Why & How To Do Market Research for a Business Idea8:52 AM
How to research whether you're business idea is ready for startup. Market research for a business idea is a part of your business, you...
How to research whether you're business idea is ready for startup. Market research for a business idea is a part of your business, you can't neglect it. Before undertaking a startup, It's essentials to test your business idea if it's good for market and you. Check the quantity of product as you need to fulfill the order to fully test your ideas. Include "market research for a business idea" into your business plan (if you have one formal). if you don't have business plan, use your personal skill to test your idea.
All people who dream of undertaking sometime think about what is the best idea to undertake.
Although we could do a market research and ask them what they think about our service, it is best to question them for the problem that our product tries to solve. In this way we can identify if it is the right one.
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Validation of Ideas
Several authors have proposed many models to validate business ideas. However, the reality of entrepreneurs is that they do not have the resources to pay for a market study.
For this, an excellent option is to apply the method known as the Experimentation Board of the consulting firm Javelin. This is a simplified variation of the Board of Ideas validation of the same consultant.
This method is simple and allows us to validate ideas or build them starting from the client. The first step is to define the (1) Hypothesis on which our product or service is based for a particular market. These must be validated with the market to know if they are correct. Then define the (2) Risky Assumptions on which our idea is based. Then we define the (3) validation method that we will use to validate our hypotheses (interviews, sale of conceptual solutions, delivery of the service manually).
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For the validation method, we must define the (4) criterion of success that will allow us to know if it is a good idea or not. And then comes the most important part, (5) go out on the ground and validate our ideas in the field. With this we will get the necessary feedback to modify our original idea and reformulate it until it is attractive to the market.
An example of the application of this method is the following: Suppose that our idea is to sell a Quinoa natural cereal bar for schoolchildren. The (1) hypothesis behind this idea is "that children want to eat healthy food," "that children like Quinoa," "children like cereal bars," etc. Therefore, we must validate them with the market to know if any of these hypotheses is not fulfilled.
Within the (2) risky assumptions (they are the ones that risk most for the business) we have "the children want healthy food", since if we detect that it is not, this idea has no future. Then we define the (3) method of validation and suppose that we will do all three (interviews, conceptual solution sales and service delivery manually). The (4) criterion of success that we will define will be 6 out of 10 or 60% of the children tell us that they prefer our product.
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And finally, we are going to (5) field to test, in this case the first method of validation is through a survey of school children and we will ask them if they would like to buy a natural cereal bar from Quinoa. A second method of validation is to offer demonstration products to children and if 6 out of 10 children tell us they like the product, it will indicate that the idea has a future. A third method of validation is to sell the products at a point of sale in or near a school, this will allow us to know if children are willing to buy a product like this, if we sell at least 60% of the stock we can say that This idea has a future.
"Market research for a business idea is a part of your business, you can't neglect it."The advantage of a method like this is that it is easy to implement by the entrepreneurs, they do not need to invest in market research and shortens the iteration process to redefine the product with the comments that are collected from part of the target market.
Validation of ideas through the web
Another way to test ideas for products or services is through the web, and for this there are several tools and methodologies that allow validating ideas and identify interest by customers.
If you are interested in promoting your product and measure the interest that customers have for it, or even, you want to measure the interest for a product or services that you want to launch but does not exist, you need other tools.
The company Startups.co offers an excellent tool called LaunchRock. This is a platform that allows your users to create professional pages quickly and at a very low cost to test ideas before investing money in producing things that your market may not want.
This is used for pre-registration or pre-sale of products because through it launches a campaign for people to register to "reserve" a product once you release it to the market.
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This allows to measure the interest of the target market. This platform offers the possibility to manage customers as they enter their data for pre-sales, so you can make targeted campaigns once you have the product or service.
An excellent web alternative for validating ideas is QuickMVP, which allows you to do it through online surveys, creating sites to share an idea, product or company. This provides several analytical tools for calculating key economic metrics such as margin and market size.
Other alternative platforms are: Unbounce that offers to test the designs of websites, this lets you know which is the best design of your site that will allow to have the highest conversion rate of visitors.
Kickofflabs helps to market research for a business idea, which allows massive email campaigns to test ideas, campaigns, products, etc.
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Mybetalist is a platform that allows to create viral campaigns to promote your products, Launcheffectapp is a template for Wordpress that allows to create viral campaigns in minutes. Prefinery is a platform for creating viral waiting lists for product reservation. Launch.deskgator is a "soon page" platform for sites to launch.
Validation of ideas is the starting point before embarking on a new venture. This can be the difference between a successful venture and a failed one. That is why, to ensure the success of our future business (and not lose our savings in the attempt) we must take the time to validate our ideas and reformulate them until we are sure that is what our customers really want.
Market research for a business idea is a part of your business, you can't neglect it. If you have anything to add here, please feel free to write in comment box.