By Tamara Irminger Underwood
Silicon Valley is synonymous with start-ups. Most of the products and brands the world interacts with either got their start, or continue to be based, in and around Silicon Valley. This region of the world is its own bubble, and rightly so. Venture capitalists are concentrated in the San Francisco/Bay Area, and it remains the hotspot for U.S.-based unicorn companies.
Most start-ups are destined to fail, and with the odds stacked against them, it takes more than luck and moving to Silicon Valley. To gain traction, start-ups need to prove business viability, and that can be done with primary and secondary market research.
Secondary Market Research for Start-ups
Start-ups that have made it beyond the ‘what if’ phase, have likely done some preliminary research into their idea or concept. Secondary research is usually obtained through government or academic studies or reports, or white papers published by trade groups or industries.
Secondary research can usually be quickly accessed with minimal investment and it helps start-ups better define a variety of topics ranging from industry-specific trends to projections and market size.
Typical questions answered through secondary research may include:
- How quickly is a specific industry growing?
- What technologies are emerging or disrupting a target industry?
- What is the addressable market value of an industry within a particular region?
These types of questions often have general enough appeal to be answered by third parties, such as government or industry.
Primary Market Research for Start-Ups
Primary research is research a start-up would typically conduct on its own, or, better yet, outsource to a reputable market research firm. Primary research is gathered directly from the source—customers or potential customers—and typically involves qualitative methodologies, such as focus groups or in-depth interviews. Primary research is crucial for helping prove product viability, or understanding product-market fit.
Typical questions that can be answered with primary research include:
- Who are the gatekeepers to getting my product or service noticed? (This is especially important for B2B concepts!)
- What are perceptions or receptivity to my product or idea?
- Does my product or service address the pain-points of my target audience?
Examples of the above questions would not be answerable through secondary research. Our team of researchers recently worked with AutumnAI, a Toronto-based start-up, to answer these very questions and more.
The newly-funded start-up was able to save itself a lot of time and dead-ends because it started with a qualitative market research study in its earliest days.
Proven ROI when Start-Ups Commission Market Research Studies
It can be hard for start-ups to understand the value of commissioning a market research study when they are just getting going. It may seem premature, or too expensive. Time and time again, we’ve worked with start-ups in their earliest stages to help with primary research, and we can confidently say that there is substantial ROI for early primary research.
The odds of success are already low for start-ups, but primary research can increase the odds. Primary, or qualitative, research provides direction and structure when it’s needed most.