Thursday, March 27, 2008

Market Research

Now that have my thoughts organized, I'm beginning the market research phase.

Brainstorming part is the fun and easy part. But between taking that idea scribbled on whatever piece of paper you could find and turning it into a successful business is the critical stage of researching your market.

When someone gets going with an idea and begins to build it more and more (I'm including myself), they can begin to lose objectivity. No matter what you develop, there will need to be a market for it to survive - so it's pretty important to hear what they have to say. Also, there will be competition out there - so you need to know the caliber of guys on the other side of battle field.

By getting on the internet and heading over to your local library (they still have those, right?) you start to develop a picture of who and what you'd be competing with. This can be a very exciting or a very disheartening experience - but critical nonetheless. One quick Google search could bring up a company that's already doing what you want to do - but they're already established, successful, and have figured out all the things you had yet to consider. Other times, you'll find someone who's in the general ballpark of what you're going for, but you know yours could be better and more accommodating towards your target market. And if you're really lucky, you'll discover no one is running around implementing your idea...yet.

Once you've gotten a good look competition, you need to start breaking it and down and seeing what they're all about. What are they doing well? Poorly? What have they figured out? What haven't they figured out? Where will mine compete in terms of price point? Is mine the free, cheaper, more expensive alternative? If possible, talk to those who are using the competition's product and see what they think. Are they happy with it or are you sensing some form of frustration/unfullfilment? If it's the latter, how would your product overcome these shortfalls. The main point is to analyze what your competition is doing so you can do it better. If after analyzing your competition, it turns out your idea is the one coming up short, it doesn't mean you're out-of-luck. You thought of your idea for a reason. Go back, tweak some things here and there, and see if you can make it work.

This is where I am now. I have my vision, my objective, and my target market. Now I need to see who, if anyone, is already doing it. From everything I've read and researched, I would say I fall in between the second and third possibility mentioned in the paragraph above. There are some who have the technology and implementation, but they are not marketing it the way I'm envisioning. Overall, I would call this pretty good news. Not great, but not bad. While I'm encouraged by the lack of product offering, I need to keep a close eye on these other guys because they could quickly shift their target market towards mine with already developed technology.

Some companies, new or old, perform little to no market research yet still flourish. Apple Corporation, named the Most Admired Company in 2008 by Forbes magazine, performs their market research without focus groups - one of the most popular ways of closely analyzing customers' wants and needs. "You can't ask people what they want if it's around the next corner," says Steve Jobs. Steve makes a great point as Apple has continued to innovate and shape the market while their products transcend gender, race, and age in time when "mass market" was considered dead.

Unfortunately, plenty of others - especially those companies not established like Apple - crash and burn. By performing appropriate market research, you can help avoid the 'crash and burn' category.

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