Back in the day, long before the internet, I would drive over to Stanford University to do my market research. The business school had a really nice library where I could find just about everything I wanted.
This would be my ritual every time we entered a new market. And, if I was lucky, I’d be able to conduct all my research in one day. It was what we had to go on back in the day.
Then, the internet came along. There was cool innovation known as a search engine. I didn’t need to go to Stanford anymore because I could do everything I wanted from my office.
How cool was that?
My methodology to research a new market really hasn’t changed much over the years. It involves these three simple steps:
Step 1: Keep a beginner’s mindset for as long as possible.
Okay, I’m stealing from Shunryu Suzuki’s great book on meditation, “Zen Mind, Beginner’s Mind.” A beginner’s mind in meditation is a mind that’s free from thinking or overthinking, and it’s the same when you’re researching a market.
You want to keep an open mind for as long as possible. This keeps from coming to preconceived notions, and it keeps you researching the market, without judgement, for as long as possible.
Step 2: Keep a central file with all the data you accumulate in one place.
I would always start with a blank file that I labeled “Market”. As I accumulated data, I would separate the information into several sections:
A. There would be a section for market size data.
It’s amazing how much information is available for free. I’ll take all that information, and I’ll identify the source of the data for future reference.
B. There would be a section on the competition.
Anything and everything I can find on our competitors goes here.
What new products did they announce? Who’s running the show? What’s their background? Key personnel? Strengths? Weaknesses? Financing? You get the idea.
C. There would be a section on the customers.
You gotta know what’s happening with your potential customers too. In fact, you want to understand your customers business better than your customers do.
How is this possible? In the business to business tech world I spent the majority of my career, it was common for analog IC companies to understand the analog electronics needs of their customers better than the customer.
The reason for this was most customers lacked analog electronics expertise. The result was we would, in many cases, design the analog part of the customer’s system for the customer. That’s when you add supreme value.
So, the more you learn about what’s driving your customer, the better off you are. Put all your thoughts and knowledge in this section.
Now you’re ready for the final step in the process:
Step 3: What does it mean to you?
This is where you take all the information you’ve learned and determine what does it mean to you:
- How big is the market today and five years from now?
- What should your strategy be?
- How are you going make customers aware you exist?
- Your competitors strengths, weaknesses, and what their likely direction and strategy will be going forward
- Your pricing strategy
- What do you need in order to win?
Then, you update the information as you continue learning new information. That’s the simple, three step plan to perform market research. I still use it today.