Why Market Insights for Startups is critical?
Market insights for established businesses understand the customers’ preferences by carrying out market research, focus group survey or involve psychologists to understand human behavior. They may even offer free samples to understand the customer needs.
A startup cannot apply a very structured approach like large companies as it involves the two scarce resources not available in abundance - Time and Cash...
“Market insight can be defined as the attempt to discover a penetrating truth about consumers, their aspirations and motivations which can in turn be used to generate growth.”- Market Research World
The importance of market validation is to reduce risk, shorten time to market and secure paying customers as soon as business is launched.
The ideal approach is to base any business on a personal problem which was solved by a startup entrepreneur. This gives an idea that there must be a large number of people out there who are also having similar problems. They offer their solutions to a few target audience.
This definitely shortens the need to do extensive market research.
This methodology certainly has limitations for growing the business.
The customer preferences could be region specific or may have ethnic connotations.
However, for the initial traction one’s own experience gives confidence and credibility in convincing potential customers.
Ideas are great but an investor always asks for proof of concept. The standard questions asked are-
What pain point the product/ service addresses?
Has the idea been validated?
What is the user experience?
The startup entrepreneur can answer the questions based on personal insights gathered by deploying their solutions. The first door opens quickly.
1. Pokemon Go
Major Marketing Insights from Pokemon Go – Entrepreneur
This article says how the current craze for Pokemon Go can be leveraged for marketing.
There is a explosion of smartphones. Any user can experience the convenience of data on the go. This should give insight on how to approach genY who are the major users of smart phones.
Personal challenges can represent real market opportunities.
Many entrepreneurs empathize with people in their life who are facing challenges and decide to step up and address the problem head-on.
The well-known accelerator ’Y Combinator’(YC) has funded the following three startup businesses based on the entrepreneurs’ market insights gained from their solving personal problems.
“- Personal experience with the problems they are solving, which gives them unique insights into the market they operate in.”- Sam Altman -President- YC
Ritesh Malik left his medical profession.His studies at London School of Economics and Harvard University made him realize that startups need ‘collaboration’ in India. Innov 8 offers beautiful shared work place for Indian entrepreneurs, freelancers and businessmen.
This startup is based on Ashwarya Singh’s unfortunate car accident. The car was jointly owned with a few of his friends. This made them think of the current generation’s requirement for frequent mobility and for being asset free to avoid the accompanying hassles. They created JustRide, a car sharing services.
Vidit Aatrey and his team have been closely associated with many small businesses. They witnessed their struggle to grow by acquiring customers. Meessho is a product built for SMEs. This offers solution to problems of SMEs for scaling their business online.
“If an idea is the seed of a strategy, experience is the seed of idea. Many people look. A few people see.”- DaVinci
One of the hall marks of any entrepreneur is to spot an opportunity ,especially, when they face a personal problem. Their curiosity makes them come out with a solution which has a market need. They are able to demonstrate proof of concept and in the process market- product fit is established.
The above attributes help them to attract investors for scaling up and gain market share.