December 2, 2024
n this episode of ‘FAQs with Jenny’, our Founder and CEO, Jenny Karubian takes a deep dive into how Market Research can help Tech Startups achieve market success.
Jenny starts out by defining a startup stating, ‘Startups are companies that are in their infancy that are striving to grow. So, this is any company that an entrepreneur started that’s meant to grow beyond the owner or founder. This is a company that is meant to offer some kind of scalable business within the market.’
She goes on to share, ‘Startups are one of the main types of businesses that we help, especially startups that are in the tech space.’
Startups are the lifeblood of innovation, but their journey is often fraught with challenges. While the allure of Silicon Valley and the dream of rapid growth are tantalizing, the harsh reality is that only a fraction of startups survive the initial years.
Jenny reveals, ‘In the United States today, there’s nearly 80,000 startups. Most of those are in California with Silicon Valley being sort of the epicenter of the startup community. But of those 80,000 very few will survive. In fact, only one in 10 startups will make it past 3 years. There’s a 90% failure rate when it comes to startups.’
This stark statistic underscores the importance of Strategic Planning and Market Research in informing decisions and guiding your startup journey to success.
While this is an inexhaustive list, Jenny urges entrepreneurs looking to get their startups off the ground to venture into the unknown with caution, armed with insights that will help illuminate the precarious path forward. She goes on to say that smart startups, in reference to those that succeed, are the ones that make themselves failproof.
To mitigate these risks, startups must adopt a data-driven approach. Jenny goes on to share how Ready to Launch Research has helped startups in the past to failproof their businesses.
To increase their chances of success, startups often engage in strategic planning and pipeline development. This is where we can provide invaluable assistance. Our expertise lies in helping startups navigate various challenges, including:
What sets successful startups apart from those that fail? A key differentiator is a deep understanding of their market. Before even launching their venture, many successful startups invest in comprehensive market research. Jenny speaking on startups that Ready to Launch has served in the past says, ‘They will commission some preliminary research that we can do where we don’t necessarily speak with consumers, but we do a full read of what the market is and market demand, market size, all the information that they need for their product or service. This helps to understand what’s the competitive landscape; how many competitors are out there; what differentiates one competitor from another; and how can their brand stand out?’.
By gaining insights into these factors, startups can identify potential opportunities, assess their competitive advantage, and refine their business model. This proactive approach empowers them to make informed decisions about product development, pricing strategies, and target market segmentation. Additionally, when considering expansion into new markets or launching new products or services, Market Research can provide valuable guidance, helping startups navigate unfamiliar territory with confidence.
Another effective strategy for startups is to directly engage with their target consumers through focus groups and interviews. This allows them to gather firsthand insights into consumer preferences, pain points, and emerging trends. By conducting these qualitative research methods, startups can gain a deep understanding of how their product or service resonates with their target audience. Jenny says, ‘This is something that we do all the time, this is very much our bread and butter. And [our startup clients] will conduct research to find out what are the consumer responses to their product, to their service, what’s the consumer demand, what are the trends that are happening.’
Jenny offers the following example: If a startup is targeting young adults, such as college students, conducting focus groups or interviews can be invaluable. This demographic is particularly dynamic, with rapidly evolving preferences and behaviors. By directly interacting with this audience, startups can identify emerging trends, gather feedback on product features, and gauge the overall market potential of their offering.
Lack of Consumer Insights:
A common pitfall for Tech Startups is a lack of understanding of their target market and consumer needs. Jenny shares that, ‘One of the main reasons for tech startup failure is a lack of understanding of the market and of consumers. This is a moment that’s really ideal for conducting Market Research to make sure that your company has a good understanding of who they’re trying to reach and how well their product or service will be received.’
To mitigate this risk, conducting thorough Market Research is essential. By gaining insights into consumer preferences, behaviors, and pain points, startups can ensure their products or services resonate with the right audience.
Our Product Validation Solution for your Tech Startup:
One powerful tool in the Market Research toolkit is Product Validation. Before investing significant resources into product development and manufacturing, startups can test prototypes with potential consumers. This allows for valuable feedback, enabling product optimization, feature refinement, and the identification of the ideal target audience. For example, if a startup is targeting women, product validation can help determine the specific demographic segments that are most likely to embrace the product. By understanding these nuances, startups can tailor their marketing and sales strategies to maximize impact.
Jenny adds that, ‘Another ideal aspect of doing Product Validation is being able to nail down whose your target audience.’ Jenny then goes on to offer the following scenario: If your product is designed for women, there’s a wide range of potential target audiences within this demographic. To identify the most promising segments, Market Research can involve surveying women of different ages, from various geographic locations, and with diverse lifestyles and preferences. By exposing your product prototype to these different groups, you can gain valuable insights into who resonates with your offering and who doesn’t. This information is crucial for tailoring your marketing efforts. For example, if your product appeals primarily to women aged 25-30, your advertising strategy will differ significantly from one targeting women aged 55 and older. This is where the power of Product Validation lies.
Informed Development as a Market Research Solution:
Informed Development is a crucial Market Research technique that helps startups make informed decisions about their product offerings and pricing strategies. By conducting detailed research, startups can identify the most valuable features to include in their products or services, determine optimal pricing points, and understand which segments of the market are willing to pay premium prices.
Jenny goes on to elucidate how Informed Development works in practice: ‘So let’s say for example, you’re looking to launch some kind of a service that has a subscription model. You may not know what type of features should be included, at which price point, you may also not know which price points are acceptable for users in the market. So, at that point when you conduct Informed Development, you might look at what are all the features that you offer, you might look at how those features resonate with different types of users and what types of users would be willing to pay different price points for the features.
Market Research for Attracting Tech Startup Investment:
Securing investment for your startup can be a daunting task. One effective strategy is to showcase genuine consumer enthusiasm for your product or service. By showcasing strong consumer interest and positive feedback, startups can increase their appeal to potential investors.
Jenny shares, ‘Another reason why startups come to us is because they’re looking to attract investment. We’ve actually worked with certain products that applied to be on Shark Tank. We’ve worked with people who are looking for funding and they want to put consumer reactions in front of investors to show the kind of enthusiasm and excitement that’s around their product. In situations like that we might videotape our Focus Groups, we might create a highlight reel that shows enthusiasm, excitement and real consumer insight on how well the product or service is performing and that’s an ideal thing to put in front of investors when looking for investment in your product.’
Whether you’re in the early stages of your startup journey or looking to scale your business, Market Research can provide invaluable insights. From validating initial ideas to optimizing existing products and services, our team can help you at every stage.
According to Jenny, at Ready to Launch, ‘We offer Market Research at all stages of the product lifecycle. So, if you’re looking to begin a startup and you haven’t even hired anyone yet or incorporated yet and you just want to do some preliminary research, if you are at the point that you’re trying to scale or perfect a product or service, if you have maybe grown a bit and are looking to get investment and you want to kind of level up to working with investors and maybe expanding your company that’s also a good time to conduct Market Research.’
Whether you’re a solo founder or a growing company seeking investment, market research can empower you to make informed decisions and achieve sustainable growth.
Get in touch to discuss your Tech Startup Market Research strategy and find out how we can help you achieve all your Market Research goals.
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