As someone with few resources, I can only do market research through observations, talking to people and using google questionnaires in addition to finding secondary research done on the topic.
However, is this method of "market research" acceptable when I want to present my ideas to potential investors? Is there some sort of more valid form of market research?
First of all, the fact that you are talking about market research ('validation') is great. I've seen so many startups invest time and money, only to find out later that no ones wants/needs their product, or that they only want a certain aspect of it (whilst the startup spent money developing a whole bunch of other features), or that they aren't willing to pay the requested price. So you're already one step ahead.
Also, the sooner you validate your product, the better!
The best ways to validate your idea is to see whether people are willing to actually pay for your product/service. The best way to get investors, is to show (1) that you are solving a need, (2) that you have traction, and (3) that the investors will get a nice return on their investment.
As for methods of validation, here are the most efficient methods.
1. Check that people will actually buy/pay for the product. You can do this by setting up a Wix or Wordpress website (this can be done for free / very low costs). If your venture is a mobile app, then you can create what’s called a Clickable Prototype (“CP”) (a visual of the app in which the images change when you click on something - you can do so using the Apple Keynote tool or Microsoft PowerPoint). On the website, include the price of the product/service, and enable people to order it (YES, even if it doesn't really exist yet!). I am happy to explain how this can be done whilst still being fair to your potential customers (the people who click the "buy/download” button).
2. Determine your target market/customers.
3. Spend a small amount (say $100 - depending on your budget) on the most relevant platforms and promote your product/service - linking to the website that you created.
This way, after only spending a very small amount, you will be able to know (if you did it right):
a. Do people like your product.
b. Do people want/need your product (not the same as 'a').
c. Are people willing to pay for your product? (not the same as 'b' - and this being the most important stage)
d. How much they are willing to pay. (you can check this by having 2-3 landing pages with different prices on each).
2 last important points:
a) In order to rule out external factors like an unattractive landing page or advertising campaign, and assuming you have the time, create multiple landing pages / advertising campaigns, with different designs.
b) During the above process, don't forget to check how much it costs you for each user/customer that clicks the "buy" button. If for example each click on your promotion/advertisement costs you $2, and only every 10 people who click go on to the "buy" page - that means each sale is costing you $20. Then check what your average profit per sale is, and then you'll know if your service/product is worth pursuing (obviously there are additional factors like return customers, referrals etc, but you will get a good estimated/validation of the idea/business).
Regarding questionnaires and talking with people, these methods are also very good, but it is crucial that you implement them correctly, otherwise your results might be misleading.
I’ve successfully helped over 300 entrepreneurs and I’d be happy to help you. Doing validation correctly can save you a lot of time and money. Before the call, and in order to make the best of your time, please send me more information about your product/service and your target market.
Best of luck!
Market research is a big ocean in itself .
What will be acceptable to the investors :
a) Primary Research (market size, market segment, customers behavior, product costs, profits, competition etc )
b) Secondary research from public and commercial sources (market size, market segment, customer needs / wants/ desires, current players in the market, concentration of the players etc)
You should be able to reconcile the differences in the two research methods ( e.g Primary research market size may differ from Secondary research market size. Which one is more realistic you should be able to understand the differences and align your proposal accordingly )
I think Yes these would be acceptable to the investors or say
that these are the minimum things that investors will seek from you
However What will attract investors to your proposal are the following things
a) Profit potential ( be prepared with cash flows, income statement, balance sheet simulation ) for next 5-10 years, you should be aware of financial ratios , break even analysis
b) Your own beliefs in the product ( what is USP of the product, what will make it sell, what will drive profits)
c) your commitment levels
(your role and your own evolution as the product grows)
d) your depth of research or knowledge of the market and product
(Yes primary and secondary research )
Feel free to reach me for any support and help
There are a lot of things someone can do to do market research with few resources.
1) Internet is full of data already collected ready to be used: google trends, searches, keyword and queries analysis can already give you an approximation of "what to search". Tools like Ubersuggest, Buzzsumo, but also Google Keyword Planner, and hashtag research on Twitter and Instagram help a lot.
2) when it comes with products Alibaba, Aliexpress and Amazon can help you see what the world is buying: trending products, best selling products, most rated products...
3) More specific websites like Statista, where you can start from free but then you will have to pay
Internet IS data! Everywhere
Hi - the best market research to present to potential investors for a start up is revenue generating customers. It is possible that you are at an idea state. I doubt you will get funding without customers, a minimum viable product, and a revenue model, no matter what market research you may submit to them.
Market research through observation for a small business is perfectly acceptable if backed by a working business model.
Hope this helps.
I think if you really want to win the "YES" of your potential investors when you present your ideas,you should have a profound and realistic ideas that pertains to your subject.
Google is way enough but make sure to search the exact wordings that pertains to your project so it will give you specific inputs.
Speaking of inputs, why not try to make a consultation to the expert. They have the best ideas how you can make your presentation a success.
1. Start by identifying who you developed your product or service for.
2. Engage your target customer in the real world.
3. Form 3-4 focus groups to provide feedback to improve product or service value.
4. Present the improved product or service to a second set of focus groups to determine what price they are willing to pay.
You then identify where your best prospective customers can be found in groups and harvest them via direct and digital presentations.
The key to business development and scaling at early stage is to not depend solely on digital platforms and keep your pitch simple and value-driven.
If you value over 2 decades of profitable growth experience, book a call and I will bring profitable growth to your young company.
Hi there. One of easiest ways I conduct market research is with a free website called Answer The Public. You can plug in keywords or groupings of words related to your industry and learn what types of questions people are asking online about the topic. Another thing you can do is follow what I call the PIGGLY method: Search Pinterest, Instagram, Google, Groups, LinkedIn, and YouTube to see what's currently showing up within your industry, the language people are using with regard to the needs/wants/desires, and then write a blog or create a video to present to those people. Validate the need before presenting the opportunity to an investor and you'll make that conversation go much smoother.
The professional way is to invest money into a research firm and other companies which provide such information to your industry. It appears you are doing it the grassroots way, which is fine, however I would work with someone who has an expertise in market research, and go more in depth with researching for data and information. If you'd like to talk more about conducting market research in this manner, feel free to give a call. I'd have to take a look at what you have done thus far and assess what has been done right, or wrong, etc. al.
Take professional help as there are many firms across sub-continent with capable researchers available at a cheap rate. If you need one, I can refer you to few good ones. Good luck.