No business survives without performing market research.
A “great idea” is a very subjective term. And countless would-be entrepreneurs have been laid to waste by a seemingly great idea…
…that no one else gave two shits about.
Perhaps they could have been spared the time and money dump if they understood their market before rushing into it.
Sure, every once in a blue moon someone knocks it out of the park with little reconnaissance performed. Maybe their offer is so unique that it’s the hottest thing since sliced bread, and simply bringing attention to it is all that’s needed to reel in life-altering wealth.
The rest of us aren’t so lucky.
Today, I’d like to illustrate the importance of market research by drawing similarities to another sort of market — the stock market.
There are some interesting parallels in terms of best practices, lucky breaks, and devastating consequences of ill-advised research tactics.
So let’s get to it.
Accumulating effective market research requires you to draw water from many different wells. Time-consuming? You bet. But the more data you can collect, the more complete your information portfolio becomes. This is essential because you want to maximize benefits while eliminating drawbacks.
Some data you collect will be inaccurate, taken out of context, or just irrelevant. No one bats 1.000. Just like some stocks in a portfolio turn out to be duds. The better assets (ideally) more than make up for it, however.
It’s the 80/20 rule: 80% of your results tend to come from 20% of the avenues. You’ll find your honey holes for gaining insights into your market, but that doesn’t mean you should stop looking for new sources.
Thinking you can strike gold with one single source is like rolling your 401k into one single stock. It’s a crapshoot at best, and you know what they say about not putting all of your eggs into one basket.
The Trend Is Your Friend…Until It’s Not
Day traders perform technical analysis aimed at identifying where a stock’s price is going. Some of these guys put enough indicators and lines on a stock chart so that it looks more like a Jackson Pollock painting than a tool for financial asset behavior.
But regardless, technical analysis is aimed at one thing; identifying a trend.
Once the trend is established, common trading sense calls to ride it and never go against it. So let’s look at this in how it relates to your market research.
Say, for example, you’ve found a certain Facebook group that’s proving you with pure gold when it comes to market insights. Real members of your target market are openly discussing their pain points, what they like about a certain product, what they would change, etc. You’re lapping it up like a thirsty dog. Things are dandy.
But all trends eventually hit a top (or bottom) and then reverse.
A soaring stock can’t go up forever. And, at some point, the research trend you’re riding will probably cool off in a similar fashion.
Maybe that same Facebook group you were effectively trolling starters getting infiltrated by network marketers. Maybe it just gets too big and the once-amazing insights become watered-down raves and stupid, time-wasting bitch sessions (not on Facebook! That never happens!)
This is another reason why you should have your market research arsenal diversified. But what the hell? Ride a research trend until it can’t be ridden anymore!
Know YOUR Market (And Don’t Rely On Data From A Similar One)
Say you wanted to invest in a fund that’s based on a stock index.
The Nasdaq is composed of 100 leading American tech stocks. The Dow Jones Industrial is made up of 30 large blue chip companies. And the S&P 500 index has about 500 companies in the U.S. across 11 sectors. It’s like a big picture of the overall economy.
If you want to invest your time, effort, and money into a consumer market, each will have its own driving forces. Each will vary in size and who it’s composed of, and you sure as hell better know it inside and out.
Just like the 3 major stock indexes, consumer markets can have overlap, but they still will move in different ways. Make sure your market research is pertinent to your market, and just pull data or ideas from one that’s “close enough.”
Be Like Warren Buffet When It Comes To Market Research.
The “Oracle of Omaha” Warren Buffet became mega-successful by developing a plan that made sense to him and then just sticking to it. He never was one to go after shiny new objects. He found what worked, and then pounded the hell out of it.
This is how you should look at your market research. Sure, it never hurts to consider different methods or avenues, and everyone has a different appetite for risk. But when you settle on a formula, it’s best to stick to it.
I hate to break it to you: but just like in picking lucrative investments, you can’t skimp on market research when it comes to your project. I hate cliches, but let’s just fucking say it:
Knowledge is power.
Just like Warren Buffet, Profile For Profit has leveraged years of investigative experience and education into formulating our proven strategies. We don’t have similar bank accounts, but the approach to what we do is still the same.
And just like Berkshire Hathaway’s clients have been more than happy with their returns on investment, our clients have been blown away by the amount of time, effort, and money they save in getting everything they need for research, data analysis, UX, and more all in one place.