When starting a technology company, understanding the needs of the market can be the difference between success and failure. The best way to understand whether you have a viable business idea is through market research.
When it comes to market research for your product, most people trust their instinct rather the data. This happens because you are excited about the product. Under stress and excitement, the hormones will force you to trust the instinct rather than the logic. Gut feelings work sometimes but can go terribly wrong. This is one of the reasons why most startups won’t make it to their second anniversary.
The purpose of market research is to validate an assumption. The assumption can be anything from product development to the sales and marketing strategy. You have to mine and analyze market data to reach a conclusion.
What are the important questions you can get answered from the web data?
1. Who are your competitors in the market? – Knowing who your competitors are, and what they are doing, can help you to make products stand out.
2. Is there a clearly identifiable market for your product? – No company is big enough to satisfy the needs of an entire market. The point is to finding your niche and capitalizing on the available opportunity by positioning your product in alignment with customer needs.
3. What are the business models of your competitors? – You need a viable business model, and learning about your competitors business model can give you insights on sales and marketing strategies. You can use this data to perform a SWOT analysis and fine tune your strategy.
4. What are the product distribution channels of your competitors? – Many entrepreneurs who build great products don’t have a good distribution strategy. Having a good knowledge of your competitor's product distribution strategies can help you develop your own distribution strategy.
5. With whom you can collaborate? – A good partnership with companies that integrates with your product strategy can take your business to the next level.
6. How much funding your competitors have raised till date? – This can be an indicator of growth in the niche and also a confidence booster for you.
7. Which VC’s are actively investing in the specific niche? - With the data, you can get a good idea of which VC firms are actively investing in the specific market. Instead of pitching a lot of investors, you can build a targeted list of and pitch them. You will save a lot of time doing so.
There are a lot of people who wants to research on companies and startups. One thing many of them don’t have is the access to required data. Without enough data, the conclusions of a research won’t be authentic and reliable. This data should be accurate and up to date.
How to get Data for your research?
Some of the most reliable sources for obtaining the data are from Crunchbase, Angel.co, and other business directories. Some sites have API’s, but many of them do not have one. We can get a 360-degree view of the companies if we can use API’s of Crunchbase, Angel.co, and mine and correlate data from other publicly available sources. The following data attributes are very normally used.
• Company Name
• Date founded
• Funding received
• Contact info
You can get all the data in a neat spreadsheet. The data should be filtered and concise so that you have only relevant information. Analysis of this data should be able to answer your questions to help you validate the assumptions.
How to segment the Data?
You can use any common spreadsheet software to segment the required data.