Startups, whether they’re in Silicon Valley or Ohio, have to get pretty far with a brilliant idea, execution strategy, and most of all, a compelling pitch to get funding.
They’ll put together a slick business plan, refine their pitch, and wow a VC or angel investor enough to earn the first round of funding.
However, the majority of startups seeking funding and aiming for ambitious growth goals miss one of the most important components of a successful business plan. In fact, it’s an aspect that even the best Big Data mining won’t uncover, and it’s absolutely essential to successful adoption.
What data doesn’t tell you
A comprehensive business plan will include a market study, demographic data, and loads and loads of statistics, charts, and predictive modeling.
Which is all good and fine, and absolutely necessary.
But you know what’s missing?
Opinions. Motivations. Experiences. Perceptions.
All of the best data in the world doesn’t uncover the subjective, feeling-part of the equation – that part that will actually help you understand how people will use your new app, sharing-economy service, or cloud-based program.
And you know what? Ninety-two percent of startups fail within the three years. Yup, 92%. Which perhaps isn’t so stunning when you consider that the majority of startups don’t build the opinion, motivation, and perception part into the vetting of their business idea.
But there is an easy solution that will set startups up for success
Gathering numbers, statistics, and comprehensive market studies is only one-half of the due diligence that founders need to do. The other half is to hire a neutral, third-party research firm to do qualitative, person-to-person interviews with the actual target market that the product is being developed for. We’re not talking about taking a poll at a bar, brainstorming with your best buddies from your college years, or crashing a bachelorette party and asking for opinions.
Nope, sorry. That’s not actual research.
Qualitative research is a methodologically rich process that takes the user-audience through a comprehensive open-ended discussion guide, and it incorporates projective exercises that get beneath the surface and tap into deeper motivations and reasoning. From this process, you’ll have a complete report, with detailed findings about how to tweak your product, refine your messaging, or position your product relative to the competition. You may even learn that your product probably won’t sell, in which case it’s time to explore a new concept. Whatever the outcome is, you’ll come away with tangible, proven ideas that will you can build into your business plan. You’ll have a more compelling case for your investors, and most importantly, you’ll be able to develop a business based on how customers will actually use your product.