing it or compromise its effectiveness.

3. How much will they pay?
   If people are willing to pay, great! But the bigger question is: how much? Use the Van Westendorp Price Sensitivity Meter to find the “sweet spot.”

   This method helps identify the pricing range that feels right for your audience, balancing affordability and perceived value.

   

Tip: When talking about your product, make sure to highlight its limitations. If you oversell, people might give overly positive answers, which won’t give you useful feedback. For example, explain what the product doesn’t do, or describe features that are still in development. This helps manage expectations and ensures you get honest, actionable insights.

When conducting market research, who you ask and how you reach them can make all the difference. Here’s a breakdown:

• Methods: Combine in-person interviews, video calls, and online surveys. Each method has strengths and mixing them reduces bias and improves results (be careful it could make it more expensive).

• Audiences:

  • Current Customers: To learn what’s working and what can be improved.

  • Past Customers: To understand why they left and how to attract them again.

  • Potential Customers: How to attract new clients.

  • Non-Customers: Honestly, it rarely makes sense to spend time with them.

Finding Participants:

• Use your community, forums, Reddit, or free/paid databases for online surveys and offer incentives if possible (e.g., discounts, giveaways) to increase response rates.

• Friends and family are quick and easy to reach but highly biased. Use them mainly for the ideation phase.

• Market research firms are expensive but effective for reaching a large, targeted audience quickly.

Pro Tip: Always study your competitors, both before starting your research and after, so you can refine your positioning and gain deeper insights.

Once your research is done, sum it up in a simple, easy-to-understand format. This will help you with your business strategy, keep your stakeholders in the loop, and make a strong case to potential investors. Here’s how:

1. Executive Summary
   Highlight the most important insights: Is there demand? Who are your customers? How much will they pay?

   Here I think it’s very important to add some graphs, I would highly recommend inserting at least these:

• Van Westendorp Meter: Optimal price range for your product.

• SWOT Analysis: Simple but effective for positioning your product.

• TAM-SAM-SOM Framework: Great for showing market potential.

• Competitive Analysis Chart: Clearly shows how your product outshines competitors.

2. Methodology
   Be clear about how you gathered your data surveys, interviews, or observational research.

3. Respondent Overview
   Describe who you talked to: demographics, behaviors, and any relevant info.

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See you next Friday,
Federico Lorenzon