Introduction to Market Research

Welcome to Lesson 3 of 4 in Enterprise Building Foundations. It takes about 15 minutes.

Market research sounds expensive. For a small business it is mostly good questions and careful listening: finding out whether other people really have the problem, before you spend any money. In this lesson you will learn which questions give honest answers, which ones only give polite ones, and how to hear the case against your own idea. You will finish by talking to one person who has your problem, the third piece of your Idea Capture Sheet.

Scripture comes from the King James Version. This is general education, not business advice, and it cannot promise particular results.

Since last time

Last time you chose a small action: noting complaints for a week, asking someone what annoys them most, or reading your problem, said from their side, to someone who has it.

Look back at the week. What did you try, and what did you notice? If you did not manage it, say so honestly and carry it into this week.

In this lesson you will

• Ask questions about what people have actually done, and avoid questions that only invite polite answers.
• Explain how seeking knowledge and hearing the other side, as Scripture describes them, protect us from spending on an untested idea.
• Talk to at least one person who has your problem and record what they said.

Before you start

How true is each of these for you today, from 1 (not true) to 5 (very true)?

• I know what questions to ask to find out whether people really have a problem.
• I am willing to find out that my idea is wrong before I spend money on it.
• I have talked to someone who has the problem I care about.

1. Find out before you spend

Many people spend their savings on equipment, stock or a shop before finding out whether anyone will buy. Proverbs describes a better order.

Proverbs 18:15 (KJV) 15 The heart of the prudent getteth knowledge; and the ear of the wise seeketh knowledge.

The heart of the prudent getteth knowledge; and the ear of the wise seeketh knowledge. Wise people go looking for knowledge, and they use their ears.

For a small business, research starts with two simple steps, both free:

• Go and look. Who already offers something similar, at what price, and how busy are they?
• Talk to people who have the problem. How do they deal with it today? What has it cost them?

Imagine a young man who wants to start a phone repair service. Before buying any tools, he spends one Saturday visiting the repair stalls near him and talking to people waiting in the queue. He comes home knowing what they charge, how long people wait, and what customers complain about.

Think about it: What could you go and see, or whom could you ask, this week about the problem you chose?

Try this week: Spend one hour looking at what already exists for your problem: who offers it, what they charge, how busy they are. Write down what you see.

2. Ask about what they have done

People are kind. If you ask, "Would you buy this?", most will say yes to be polite, and you learn nothing. The entrepreneur Rob Fitzpatrick makes this point in his short book The Mom Test: talk about the other person's life, not your idea; ask about specific things that already happened, not opinions about the future; and listen far more than you speak.

Questions that give honest answers:

• "Tell me about the last time this happened."
• "What did you do about it?"
• "What did that cost you, in time or money?"
• "What have you tried that did not work?"
• "Who else should I talk to?"

Questions that mostly give polite answers:

• "Would you buy this?"
• "Don't you think this is a good idea?"

Do not mention your idea until the end, if at all. Write down their exact words afterwards. One conversation is a good start; five is better.

Think about it: When you have asked people about your ideas before, did you ask about what they had done, or what they thought of your idea?

Try this week: Have one conversation this week with someone who has your problem, using only the good questions. Write down their exact words.

3. Hear the other side

Our own ideas always sound convincing to us. Proverbs warns how persuasive the first story is.

Proverbs 18:17 (KJV) 17 He that is first in his own cause seemeth just; but his neighbour cometh and searcheth him.

He that is first in his own cause seemeth just; but his neighbour cometh and searcheth him. In research, the first story is usually our own enthusiasm. So look for evidence against your idea as carefully as for it:

• Who already serves these people, and why might they stay?
• What would stop someone buying from you? Price, trust, distance, habit?

Imagine a woman planning a cake business. Her friends love her cakes. Then she asks a bakery owner what it is really like, and learns that most profit comes from large events booked months ahead. She builds around events. The hard questions did not kill her idea. They made it better.

When you are ready to run a small paid test and write a full research plan, KMA's Enterprise Building Track shows you how.

Think about it: What is the strongest reason someone might not choose what you plan to offer?

Try this week: Ask one honest person to give you three reasons your idea might not work. Thank them and write the reasons down.

Activities

Reflection

• Are you afraid of finding out that your idea is wrong? What would it cost you to find out now rather than after you have spent money?

Key takeaways

• Find out before you spend: go and look, and talk to people who have the problem.
• Ask about what people have actually done, not what they might do. Listen far more than you speak.
• Your own idea always sounds right. Seek the other side.
• One honest conversation is worth more than many polite compliments.

Your next step

You have finished Lesson 3. You are on the path of growth: you know how to ask honest questions, and you have started talking to people who have your problem.

These lessons give you the everyday basics. To keep growing, KMA offers two next steps:

Mentorship. Work on your own idea with a KMA mentor who helps you talk to real people, shape a first offer and follows up with you on what you tried. See KMA's mentorship packages. See the mentorship packages

Or: the Enterprise Building Track (monthly Learning membership). Prefer to learn on your own first? The Enterprise Building Track takes these basics further: a full one-page business model, a research plan with a small paid test, honest pricing and finding your first customers. See the Enterprise Building Track