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Market research plays an important role in defining the strategies of all organizations, and startups are no different. For many growth-stage companies, market research is a vital input into decisions that could make or break the entire business. The insights developed by market research shape product development pipelines, inform go-to-market strategies, and enable startups to best position themselves for success.

There are, however, distinct differences between how market research initiatives are typically carried out at startups and how they are carried out in more mature companies. It’s likely that the person charged with leading a market research initiative at a startup lacks the domain expertise, time, and funding of a team heading market research at a larger organization. After all, everyone wears a lot of hats in a startup environment and needs to be ready to hop on new projects at a moment’s notice. 

Regardless of the sophistication of the market research team, the same core principles, best practices, and phased approach to conducting market research still apply. 

In this article, we’ll explain exactly what the optimal market research process looks like for a startup. We’ll share cost-effective strategies that will help you quickly deliver insights across every stage of the market research journey. Let’s get started. 

 

1. Defining the Research Objective

Before you start recruiting participants for focus groups and administering surveys, it’s important to take the time to define the objective of the market research process. 

Often, you’ll have been assigned a market research project because your leadership team wishes to have certain questions answered; the relative attractiveness of new product features, or the size of new markets. Other times, a founder might be ready to make a big bet on an emerging trend but needs data to sell this pivot to their investors. 

In this phase, there are several best practices you should keep in mind. Ensure there is clarity and internal alignment on the desired outcome of the research project. Establish one singular overarching research objective. Here are a few examples:

  • Which European market should we launch our product into first?
  • What combination of product features is most valuable to our target customers?
  • How much is our target market willing to pay for our products and services?

Once you’ve established a clear, measurable research objective, you’re ready to kick off the research process itself.

🔎 Related Article: How Much Does Market Research Cost?

2. Exploratory Research

Exploratory research is a preliminary stage of the wider market research process and enables researchers to get initial validation for their preconceived hypotheses. Conducting exploratory research is relatively straightforward, and the process is usually pretty informal – particularly for startups. 

In this phase, the goal is to substantiate existing research ideas with a small group of participants before investing in larger primary and secondary market research efforts. In practice, exploratory research typically involves informal interviews or focus groups with a small group of people that are representative of your startup’s wider customer base. 

For startups, it’s often easiest to conduct exploratory research with your existing customers. Ask your Customer Success Managers to set up short calls with some of your key customers. These calls should be relatively informal and unstructured: you should have a loose agenda, but let the conversation flow organically and explore new ideas. 

Once you’ve talked to several different customers, you should have validated some of your existing ideas, and most likely unearthed some new ones you hadn’t thought of. Take these ideas and form a set of hypotheses that you can put to the test through a more rigorous program of primary research.

🔎 Related Article: Exploring the Market Research Process

3. Primary Market Research

Primary market research will likely form the bulk of your market research work. The techniques that are used in this phase can be divided into two camps: quantitative research and qualitative research. 

Quantitative research uses various forms of surveys to produce raw data, which researchers can then analyze to develop insights. It’s simple enough to produce your own basic survey: use a tool like FocusVision Decipher that offers you access to pre-built surveys you can tailor to the needs of your research project. 

Qualitative research, which includes focus groups and interviews, is also valuable in helping to establish context around the results of your research. It’s possible to run your own qualitative research process, but this isn’t always the best way to go. Your research must be entirely impartial. Ideally, participants should not know the organization sponsoring the research, as this could cause them to produce biased answers. For that reason, many companies––including startups––will hire market research consultants to run their primary market research process. 

It’s vital you include both quantitative and qualitative research techniques in your market research process. The two complement each other: generally, quantitative research tells researchers what is happening, and qualitative tells them why it’s happening. 

 

4. Secondary Market Research

All organizations should conduct secondary market research on an ongoing basis: not just as part of a particular market research initiative. Secondary market research consults a wide variety of existing bodies of research, including industry reports, academic studies, and data from government agencies such as the FDA. 

The goal of secondary market research is to build a more comprehensive understanding of your startup’s customers, competitors, and wider market. For specific market research initiatives, possessing this kind of understanding enables startups to place their findings in the wider context of the markets in which they compete, rather than just looking at issues in an isolated manner.

Market Research Overview

Tracking and analyzing all of the secondary data sources you need to be successful is impossible without the support of a sophisticated market and competitive intelligence technology platform. For startups, who likely lack a dedicated market research team, this is even more important. 

Software platforms like Knowledge360Ⓡ enable startups to automatically monitor a huge range of secondary market research sources. The tool uses sophisticated AI algorithms to automatically summarize information into shared team dashboards and email reports that ensure everyone in an organization has streamlined access to cutting-edge insights. 

 

5. Sharing Market Research Insights

As you approach the conclusion of your market research project, it’s important to carefully consider how to best share the insights you’ve developed through your work. These insights are crucially important to your startup, but they’ll only be used if you present them in a format that works for your team. 

Startups move at a hundred miles per hour, and it’s unlikely that anyone has time to read a lengthy report on the outcomes of your market research project. Instead, focus on distilling the insights you’ve developed into a few key headlines that can be quickly shared with decision-makers. 

Choose an appropriate format: it could be a one-page summary, an email, or a short slide deck. Make sure to include visualizations of your data, including pie charts and graphs, that make it easy for readers to quickly grasp the key insights in your report. Talk to your colleagues about best practices for knowledge sharing within your startup, and don’t be afraid to ask for feedback about how your deliverable can be improved: it’s important for startups to continuously ideate, learn, and grow. 

 

An Alternative Approach: Prediction Market Research

Market research can be a lengthy, involved process, and it may not always make sense for a startup to pursue a traditional market research approach as outlined above. Instead, a better option for many startups might be prediction market research: a cutting-edge marketing research technique that delivers accurate results in a shorter time frame. 

Prediction market research is particularly valuable for many of the market research issues faced by startups. It can quantify the timing, sizing, and impact of market trends that startups often seek to capitalize on, and it can assess the market potential of early-stage ideas to provide an understanding of how these will progress. There are also applications in later-stream aspects including product messaging, packaging design, and product line-ups that help agile startups quickly optimize their products and services to satisfy the needs of their market. 

Prediction Market Research - Insurance

Prediction markets work by challenging research participants to predict how certain groups will react to ideas and events and to bet a virtual currency indicating their confidence levels in their predictions. This approach reduces response bias and boosts research accuracy, resulting in significantly more insightful market research. 

HUNUUⓇ Futures, from Cipher, delivers compelling market research insights in a matter of days. It’s faster and less expensive than traditional market research methods, making it the perfect match for startups looking to get to market insights fast. 

 

To learn more about HUNUU Futures, contact us today.