market research for startups

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How to Conduct Market Research for a Startup

• 17 Mar 2022

With every innovative product idea comes the pressing question: “Will people want to buy it?”

As an entrepreneur with a big idea, what’s the best way to determine how potential customers will react to your product? Conducting market research can provide the data needed to decide whether your product fits your target market.

Before launching a new venture, you should understand market research. Here’s how to conduct market research for a startup and why it’s important.

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What Is Market Research?

Market research is the process of gathering information about customers and the market as a whole to determine a product or service’s viability. Market research includes interviews, surveys, focus groups, and industry data analyses.

The goal of market research is to better understand potential customers, how well your product or service fits their needs, and how it compares to competitors’ offerings.

There are two types of research you can conduct: primary and secondary.

• Primary research requires collecting data to learn about your specific customers or target market segment. It’s useful for creating buyer personas, segmenting your market, and improving your product to cater to customers’ needs .
• Secondary research is conducted using data you didn’t collect yourself. Industry reports, public databases, and other companies’ proprietary data can be used to gain insights into your target market segment and industry.

Why Is Market Research Important for Entrepreneurs?

Before launching your venture, it’s wise to conduct market research to ensure your product or service will be well received. Feedback from people who fall into your target demographics can be invaluable as you iterate on and improve your product.

Performing market research can also help you determine a pricing strategy by gauging customers’ willingness to pay for your product. Additionally, it can improve the user experience by revealing what features matter most to potential customers.

When assessing which startups to fund, investors place heavy importance on thorough market research that indicates promising potential. Providing tangible proof that your product fulfills a market need and demonstrating you’ve taken the time to iterate on and improve it signal that your startup could be a worthwhile investment.

Related: How to Talk to Potential Investors: 5 Tips

How to Do Market Research for a Startup

1. form hypotheses.

What questions do you aim to answer through market research? Using those questions, you can make predictions called hypotheses . Defining your hypotheses upfront can help guide your approach to selecting subjects, researching questions, and testing designs.

An example question you may ask is: “How much are people in my target demographic willing to pay for the current version of my product?” Your hypothesis could be: “If my product contains all its current features, customers will be willing to pay $500 for it.”

Another example question you may ask is: “What’s the user’s biggest pain point, and is my product meeting their needs?” Your hypothesis could be: “I believe the user’s biggest pain point is needing an easy, unintimidating way to learn basic car maintenance, and I predict that my product meets that need.”

You can and should test multiple hypotheses, but try to select no more than a few per test, so the research stays focused.

Related: A Beginner’s Guide to Hypothesis Testing in Business

2. Select the Type of Research Needed to Test Hypotheses

Once you’ve formed your hypotheses, determine which type of research to conduct.

If your hypotheses focus on determining your startup’s place in the broader market, start with secondary research. This can include using existing data to determine market size, how much of that market your startup could reasonably own, who your biggest competitors are, and how your brand and product compare to theirs.

If your hypotheses require primary research, decide which data collection method best fits your needs. These can include one-on-one interviews, surveys, focus groups, and polls. Primary research allows you to gather insights into customer satisfaction and loyalty, brand awareness and perception, and real-time product usability.

3. Identify Target Demographics and Recruit Subjects

To gather meaningful insights, you need to understand your target demographic. Do you aim to cater to working parents, young athletes, or pet owners? Determine the type of person who can benefit from your product.

If you conduct primary research, you need to recruit subjects. This can be done in several ways, including:

• Word of mouth: The simplest but least reliable way to recruit participants is by word of mouth. Ask people you know to refer others to be research subjects, then screen them to confirm they fit your target demographic.
• Promoting the study on social media: Many social media platforms enable you to show an ad to people who fall into specific demographic categories or have certain interests. This allows you to get the word out to a large number of people who qualify.
• Hiring a third-party market research company: Some companies provide full market research services and recruit participants and conduct research on your behalf.

However you recruit subjects, ensure they take a screener survey beforehand, which allows you to determine whether they fit the specific demographic you want to study or have a trait that eliminates them from the research pool. It also provides demographic data—such as age and race—that enables you to select a diverse subset of your target demographic.

In addition, you can offer compensation to boost participation, such as money, meal vouchers, gift cards, or early access to your product. Make it clear that compensation is in appreciation for subjects’ time and honest feedback.

4. Conduct the Research

Once you’ve determined the type of research and target demographic necessary to test your hypotheses, conduct your research. To reduce bias, enlist someone unfamiliar with your hypotheses to perform interviews or lead focus groups.

Ask questions based on your audience and hypotheses. For instance, if you’re aiming to test existing customers’ purchase motivations, you may ask: “What challenge were you trying to solve when you first bought the product?”

If examining brand perception, your audience should consist of potential customers who don’t yet know your brand. Present them with a list of competitor logos—with yours in the mix—and ask them to rank the brands by perceived reliability.

While the questions you ask are vehicles to prove or disprove hypotheses, ensure they don’t lead subjects in one direction. To craft unbiased research questions , use neutral language and vary the order of options in multiple-choice questions. This can keep subjects from selecting the same option each time if they sense the third option is always mapped to a certain outcome. It also helps account for primacy bias (the tendency to select the first option in a list) and recency bias (the tendency to select the final option in a list).

Once you’ve collected data, ensure it’s organized efficiently and securely so you can protect subjects’ identities .

Related: 3 Examples of Bad Survey Questions and How to Fix Them

5. Gather Insights and Determine Action Items

After you’ve organized your data, analyze it to extract actionable insights. While some of the data will be qualitative rather than quantitative, you can detect patterns in responses to make it quantifiable. For instance, noting that 15 of 20 subjects mentioned feeling overwhelmed when attempting to assemble your product.

Once you’ve analyzed the data and communicated emerging trends using data visualizations , outline action items.

If the majority of users in your target demographic reported feeling overwhelmed while assembling your product, action items might include:

• Creating different versions of assembly instructions to test with other groups, varying diagrams and instructional language
• Researching instruction manual best practices

Each round of market research can offer more information about how your product is perceived and experienced by potential users.

Market Research as an Ongoing Endeavor

While it’s useful to conduct market research before launching your product, you should revisit your hypotheses and form new ones over the course of building your venture.

By conducting market research with each version of your product, you can gradually improve it and ensure it continues to fit target customers’ needs.

Are you interested in bolstering your entrepreneurship skills? Explore our four-week online course Entrepreneurship Essentials and our other entrepreneurship and innovation courses to learn to speak the language of the startup world.

About the Author

How to Conduct Market Research for Startups

With 50% of new businesses failing within the first five years of operation, startups need to develop a deep understanding of their customer base quickly in order to thrive. Successful new business ventures strategically begin by gathering accurate and thorough information about their industry to identify the best path ahead. Conducting market research for startups is a key step toward meeting customer needs and strengthening marketing messaging.

Market research brings together important details about a business's customers, competition, and industry. The results serve as a tool in a startup’s business planning process as it evolves. Analyzing the findings can help determine the viability of a business concept and identify areas for adjustment to improve performance, profitability, and attract investors.

“Without market research, a startup is just making guesses. Listening to your prospective customers will help you align your product/service and marketing messaging to address their needs.” Dr. Elaine Young, Champlain College Online

As noted by Dr. Elaine Young , professor and program director of marketing communication at Champlain College Online, “Startups need market research so that they can gain insight into the behaviors and values of their target customers. Just because you think your startup idea is amazing, doesn't mean that consumers will. Without market research, a startup is just making guesses. Listening to your prospective customers will help you align your product/service and marketing messaging to address their needs.”

Table of Contents

What is market research?

Why is it valuable for startups, types of market research, methods of market research, how to do market research for startups, sample questions to ask customers.

Market research is defined as the process of collecting, analyzing, and interpreting a broad set of information about a specific market or industry. The research might focus on:

• A potential product or service for that market
• Existing and/or potential customers for the product or service
• The needs, purchase habits, characteristics, and location of your target market
• Competitors in your industry
• Trends within your market or industry as a whole

As a business strategy, market research enables companies to make actionable decisions according to data-based findings. These measurable statistics can be gathered through a variety of methods, which we will explore below.

Startups benefit from market research in multiple ways. With so much time, energy, and funds invested in a startup, taking steps to strengthen the concept and connection to your target audience is critical to survival and the bottom line. 

The market research process delivers value to startups by:

• Allowing you to test the ideas and concepts behind your product or service
• Enticing investors with data showing the projected profitability of your venture 
• Providing statistical evidence to potentially support your business concept or encourage you to adapt it to better meet the needs of your target market
• Helping to clarify exactly who your customers are
• Serving as evidence to investors of an entrepreneur’s commitment to improving a business based on current market conditions
• Increasing the odds of   success of your startup

“Market research can help founders focus their energy, enthusiasm, and resources toward a specific segment and the real target audience.”

Adrienne Wallace, Grand Valley State University

The American Marketing Association confirms that market research can directly increase your bottom line. And trusted market research findings can also speed up the process of getting investors on board with your startup venture.

“Startups can't begin with just a hope and a prayer,” notes Adrienne Wallace , associate professor at Grand Valley State University. “Market research can help founders focus their energy, enthusiasm, and resources toward a specific segment and the real target audience instead of making the age-old error of ‘everyone is the target’ because it simply can't be that for efforts to be fruitful.”

There are two types of market research used most in the business world today: primary and secondary. They can be used individually but are often combined to create a broader understanding of your target market.

Primary research

Primary research involves collecting data directly from your target market. This is often achieved through the use of surveys, interviews, and focus groups. The findings can provide a comprehensive understanding of your customer base’s needs and preferences.

Secondary research

Secondary research requires examining existing data collected by third parties. Examples of potential data sources include news media, industry reports, proprietary data from other companies, academic journals, or public databases. Although targeted data is not always available for your particular industry, secondary research enables you to gain insight and understanding about an industry overall.

Choosing a specific method of market research — either quantitative or qualitative — will determine the type of data collected in your research.

Quantitative research

Quantitative market research gathers large numerical datasets that can be used in statistical analysis. These results offer more accurate snapshots of industry trends and market challenges. Common methods of collecting quantitative research data are through surveys, questionnaires, and polls.

Qualitative research

Qualitative market research strives to identify the reasons behind customers’ buying habits, as well as their needs, wants, and overall customer satisfaction . These results can help clarify the “why” behind your target market’s behaviors and feelings. Focus groups, in-depth interviews, and online bulletin boards are typical methods for conducting qualitative market research.

Generally, quantitative market research is more commonly utilized than qualitative market research because it is more scientific, unbiased, and more easily plicated in future studies. In 2019, 61% of the money spent on market research in the United States went toward quantitative research, with only 12% spent on qualitative research.

Conducting market research is not a quick process, so it requires thoughtful planning. You may handle this research on your own or hire a third-party market research company to manage the process on your behalf. The steps below will guide you through developing a market research strategy that benefits your startup.

Step 1. Define your research purpose

The first step in market research for startups is to determine what questions you hope to answer through this research. From those questions, you can develop projected results that will help reveal the overall purpose of your research. Understanding the purpose from the beginning will be an asset in identifying the best approach to selecting subjects, composing questions, and testing product designs.

Examples of market research purpose include:

• Confirming consumers’ biggest pain point and whether your product meets their needs
• Tracking and predicting relevant industry trends
• Determining consumer spending capacity for a product/service
• Gauging the market infiltration of your competitors

Step 2. Study your target market and competitors closely

It’s important to take time to study existing information about your target market, your competitors, and your target demographic. Growing your knowledge base about all of these factors in advance will strengthen the relevancy of your research.

When working on demographics, a buyer persona template can be a useful tool to help segment the consumer audience into smaller groups for better targeting. Understanding each group’s behaviors and motivation can lead to research findings that resonate deeply with your customer base.

Step 3. Choose the right type and method for your needs

The best type of market research for your business will depend on the purpose you aim to achieve. If your goal is a broad-scope industry view, secondary research examining existing data may provide you with all the information you need. But if your strategy is to clarify specific details about your customer base, you will need to collect new data through primary research. 

The ideal method for data collection also depends on the end goal. Quantitative research methods such as surveys create data useful in making market predictions. Qualitative research methods like focus groups and in-depth interviews offer more personal and subjective responses from participants. Such responses are valuable when seeking direct consumer insight on your product or service and on brand awareness.

Step 4. Recruit appropriate research subjects

If you are pursuing primary research, the subjects involved in your study should be capable of providing insights that are directly relevant and valuable to your market research goals. Recruitment methods can vary from social media posts to hiring third-party market research firms and incentivizing participation.

Seek out existing customers, former customers, and potential customers to create a full spectrum view of your market and product. Other potential sources for research participants include:

• Recent customers
• Customers who did not complete their purchase
• Word of mouth among both personal and professional networks 

Step 5. Conduct your research

Execute your market research plan based on the method you identified in Step 3. Appoint someone not deeply connected with the project planning as the point person for interviews or focus groups in an effort to reduce potential bias. When creating surveys, strive to incorporate neutral (non-leading) language as a way to craft unbiased research questions.

Christina Inge , an instructor and curriculum designer at Northeastern University, suggests an effective research technique called customer discovery. “It requires asking customers what their needs are,” she says, “rather than showing them your product or service and asking for their reactions. This can help you get to the heart of what your customers need, leading to better product market fit, faster.”

Step 6. Analyze your results

Once you’ve collected and organized all of your data, analyze it for relevant trends and patterns. Any qualitative data, such as feedback from focus groups or interviews, can be interpreted quantitatively by noting response ratios amongst the participants. Examine your findings for insights that offer actionable next steps.

One famous example of a startup that pivoted toward success as a result of closely analyzing the market research on their target market is Tune In Hook Up. As an online video dating site that wasn’t seeing much traffic, their research revealed that users struggled to share videos easily with one another. Based on their findings, they decided to shift away from romance and focus on the videos, renaming themselves YouTube.

Step 7. Create an actionable report from your findings

Gather your findings into a report that outlines the recommended actions necessary to address the market research results. Whether the data provides positive or negative insights, you should always come away with actionable steps and suggestions for the next stage of your startup.

Find additional tips and a free report template in HubSpot’s’ How To Do Market Research: A Guide and Template .

Drafting market research questions for startups is not an exact science because cookie-cutter surveys and interview questions will not work. Every product, service, and industry has unique features that require tailored language in each research question. 

Below is a sampling of the type of questions you may want to consider: 

• What do you like most about our new product or service?
• What do you wish our product or service did that it does not currently do?
• What do you lose sleep over at night?
• What price would you consider so low that you’d question this product’s overall quality?
• Which of these companies have you purchased this product from in the past six months? (list of competitors)

Market research is a booming industry around the globe, but nowhere more so than in the United States. The U.S. is the leading country for market research services , with the industry bringing in $18.75 billion in 2020, more than six times the industry-related revenue of any other country in the world. It’s no surprise, considering how quality market research can directly impact a company’s bottom line and growth. Free kits for growth marketing can help you get moving on the road to success through market research for startups.

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How to do market research for a startup (with examples)

Did you step out of the shower this morning with a business idea to beat them all? Did you read back through late-night notes, and they finally made sense?

If you’ve come up with an amazing idea for a product or service, congratulations! This could be the start of a great adventure, and every adventure needs to start somewhere.

To set a business set up for success, don’t create that website or launch that prototype just yet .

Take the time for proper market research . We know it might not seem as exciting as elevator pitches and guerilla marketing campaigns. Still, it’s just as important for your business strategy and will be a firm contributor to your startup’s success.

To discover if your big shower idea is viable, you need to conduct market research .

Before understanding which market research method is best for you, let’s get on the same page. 

What we’ll cover in this article:

What is market research.

• What good market research looks like, and what it can deliver
• Why market research for startups is so valuable 
• How to conduct market research for startups in a way that’ll give you actionable data
• Some examples of how market research changed the course for startups that went on to become successful businesses

Market research is about analysing the market you are in or are about to enter. It involves closely examining market trends, industry trends, market dynamics, your target audience, and other potential customers. Market research includes competitor analysis to see how similar businesses are selling and identify any indirect competitors you can learn from.

Market research findings will influence and guide your go-to-market strategies, and help you secure funding — they aren’t just for good-looking reports! Investors will want to see more than general market size figures. If you can show them proprietary data you’ve gathered from your target consumers (also known as zero-party data ), it will give them the deeper layer of insight they’re looking for.

Market research has been around for decades , and companies have tweaked and updated it over time, but the term has always been used rather loosely. It shouldn’t be conducted to simply confirm that your idea is good. 

When you conduct market research looking to affirm a hypothesis, you become susceptible to market research bias. You can end up walking away with specific data sets that affirm your theory, rather than actionable data that can dictate the direction your theory needs to take—which may be the opposite direction!

Why is market research important for entrepreneurs and startups?

It’s easy to be blinded by the potential of a big startup idea. Your product or service might seem great on paper—or even as a prototype—but without proper market research services , it could flop when you go to market.

Startup founders need to get as much detailed information on their potential market as soon as possible. Here are some reasons why:

Market research will help you test your ideas

There are several things you can and should find out about your product through research. The first question to answer: is there sufficient demand for your product?

It’s not true that if you make something and promote it hard enough, people will eventually start buying it. 

It could be that the product you have in mind is not for the target group you would expect or that the timing is off. For example, selling wired headphones now that most cell phones don’t even have a headphone jack would not be the perfect timing to secure demand. This works both ways; your product could be behind the times or ahead of them—as you’ll see later in our examples!

That doesn’t mean you can’t produce anything that hasn’t been done before – you simply have to do it differently and better. When Slack entered the market, there were communication tools for businesses already on the market. They just did it better. 

Aside from understanding what your core product and its features need to look like, you’ll also gather important information on pricing, payment plans, marketing strategies, product messaging, and more. There are tons of companies to help you with your research—here are the top market research companies in the US to get you started.

Conducting market research is important for attracting investors

If you want to impress potential investors, you’ll need more than a spicy prototype to whet their appetite. The main thing that investors care about is how likely they are to make money out of this product in the long run. 

For that, they’ll need to see research that backs up your claims and proves there’s a viable market for you to enter and meet demand. 

 This research makes the decision-making process to invest that much easier. 

Investors will need to conduct a due diligence check before they part with their cash. You’ll have a large chunk of the data they need embedded in your market research—making this investment process run that much smoother for every stakeholder. 

Discover how market research can help your brand: from reaching the right customers to testing creative assets

It makes startups less likely to fail 

Let’s look at why startups fail.

The top answers for this underline the importance of market research once again. At number 1 on the list of reasons why startups fail: ‘ no market need. ’ In 42% of cases , there’s simply not sufficient demand for a shower thought—no matter how innovative it is.

Number 3 on that same list is being beaten by the competition. Ignoring your competitors accounts for 20% of startup failure !

Of course, market research can’t predict the future entirely. However, when done properly, it’ll give your small business the tools needed to get a head start in the sink-or-swim world of startups.

Choose the right tools for market research

Attest is here to give you all the market insights you need, with tailored demographic filters and ready-to-go survey templates, you can measure everything from brand awareness to product demand in hours, not days or weeks.

How to do market research for a startup: 6 steps

There are plenty of tools, resources, and best practices to conduct solid market research, but it can be difficult to pick the right direction to head in. Worry not! Here are six steps to get the most out of your market research.

1. Find the right market research methods for your needs

Before diving into your market, target audience, and competitors, it’s good to freshen up on the types of market research methods there are: primary research and secondary research.

Primary market research

The internet only knows so much. You’ll have to get some data straight from the source: your target audience. That’s where primary data enters the picture. This is research you do yourself, gathering information directly from the people you want to use your product or service.

A great way to do this is by using online surveys or working with focus groups to get a comprehensive understanding of what your future buyers and loyal customers need.

Secondary research

If you use existing research and data, you’re doing secondary market research and finding secondary data. This can be great for exploring market dynamics and spotting trends. You can find more tools to help you conduct this research method in our blog: 12 great market research tools .

Secondary data has its place, but because it’s external research that hasn’t been conducted with your business in mind, you’ll need to be aware of citation bias.

What’s citation bias? Citation bias occurs when your data uses the results of other research. The results of which may have been looking to prove something slightly different to what you’re looking to prove. Plus, if the research is not conducted by you, then the data may already have fallen victim to one or more other types of survey bias you haven’t been able to account for.

2. Find out what you need to focus on

You might have a general sense of what you want to learn from your market research: whether or not you should launch your startup idea. However, you’ll need to specify some research goals to get actionable data.

After your first exploratory primary research or secondary research, you’ll be able to identify where you have knowledge gaps. What isn’t clear about the market? What assumptions about your potential customers need to be verified?

You can split up your market research goals into different categories—helping you better assign the right team to the right tasks.

For example, let your best marketers and sales reps help you in researching buyer behaviours. Let your finance team guide payment habits and payment methods for your market research. 

This market research template can help you better guide your market research.

3. Identify your ideal market

In any market research, you’ll have to look at three important factors:

• the target market as a whole
• your competitors
• your potential customers

We’ll start with the market as a whole because it’ll help you get more specific data along the way.

First, figuring out which market and industry niche you fall into is crucial. It may seem obvious, but if you put some thought into it, you might find you’d perform better in a different market.

Aim for a market where you fit in, where there’s a large enough product demand , and where you can make a difference.

Here’s how to find out what’s going on in a market:

Find your market, fast

Don’t leave the success of your startup to chance – our market research software is here to help you navigate the market and make the right decisions for your brand.

Talk to industry experts

Talk to experts who’ve been working in that target market for years and ask them about what they think the future will look like. These might just be speculations, but it’s better to hear them and address them than pretend they don’t exist.

You can also pay attention to what’s happening in online communities revolving around your product idea. For example, places like Facebook Groups, Reddit, Twitter, Twitch, ProductHunt, G2, Capterra, and other platforms can be a great eye opener about your potential future customers and market. 

Read the latest trend reports

Another great way to get a clear view of trends in your market is to keep track of relevant blogs and news. There are plenty of target market reports and public market data available to find out the latest trends and where the market is going, like G2, Deloitte, Gartner, McKinsey, and more—make the most of these datasets.

Use target market research tools

With Google Alerts and Trends, you always have comprehensive, up-to-date data on trends and can spot changes in popularity for certain brands and products by focusing on specific keywords. 

Find out what our favourite tools are for analysing your target market in our blog: eight smart market analysis tools .

4. Shake hands with your target audience

Get ready to talk to real people.

To understand your target market, you need to look at more than numbers. It’s great to see some people spending a lot on certain products, but you’ll need to learn why they do that. Get the powerful insights you need to create a strong positioning and ensure your marketing efforts hit the spot.

This is where primary research is most important. You can choose in-depth interviews, online surveys, focus groups, or a mix of those things, depending on what answers you’re looking for. 

Lost for words? We’ll give you some inspiration in this list of 20 essential questions you should ask your (future) customers .

Consumer profiling for startups

We recommend you go beyond the standard consumer profiling demographics and build buyer personas with layers. By adding behavioural and attitudinal data to the mix, you will create much more effective marketing campaigns and digital marketing strategies that land with the people most likely to use your product.

We’ve got a guide full of tips to get started with consumer profiling as a startup and a success story of one startup that discovered their most important potential customers weren’t who they thought they were .

5. Analyse your key competitors—direct and indirect

Next up: your competition. You don’t need to infiltrate their business to get to know them inside-out, but it sure helps to look at their strategy, messaging, tactics, and, most  importantly, what your target audience thinks of them.

Your target market probably knows who your competitors are better than anyone else. Find out what products they consider as alternatives to yours, and you may find out you have significantly more competition than you initially thought.

Take things a step further and look beyond your obvious direct competitors; focus on other companies that could be catching up with you in a few years or are in your niche but currently offering something else. Chances are you’re not the only one working on a new business idea each morning in the shower!

Rest assured, this doesn’t have to be guesswork—here are our 14 favourite competitor tracking tools to help you get started.

6. Be prepared to make big, but well-informed decisions

Once your market research is done, and all questions answered, it’s time to create a plan of action. Hopefully, you found out that your product or service is a lucrative idea and that there’s a real market for it—even if you need to tweak your idea a bit.

Market research will be the guide for any future business decision you take. How you approach product development, branding, and marketing, will all depend on the results of this research. 

3 Examples of market research for startups

The success of any startup heavily depends on whether they’re willing to listen to their target market or not.

Let’s look at real-life examples that paved the way for tons of startups and set an example in market research best practices to transform a business in its earliest stages of growth.

Example 1: the board game maker that won big with market research

Before coming across Attest, Big Potato Games was cobbling together insights from social media and Google Analytics—not ideal when you want a comprehensive picture of your market.

The team needed to establish exactly who their customers were, and learn the behaviours and attitudes of their potential customers to more effectively target the right people in the right places with the right messaging.

Using market research to explore consumers’ attitudes towards board games and what motivates them to play helped them define key customer personas. The research uncovered seven key customer types, all the way from casual, occasional players to hardcore gamers.

An example of what they uncovered through market research was that mums view board games as a way of getting the family together, while young adults saw it more as a way to socialise with friends.

They also found out the size and importance of each customer segment. While the hardcore gamers are a super important and dedicated segment, it’s still quite a small buyer group. It turned out that the mums group was a much bigger purchase decision-maker and demographic to go for.

Market research allowed them to better understand the segments where they sought to build awareness, who was using their product, and who was actually buying it.

Example 2: admit when you can’t beat the competition

Ever heard of Odeo? It probably doesn’t ring a bell. It was created by Evan Williams and Biz Stone in 2005 as a platform for podcasts. They placed their bets on podcasts. However, as we now know, their timing was off.

Instead of sitting around and waiting for podcasts to hit, they re-examined the market. They looked at user adoption rates, technology, and customer acquisition costs. At the time, Apple was their main competitor, and they knew they wouldn’t win. So, based on their market research, they pivoted.

They looked at other popular platforms where content was shared, such as Facebook. Their market research looked at what people didn’t like about those platforms. What tools were they missing? What annoyed people?

Not long after, Twitter was born. The Facebook News Feed was too cluttered for many people, so they cleaned things up. As we know today, it was a huge success.

Example 3: The dating site that turned into a video platform

Over the years, a lot of dating sites and apps have come and gone. Tune In Hook Up is one of those that has gone rather quickly. Its creators saw that the website, which was a video dating site, didn’t get enough traffic to make the right matches.

They had this technology that made posting videos online easier than ever, but not enough people were jumping on it.

They did market research and found it was hard to find specific videos online, and websites that did offer them didn’t work very well. Sharing videos with others was a pain for users.

Based on their research, they broke up with the online dating market and focused on the video part of their business that already existed. They changed the name, the platform, and their lives. You might have heard of it. They called it: YouTube.

Market research made simple

The right market insights can make or break your business, which is why market research is one of the most important things you can invest in. Don’t leave your market research up to chance – choose the best tools that set your startup on the path to success and match it with talent that knows what to go for. Now get back in the shower; you’ve got ideas to create!

Make market research easy with Attest

With our cutting-edge tech and on-demand research expertise, your startup can rest easy. Measure brand awareness and gain vital insights from our built-in audience of 110+ million people.

Market Research FAQs

To do market research for a startup, you should follow these six steps: 1. Pick the right market research methods 2. Identify what you need to know 3. Find your ideal market 4. Get to know your target audience 5. Analyse your key competitors – direct and indirect 6. Be prepared to make big, but well-informed decisions Once you complete them, you’ll have all the information you need to create a business strategy that will lead to your startup’s success.

The best form of market research you can do for a new business is primary market research. This is gathering information directly from the people you want to use your product or service by using online surveys or working with focus groups.

The main focus of the market research for small startup businesses is to validate their business idea. It doesn’t matter how good your idea or prototype looks; if there isn’t a market for it, no marketing budget will suffice.  By researching what the market thinks about your idea and what needs they have, you’ll know if your product will have demand or not. 

Customer Research Lead 

Nick joined Attest in 2021, with more than 10 years' experience in market research and consumer insights on both agency and brand sides. As part of the Customer Research Team team, Nick takes a hands-on role supporting customers uncover insights and opportunities for growth.

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The Complete Guide to Market Research for Startups

The importance of doing market research for startups is often underrated by those who need it most. The number one reason most startups fail is a lack of market understanding; it’s easy to see how so many new businesses don’t succeed in the early stages.

Success becomes an uphill battle when going to market without fully understanding who a target audience is and how to meet their needs.

Before we show you why and how to do market research for your startup, look at these stats.

The benefits of doing market research for a startup

You’ve seen the stats, and likely, you’re going to want to do everything possible to ensure you don’t end up being one of the many businesses that don’t make it through the early years. As you’ve started learning how to do market research for your startup, you’re on the right track to future-proofing your business – giving it (and you) the best chance of success.

Here are seven things startup market research allows you to do:

• Identify target market
• Understand customer’s needs
• Tailor marketing or a product launch
• Choose the best channels to market your business
• Understand the competitive landscape
• Formulate an effective pricing strategy
• Identify your Unique Selling Proposition (USP)

The information you need to succeed (in almost any market) is at your fingertips – ready and waiting to be discovered. With the right intel, you can refine your go-to-market strategy, remove the guesswork from your marketing, and plan activities based on what you know is working.

What’s more, with software like Similarweb Digital Research Intelligence , you can access instant insights that tell you where opportunities exist in your market.

How to do a market analysis for a startup

In this section, I’m going to show you six of the best ways to do market research for startups. Whether new to a market or a seasoned expert, these activities will give you the insights you need to formulate a successful plan.

If you’re still in the pre-planning stage, you can read more about how to do market research for a business plan here.

1. Size your market

Before entering a new market, it’s crucial to size up the opportunity. Market sizing allows you to see the potential share of your reachable market. The three metrics you need to work out are listed below, along with relevant formulas for each.

• Total Addressable Market (TAM)
• Serviceable Addressable Market (SAM)
• Serviceable Obtainable Market (SOM)

2. Research the competition

Startups can use market research to get a clear picture of the competitive landscape . With the right tools, you can analyze a market and evaluate industry leaders and emerging players in just a few hours. Any new business can use this information to shape its strategy and benchmark itself against competitors.

• Select between 2-4 competitors to analyze.
• Systematically collect data for each business that considers company, product, marketing, and customers, to build the ultimate competitive blueprint.
• Take advantage of our free market research templates to save time. Each is designed to help you better understand your market, customers, and competition. Use a template to record your findings to compare and benchmark easily.

To quickly get a handle on your nearest and dearest rivals, sign up for a free trial of Similarweb . Next, head to the industry overview tab of the Similarweb Digital Research Intelligence solution to start grabbing the data you need.

Industry Overview : The best place to begin any competitive research is here. View website traffic and engagement metrics for your industry to see industry-standard benchmarks. 

A quick click on Industry Leaders module (below) will immediately show you industry leaders and rising players. Here’s where things start to get interesting.

Use Industry Leaders to view your industry leaders and any rising stars that have been gaining traffic at pace. These rising stars are just as important to analyze as market leaders.

Further reading: This post covers seven types of Competitive Analysis Frameworks and includes a free template to help you record and compare findings.

3. Discover what marketing channels work

Whether you’re bootstrapping or have a healthy budget, managing your marketing spending is key. Market research helps you quickly see what channels work for others in your space and uncover competitors’ marketing strategies.

• Take or create a list of competitors.
• Evaluate their marketing channels, including direct, social, email, referrals, and ads.
• Determine if competitors are neglecting any high-value marketing channels.
• Document findings and analyze which channels offer the best ROI.

Use this intel to develop a marketing strategy tailored to today’s market. With Similarweb Digital Research Intelligence, you can do this element of startup market research in under an hour.

With a free trial of Similarweb, you can see granular insights about your rival’s most successful channels. This includes affiliates and referral partners, high-performing ads, upwards and downward turns, mobile app analysis , and more.

4. Identify best-performing pages and keywords

Discover which pages get the most traffic and conversions to find the keywords that drive traffic to competitors’ sites. This will help inform your keyword and content strategy. To create a list of relevant keywords (both long and short-tail), follow these pointers. The key to success is taking a broad view and not just going for the most obvious keywords everyone else is targeting.

• Analyze high-traffic keywords of your rivals, looking at both high and low keyword difficulty (KD).
• Avoid the apparent wins, and do a quick keyword gap analysis to reveal hidden gems.
• Evaluate search trends relevant to the industry you want to enter. Consider keyword seasonality too.
• Review rival sites and dig into their highest-performing pages. This will show you what keywords to use and provide a more informed view of what good content looks like in your market.

Pro Tip: When looking at top-performing pages, visit them and note the different calls to action your rivals use, as this will help you decide which to implement on your site.

With the pages element of Similarweb Digital Research Intelligence, you can analyze up to 10,000 pages per site. In an instant, you can unpack and track their highest-hitting pages as well as those growing or declining over time.

5. Analyze audience demographics

Knowing your target audience is critical for any startup market research.  Establish the following factors to build a picture of your potential audience.

• Use geographical data to see relevant gender and age distribution
• Review audience loyalty metrics to understand how people behave – e.g., do they shop around
• See what search terms they use to discover sites in your niche
• Do they view sites like yours on a mobile device or desktop?

As you can see, you can learn many things about your target audience before starting a business. With this data, you can refine your marketing activities like advertising, outreach, strategy, positioning, and more.

Further reading : Read our guide on how to identify your ideal niche audience

6. Monitor social media engagement and presence

Establishing a social media presence takes a lot of work, and you must evaluate how useful it is at the beginning before deciding how to allocate your resources.

• Review both industry leaders and new players in your industry
• List what channels they have a presence on.
• Look at the number of followers vs. the level of engagement.
• Record how many posts they make daily and weekly.

You can create a spreadsheet to track this or add this to your competitive framework. Don’t try to overdo things. Choose the best channels based on what you already see working for others.

Market research questions for startups

When doing any type of market research for a new business, you need to ask the right questions. There’s no point delving into company research and competitive analysis in a market without first considering what you’re trying to learn from the research.

Here’s a list of market research questions that you might want to consider:

• Do you know who your direct and indirect competitors are?
• Have you sized your market – and do you know your total addressable market (tam), serviceable available market (sam), and share of market (som)?
• What is your Unique Selling Proposition (USP)?
• How much are people willing to pay for your product or service?
• Will you go to market with a promotion, such as a free trial or discounted offering?
• How much do your competitors charge, and do they offer a like-for-like service?
• What trends are currently emerging or impacting your market?
• Do seasonal trends impact your business?
• How do your rivals onboard new customers? Will you do this in the same way or not?
• Do your competitors offer any loyalty or new-customer discounts?
• What are the most effective marketing channels in your industry?
• Are your rivals active on social media? If yes, which channels are the most successful?
• What type of customer support channels will you offer? Consider what your competition offers at present.
• What are your trading hours going to be? Consider the competition here too.
• What keywords are the most successful for your market?

Doing Startup research with Similarweb

Conducting thorough market research and analysis as a startup will help you direct your resources and sharpen your business plan to ensure you take advantage of market opportunities.

With Similarweb Digital Research Intelligence, you’ll access comprehensive industry data in real-time. This way, you’ll be able to track industry trends and the demographic makeup of your target audience to reach them better.

Because we provide real-time data, you get to see emerging market trends as they open. When you’re ready to launch your startup, you can use all that knowledge to your advantage.

Because we provide real-time data, you see emerging market trends as they happen. When you’re ready to launch your startup, you can use all that knowledge to your advantage and ensure your business is prime for the market you’re about to enter.

Don’t delay – start your market research strategy today. Try Similarweb’s Research Intelligence tool for free!

How do you do market research for a startup?

First, measure your market share, then identify best-performing pages and keywords, investigate marketing channels, analyze your audience demographics, compare metrics, and monitor social media.

What is the best type of market research for a startup?

When time and money are key considerations, the best type of research for any startup is secondary market research, AKA desk research . It’s low-cost, can be done with little-to-no market research experience, and the data is readily available online.

What are the 4 types of market research?

The four core types of market research are primary research , secondary research , quantitative research, and qualitative research .

by Liz March

Digital Research Specialist

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How to Do Market Research: The Complete Guide

Learn how to do market research with this step-by-step guide, complete with templates, tools and real-world examples.

Access best-in-class company data

Get trusted first-party funding data, revenue data and firmographics

Market research is the systematic process of gathering, analyzing and interpreting information about a specific market or industry.

What are your customers’ needs? How does your product compare to the competition? What are the emerging trends and opportunities in your industry? If these questions keep you up at night, it’s time to conduct market research.

Market research plays a pivotal role in your ability to stay competitive and relevant, helping you anticipate shifts in consumer behavior and industry dynamics. It involves gathering these insights using a wide range of techniques, from surveys and interviews to data analysis and observational studies.

In this guide, we’ll explore why market research is crucial, the various types of market research, the methods used in data collection, and how to effectively conduct market research to drive informed decision-making and success.

What is market research?

The purpose of market research is to offer valuable insight into the preferences and behaviors of your target audience, and anticipate shifts in market trends and the competitive landscape. This information helps you make data-driven decisions, develop effective strategies for your business, and maximize your chances of long-term growth.

Why is market research important? 

By understanding the significance of market research, you can make sure you’re asking the right questions and using the process to your advantage. Some of the benefits of market research include:

• Informed decision-making: Market research provides you with the data and insights you need to make smart decisions for your business. It helps you identify opportunities, assess risks and tailor your strategies to meet the demands of the market. Without market research, decisions are often based on assumptions or guesswork, leading to costly mistakes.
• Customer-centric approach: A cornerstone of market research involves developing a deep understanding of customer needs and preferences. This gives you valuable insights into your target audience, helping you develop products, services and marketing campaigns that resonate with your customers.
• Competitive advantage: By conducting market research, you’ll gain a competitive edge. You’ll be able to identify gaps in the market, analyze competitor strengths and weaknesses, and position your business strategically. This enables you to create unique value propositions, differentiate yourself from competitors, and seize opportunities that others may overlook.
• Risk mitigation: Market research helps you anticipate market shifts and potential challenges. By identifying threats early, you can proactively adjust their strategies to mitigate risks and respond effectively to changing circumstances. This proactive approach is particularly valuable in volatile industries.
• Resource optimization: Conducting market research allows organizations to allocate their time, money and resources more efficiently. It ensures that investments are made in areas with the highest potential return on investment, reducing wasted resources and improving overall business performance.
• Adaptation to market trends: Markets evolve rapidly, driven by technological advancements, cultural shifts and changing consumer attitudes. Market research ensures that you stay ahead of these trends and adapt your offerings accordingly so you can avoid becoming obsolete. 

As you can see, market research empowers businesses to make data-driven decisions, cater to customer needs, outperform competitors, mitigate risks, optimize resources and stay agile in a dynamic marketplace. These benefits make it a huge industry; the global market research services market is expected to grow from $76.37 billion in 2021 to $108.57 billion in 2026 . Now, let’s dig into the different types of market research that can help you achieve these benefits.

Types of market research 

• Qualitative research
• Quantitative research
• Exploratory research
• Descriptive research
• Causal research
• Cross-sectional research
• Longitudinal research

Despite its advantages, 23% of organizations don’t have a clear market research strategy. Part of developing a strategy involves choosing the right type of market research for your business goals. The most commonly used approaches include:

1. Qualitative research

Qualitative research focuses on understanding the underlying motivations, attitudes and perceptions of individuals or groups. It is typically conducted through techniques like in-depth interviews, focus groups and content analysis — methods we’ll discuss further in the sections below. Qualitative research provides rich, nuanced insights that can inform product development, marketing strategies and brand positioning.

2. Quantitative research

Quantitative research, in contrast to qualitative research, involves the collection and analysis of numerical data, often through surveys, experiments and structured questionnaires. This approach allows for statistical analysis and the measurement of trends, making it suitable for large-scale market studies and hypothesis testing. While it’s worthwhile using a mix of qualitative and quantitative research, most businesses prioritize the latter because it is scientific, measurable and easily replicated across different experiments.

3. Exploratory research

Whether you’re conducting qualitative or quantitative research or a mix of both, exploratory research is often the first step. Its primary goal is to help you understand a market or problem so you can gain insights and identify potential issues or opportunities. This type of market research is less structured and is typically conducted through open-ended interviews, focus groups or secondary data analysis. Exploratory research is valuable when entering new markets or exploring new product ideas.

4. Descriptive research

As its name implies, descriptive research seeks to describe a market, population or phenomenon in detail. It involves collecting and summarizing data to answer questions about audience demographics and behaviors, market size, and current trends. Surveys, observational studies and content analysis are common methods used in descriptive research. 

5. Causal research

Causal research aims to establish cause-and-effect relationships between variables. It investigates whether changes in one variable result in changes in another. Experimental designs, A/B testing and regression analysis are common causal research methods. This sheds light on how specific marketing strategies or product changes impact consumer behavior.

6. Cross-sectional research

Cross-sectional market research involves collecting data from a sample of the population at a single point in time. It is used to analyze differences, relationships or trends among various groups within a population. Cross-sectional studies are helpful for market segmentation, identifying target audiences and assessing market trends at a specific moment.

7. Longitudinal research

Longitudinal research, in contrast to cross-sectional research, collects data from the same subjects over an extended period. This allows for the analysis of trends, changes and developments over time. Longitudinal studies are useful for tracking long-term developments in consumer preferences, brand loyalty and market dynamics.

Each type of market research has its strengths and weaknesses, and the method you choose depends on your specific research goals and the depth of understanding you’re aiming to achieve. In the following sections, we’ll delve into primary and secondary research approaches and specific research methods.

Primary vs. secondary market research

Market research of all types can be broadly categorized into two main approaches: primary research and secondary research. By understanding the differences between these approaches, you can better determine the most appropriate research method for your specific goals.

Primary market research 

Primary research involves the collection of original data straight from the source. Typically, this involves communicating directly with your target audience — through surveys, interviews, focus groups and more — to gather information. Here are some key attributes of primary market research:

• Customized data: Primary research provides data that is tailored to your research needs. You design a custom research study and gather information specific to your goals.
• Up-to-date insights: Because primary research involves communicating with customers, the data you collect reflects the most current market conditions and consumer behaviors.
• Time-consuming and resource-intensive: Despite its advantages, primary research can be labor-intensive and costly, especially when dealing with large sample sizes or complex study designs. Whether you hire a market research consultant, agency or use an in-house team, primary research studies consume a large amount of resources and time.

Secondary market research 

Secondary research, on the other hand, involves analyzing data that has already been compiled by third-party sources, such as online research tools, databases, news sites, industry reports and academic studies.

Here are the main characteristics of secondary market research:

• Cost-effective: Secondary research is generally more cost-effective than primary research since it doesn’t require building a research plan from scratch. You and your team can look at databases, websites and publications on an ongoing basis, without needing to design a custom experiment or hire a consultant. 
• Leverages multiple sources: Data tools and software extract data from multiple places across the web, and then consolidate that information within a single platform. This means you’ll get a greater amount of data and a wider scope from secondary research.
• Quick to access: You can access a wide range of information rapidly — often in seconds — if you’re using online research tools and databases. Because of this, you can act on insights sooner, rather than taking the time to develop an experiment. 

So, when should you use primary vs. secondary research? In practice, many market research projects incorporate both primary and secondary research to take advantage of the strengths of each approach.

One rule of thumb is to focus on secondary research to obtain background information, market trends or industry benchmarks. It is especially valuable for conducting preliminary research, competitor analysis, or when time and budget constraints are tight. Then, if you still have knowledge gaps or need to answer specific questions unique to your business model, use primary research to create a custom experiment. 

Market research methods

• Surveys and questionnaires
• Focus groups
• Observational research
• Online research tools
• Experiments
• Content analysis
• Ethnographic research

How do primary and secondary research approaches translate into specific research methods? Let’s take a look at the different ways you can gather data: 

1. Surveys and questionnaires

Surveys and questionnaires are popular methods for collecting structured data from a large number of respondents. They involve a set of predetermined questions that participants answer. Surveys can be conducted through various channels, including online tools, telephone interviews and in-person or online questionnaires. They are useful for gathering quantitative data and assessing customer demographics, opinions, preferences and needs. On average, customer surveys have a 33% response rate , so keep that in mind as you consider your sample size.

2. Interviews

Interviews are in-depth conversations with individuals or groups to gather qualitative insights. They can be structured (with predefined questions) or unstructured (with open-ended discussions). Interviews are valuable for exploring complex topics, uncovering motivations and obtaining detailed feedback. 

3. Focus groups

The most common primary research methods are in-depth webcam interviews and focus groups. Focus groups are a small gathering of participants who discuss a specific topic or product under the guidance of a moderator. These discussions are valuable for primary market research because they reveal insights into consumer attitudes, perceptions and emotions. Focus groups are especially useful for idea generation, concept testing and understanding group dynamics within your target audience.

4. Observational research

Observational research involves observing and recording participant behavior in a natural setting. This method is particularly valuable when studying consumer behavior in physical spaces, such as retail stores or public places. In some types of observational research, participants are aware you’re watching them; in other cases, you discreetly watch consumers without their knowledge, as they use your product. Either way, observational research provides firsthand insights into how people interact with products or environments.

5. Online research tools

You and your team can do your own secondary market research using online tools. These tools include data prospecting platforms and databases, as well as online surveys, social media listening, web analytics and sentiment analysis platforms. They help you gather data from online sources, monitor industry trends, track competitors, understand consumer preferences and keep tabs on online behavior. We’ll talk more about choosing the right market research tools in the sections that follow.

6. Experiments

Market research experiments are controlled tests of variables to determine causal relationships. While experiments are often associated with scientific research, they are also used in market research to assess the impact of specific marketing strategies, product features, or pricing and packaging changes.

7. Content analysis

Content analysis involves the systematic examination of textual, visual or audio content to identify patterns, themes and trends. It’s commonly applied to customer reviews, social media posts and other forms of online content to analyze consumer opinions and sentiments.

8. Ethnographic research

Ethnographic research immerses researchers into the daily lives of consumers to understand their behavior and culture. This method is particularly valuable when studying niche markets or exploring the cultural context of consumer choices.

How to do market research

• Set clear objectives
• Identify your target audience
• Choose your research methods
• Use the right market research tools
• Collect data
• Analyze data 
• Interpret your findings
• Identify opportunities and challenges
• Make informed business decisions
• Monitor and adapt

Now that you have gained insights into the various market research methods at your disposal, let’s delve into the practical aspects of how to conduct market research effectively. Here’s a quick step-by-step overview, from defining objectives to monitoring market shifts.

1. Set clear objectives

When you set clear and specific goals, you’re essentially creating a compass to guide your research questions and methodology. Start by precisely defining what you want to achieve. Are you launching a new product and want to understand its viability in the market? Are you evaluating customer satisfaction with a product redesign? 

Start by creating SMART goals — objectives that are specific, measurable, achievable, relevant and time-bound. Not only will this clarify your research focus from the outset, but it will also help you track progress and benchmark your success throughout the process. 

You should also consult with key stakeholders and team members to ensure alignment on your research objectives before diving into data collecting. This will help you gain diverse perspectives and insights that will shape your research approach.

2. Identify your target audience

Next, you’ll need to pinpoint your target audience to determine who should be included in your research. Begin by creating detailed buyer personas or stakeholder profiles. Consider demographic factors like age, gender, income and location, but also delve into psychographics, such as interests, values and pain points.

The more specific your target audience, the more accurate and actionable your research will be. Additionally, segment your audience if your research objectives involve studying different groups, such as current customers and potential leads.

If you already have existing customers, you can also hold conversations with them to better understand your target market. From there, you can refine your buyer personas and tailor your research methods accordingly.

3. Choose your research methods

Selecting the right research methods is crucial for gathering high-quality data. Start by considering the nature of your research objectives. If you’re exploring consumer preferences, surveys and interviews can provide valuable insights. For in-depth understanding, focus groups or observational research might be suitable. Consider using a mix of quantitative and qualitative methods to gain a well-rounded perspective. 

You’ll also need to consider your budget. Think about what you can realistically achieve using the time and resources available to you. If you have a fairly generous budget, you may want to try a mix of primary and secondary research approaches. If you’re doing market research for a startup , on the other hand, chances are your budget is somewhat limited. If that’s the case, try addressing your goals with secondary research tools before investing time and effort in a primary research study. 

4. Use the right market research tools

Whether you’re conducting primary or secondary research, you’ll need to choose the right tools. These can help you do anything from sending surveys to customers to monitoring trends and analyzing data. Here are some examples of popular market research tools:

• Market research software: Crunchbase is a platform that provides best-in-class company data, making it valuable for market research on growing companies and industries. You can use Crunchbase to access trusted, first-party funding data, revenue data, news and firmographics, enabling you to monitor industry trends and understand customer needs.

• Survey and questionnaire tools: SurveyMonkey is a widely used online survey platform that allows you to create, distribute and analyze surveys. Google Forms is a free tool that lets you create surveys and collect responses through Google Drive.
• Data analysis software: Microsoft Excel and Google Sheets are useful for conducting statistical analyses. SPSS is a powerful statistical analysis software used for data processing, analysis and reporting.
• Social listening tools: Brandwatch is a social listening and analytics platform that helps you monitor social media conversations, track sentiment and analyze trends. Mention is a media monitoring tool that allows you to track mentions of your brand, competitors and keywords across various online sources.
• Data visualization platforms: Tableau is a data visualization tool that helps you create interactive and shareable dashboards and reports. Power BI by Microsoft is a business analytics tool for creating interactive visualizations and reports.

5. Collect data

There’s an infinite amount of data you could be collecting using these tools, so you’ll need to be intentional about going after the data that aligns with your research goals. Implement your chosen research methods, whether it’s distributing surveys, conducting interviews or pulling from secondary research platforms. Pay close attention to data quality and accuracy, and stick to a standardized process to streamline data capture and reduce errors. 

6. Analyze data

Once data is collected, you’ll need to analyze it systematically. Use statistical software or analysis tools to identify patterns, trends and correlations. For qualitative data, employ thematic analysis to extract common themes and insights. Visualize your findings with charts, graphs and tables to make complex data more understandable.

If you’re not proficient in data analysis, consider outsourcing or collaborating with a data analyst who can assist in processing and interpreting your data accurately.

7. Interpret your findings

Interpreting your market research findings involves understanding what the data means in the context of your objectives. Are there significant trends that uncover the answers to your initial research questions? Consider the implications of your findings on your business strategy. It’s essential to move beyond raw data and extract actionable insights that inform decision-making.

Hold a cross-functional meeting or workshop with relevant team members to collectively interpret the findings. Different perspectives can lead to more comprehensive insights and innovative solutions.

8. Identify opportunities and challenges

Use your research findings to identify potential growth opportunities and challenges within your market. What segments of your audience are underserved or overlooked? Are there emerging trends you can capitalize on? Conversely, what obstacles or competitors could hinder your progress?

Lay out this information in a clear and organized way by conducting a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats. Jot down notes for each of these areas to provide a structured overview of gaps and hurdles in the market.

9. Make informed business decisions

Market research is only valuable if it leads to informed decisions for your company. Based on your insights, devise actionable strategies and initiatives that align with your research objectives. Whether it’s refining your product, targeting new customer segments or adjusting pricing, ensure your decisions are rooted in the data.

At this point, it’s also crucial to keep your team aligned and accountable. Create an action plan that outlines specific steps, responsibilities and timelines for implementing the recommendations derived from your research. 

10. Monitor and adapt

Market research isn’t a one-time activity; it’s an ongoing process. Continuously monitor market conditions, customer behaviors and industry trends. Set up mechanisms to collect real-time data and feedback. As you gather new information, be prepared to adapt your strategies and tactics accordingly. Regularly revisiting your research ensures your business remains agile and reflects changing market dynamics and consumer preferences.

Online market research sources

As you go through the steps above, you’ll want to turn to trusted, reputable sources to gather your data. Here’s a list to get you started:

• Crunchbase: As mentioned above, Crunchbase is an online platform with an extensive dataset, allowing you to access in-depth insights on market trends, consumer behavior and competitive analysis. You can also customize your search options to tailor your research to specific industries, geographic regions or customer personas.

• Academic databases: Academic databases, such as ProQuest and JSTOR , are treasure troves of scholarly research papers, studies and academic journals. They offer in-depth analyses of various subjects, including market trends, consumer preferences and industry-specific insights. Researchers can access a wealth of peer-reviewed publications to gain a deeper understanding of their research topics.
• Government and NGO databases: Government agencies, nongovernmental organizations and other institutions frequently maintain databases containing valuable economic, demographic and industry-related data. These sources offer credible statistics and reports on a wide range of topics, making them essential for market researchers. Examples include the U.S. Census Bureau , the Bureau of Labor Statistics and the Pew Research Center .
• Industry reports: Industry reports and market studies are comprehensive documents prepared by research firms, industry associations and consulting companies. They provide in-depth insights into specific markets, including market size, trends, competitive analysis and consumer behavior. You can find this information by looking at relevant industry association databases; examples include the American Marketing Association and the National Retail Federation .
• Social media and online communities: Social media platforms like LinkedIn or Twitter (X) , forums such as Reddit and Quora , and review platforms such as G2 can provide real-time insights into consumer sentiment, opinions and trends. 

Market research examples

At this point, you have market research tools and data sources — but how do you act on the data you gather? Let’s go over some real-world examples that illustrate the practical application of market research across various industries. These examples showcase how market research can lead to smart decision-making and successful business decisions.

Example 1: Apple’s iPhone launch

Apple ’s iconic iPhone launch in 2007 serves as a prime example of market research driving product innovation in tech. Before the iPhone’s release, Apple conducted extensive market research to understand consumer preferences, pain points and unmet needs in the mobile phone industry. This research led to the development of a touchscreen smartphone with a user-friendly interface, addressing consumer demands for a more intuitive and versatile device. The result was a revolutionary product that disrupted the market and redefined the smartphone industry.

Example 2: McDonald’s global expansion

McDonald’s successful global expansion strategy demonstrates the importance of market research when expanding into new territories. Before entering a new market, McDonald’s conducts thorough research to understand local tastes, preferences and cultural nuances. This research informs menu customization, marketing strategies and store design. For instance, in India, McDonald’s offers a menu tailored to local preferences, including vegetarian options. This market-specific approach has enabled McDonald’s to adapt and thrive in diverse global markets.

Example 3: Organic and sustainable farming

The shift toward organic and sustainable farming practices in the food industry is driven by market research that indicates increased consumer demand for healthier and environmentally friendly food options. As a result, food producers and retailers invest in sustainable sourcing and organic product lines — such as with these sustainable seafood startups — to align with this shift in consumer values. 

The bottom line? Market research has multiple use cases and is a critical practice for any industry. Whether it’s launching groundbreaking products, entering new markets or responding to changing consumer preferences, you can use market research to shape successful strategies and outcomes.

Market research templates

You finally have a strong understanding of how to do market research and apply it in the real world. Before we wrap up, here are some market research templates that you can use as a starting point for your projects:

• Smartsheet competitive analysis templates : These spreadsheets can serve as a framework for gathering information about the competitive landscape and obtaining valuable lessons to apply to your business strategy.
• SurveyMonkey product survey template : Customize the questions on this survey based on what you want to learn from your target customers.
• HubSpot templates : HubSpot offers a wide range of free templates you can use for market research, business planning and more.
• SCORE templates : SCORE is a nonprofit organization that provides templates for business plans, market analysis and financial projections.
• SBA.gov : The U.S. Small Business Administration offers templates for every aspect of your business, including market research, and is particularly valuable for new startups. 

Strengthen your business with market research

When conducted effectively, market research is like a guiding star. Equipped with the right tools and techniques, you can uncover valuable insights, stay competitive, foster innovation and navigate the complexities of your industry.

Throughout this guide, we’ve discussed the definition of market research, different research methods, and how to conduct it effectively. We’ve also explored various types of market research and shared practical insights and templates for getting started. 

Now, it’s time to start the research process. Trust in data, listen to the market and make informed decisions that guide your company toward lasting success.

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How to Conduct Market Research for a Startup

| Written by

So, you have a great idea for a startup. You’re passionate about solving a problem and believe your solution is something customers want. But how do you validate these assumptions? This is where market research comes in. 

Conducting market research is a critical step in developing any new product or service. It helps startups make data-driven decisions about their target customers, product features, pricing, and more. In this article, we’ll discuss what market research entails, why it’s vital for entrepreneurs, and how to conduct it like a pro.

Understanding Market Research for Startups

As companies look to understand their customers and make data-driven decisions, market research has become an essential tool in the business world. Let’s further explore what it is and why it’s so important for startups specifically.

What Is Market Research?

Market research is the process of gathering data about your industry, target market, and competitors to gain insights into customer demand, behavior, and preferences. It essentially aims to determine if there is an appetite for your solution or product. 

Why Market Research Is Vital for Startups

Startups often operate with limited resources, and every decision can have significant consequences. Market research helps in the following ways:

• Developing marketing strategies: Insights into demographics/preferences allow startups to segment customers and develop targeted marketing strategies and messaging on a bootstrap budget.
• Competitor Analysis: Identifying competitors and their strategies helps you find a unique position in the market.
• Risk Mitigation: Analyzing market trends and potential challenges helps in anticipating and preparing for risks.
• Refining Product Features: Enables startups to identify the most important and desired product features to focus on in their MVP or prototypes. This ensures product-market fit .
• Forecasting market size : Helps startups realistically estimate the total addressable market and forecast demand. Accurate projections are critical for attracting investors.
• Identifying sales opportunities: Understanding where target customers congregate, both online and offline, helps startups identify the right distribution channels, partnerships, and promotional outlets to sell their offerings.
• Funding and Investment: A well-researched market plan can make your business more appealing to investors and financial institutions.

Without proper market research, a startup may enter a market with limited understanding and potential for failure. This underscores why it isn’t just useful but essential for startups.

How to Do Market Research for Your Startup

Follow our step-by-step guide below to learn how to perform market research to validate and inform your startup plans.

1. Identify Your Goals

First, clearly define your objectives for the market research. Ask yourself:

• What specific questions do I need answered?
• What data and information do I need to make an informed business decision?
• How will I use the results of the research?

Having clear goals will allow you to determine the proper scope, methodology, budget, timeline, and resources required for the market research project.

For example, if your goal is to understand consumer demand for a new mobile app, your research objectives may be to gauge interest levels, ideal features, and potential pricing models.

2. Determine the Type of Market Research to Conduct

There are two main types of market research to consider – primary and secondary research.

Primary research involves collecting new data yourself. This could include surveys, interviews, focus groups, field trials, and firsthand observation. Primary research gives you direct insights from your target market but also tends to be more time-consuming and expensive.

For instance, Airbnb has utilized interviews and surveys with hosts and guests to understand their experiences and preferences. This research has helped in refining the platform’s features and service offerings.

Secondary research compiles existing data from sources like industry reports, academic studies, government statistics, and news articles. While the data is not customized, it can provide useful context, benchmarks, and trends.

Uber likely relied on secondary transportation data to estimate the market opportunity for ride-sharing in various cities.

You will likely need a blend of both primary and secondary research. Just make sure your methods directly align with your defined goals.

3. Define Your Target Market

An integral step is to narrowly define the target market(s) you want to reach with your startup. Gather basic demographic, geographic, psychographic, and behavioral data on your ideal customer profiles.

For example, if your app helps busy moms tackle household organization, your target market research would focus on working mothers in suburban areas who value efficiency and convenience.

The more precisely you can define your target markets, the better your research will resonate with your future customers’ needs and interests.

4. Create Your Research Plan

Now outline your market research plan. Determine:

• Research timeline – Set realistic milestones for completing the research from start to finish.
• Budget – Estimate costs for tools, software, data purchases, involved personnel, incentives, and other expenses.
• Methodology – Will you conduct surveys, interviews, focus groups, or a mixed methods approach? Detail how you will distribute, collect, and analyze the data.
• Sample sizes – For surveys or interviews, determine appropriate sample sizes to produce statistically significant findings.
• Tools & technologies – Select market research software, data analysis tools, survey builders, social listening tools, and other relevant resources .

Thoughtfully mapping out your plan will keep your research focused, efficient, and aligned with your defined goals.

5. Conduct the Research

Primary research.

If your plan includes primary research, carefully develop your research instruments to collect useful, unbiased data.

For survey research:

• Write neutral, closed-ended questions that elicit valuable insights.
• Avoid leading or confusing questions that skew results.
• Limit the survey length and simplify questions to boost completion rates.
• Offer incentives to improve participation.

For interviews or focus groups:

• Recruit participants who match your target buyer personas.
• Prepare an interview script to cover all objectives while allowing organic conversation.
• Offer thank-you gifts to interviewees to show appreciation for their time.

Take detailed notes during interviews and focus groups. Only record sessions if participants consent.

Secondary Research

To conduct effective secondary research:

• Search for relevant industry reports, academic studies, news articles, and other pre-existing sources.
• Analyze competitors through product reviews, market share data, and brand messaging.
• Look for demographic statistics, economic trends, and forecasts related to your market.
• Compile findings in a way that contrasts and compares relevant data points.

Secondary research provides context to better interpret your own primary research.

6. Analyze and Interpret the Results

Once your research data is gathered, analyze the findings to identify patterns, trends, correlations, and actionable insights in relation to your original goals. Consider the following:

• Quantitative data analysis – Use statistics, graphs, and charts to analyze survey data.
• Qualitative data analysis – Identify themes in open-ended questions, interviews, and observations.
• Compare market segments – Spot differences in responses across your target groups.
• Benchmark competitors – Gauge how your startup could improve upon existing solutions.

Solid analysis transforms simple data points into powerfully insightful market intelligence.

7. Refine Your Startup Idea

With your research findings in hand, refine and validate your startup concept to match real market demand:

• Fill gaps – Find openings or pain points overlooked by current solutions.
• Adapt to preferences – Adjust your product roadmap based on customer feedback.
• Price competitively – Set optimal prices informed by buyers’ willingness to pay.
• Position your competitive advantage – Demonstrate how you will provide superior value compared to alternatives.

Ongoing market research helps startups recognize opportunities and craft innovative products people truly want and need.

Market Research Tools and Resources

Here’s a list of some market research tools and resources that startups may find particularly useful:

Databases and Market Research Platforms

• Systematic : AI-powered data analysis tool for startups and investors.
• Statista : A broad database for statistical information.
• CB Insights : Focuses on technology market trends and startups.

Free Government and Public Resources

• U.S. Census Bureau : Offers demographic and economic data.
• Bureau of Labor Statistics : Provides labor market information.
• World Bank Open Data : Free access to global development data.

Survey and Questionnaire Tools

• Google Forms : A free tool for creating surveys.
• Typeform : Known for engaging, conversational surveys.
• Qualtrics : Offers advanced survey options and analytics.

Social Listening and Monitoring Tools

• Brandwatch : For tracking and analyzing online conversations.
• BuzzSumo : Helps in content research and monitoring social presence.
• Hootsuite : Manages social media and offers monitoring.

SEO & Competitive Analysis Tools

• Google Analytics : Analyzes website traffic and user behavior.
• Semrush : Comprehensive tool for SEO, PPC, and content marketing.
• Ahrefs : Helps in analyzing backlinks and SEO rankings.

Consumer Insight Tools

• Nielsen : Provides market insights, data, and analysis.
• IBISWorld : Offers industry research and analysis.

User Testing Tools

• UserTesting : Gathers feedback through video sessions with customers.
• Crazy Egg : Offers heatmap tools to understand how visitors interact with a website.

Further Reading

• How to Start a Startup in 10 Steps (2024 Guide) July 18, 2024
• What Is a Startup? July 2, 2024
• 80 Best Startup Ideas to Make Money in 2024 July 10, 2024
• 12 Best Market Research Tools for Startups July 25, 2024

Topics to Explore

• Startup Ideas
• Startup Basics
• Startup Leadership
• Startup Marketing
• Startup Funding

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• Case studies

How to Do Market Research for a Startup: 7 Steps with Examples

Kateryna Pysmenna

Tech Researcher

Head of Business Development

Get your project estimation!

Like most entrepreneurs, you believe in your startup’s success. But what if this belief is blind?

Picture this.

After spending 18 months and $70,000 on launching your new business, you recognize that revenue doesn’t meet your expectations and never will. The market is too small, the competition is too high, there are too few paying customers. Is there no way for startup owners to avoid financial losses and frustration?

In this article we will dive deep into how to do market research for startups to avoid failures.

Market research is not optional; it is imperative

Having a strong case that your startup idea is profitable is the difference between a serious business and a hobby. Market research for a new product is all about getting solid facts to make informed decisions prior to project development .

• Does your industry generate enough revenue to make it worth investing in?
• What is the market size, and what market share can you count on?
• How many competitors are there in your niche and how much money does it require to entice their customers?
• Who are the customers you should target and how much are they ready to pay for your product or service?
• What is the potential income your startup can generate in X months, and will it ever meet your financial expectations?

To get comprehensive answers to these questions, there’s no substitute for thorough market research for startup. Want proof in numbers? Let’s look at the top three reasons why startups fail according to CBInsights :

This data shows that in most cases, startups ultimately fail because their owners underestimate the importance of timely market research for a product. To prevent you from joining their ranks, we’ve prepared a step-by-step guide on how to do market research for a startup to get the most valuable insights in a short time and for a light cost.

Step by step: how to do market research for a new product

Before starting market research for a startup, you need to know four key definitions . First of all, the types of information sources you use define the two main thrusts of market research:

• Primary research is when you get information by directly interacting with representatives of your niche, target users, and competitors.
• Secondary research is when you get information from indirect public sources related to your niche (statistics, reports, surveys, articles, etc.).

When conducting market research, you’ll receive lots of mixed information that you need to put in order. According to the type of information you receive, you can divide primary and secondary research into two subcategories:

• Qualitative research identifies general concepts, visions, opinions, feelings, emotions, and preferences of your respondents.
• Quantitative research collects hard facts and involves analytics and statistics.

A wise combination of all four research types is the key to solid market research. To understand how market research works, follow our seven steps .

Step 1. Formulate your startup idea

To be able to conduct thorough market research, you need to specify what problems your startup solves, what needs it meets, and what business objectives it fulfills. The more clearly you define your business idea, the more productive your research will be.

Without being heavy on the details, you should describe:

• The problem you’re going to solve
• Your solution and its benefits
• Your unique value proposition
• Your company

Step 2. Explore your current business environment

With an idea for a startup defined, you need to understand what waters you’re entering. To analyze the current business environment, you can use both online and offline public sources, including:

• Government sources (e.g. the US Census Bureau , the Bureau of Labor & Statistics )
• Industry reports ( Statista , MarketResearch , IBISWorld )
• Local chambers of commerce and their business development departments
• Patent bureaus to stay familiar with innovations and identify trends

Figure out the total annual revenue of your industry . You’ll need this data to plan your desired market share.

To get a better understanding of how this works, look at the fitness mobile app market research we conducted for the FitrTraining app.

Step 3. Know your competitors

Once you’ve outlined your idea for a startup, you need to figure out who you’ll have to fight for market share. You should explore two main categories of competitors:

• Direct competitors are companies that offer similar solutions to your target audience and are similar to your company in terms of size and operations.
• Indirect competitors are companies that offer other solutions that differ from yours to your target audience and can provide you with deeper insight into your users’ preferences, stereotypes of behavior, and long-standing habits.

It’s worthwhile taking scale-ups — startups that have already raised funds in seed and subsequent rounds — as a model. To do startup market research, you can rely on tools like Y Combinator Startup Directory and Crunchbase .

Moreover, you can gain in-depth information about your competitors using commercial sources :

• Online platforms like Semrush , Crunchbase Pro , and App Radar
• Market research agencies like Pew Research Center , Gartner , Forrester , and Mintel

These market research resources are paid, but they can provide you with important data about your competitors:

• Acquisition channels and digital marketing strategies
• Powerful calls to action, reward systems, referral programs, etc.
• Incentives competitors use to turn visitors into buyers (free trials, bonuses, discounts, free shipping, etc.)
• Ways they increase customer engagement (push notifications, top-notch technologies, gamification, etc.)
• Core performance metrics including conversion rate , customer acquisition cost (CAC) , and customer lifetime value (LTV)

While conducting competitor analysis, you might require a tool to systematize information. For this, you can use a SWOT diagram . It’s a simple and practical evaluation tool to break down insights about your competitors into their strengths, weaknesses, opportunities, and threats.

Step 4. Define your TAM, SAM, and SOM

Before investing your time and money in a new business idea, you need to figure out how many customers you can expect. To do so, you must be aware of three market subsets:

• The total available market (TAM) spans all people in the world that can potentially be your customers. TAM identifies the largest possible amount of revenue you can bring in by selling your product or service across the globe. Use TAM to measure your startup’s potential for growth.
• The serviceable available market (SAM) refers to the portion of TAM you can reasonably access based on your geographical reach, regulatory requirements, or pricing/quality requirements. SAM reflects the real market you can embrace with your product/service.
• The serviceable obtainable market (SOM) identifies the portion of SAM you can actually service, considering that you have competitors and can’t make the entire market consume only your product or service.

You can figure out your TAM, SAM, and SOM using two approaches:

• Top-down research is when you move from the general market to your target audience. Typical top-down research analyzes how big macroeconomic factors (e.g. technology trends, federal funding, trade balances, unemployment rates, energy consumption, inflation rates, etc.) affect the market to enable you to predict what market share you can capture.
• Bottom-up research is when you begin with your local target market and move to worldwide demand. This reverse process pushes off your core business metrics (e.g. number of paying users, products sold, average check, etc.) to make assumptions about your overall market reach.

If you plan to create a pitch deck for investors, it’s sensible to include detailed data from both top-down and bottom-up methods individually first and then collectively.

For example , say you’re thinking of making a food delivery platform like Instacart . Conducting TAM, SAM, and SOM market research for your app idea through the top-down approach can look like this:

The platform-to-customer delivery segment is predicted to bring in $173 million in revenue in 2021 according to Statista . This will be your TAM.

You plan to start from your country to test your custom food delivery platform before operating worldwide. If your country is Saudi Arabia, the projected revenue that local food delivery platforms will generate in 2021 is $1,605 million . This will be your SAM.

Considering the number of available deliverers and stores eager to partner with you from the get-go, you can process 5% of all orders and capture $80,250 a year. This will be your SOM.

Step 5. Set up your market research criteria

Based on your business environment overview, competitor analysis, and top-down/bottom-up estimates, it’s time to determine your core parameters needed to proceed with market research for your new product.

The market share you intend to conquer. To calculate your target market share, you need to:

• Decide on a fiscal period (month, quarter, year, or multiple years)
• Calculate your company’s total sales over that fiscal period. If you’re starting your business from scratch, you can think over the numbers generated by your competitors and calculate your potential revenue using a simple formula: Company's total revenue = Number of units sold per fiscal period x Average market price
• Divide your company’s total sales by the industry’s total sales from the previous business environment analysis. The formula looks like this: Market share = Your company's total revenue / Total market revenue x 100%

Depending on the specifics of your business, you might need customer-centric estimates. In this case, you can apply the customer market share formula:

Customer market share = Your company's total customers / Total market customers x 100%

In the end, you will be able to determine by how much you want to increase your current market share or the percentage of the market you want to capture.

The time you’ll need to obtain the market share. To roughly estimate the time you’ll need to capture your market share, rely on your competitors’ average conversion rate. Having specified your SAM and SOM, you can calculate how many leads you can get in a fiscal period (for example, in a month) and then divide the amount of your SAM by the number of your paying customers:

Time to obtain market share (months) = Serviceable available market (SAM) / ( Serviceable obtainable market (SOM) per month x Conversion rate )

Your initial marketing budget. As for funding, more often than not, the budget you require to market your new tech startup doesn’t align with your available budget. At this stage, write down the budget you plan to allocate for marketing a new product or service and move to the next step.

Step 6. Calculate your required marketing budget

Let’s figure out the marketing budget you’ll need to promote your startup using the table below. It calculates data for a real estate mobile app . If you’re interested in how to do market research for an app idea, this calculation can help you align your required marketing budget with available budget by changing variables, for instance, desired market share or conversion rate.

If the required marketing budget is too high, you can change your initial criteria. For example, you can reduce the desired market share, cut operational expenses, or increase your average check size.

Also, keep in mind that we haven’t included the cost to develop your product. For example, the mobile app MVP development cost can start from $40,000 and go up depending on numerous factors such as the complexity of app features.

Finding the balance between your available marketing budget, the project development cost, and the average check is part of a more sophisticated revenue valuation methodology called unit economics . We plan to discuss this topic in subsequent posts.

For now, remember that correctly estimating the average check size is key to targeting the right customers who are able to pay. That’s why it’s better to determine your average check size before analyzing potential customers.

Step 7. Analyze your target users

This step is dedicated to identifying who will use your new product — that is, to creating your target customer persona .

You need to think about who can pay your average price in the area in which your business will operate. This will enable you to figure out your persona’s average income, and therefore your persona’s occupation. By using online portals like the one provided by the U.S. Bureau of Labor Statistics , you can clarify your target demographics and draw up a realistic customer persona.

If you work in the B2B segment, your average price and your customer persona can help you create an ideal customer profile (ICP) — a fictional company that would benefit the most from buying and using your product or service. Your ICP needs to describe the company’s industry, location, size, budget, revenue, funding or IPO status, and so forth.

After you have a clear picture of who your end customers are, it’s time to figure out the perception of your startup idea by asking people who correspond to your customer persona. There are different ways of asking about the perception of your idea, including:

• Focus groups
• Observations and field trials
• Social media listening
• Forums and business communities

Let’s highlight the most effective tools you can use to analyze your target audience while conducting problem and solution interviews:

Problem interview. Before offering something to your customers, you should discuss the problem you will solve and typical ways to solve it. It’s hard to compete with the effectiveness of in-person interviews or Zoom interviews, but tools like SurveyMonkey are increasing in popularity.

SurveyMonkey lets you create a customized survey and send it to individuals who meet the criteria of your ideal customers, starting from $1 per answer. Thus, you can narrow the circle of interviewed people, get valuable information, and as a result, save your time and money.

Solution interview. Once you come up with a solution for a problem, you need to figure out whether it satisfies your users. Offer respondents whom you’ve interviewed to test your pilot product or service and tell about how well it meets their expectations. If you’re doing market research for app development, it’s better to pitch your idea in the form of an interactive app prototype , focusing on making an intuitive UX design, not UI .

You can use Zoom to provide solution interviews. Besides using Zoom for testing your pilot app, you can refer to UserTesting . This online platform provides you with video records of how respondents interact with your app while moving from one screen to another. You may also like an app marketing strategy .

Every step of this startup market research guide is aimed at collecting the most important and comprehensive data you need to continue startup development. Knowing your business environment, main competitors, and target audience will help you:

• Create a value proposition map
• Compile a business plan
• Draw up a product requirements document
• Improve your product’s functionality
• Expand your target audience

Market research for a new business never stops and continues as long as your project is alive.

Market research for apps and websites is our strong point

Any complex task can be subdivided into easy-to-do steps, and market research for a startup is no exception. In this article, we’ve shared a simple approach to conducting market research for a business idea. But since every business has unique requirements, any one-size-fits-all market research guide can only be a starting point.

To make your make your market research for a new product effective, you might need an experienced product manager alongside a tightly knit development team . At Mind Studios , we emphasize a comprehensive discovery stage before starting to develop a mobile app or website. Benefit from our experience.

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Conducting Market Research for Startups: Methods and Examples

• by Alice Ananian
• July 12, 2024

In the ever-evolving landscape of startups, grasping your market isn’t merely advantageous—it’s a necessity. Whether you’re a budding entrepreneur, a small business owner with growth ambitions, or a business student hungry for knowledge, thorough market research is your compass to navigate the path to success.

This blog post will guide you through the importance of market research for startups, the different methods you can use, and practical steps to execute it efficiently. We’ll also share some real-world examples to illustrate these concepts. By the end, you’ll have a solid understanding of how to gather market insights and validate your business ideas effectively.

What Is Market Research for Startups and Why Is It Important?

Market research is the systematic process of collecting, analyzing, and interpreting data about your target market, competitors, and industry trends. It allows you to answer critical questions like:

• Is there a real need for your product or service?
• Who is your ideal customer, and what are their pain points?
• How big is the market opportunity?
• Who are your competitors, and what are their strengths and weaknesses?
• How will you price your product or service competitively?

By investing time and resources in market research, you gain valuable insights that minimize risk and increase your chances of success. Here’s why market research is crucial for startups:

Idea Validation: It helps you determine if there’s a viable market for your concept and identify potential problems before substantial investment.

Customer Focus: It allows you to tailor your product or service to your target audience’s specific needs and preferences.

Competitive Advantage: By understanding your competitors, you can differentiate your business and develop a winning strategy.

Informed Decisions: Data from market research empowers you to make well-informed decisions about product development, marketing, and pricing.

Types of Market Research for Startups

Market research for startups is like having a toolbox filled with different instruments – each with its own strengths and purposes. Understanding these research types empowers you to choose the right tool for the job and gather the most valuable insights for your venture. Let’s delve deeper into the two main categories:

Secondary Research: Leverage Existing Data

Imagine a treasure trove of pre-existing information waiting to be explored. That’s the beauty of secondary research. It involves utilizing data collected by other organizations, saving you time and resources. Here are some key sources to tap into:

Industry Reports: Market research firms and industry associations publish reports on market size, trends, demographics, and competitor analysis. These reports offer valuable insights into the overall landscape you’re entering. (Example: Gartner )

Government Publications: Government websites often provide a wealth of data, including economic indicators, consumer spending patterns, and demographic statistics. This data can help you understand your target market’s characteristics and purchasing power. (Example: US Census )

Market Research Databases: Subscription-based databases like Statista and IBISWorld offer a vast collection of market research reports across various industries. They can be a goldmine for in-depth data and analysis on specific market segments. (Examples: Statista & Euro Monitor )

News Articles and Publications: Industry publications and news websites often publish articles on market trends, product launches, and consumer behavior. Staying updated on these resources allows you to keep your finger on the pulse of the market.

Advantages of Secondary Research

• Cost-effective: It’s a budget-friendly way to gather a significant amount of data.
• Quick and Easy Access: Existing data is readily available, saving you time on data collection.
• Broad Overview: Provides a comprehensive picture of the market landscape and trends.

Limitations of Secondary Research

• May Not Be Specific Enough: The data might not be tailored to your specific niche or target audience.
• Outdated Information: Ensure the data is recent to avoid basing your decisions on outdated trends.
• Limited Control over Quality: You rely on the methodology and accuracy of the data collected by others.

Primary Research: Gather First-Hand Insights

Primary research allows you to delve deeper and gather data directly from your target audience. This provides a clearer understanding of their specific needs, preferences, and opinions. Here are some common methods used in primary research:

Surveys: Online surveys are a versatile tool for collecting quantitative data from a large sample size. You can use surveys to gather information on demographics, product preferences, pricing perceptions, and customer satisfaction. Tools like SurveyMonkey and Google Forms make creating and distributing surveys a breeze.

Interviews: In-depth interviews with potential customers provide rich qualitative data. By engaging in one-on-one conversations, you can uncover deeper motivations, buying behaviors, and pain points that might not be readily apparent in surveys.

Focus Groups: Bringing together a small group of target customers for a moderated discussion allows you to explore specific topics in detail. Focus groups can generate valuable insights into customer perceptions of your product concept, existing solutions in the market, and potential areas for differentiation.

Usability Testing: If you have a prototype or beta version of your product, conducting usability testing allows you to observe how potential customers interact with it. This helps you identify any design flaws or areas for improvement before launch.

Social Media Listening: Monitoring online conversations about your industry or competitors on social media platforms can reveal valuable insights into customer sentiment, emerging trends, and potential brand perception issues. Tools like Brandwatch and Sprout Social can help you track relevant conversations.

Advantages of Primary Research:

• Targeted Insights: Tailored specifically to your niche and target audience.
• In-Depth Understanding: Provides deeper insights into customer motivations and behavior.
• Actionable Data: Helps you make informed decisions about product development, marketing strategies, and pricing.

Limitations of Primary Research:

• Costly: Conducting surveys, interviews, and focus groups can be expensive, especially if you outsource them.
• Time-consuming: Designing, conducting, and analyzing primary research can take significant time.
• Sample Bias: If your sample group isn’t representative of your target market, the data may not be reliable.

For a well-rounded understanding of your market, consider using a combination of both secondary and primary research methods. Leverage secondary research to gain a broad overview of the landscape, and then use primary research to get specific insights from your target audience. This two-pronged approach helps you validate existing data with real-world customer feedback.

How to Conduct Market Research for Startups

Conducting market research may seem daunting, but by following these steps, you can make the process manageable and effective:

Step 1: Define Your Research Goals (Think Laser Focus!)

Before diving headfirst into data collection, take a moment to crystallize what you want to achieve. Are you:

• Validating your idea? Is there a real need for your product or service?
• Understanding your target market? Who are your ideal customers, and what are their pain points?
• Analyzing the competition? Who are your main competitors, and what are their strengths and weaknesses?

Having clear goals ensures your research is focused and delivers actionable insights.

Step 2: Craft Your Buyer Persona

Imagine your perfect customer. What are their demographics (age, location, income)? What are their interests and online behavior? What problems do they face that your product or service can solve?

Getting Creative on a Budget:

• Leverage social media listening tools like Hootsuite or Sproutsocial to see what online communities your target audience frequents and what topics they discuss.
• Look for free online reports or surveys related to your industry. The U.S. Small Business Administration offers a wealth of free resources for startups.

Did you know? Prelaunch is a concept-validating platform that gathers reliable information from people who actually interact with your product’s landing page AND creates realistic, reliable customer personas based on the analytics gathered. 

Step 3: Choose Your Research Method

Startups often juggle limited budgets and tight timelines. Here’s where being resourceful comes in:

Secondary Research (Free & Fast)

Utilize resources like industry reports, government data (demographics, consumer spending habits), and market research databases ( Statista , Euromonitor ).

Example: You’re developing a fitness app for busy professionals. Secondary research might involve using Statista to understand the market size for fitness apps and exploring government data on health and wellness trends among working adults.

Primary Research (Gather In-Depth Insights)

Consider cost-effective methods like:

Online Surveys: Tools like SurveyMonkey or Google Forms allow you to gather quantitative data from a large sample size at minimal cost.

Targeted Social Media Polls: Leverage platforms like Facebook or Twitter to get quick feedback from your target audience.

Customer Interviews: Conduct video calls or in-person interviews with a few potential customers to gain qualitative insights into their needs and motivations.

Comprehensive primary research tools: Believe it or not there are concept validation platforms like Prelaunch that actually bring together surveys, interviews, and focus groups through a single landing page that lets you present your product to the world and use analytics to track how they engage, what price point they’re willing to pay, and what version of your product they’d most like to see. So you don’t max out your credit card before you’ve even launched, all-in-one tools like this are definitely worth a gander.

Step 4: Collect and Analyze Your Data

Once you have your data, the magic happens! Analyze it carefully, looking for patterns and trends that answer your research questions. Here are some tips:

• Quantitative Data (Surveys, Polls): Use tools like Google Sheets or Excel to organize and analyze your data. Look for trends in demographics, preferences, and pain points.
• Qualitative Data (Interviews): Transcribe your interviews and identify recurring themes. Look for emotional responses and specific language used by your target audience.

To get a more in-depth idea about the types of market research including the difference between quantitative and qualitative methods click here . 

Step 5: Translate Insights into Action

This is where the rubber meets the road! Use your research findings to:

• Refine your product or service: Ensure it directly addresses the needs of your target market.
• Develop a targeted marketing strategy: Craft messaging and choose channels that resonate with your ideal customer.
• Set competitive pricing: Understand your competitors’ pricing models and position your product strategically.

Remember: Market research is an ongoing process. As your startup evolves, revisit your research and gather new data to stay ahead of the curve.

Bonus Tip: Don’t be afraid to get creative! There are many affordable online tools and resources available to help you conduct effective market research on a shoestring budget.

By following these steps and embracing a resourceful mindset, you can unlock the power of market research to propel your startup towards success!

Case Studies and Examples

As we explore the world of startup market research, we encounter unique methods and inspiring success stories. Our first case study is from Prelaunch, a concept-validating platform revolutionizing product development with virtual focus groups.

Case Study: Kara Pure’s Innovative Market Research

In the realm of groundbreaking startup launches, the story of Kara Pure stands out as a powerful testament to the value of prelaunch market research. By leveraging market research tools like Prelaunch , Kara Pure was able to successfully raise an impressive $1.3M on Indiegogo for their innovative air-to-water system.

The startup seized the power of data-driven decision making during their prelaunch stage. They executed various pricing models and tests to discern potential customers’ willingness to pay, ultimately identifying the optimal launch price of $999, a figure that encapsulated the unique value offering of their product.

The team at Kara Pure used the actionable insights derived from Prelaunch.com’s survey results to generate comprehensive buyer personas. This data was key in customizing communication to address each consumer segment’s unique desires and concerns, thereby significantly enhancing their message’s impact.

Additionally, they adopted a dynamic retargeting strategy along with a highly effective lead conversion funnel. These strategies catered to both broad and VIP audiences, yielding a significant return on investment. One particularly innovative strategy they employed was Live Lead Generation, a tactic that not only allowed them to maintain control over potential leads but also delivered one of the highest conversion rates known in the industry.

Kara Pure didn’t stop at digital strategies. They also integrated creative financing solutions, including a 3-month installment plan and secret perks for those who had returned their Initial pledges. Their successful product launch was further bolstered by maximising the use of social media, influencer marketing and public relations, all of which played a crucial role in enhancing their visibility and credibility.

Overall, the Kara Pure case study illuminates the undeniable importance of strategic communication, trust-building, and, most importantly, the effective use of market research tools in achieving startup success. Stay tuned for our next featured case study where we delve further into these essential market research strategies.

Case Study 2: Pico’s Kickstarter Campaign

Our second example spotlights the successful Kickstarter campaign for a project called Pico. This campaign not only faced notable challenges such as a saturated market and lack of prototypes, but it also managed to collect over $1.5 million in funding.

The secret behind this astounding success? Prelaunch market research tools and carefully curated strategies. The Pico team made use of various resources and techniques to ensure the highest possible outcomes for their campaign. They leveraged visual content, with photoshoots and badges echoing the aesthetic of Kickstarter, to captivate their audience.

Their marketing efforts didn’t stop at aesthetics; they also made use of advertising, influencer marketing, and social media maneuvering to bolster their brand awareness and heighten sales. However, central to their approach was the emphasis on customer engagement. They maximized their conversions through cross-promotions, a meticulous direct sales campaign, and personalized outreach to their backers.

Furthermore, their responsive approach to audience engagement, such as answering comments and promptly addressing payment issues, added to the campaign’s triumphant launch. The Pico example demonstrates the powerful impact of prelaunch market research tools, agile strategies, and ongoing optimization efforts in successfully launching a project.

Conducting market research is a critical step for any startup looking to succeed. By understanding your market, validating your ideas, and identifying opportunities, you can make informed decisions that pave the way for success. Remember, market research is an ongoing process—continuously gather and analyze data to stay ahead of the curve.

Ready to take your startup to the next level? Start your market research journey today and unlock the insights you need to thrive.

Frequently Asked Questions

1. what is the best form of market research for a new business startup.

There’s no single “best” form. The ideal approach depends on your specific research goals and budget. Here’s a breakdown:

• Start with Secondary Research: This is a cost-effective way to gain a broad understanding of your market landscape. Utilize industry reports, government data, and market research databases (like Statista or Euromonitor).
• Combine with Primary Research: Once you have a basic understanding, delve deeper with primary research methods like online surveys, social media polls, or targeted customer interviews. This provides richer insights into your specific target audience.

The key is to choose a combination of methods that fit your needs and resources.

2. What tools can help startups with market research?

Several online tools can streamline your market research process:

• Free Survey Tools: SurveyMonkey and Google Forms allow you to create and distribute surveys to gather quantitative data.
• Social Media Listening Tools: Platforms like Hootsuite or Sprout Social help you track online conversations about your industry and target audience.
• Free Market Research Resources: The U.S. Small Business Administration offers a wealth of free reports and data relevant to various industries.
• Freemium Market Research Tools: Some market research databases, like Statista, offer limited free data sets you can leverage.

3. How much does market research cost for a startup?

Market research costs can vary greatly. Here’s how to manage it as a startup:

• Focus on free resources: Utilize the many free tools and data sets available.
• Start small and scale up: Begin with basic research and expand as needed.
• Get creative: Conduct online polls, analyze social media trends, and conduct targeted customer interviews for valuable insights.

Alice Ananian

Alice has over 8 years experience as a strong communicator and creative thinker. She enjoys helping companies refine their branding, deepen their values, and reach their intended audiences through language.

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Written by Mary Kate Miller | June 1, 2021

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Market research is a cornerstone of all successful, strategic businesses. It can also be daunting for entrepreneurs looking to launch a startup or start a side hustle . What is market research, anyway? And how do you…do it?

We’ll walk you through absolutely everything you need to know about the market research process so that by the end of this guide, you’ll be an expert in market research too. And what’s more important: you’ll have actionable steps you can take to start collecting your own market research.

What Is Market Research?

Market research is the organized process of gathering information about your target customers and market. Market research can help you better understand customer behavior and competitor strengths and weaknesses, as well as provide insight for the best strategies in launching new businesses and products. There are different ways to approach market research, including primary and secondary research and qualitative and quantitative research. The strongest approaches will include a combination of all four.

“Virtually every business can benefit from conducting some market research,” says Niles Koenigsberg of Real FiG Advertising + Marketing . “Market research can help you piece together your [business’s] strengths and weaknesses, along with your prospective opportunities, so that you can understand where your unique differentiators may lie.” Well-honed market research will help your brand stand out from the competition and help you see what you need to do to lead the market. It can also do so much more.

The Purposes of Market Research

Why do market research? It can help you…

• Pinpoint your target market, create buyer personas, and develop a more holistic understanding of your customer base and market.
• Understand current market conditions to evaluate risks and anticipate how your product or service will perform.
• Validate a concept prior to launch.
• Identify gaps in the market that your competitors have created or overlooked.
• Solve problems that have been left unresolved by the existing product/brand offerings.
• Identify opportunities and solutions for new products or services.
• Develop killer marketing strategies .

What Are the Benefits of Market Research?

Strong market research can help your business in many ways. It can…

• Strengthen your market position.
• Help you identify your strengths and weaknesses.
• Help you identify your competitors’ strengths and weaknesses.
• Minimize risk.
• Center your customers’ experience from the get-go.
• Help you create a dynamic strategy based on market conditions and customer needs/demands.

What Are the Basic Methods of Market Research?

The basic methods of market research include surveys, personal interviews, customer observation, and the review of secondary research. In addition to these basic methods, a forward-thinking market research approach incorporates data from the digital landscape like social media analysis, SEO research, gathering feedback via forums, and more. Throughout this guide, we will cover each of the methods commonly used in market research to give you a comprehensive overview.

Primary vs. Secondary Market Research

Primary and secondary are the two main types of market research you can do. The latter relies on research conducted by others. Primary research, on the other hand, refers to the fact-finding efforts you conduct on your own.

This approach is limited, however. It’s likely that the research objectives of these secondary data points differ from your own, and it can be difficult to confirm the veracity of their findings.

Primary Market Research

Primary research is more labor intensive, but it generally yields data that is exponentially more actionable. It can be conducted through interviews, surveys, online research, and your own data collection. Every new business should engage in primary market research prior to launch. It will help you validate that your idea has traction, and it will give you the information you need to help minimize financial risk.

You can hire an agency to conduct this research on your behalf. This brings the benefit of expertise, as you’ll likely work with a market research analyst. The downside is that hiring an agency can be expensive—too expensive for many burgeoning entrepreneurs. That brings us to the second approach. You can also do the market research yourself, which substantially reduces the financial burden of starting a new business .

Secondary Market Research

Secondary research includes resources like government databases and industry-specific data and publications. It can be beneficial to start your market research with secondary sources because it’s widely available and often free-to-access. This information will help you gain a broad overview of the market conditions for your new business.

Identify Your Goals and Your Audience

Before you begin conducting interviews or sending out surveys, you need to set your market research goals. At the end of your market research process, you want to have a clear idea of who your target market is—including demographic information like age, gender, and where they live—but you also want to start with a rough idea of who your audience might be and what you’re trying to achieve with market research.

You can pinpoint your objectives by asking yourself a series of guiding questions:

• What are you hoping to discover through your research?
• Who are you hoping to serve better because of your findings?
• What do you think your market is?
• Who are your competitors?
• Are you testing the reception of a new product category or do you want to see if your product or service solves the problem left by a current gap in the market?
• Are you just…testing the waters to get a sense of how people would react to a new brand?

Once you’ve narrowed down the “what” of your market research goals, you’re ready to move onto how you can best achieve them. Think of it like algebra. Many math problems start with “solve for x.” Once you know what you’re looking for, you can get to work trying to find it. It’s a heck of a lot easier to solve a problem when you know you’re looking for “x” than if you were to say “I’m gonna throw some numbers out there and see if I find a variable.”

How to Do Market Research

This guide outlines every component of a comprehensive market research effort. Take into consideration the goals you have established for your market research, as they will influence which of these elements you’ll want to include in your market research strategy.

Secondary Data

Secondary data allows you to utilize pre-existing data to garner a sense of market conditions and opportunities. You can rely on published market studies, white papers, and public competitive information to start your market research journey.

Secondary data, while useful, is limited and cannot substitute your own primary data. It’s best used for quantitative data that can provide background to your more specific inquiries.

Find Your Customers Online

Once you’ve identified your target market, you can use online gathering spaces and forums to gain insights and give yourself a competitive advantage. Rebecca McCusker of The Creative Content Shop recommends internet recon as a vital tool for gaining a sense of customer needs and sentiment. “Read their posts and comments on forums, YouTube video comments, Facebook group [comments], and even Amazon/Goodreads book comments to get in their heads and see what people are saying.”

If you’re interested in engaging with your target demographic online, there are some general rules you should follow. First, secure the consent of any group moderators to ensure that you are acting within the group guidelines. Failure to do so could result in your eviction from the group.

Not all comments have the same research value. “Focus on the comments and posts with the most comments and highest engagement,” says McCusker. These high-engagement posts can give you a sense of what is already connecting and gaining traction within the group.

Social media can also be a great avenue for finding interview subjects. “LinkedIn is very useful if your [target customer] has a very specific job or works in a very specific industry or sector. It’s amazing the amount of people that will be willing to help,” explains Miguel González, a marketing executive at Dealers League . “My advice here is BE BRAVE, go to LinkedIn, or even to people you know and ask them, do quick interviews and ask real people that belong to that market and segment and get your buyer persona information first hand.”

Market research interviews can provide direct feedback on your brand, product, or service and give you a better understanding of consumer pain points and interests.

When organizing your market research interviews, you want to pay special attention to the sample group you’re selecting, as it will directly impact the information you receive. According to Tanya Zhang, the co-founder of Nimble Made , you want to first determine whether you want to choose a representative sample—for example, interviewing people who match each of the buyer persona/customer profiles you’ve developed—or a random sample.

“A sampling of your usual persona styles, for example, can validate details that you’ve already established about your product, while a random sampling may [help you] discover a new way people may use your product,” Zhang says.

Market Surveys

Market surveys solicit customer inclinations regarding your potential product or service through a series of open-ended questions. This direct outreach to your target audience can provide information on your customers’ preferences, attitudes, buying potential, and more.

Every expert we asked voiced unanimous support for market surveys as a powerful tool for market research. With the advent of various survey tools with accessible pricing—or free use—it’s never been easier to assemble, disseminate, and gather market surveys. While it should also be noted that surveys shouldn’t replace customer interviews , they can be used to supplement customer interviews to give you feedback from a broader audience.

Who to Include in Market Surveys

• Current customers
• Past customers
• Your existing audience (such as social media/newsletter audiences)

Example Questions to Include in Market Surveys

While the exact questions will vary for each business, here are some common, helpful questions that you may want to consider for your market survey. Demographic Questions: the questions that help you understand, demographically, who your target customers are:

• “What is your age?”
• “Where do you live?”
• “What is your gender identity?”
• “What is your household income?”
• “What is your household size?”
• “What do you do for a living?”
• “What is your highest level of education?”

Product-Based Questions: Whether you’re seeking feedback for an existing brand or an entirely new one, these questions will help you get a sense of how people feel about your business, product, or service:

• “How well does/would our product/service meet your needs?”
• “How does our product/service compare to similar products/services that you use?”
• “How long have you been a customer?” or “What is the likelihood that you would be a customer of our brand?

Personal/Informative Questions: the deeper questions that help you understand how your audience thinks and what they care about.

• “What are your biggest challenges?”
• “What’s most important to you?”
• “What do you do for fun (hobbies, interests, activities)?”
• “Where do you seek new information when researching a new product?”
• “How do you like to make purchases?”
• “What is your preferred method for interacting with a brand?”

Survey Tools

Online survey tools make it easy to distribute surveys and collect responses. The best part is that there are many free tools available. If you’re making your own online survey, you may want to consider SurveyMonkey, Typeform, Google Forms, or Zoho Survey.

Competitive Analysis

A competitive analysis is a breakdown of how your business stacks up against the competition. There are many different ways to conduct this analysis. One of the most popular methods is a SWOT analysis, which stands for “strengths, weaknesses, opportunities, and threats.” This type of analysis is helpful because it gives you a more robust understanding of why a customer might choose a competitor over your business. Seeing how you stack up against the competition can give you the direction you need to carve out your place as a market leader.

Social Media Analysis

Social media has fundamentally changed the market research landscape, making it easier than ever to engage with a wide swath of consumers. Follow your current or potential competitors on social media to see what they’re posting and how their audience is engaging with it. Social media can also give you a lower cost opportunity for testing different messaging and brand positioning.

SEO Analysis and Opportunities

SEO analysis can help you identify the digital competition for getting the word out about your brand, product, or service. You won’t want to overlook this valuable information. Search listening tools offer a novel approach to understanding the market and generating the content strategy that will drive business. Tools like Google Trends and Awario can streamline this process.

Ready to Kick Your Business Into High Gear?

Now that you’ve completed the guide to market research you know you’re ready to put on your researcher hat to give your business the best start. Still not sure how actually… launch the thing? Our free mini-course can run you through the essentials for starting your side hustle .

About Mary Kate Miller

Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.

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Market Research for Startups: A Comprehensive Guide to Success

Market research plays a pivotal role in the success of startups. It provides valuable insights into the target market , customer preferences , and competitor landscape . By conducting thorough market research, startups can make informed decisions, minimize risks, and maximize their chances of success.

In this comprehensive guide, we will explore the various types of market research, how to conduct primary and secondary research, analyze data, identify target markets, and more. So let's dive in and unlock the power of market research for startups .

Table of Contents

Importance of Market Research for Startups

Types of market research for startups, analyzing market research data, identifying target markets and customer segments, competitor analysis and market positioning, market research tools and resources for startups, common market research mistakes to avoid, implementing market research findings into business strategies, benefits of ongoing market research for startups.

Market research is the foundation on which startups build their business strategies. It helps them understand the market dynamics, customer needs, and competitive landscape. By conducting market research, startups gain insights into consumer preferences, buying behavior, and market trends . This knowledge enables them to develop products or services that cater to the specific needs of their target audience, ensuring higher chances of success.

Startups can utilize two main types of market research: primary research and secondary research . Primary research involves gathering firsthand information directly from potential customers, while secondary research involves analyzing existing data and information that is already available.

Conducting Primary Market Research

Primary market research involves interacting directly with potential customers to gather insights. There are various methods to conduct primary research, such as surveys, interviews, focus groups, and observations. Surveys can be conducted online or offline, while interviews and focus groups provide in-depth qualitative data. By engaging with customers, startups can understand their needs, preferences, and pain points, which will help them refine their products or services.

Conducting Secondary Market Research

Secondary market research involves analyzing existing data and information from external sources. Startups can access market reports, industry publications, government statistics, and online databases to gather insights. This research helps in understanding the market size, industry trends , competitor analysis, and consumer behavior. Secondary research is cost-effective and provides a broader perspective of the market, enabling startups to make informed decisions.

Once startups have gathered primary and secondary research data, the next step is to analyze it effectively. Data analysis involves organizing, interpreting, and deriving meaningful insights from the collected information. Startups can use various techniques like statistical analysis , data visualization , and trend analysis to identify patterns and trends. By analyzing market research data, startups can gain a deeper understanding of their target market, customer preferences, and competitive landscape.

One of the key objectives of market research is to identify target markets and customer segments. Startups need to define their target audience based on demographics, psychographics, and behavioral factors. By understanding who their customers are, startups can tailor their marketing messages, product features, and pricing strategies accordingly. Market research helps startups identify niche markets, untapped opportunities, and customer segments that align with their business goals.

Market research also involves conducting competitor analysis to understand the competitive landscape. Startups should identify their direct and indirect competitors, analyze their strengths, weaknesses, and market positioning strategies. By studying competitors, startups can differentiate themselves by offering unique value propositions and positioning themselves effectively in the market. Market research helps startups identify gaps in the market and develop strategies to gain a competitive edge.

Startups can leverage various market research tools and resources to streamline their research process. Online survey tools like SurveyMonkey and Google Forms help in collecting primary research data. Social listening tools like Brand24 and Mention allow startups to monitor online conversations and gather insights about their brand and competitors. Market research platforms like Nielsen and Statista provide access to industry reports and market data. Startups should explore these tools and resources to enhance the effectiveness of their market research efforts.

While conducting market research, startups must be aware of common mistakes that can hinder the accuracy and reliability of their findings. Some of the common mistakes to avoid include:

Biased sampling : Startups should ensure their sample size represents their target market accurately to avoid biased results.

Leading questions : Framing questions in a way that leads respondents to a particular answer can skew the results.

Ignoring qualitative data : Quantitative data alone is not sufficient. Startups should also gather qualitative data to gain deeper insights into consumer behavior.

Overreliance on secondary research : While secondary research is valuable, startups should validate the findings through primary research to ensure accuracy.

By avoiding these mistakes, startups can ensure the integrity and reliability of their market research findings.

Market research is only valuable if its findings are implemented into business strategies. Startups should use the insights gained from market research to refine their value proposition, product development, pricing strategies, and marketing campaigns . By aligning their business strategies with customer needs and market trends, startups increase their chances of success. Regularly revisiting and updating market research findings is crucial to stay relevant in an ever-changing market landscape.

Market research is not a one-time activity; startups should engage in ongoing market research to stay ahead of the competition and adapt to changing market dynamics. Some benefits of ongoing market research include:

Identifying emerging trends : Continuous market research helps startups identify emerging trends and capitalize on new opportunities.

Tracking customer satisfaction : Regularly collecting feedback and measuring customer satisfaction enables startups to improve their products or services.

Monitoring competitor strategies : Ongoing market research allows startups to closely monitor their competitors' strategies and adapt accordingly.

Evaluating marketing effectiveness : By tracking marketing metrics, startups can evaluate the effectiveness of their marketing campaigns and make necessary adjustments.

By embracing ongoing market research, startups can stay agile, responsive, and competitive in their respective industries.

Market research is an indispensable tool for startups to navigate the complex business landscape. By conducting thorough market research, startups can gain valuable insights into their target market, customer preferences, and competitor landscape. Through primary and secondary research, startups can gather meaningful data, analyze it effectively, and identify target markets and customer segments. By implementing market research findings into their business strategies and embracing ongoing research, startups can increase their chances of success. So, invest time and resources into market research, and let data-driven decisions guide your startup towards success.

How much does market research cost for startups?

The cost of market research for startups can vary depending on the scope and complexity of the research. Startups can conduct primary research at a relatively low cost using online survey tools and social media platforms. Secondary research, which involves analyzing existing data, is often more cost-effective. Startups can access free or low-cost market research reports and industry publications. It is essential to allocate a budget for market research as it is a valuable investment in the success of the startup.

How long does market research take for startups?

The duration of market research for startups depends on several factors, such as the research objectives, target market size, and availability of data. Primary research methods like surveys and interviews can be conducted within a few weeks, depending on the response rate. Secondary research can be time-consuming, as it involves analyzing vast amounts of data. Startups should allocate sufficient time for market research to ensure thoroughness and accuracy in their findings.

How often should startups conduct market research?

Startups should engage in ongoing market research to stay up to date with market trends, customer preferences, and competitor strategies. The frequency of market research may vary depending on the industry and the pace of change. However, startups should aim to conduct market research at least annually or whenever there are significant changes in the market dynamics. Regular market research ensures that startups stay relevant, responsive, and adaptable in a rapidly evolving business environment.

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How to do market research for a startup: 5 best research methods

Have you ever played darts? How about blindfolded without knowing where the board is? That’s basically what launching a new startup without adequate market research is like — you’re just guessing and hoping for the best. 

More experienced entrepreneurs know that the best business plans and product ideas are usually informed with cold, hard facts. Market data can tell you precisely what your potential customers want and need without any guessing at all. The hard part is knowing how to do market research for a startup. 

In this guide, we discuss the best research and marketing strategies for a small business. We outline five types of market research goals and methods you can start using right now, but first let’s go over some of the basics, starting with the question “what is market research?”

Table of Contents

What is market research, why startups should conduct market research, types of market research, before you start the market research process…, 1. identify your target audience, 2. find your target audience’s pain points, 3. analyze industry trends, 4. communicate with your audience, 5. a/b testing.

Market research is the process of collecting information and data about your target markets and customers: what people want to buy, what products aren’t available yet (identifying market gaps), and what people are willing to spend on them. Because different customers and types of customers are all unique, a large portion of market research is devoted to understanding your brand’s particular target audience. 

So why do small businesses need to conduct market research? In short, to help guide their decision-making. The greatest advantage of market research is enabling you to make informed business decisions. Entrepreneurs with reliable market research don’t have to guess about what products people want or which marketing campaigns will work on their target customers. 

Market research validates a new business idea or new product idea, eliminating risky business decisions. The right data can also test the viability of a new business plan, even an experimental one. At the very least, market research looks impressive to investors, who have their own risks in mind. With that in mind, let’s take a look at some different types of market research.

Marketers aren’t (normally) scientists, so let’s review some of the technical terms used in market research in case they’re unfamiliar to you. 

First, let’s talk about primary research and secondary research. Primary market research is when you collect new and original data yourself, such as using online surveys or focus groups. Secondary market research is when you review pre-existing data from another company or data collection agency. Secondary research is just as useful as primary research — and sometimes cheaper — but it doesn’t give you the specific and unique answers you might need. 

Second, you should also understand the difference between quantitative research and qualitative research. Quantitative research yields empirical data, i.e., verifiable data like numbers, figures, or factual observations. Qualitative research , on the other hand, yields abstract data like opinions, tastes, and emotional responses. 

While quantitative data is written in stone, qualitative data is less substantial; nevertheless, qualitative research can still reveal insights into customer satisfaction and pain points, which helps tremendously with product development and new product ideas. 

Before you dive into quantitative data collection, it’s best to prepare a bit so you don’t waste your efforts. Above all, you need to define your research goals . Consider asking yourself these questions:

• What does your company need to know? 
• What research questions do you need answered? 

It’s best to think about these things first because your goals determine your market research methodology.

It also helps to come up with some hypotheses before the actual data collection. Hypotheses are ideas of what you think will happen before testing; having a few hypotheses in mind can help steer the direction of your market research. Just don’t be afraid to abandon these ideas if the data proves them untrue. 

Now, let’s take a look at five popular market research tactics to help you get started.

Choosing the right audience is crucial to any business. Your target customers have their own special wants, needs, preferences, and pet peeves, all of which are likely different from another company’s target customers. By narrowing down your target market, you can hand-tailor your business strategies specifically for them. 

If you already have an established business, pay attention to the demographics of your top customers: age, geographic location, income, education, etc. Other information like shopping behavior and personal interests can also offer insights that can improve your business strategy. 

Once you have a solid understanding of your target customers, try creating buyer personas. Buyer personas are fictional characters that represent the key attributes of your real-life customers — whenever you’re faced with a business decision, ask yourself, “What would our buyer personas want?”

One of the most important types of market research , especially qualitative research, is identifying your target market’s pain points. What do your target customers hate in their life that your product or service can fix? 

For starters, knowing your audience’s pain points can improve customer satisfaction. Moreover, if you understand what your customer needs, you can create new product ideas or modify existing products to address those needs. You may even come up with a new business plan or startup idea. 

Aside from talking to them directly (which we discuss below), take a look at similar products and how your target customer responds to them. Is there a market gap for customer needs that aren’t addressed in your target market? What do shoppers like and dislike about the current available products? These are the research questions that can fuel better and more successful product ideas. 

Data collection for market research isn’t just about your target audience. It’s also about the industry in general. Following industry trends is excellent for secondary research — you can see what your potential customers are thinking just by looking at the state of the market. 

For one thing, stay up-to-date on industry reports and public market analyses. Try to find a trustworthy source for news about your industry so you can discover market trends while they’re still new. Although less reliable, you can also glean what’s going on with your market by following relevant people and topics on social media.

Additionally, consider doing some competitor analysis. You may be able to discover some market trends just by watching what your competitors are doing. Also, competitive analysis can reveal holes in your competitors’ business plans that you can take advantage of, such as missing a key demographic that you can target instead. 

Of course, the best research method for reliable data is to go straight to the source: your target audience. You’ll find the most useful data comes directly from them. 

One-on-one conversations like in-depth interviews yield the best results because you can tailor your questions as you go and pivot to new topics as needed. The downside is they might cost more and take up more time. Traditionally marketers relied on focus groups, however they have their problems. Focus groups tend to succumb to both peer pressure and host influencing, both of which can corrupt data. 

A cheaper alternative is simply messaging your potential customers on social media, such as posting an open-ended question. This is not very efficient for data collection, however; there’s no guarantee the people answering are part of your target audience, or even telling the truth. Still, it can be useful to get a feel for your audience as long as you don’t take everything for fact. 

Last, you can use online surveys and questionnaires, such as marketing emails or website pop-ups. These are not intensive for the participants and you can put them in places only your target audience would find. 

Sometimes asking questions isn’t enough. One of the most powerful research tools a marketer has is A/B testing: show a participant two or more options to see which they like best. 

For example, if you have two different product designs and you want to see which your target customers prefer, you can pit them against each other in a Head-to-Head poll to see which is more popular. If you have a few different variants, you can use a Ranked poll in which participants rate all the options from most to least favorite, with a final score calculated at the end for each. 

You can apply A/B testing to almost every aspect of your business. Typically, entrepreneurs use it to test variants of an image, such as a product photo, website landing page design , brand logo, etc. However, savvy marketers can also use it to test any number of things, from pricing to slogans to new product ideas. 

If you’re using PickFu for marketing , you can also narrow down who can participate to hone in on your target audience exclusively. PickFu not only lets you filter demographics like age, income, education, etc., but also personality types and behavior, such as people who use Amazon Prime or people who go to the gym more than 3 times a week. 

Moreover, PickFu encourages participants to write-in comments about why they made their choices. This gives you valuable insights into how your target audience thinks, stated in their own words. 

With the participant commentary and calculated scores, A/B testing gives you both the quantitative and qualitative data you need to make smart, informed business decisions. Sign up for free now and see for yourself the difference PickFu makes. 

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The Importance of Market Research for Startups: A Step-by-Step Guide

​​the importance of market research for startups: a step-by-step guide.

Starting a new business venture is an exciting journey, but it also comes with significant risks and uncertainties. To navigate the challenging waters of entrepreneurship successfully, one of the key tools at a startup founder's disposal is market research. Market research is a crucial process that helps startups gather essential data about their target market, customers, and industry. In this post, we will explore the importance of market research for startups and provide a step-by-step guide to conducting effective market research. By the end, you will understand how market research can inform business decisions, validate ideas, identify target audiences, and optimize strategies for success.

Why is Market Research Important for Startups?

Market research serves as the foundation for informed decision-making and is essential for various reasons:

Understanding the Target Market: Market research provides valuable insights into the preferences, needs, and pain points of your potential customers. Understanding your target market helps you tailor your products or services to meet their demands effectively.

Validating Business Ideas: Before investing significant resources into a business idea, startups can use market research to validate its potential. By gauging market demand and competition, entrepreneurs can determine if their ideas have a viable chance of success.

Identifying Opportunities and Threats: Market research allows startups to identify opportunities that competitors might have overlooked and uncover potential threats to their business model. This information helps in devising effective strategies and staying ahead in the market.

Optimizing Marketing and Sales Strategies: Understanding customer preferences and behavior enables startups to develop targeted marketing and sales strategies. This approach improves the efficiency of marketing campaigns and maximizes the return on investment.

Minimizing Risks: Entering a new market without conducting thorough market research can be risky. Market research helps in making well-informed decisions, reducing the risk of failure or costly mistakes.

How to Do Market Research for a Startup

Now that we understand the importance of market research let's delve into a step-by-step guide to conducting effective market research for your startup:

Step 1: Define Your Research Objectives

Clearly define what you want to achieve through your market research. Identify the specific questions you need to answer and the information you require. Whether you're evaluating market demand, understanding customer preferences, or assessing competitor strengths and weaknesses, having well-defined objectives ensures focused and actionable research.

Step 2: Identify Your Target Audience

Determine the target audience for your market research. This could be your potential customers, existing clients, or industry experts. The selection of the target audience depends on the research objectives and the data you need to collect. Consider factors such as demographics, location, and behavior to identify the most relevant audience.

Step 3: Choose the Right Research Methods

Market research can be conducted using various methods, each offering different insights. Common research methods include surveys, interviews, focus groups, and observation. Online surveys are cost-effective and allow you to reach a wide audience quickly, while interviews and focus groups offer more in-depth responses. Write this down.

Step 4: Collect and Analyze Data

Implement one or more of the above research methods to collect data from your target audience. Ensure the data is collected accurately and ethically. Once you have gathered the data, analyze it to draw meaningful conclusions. Use tools and software to organize and interpret the data effectively. Depending on the amount of data you collect, tools like Microsoft Power BI or Tableau may be useful to organize and visualize the data. On the other hand Excel or Google Sheets may be sufficient. A simple graph can help identify concentrations or trends - but try not to over-complicate the visuals.

Step 5: Draw Insights and Make Decisions

Based on the analysis, draw actionable insights that align with your research objectives. Look for trends and concentrations in the answers collected. Use these insights to make informed business decisions, refine your business strategies, and address any identified gaps or challenges. The decisions may not always be clear or definitive. Sometimes the best bet is to make an inference from your collected data and then test it with a portion of your market - measure the results to see if your inference was accurate. If not, revisit the data and try again. There is no harm in a bit of iteration, particularly if your decisions are data-informed.

Market Research Cost Considerations for Startups

The cost of market research for startups can vary depending on factors like the research scope, data collection methods, and the size of the target audience. For early-stage startups with limited resources, cost-efficient research methods like online surveys or desktop research can be viable options. Additionally, startups can explore free or low-cost market research tools available online. Though market research is an investment, its benefits far outweigh the costs, as it lays the groundwork for a successful business venture.

Market Research and the Startup Business Plan

Market research is a critical component of a startup business plan. Including a section dedicated to market research in your business plan demonstrates to potential investors and stakeholders that you have thoroughly analyzed the market landscape. It highlights your understanding of the target audience, competitors, and industry trends, making your business plan more compelling and credible.

Market research is an invaluable tool for startups seeking success in competitive markets. It enables entrepreneurs to make well-informed decisions, validate business ideas, understand their target audience, and optimize their strategies for maximum impact. By following the step-by-step guide outlined in this blog post, startups can conduct effective market research that serves as the bedrock of their business journey.

Still working out some of your ideas? Browse the ideas from founders here or check out this article on coming up with your business idea: How to come up with a business idea

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Unveiling Your Target Audience: A Guide to Market Research for Startups

Every entrepreneur dreams of a product that resonates with customers, but how do you know if yours will? The answer lies in market research, the key to unlocking valuable insights about your target audience and their needs. This guide delves into the world of market research for startups, equipping you with the knowledge and tools to navigate this crucial step for success. 

Understanding Market Research

Market research is a systematic process of gathering, analyzing, and interpreting information about customers and the market to assess the viability of a product or service. It involves various methodologies such as interviews, surveys, focus groups, and data analyses to gain insights into potential customers, their needs, and how a product compares to competitors.

Types of Market Research

There are two main types of market research: primary and secondary.

Primary Research: Involves collecting data directly from the target market. It helps in creating buyer personas, segmenting the market, and improving the product to meet customer needs.

Secondary Research: Utilizes existing data not collected by the entrepreneur. This can include industry reports, public databases, and proprietary data from other companies to gain insights into the target market and industry.

Methods of Market Research

Market research can be conducted using two main methods: quantitative and qualitative.

Quantitative Research:   Quantitative research gathers large numerical datasets for statistical analysis. Surveys, questionnaires, and polls are common methods for collecting quantitative research data.

Qualitative Research:   Qualitative research aims to understand the reasons behind customer behaviors, needs, and satisfaction. Focus groups, in-depth interviews, and online bulletin boards are typical methods for conducting qualitative research.

Why Market Research is Crucial for Entrepreneurs

In an environment where 50% of new businesses fail within the first five years, startups need to gain a deep understanding of their customer base quickly. Market research serves as a strategic tool, offering insights into customer behavior, industry trends, and competition.

Before launching a startup, conducting market research is essential for several reasons:

Product Improvement: Feedback from the target demographic is invaluable for iterating and improving the product.

Pricing Strategy: Market research helps in determining the optimal pricing strategy by gauging customers’ willingness to pay.

User Experience Enhancement: Understanding what features matter most to potential customers enhances the overall user experience.

Investor Attraction: Thorough market research provides tangible proof that the product fulfills a market need, making the startup more attractive to investors.

How to Conduct Market Research for a Startup

To initiate an effective market research strategy, begin by defining your target audience. Identify their demographics, preferences, and pain points to tailor your product or service accordingly. Utilize both primary and secondary research methods, such as surveys, interviews, and competitor analysis, to gather valuable insights.

Analyze industry trends, consumer behavior, and market dynamics to stay informed about potential opportunities and challenges. Engage with potential customers through social media, forums, and other online platforms to understand their needs and expectations. Additionally, leverage data analytics tools to gather quantitative data that can provide a comprehensive view of the market landscape. By investing time and resources in a robust market research process, your startup can make informed decisions, refine its value proposition, and gain a competitive edge in the marketplace.

A Step-by-Step Guide

Define Your Research Purpose:

• Identify the questions you aim to answer through research.
• Develop hypotheses to guide your approach.

Study Your Target Market and Competitors:

• Gain a comprehensive understanding of your target market, competitors, and demographic.
• Use buyer persona templates for better targeting.

Choose the Right Type and Method:

• Select primary or secondary research based on your goals.
• Determine the ideal method for data collection, such as surveys or interviews.

Recruit Appropriate Research Subjects:

• Understand your target demographic.
• Recruit subjects through word of mouth, social media, or third-party research firms.

Conduct Your Research:

• Execute the research plan with unbiased questioning.
• Use various methods like interviews and surveys.

Analyze Your Results:

• Organize and analyze data for relevant trends.
• Interpret qualitative data quantitatively.

Create an Actionable Report:

• Compile findings into a report with actionable steps.
• Provide recommendations for the next stage of your startup.

Sample Questions to Ask Customers

Crafting market research questions requires tailored language for each product, service, and industry. Sample questions may include:

• What do you like most about our new product or service?
• What do you wish our product or service did that it does not currently do?
• What price would you consider so low that you’d question this product’s overall quality?

Market Research: A Key to Startup Success

Whether confirming consumer pain points or predicting industry trends, market research is a foundational step toward building a successful and sustainable startup. However, market research is not a one-time activity but an ongoing process. Revisit and form new hypotheses with each product version to continuously improve and align with customer needs.

In conclusion, for startups aiming to navigate the competitive landscape and thrive, market research is not just a valuable tool—it’s an indispensable compass guiding them towards informed decisions and customer-centric innovation.

To learn more about market research for startups, see if you qualify for membership to join Founders Network .

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Market Research for Startups [2023 Ultimate Guide]

by George Kuhn

Posted at: 3/10/2023 1:30 PM

Do you have a great business or product idea? Are you entertaining the idea of launching a startup? Perhaps there is no more exciting time than the spot you are in right now.

How do I know? I’ve been there. My startup idea just happened to be a market research firm, so I am very excited to share my expertise on both of these topics.

Startup market research can answer the common questions racing through your mind. 

Combatting the excitement and potential of your startup idea are likely some seeds of doubt. 

Will this work? Will customers buy my idea? What do I need to charge? How do I need to market it? How do I solve the cash flow issues? Is it worth my time?

The good news is market research can help a new business by solving some of your most challenging questions. Market research for startups can also help remove your doubt and give you confidence in making informed decisions based on facts and evidence.

Article contents - go directly to each section by clicking one of the links below

• What is market research?
• Primary vs. secondary market research
• Why market research is valuable for a startup
• Common startup challenges (and how market research helps)
• Best market research options for startups
• What is the process for a market research project?
• How long does startup market research take?
• How much does startup market research cost?
• What to look for in a market research partner
• Startup market research case studies

What is Market Research?

Very simply, market research is a process of collecting information on a product, service, business, market, or topic to apply that knowledge to help with data-driven decision-making (DDM) .

Market research comes in many shapes and sizes. The two highest-level paths include qualitative research and quantitative research, which are both considered primary research. 

Before we get into primary vs. secondary research, we’ll first cover the difference between qualitative research and quantitative research .

Qualitative research

Qualitative research is not scientific and aims to explore topics and ideas. This would include a focus group with 6 participants or individual in-depth phone interviews with 10 potential customers. 

Talking to 6-10 participants would be extremely insightful and provide you with a wealth of information to consider, but it will not be statistically reliable.

In no world will 6 people you chat with represent a pool of millions of potential customers. 

If you use qualitative research, it’s essential to understand that it’s exploratory, which means you can dive deep, but the findings should not be broadly applied to large audiences.

Quantitative research

Quantitative research is the opposite of qualitative. It involves statistics and numbers to create reliable and statistically significant information.

There are many common forms of quantitative research including online surveys of 400 respondents, phone surveys, in-person intercept surveys, etc.

This is critical if you are trying to test the viability of your startup.

Primary vs. Secondary Market Research

Is one better than the other? 

Not necessarily. But both primary and secondary research carry specific roles, as we touched on before. Below, we’ll list a few key differences and benefits of both methods. 

Primary market research

P rimary research is data you are collecting on your own/custom. It is many of the methodologies we discussed above: online surveys, focus groups, intercept surveys, etc. 

The top benefits of primary research include: 

• The data is yours. You conducted the research, therefore it belongs to you. This works as a fantastic benchmarking opportunity for your brand. In order to grow, you need to be able to have a steady record of key data to work with. 
• The data is fresh . Unfortunately, studies with great data that are from years ago don’t hold up. With primary research, the data is brand new and reliable. 
• The data is controlled . Primary research ensures the data and entire research process is tailored to your needs. You don’t have to rely on outside sources. 

Secondary market research

Beyond primary research, there is also secondary research . 

Secondary research uses data that has already been collected to help with decision-making.

This might include Census data, customer database information, paid subscription services that give you access to data, online searches on Google to pull up past reports and information on a topic, etc.

The top benefits of secondary research include:

• The data is free/low cost. In many cases, the data found through secondary research is free, or low-cost. 
• The data is varied . There are secondary data sources on countless topics. Whatever your company needs data for, it’s likely secondary research exists on it. However, this is not always true for niche topics. 
• The data will save you time . It doesn’t make sense to run research on a topic you know already has fresh data. This saves you time (and money), but still gives you reliable data. 

Why Is Market Research Valuable for a Startup?

You may not only be wondering how to do market research for a startup, but you may also be curious if market research is necessary for testing a new product , business concept, or service.

🚨🚨 Spoiler alert: it is . 

There are many benefits that can be leveraged from a market research project. The key theme with these benefits is the ability to repurpose the data across various departments, assets, and uses.

Benefit 1: Helps with concept development

Do you have a general idea of your product or service but are unsure of the details? 

Market research can help a startup with a variety of things around your concept:

• What should I name it?
• Which logo should I choose?
• What features of the idea should I offer?
• What features are not important?
• How appealing is the new product concept ?
• Is it different or unique?
• Would you consider purchasing it? Why or why not?

And testing is relevant even past these beginning stages. Take a look at our ultimate guide to ad concept testing surveys , which can be used down the road to help market your startup’s campaigns. 

You can also watch this brief video on the same topic: 

Benefit 2: Marketing insight

Do you need to know more about what messaging to use in your marketing, or find out what is most important to your potential customers when they are considering buying your product or service?

Market research can help you formulate a marketing plan, including what source(s) to advertise to capture the attention of your target audience.

Maybe you are developing your website and want to test your homepage layout. Perhaps you are looking at running social media ads. Or maybe you are looking to run an ad in a publication. 

You can use portions of your market research project design to test these to ensure you are on the right path and featuring messaging and imagery that resonates with your customer.

One of the most common product concept development survey questions is asking about how important factors are when purchasing.

You can ask about the importance of price, customer service, shipping time, expertise, hours, variety, or any other feature or benefit of your startup idea. 

If you learned through the survey that your customers only care about shopping time, customer service, and online payment, you now have the 3 items you need to feature in your marketing. They become your lead messages.

Benefit 3: Strategy

This is a broader benefit, but market research will allow you to make higher-level decisions about your startup. Understanding how to do market research also means understanding the core principles of your business strategies. 

• Do you need to shift the model of your startup from in-store to eCommerce?
• Do I need to change my business hours to accommodate evening customers?
• Where should my business be located/which market offers the most potential? 

These are all more strategic questions where market research can guide you.

For more ideas to consider, read our blog Factors to Consider Before a Product or Service Launch .

Benefit 4: Profiling your target customer

So, what is a customer persona ?

A simple survey can provide you with a ton of data on your target customer. You may find out through the survey that the profile of the buyer to target is female, aged 30-40, with children in the household, earning a household income of $100,000 or more. 

This data benefits your advertising budget and marketing campaigns and prevents you from wasting money marketing to less fruitful audiences.

The profiling data points on your customers are endless:

• Demographics (age, income, gender, marital status, children, ethnicity, etc.)
• Behaviors (competitors used, how often they buy, what they buy, why they buy, etc.)
• Attitudes (feelings towards brands, emotional triggers to purchases, etc.)
• Geographical (where your audience resides/works - ZIPs, counties, DMAs, states, regions, countries)

Benefit 5: Choosing the right market

If your startup is a brick-and-mortar location (restaurant, bookstore, etc.), you are probably wondering where the best place to set up shop is. 

Market research can help you define what area in your region offers the most potential for purchases. This could be accomplished with a simple survey that divides responses across 6 counties. 

By asking a simple appeal of your concept or likelihood to purchase, you may find that 1 of those 6 counties is significantly greater to purchase your startup idea than all others combined

Benefit 6: Choosing the right price

Asking yourself, “ how much does market research cost ?” It depends. 

Understanding price points is one of the most common reasons for commissioning market research.

It is true not only for startup research brands but also for Fortune 50 companies. How much is someone willing to pay for the product or service?

There are several ways to approach pricing in market research through systematic methods.

Unfortunately, the easy way of asking a respondent how much they are willing to pay open-ended does not work. Survey respondents are savvy and often view it as a negotiation session to lowball the value.

A market research company like Drive Research can help guide you on the best approach, whether the Gabor-Granger model or the Van Westendorp process. Each has a scientific way of reaching an optimal price point for your startup idea.

Benefit 7: Using the research for funding/investments

Before a venture capitalist provides you funding to fuel your startup, they often want to see data to ensure the money they give you will make it back to them. It usually requires third-party validation through market research. 

Although this is not often a standard driver of commissioning market research, it is something to keep in mind for your startup.

Market research can be a powerful tool as you gear up and need additional investment funding to scale.

Benefit 8: Loan acquisition

Suppose you plan on going the more formal route by taking out a loan from a bank.

In that case, they will almost certainly require a feasibility study or some objective market research to help validate the potential success of your idea.

Banks are businesses too, and they want to invest in ideas where the lessee can pay back the amount borrowed in complete confidence.

Benefit 9: Eliminates risk

In essence, market research is all about reducing risk. Could you launch your startup without any market research and be successful?

Sure. If you found your start-up using market research and the valuable insights you collected, do you stand a better chance of success? Yes.

Take for instance these product failures from the last decade and how market research could have helped.

Common Startup Challenges Market Research Helps

While new businesses have a risk of failure, there's also plenty of hope they'll take off. The key here is understanding the issues before you get in too deep. 

For this section, Drive Research  spoke with business experts and owners about how to navigate these issues. 

Challenge #1: Not having enough content

We'll put it this way: you can never have too much content for your small business website. 

Content is the very foundation on which your branding strategy is built. Because of that, you must have plenty of resources on your site. 

Startup company challenges can begin when you lack content for your website. This can mean not enough blog posts, effective landing page copy, and so on. 

How Market Research for Startups Can Help

First, make sure your business has a website!

Recent research revealed a whopping 1 in 3 businesses still don’t have a website. 

Without an online presence, you're missing out on significant connections with your base. 

Secondly, ensure you have pre-written content you can use on your site in the early days.

As for the type of content? That will depend on your business objectives. 

This step will take the stress off of having to churn out a quickly-written copy just for the sake of throwing something on your site. 

Additionally, consider the user's experience from this angle. 

• Is the content easy to read?
• Can the user quickly navigate to the content? 
• Is the content relevant? 

Marketing challenges for small businesses frequently arise when the answer to these questions is "no." 

The best thing you can do when starting a business is to build a foundation of content on your website. 

The more you can have potential brands and clients reaching out to you for new projects vs. you having to spend the time to develop new relationships cannot be understated. Invest heavily in your website content, copy, and SEO. 

If you are considering starting a new business down the road, start writing today because all of that can be leveraged for your site. 

Coupled with this suggestion, hire a solid UX consultant to review your initial website prototype to point out simple flaws, navigational issues, and layout concerns. 

I did this in the first month of starting our company for a few hundred dollars.

The insights and ROI I received from our UX assessment were implemented immediately and still resonate with how we design our website design to this day. 

The return and perspective of having a third-party user experience market research company evaluate your website or app cannot be understated and paid for themselves 100X over.

George Kuhn, Owner and President of Drive Research  

Recommended Reading: How to Improve User Experience (UX) For Your Website

Challenge #2: Client/customer needs aren't being met

Your customers are the reason you have a business in the first place. 

This is why customer needs must come first if you want your brand to thrive. Not only does this help with customer retention, but it also builds a bond between you and them. 

Take this recent statistic, for example. Up to 78% of consumers will return to a company after a mistake if its customer service strategy is solid. 

Small business challenges pop up when this strategy is forgotten. 

Thankfully, customer satisfaction surveys can help you out here. 

These surveys target your customers and reveal how they feel about your business. In fact, we think surveys are one of the best customer retention strategies to build brand loyalty . 

With the survey data, you can:

• Improve customer service strategies
• Gain better insight into customer demographics
• Develop marketing/advertising campaigns
• Make a video of positive results using free video maker software or tools

Additionally, Raissa Simpson put it best, when she said,  "Building a business always reminds me of the importance of being mindful of how to meet the client's needs without losing my own personality and creativity." 

She continued, "I bring my years of experience as an artist while also approaching what I have to offer by listening first to feedback and then taking appropriate actions to our services.

People like to see that you listen to them and make responsive and responsible changes where needed."

Raissa Simpson, Artistic Director at PUSH Dance Company

Challenge #3: Your Niche Is Too Broad

It's good to have a big picture for your business when starting. 

But if that picture becomes overly broad, you can end up juggling too many services and lose sight of your core business goals. While it's good to have ideas for your brand, this can be a challenge for small business and startup owners . 

If you want to target a niche market, then you have to know what you're getting into. 

• Do your research
• Locate your target audience
• Understand your capabilities: can you properly serve this audience?

“One challenge I experienced in my small business was narrowing my niche . It's easy to get excited and have the desire to serve everyone. T hen overwhelmedness sets in." Says Robin Camarote of Robin Camarote Coaching and Consulting .

She continues, "There is so much need, so many ways to reach people and so little bandwidth to cover them all. Narrowing down who you serve and how makes delivering on your promise so much easier and dramatically increases the value you can deliver to a smaller group." 

Camarote says, "Narrowing down my niche required personal reflection, some business coaching, and testing. I knew I had to love the people in my niche and want to help them." 

She continues, "I also needed some input from coaches further down the road.

Their feedback helped me get clearer on the series I should offer. And lastly, testing and refining the offer is essential as you find the right words that resonate with your chosen niche.  It's not a failure until you give up."

Conducting a market survey will help you narrow down the demographics you want to serve. 

Aside from growing your business, a market survey can also: 

• Aid in developing new locations
• New product or service creation 

Since small business challenges can arise when you cater to multiple niches, it's important to focus on the market most relevant to your services. Eyes on the prize! 

Additionally, Chauncey Zalkin, SVP of Marketing at HouseAmp, says "Be ruthless with yourself in questioning whether what you are doing is something people want ." 

Zalkin continues to say, " Is what I'm doing to promote my business just what I like, or is it going to clearly communicate the value in a way people will want to take action? Don't just do things because you hear you should, make sure in the early days you are doing things that are good for your business."

Challenge #4: You don't have enough clients/customers

Remember when we talked about how customers are the foundation of a business? Well, you need to make sure you have enough of them, too!

A common small business challenge is simply not having a populated customer base. This plays directly into our previous point--not having a solid niche. 

If you don't know who you're serving, you won't have anyone to serve. 

For instance, Gene Marks, President of Marks Group PC, told us  “My business is project-oriented, not subscription-based, so we go from project to project." 

Marks goes on to say their  biggest challenge is to fill a big enough backlog of projects to keep their revenue stream growing , while at the same time performing current projects and looking for more work.

Marks has done this through diversification: hiring people to do services while he focuses on marketing. 

" Many years ago when we were only a two-man shop (my father and I) it was more difficult to maintain this momentum. We are now able to do this with the people we have, but it's still a major challenge."

A useful small business administration tool to attract more clients is market surveys with target buyers.

The data collected from market surveys will reveal key insights that can help boost your outreach strategies. 

Additionally, competitive assessments can be useful in understanding what marketing strategies work well for competitors (and what don't)

These assessments measure your rivals and are ideal if you want to survey non-customers . 

There are many ways to collect data for a competitive assessment survey, but online surveys and IDIs are the most beneficial.

Challenge #5: There's not enough time in the day

Many times, startup business challenges arise because owners simply don't have enough time to allocate to each moving part. In turn, your business can (and probably will) suffer. 

In fact, new businesses take roughly 6 months to a year to fully come together, so include that in your overall timeline. 

Before you dive into your business idea, make sure you're ready for the following: 

• Long(er) hours
• Researching relevant industry trends 
• Juggling multiple tasks (website/social media management) 

" Dedication, tenacity, and a bit of stubbornness were important for us [when] getting Recess off the ground. Be prepared to work long hours and work very hard to get your small business going." Says Jesse Daino, Co-Owner of Recess Coffee House & Roastery.

Daino continues, "A lot of people get into the food service industry thinking it will be an easy way to make some money. But any food service business comes with high daily operating costs. It takes a long time to build the customer base you need to make it profitable." 

Daino recommends startups focus on reinvesting in their business to keep that customer base happy.

Best Market Research Options for Startups

When it comes to options for startup market research , you are never short of them. 

Understanding the pros and cons of different market research methodologies is essential. What you are trying to learn will help guide you in which approach to take, qualitative or quantitative.

We’re only listing the best here, but we go into detail in our blog post 11 Types of Market Research to Consider This Year.

Or, watch our video for a short synoposis of market research examples to fuel your business growth .

Option 1: Online surveys

Running a concept test using an online survey (in my opinion) offers the best bang for your buck as a startup. 

With online surveys, you can acquire a lot of responses and a statistically reliable sample for your decisions around your business model, marketing, and strategy.

The extensive data set will also allow you to slice and dice the data by demographics to truly understand what’s driving concept appeal and purchase intent. 

We rely on only the highest quality online survey respondents , so you can be sure the data is top-notch. 

Online surveys are affordable, timely, and can be run quickly, all of which are vital for a startup. One of the most basic types of startup marketing research, new product demand  surveys are also versatile and can be used in any industry. 

Option 2: Feasibility studies

This multi-pronged project is typically best suited for a development project or brick-and-mortar idea.

The key components to a market research feasibility study include a market analysis using Census data and 5-year estimates to help you understand where the market is going (is your target audience growing or shrinking). 

Additionally, a competitve assessment  of other businesses/products in your category is included, along with a survey of your audience. Feasibility study firms have a patented process they follow to help you understand the feasibility of your new idea.

Option 3: Market analyses

A market analysis uses all secondary research or desk research to generate information for you. 

This is one of the components of a full feasibility study.

It focuses on Census data and publicly available information/articles on the topic. Again, with secondary research, like a market analysis, you are not collecting anything new. It’s information that exists online. 

The tradeoff is that this can often be quick and inexpensive but may not be as relevant to your startup idea as a customized survey with relevant and very specific questions.

See our market analysis pricing packages, here .

Option 4: Competitive assessments

This is another piece of the full feasibility study mentioned above.

It takes a deep dive into your core competitors to understand key differentiators, pricing, product availability, and other data points to help you understand gaps where you may be able to stand out with your concept. 

For more information, check out our Ultimate Guide to Conducting a Competitor Analysis .  

Option 5: In-depth interviews (IDIs)

These are longer in-depth conversations you have with participants. 

The participants might include potential customers, subject matter experts in your field, or other stakeholders. These are often 30-60 minute conversations held over the phone or through Zoom.

A research firm can help recruit and schedule these participants and even moderate the conversations as a third party.

Additionally, IDIs can often be a great starting point if you are dipping your toes into the startup waters and looking to go deep into conversations.

What Is the Process for a Market Research Project?

Although the steps differ somewhat depending on your chosen methodology, most market research projects follow a similar flow. 

Whether it be ongoing research through pre or post-product development , the steps showcased below are what it would look like to work with a startup research firm to assist you.

However, if you are interested in DIY research , several of these steps would not be applicable. This process below primarily focuses on primary/custom research (qualitative or quantitative).

Use our list of free market research resources for start-up small businesses if you're looking to conduct something in-house.

Step 1. Define your objectives

It is critical to determine this before you start the marketing research process.

• What are your objectives? 
• What do you want to learn from the research? 
• How would you like to use the results?

Those 3 questions are a great starting point for requesting a proposal from a firm or thinking about launching the market research in-house. Design the study with the end in mind.

Step 2. Kickoff

Once you choose on a market research partner , they will host a 30-60 minute kickoff work session to explore those questions, walk you through the process, discuss the next steps, and answer any questions you might have.

An agenda is typically prepared for this meeting to help stay on task.

Step 3. Workplan

This is one of the first deliverables for your project.

It will outline key tasks, dates, and deliverables for both parties (you, the client, and the research firm). This document evolves and is updated throughout the study, so you know where everything stands.

Step 4. Design

This is likely the most critical component of startup research–and the key element of all our market research tools : garbage in, garbage out . Below is some survey writing 101 for you. 

The design component involves hashing out the actual questions you want to include in the survey or interview guide.

This ties back to your objectives and what you are trying to learn from the research. It’s crucial to consider many perspectives when drafting your instrument for your startup.

• Screening/qualification criteria (if your product is targeted to females, you can disqualify males)
• Length of the survey to avoid dropoff or disengagement from the respondent
• Number of responses (minimum of n100, consider options for n400, n1000, n2000)
• Writing the questions in an unbiased manner
• Making the survey questions mutually exclusive and collectively exhaustive
• Types of questions (closed-ended, open-ended, ratings, etc.)

It is one area of the process where a market research expert can provide the best guidance.

If you do not design the survey well, it will ultimately reflect on your results, where you may misinterpret findings or wish you could have asked different/other questions.

Step 5. Launch

If you are conducting an online survey, you will need to find a survey platform to program your survey and a market research company with vetted/qualified respondents to receive responses. 

There are online panel companies you can reach out to or full-service market research firms that can program the survey on your behalf in its software and field it to respondents. Very critical that you test the survey to ensure there are no typos, errors, routing mistakes, piping, etc. 

We suggest running a soft launch to start the project by collecting about 3-5% of your total sample. Examine these results closely before moving to the full launch.

Step 6. Data collection

This is the process of fully fielding the research to your audience. 

Many firms will offer live, 24/7 accessible data portals so you can check on the data and responses at any time.

These portals often tabulate the data into charts and graphs in real-time for you. Many allow you to export the data into Excel, PowerPoint, Word, or PDF.

Here is an example of a live client dashboard by Drive Research .

Step 7. Quality checks

This is another step in the process where a research expert can add value. Several checks are likely built into your survey to help with data quality (ReCaptcha, red herrings , etc). 

However, there should also be data quality checks on the back-end around duplicate submissions for IP addresses, speedy completion times, etc.-- some of our most basic tips to quality check a data file in market research .

A quality market research company will have a checklist they’ll run through for you. 

Data quality is a real issue in market research. Some respondents try to game the system to earn extra rewards or entries into a raffle but create bots, automated submissions, or try to take the survey more than once.

Several safeguards are put in place to avoid this.

Learn more about spotting poor survey respondents .

Step 8. Analysis

Once data collection is complete, you will want to dive in.

The analysis includes reviewing the tabulations and thinking through themes you’re seeing, reading open-ended comments to identify commonalities, and trying to understand the story the market research is telling for your startup.

With the analysis, try to cut and segment the data as much as possible. Take all your audience profiling questions and see how the likelihood of considering your concept differs by demographics, behaviors, attitudes, and geographies.

Step 9. Reporting

Once your analysis is complete, it’s time to draft the findings. These should be created as themes based on your insights. It is an excellent time to revisit your market research objectives and follow that roadmap for your report.

For example, if the market research you commissioned for your startup focused on the following:

• Is my concept appealing, will customers purchase it?
• What do customers like best about the concept?
• What do they like least about the concert?
• Who is my target customer?
• What source(s) of information will they use to learn about my concept?

You now have an outline for your report with headings centered around your key takeaways. Again, design your survey with the end in mind. If these are the answers you need for your startup, address them in your survey design.

Step 10. Recommendations

Now that you have the market research findings, it is time to consider the implications. 

You have the what (your analysis), the so what (your results), and now you need to apply the now what (recommendations).

A trusted market research company can offer their expert recommendations to help answer questions such as:

• How can you apply market research to help your startup?
• Who should you target with your concept?
• What messages should you use?
• What marketing channels should you explore? What features of your concept do you need to improve before launch?

Step 11. Debrief

A market research firm will schedule a 30-60 minute debrief to walk you through the report and recommendations as a final step.

Even if you completed the startup research by yourself, it is still helpful to sit with another stakeholder or friend with some tie to your idea and get their thoughts. 

Additional perspective can always be helpful, as it can bring other interpretations to your research.

What Is the Timeline for a Market Research Project? 

There is often no concrete timeline for market research. Much of it depends on your scope of the research, how many respondents you want to reach, and the level of reporting (e.g., topline vs. a comprehensive report).

As a general rule of thumb, market research can be completed in as little as 3-days to a week and as long as 4-8 weeks).

If the scope is small enough (e.g., 10 questions to 100 respondents), you may be able to draft a survey, program it, and return responses within 24 hours with tabulations.

However, it’s important not to rush the survey design because if you have a limited budget, you only get one shot to reach out to respondents.

Because we encourage collaboration with startups to design the survey and ask the right questions after the kickoff, we often like to budget 1-2 weeks on the setup and design. 

This is followed by 1-2 weeks for data collection to ensure the proper time for a soft launch, data quality checks, initial analysis, etc. A topline report can be completed within 1 week, with a comprehensive report usually taking 2 weeks.

How Much Does Startup Market Research Cost?

You won’t like this answer, but it depends.

Why? There are a lot of factors to consider. However, we can provide high-level guidance regarding what you would need to invest in market research if you are a startup with presumably limited funds.

That's why it's helpful to share your project budget . Doing so can save the back and forth of a third party creating a proposal, just for it to be thousands of dollars outside your budget. 

Some more of my thoughts are below.

If you have a budget in the hundreds, it will be challenging

Market research is complex and takes years of expertise to master to do it correctly. Finding respondents for a study (that are high quality) can also be a challenge. 

There are a lot of sites and panel companies out there that can provide you with an email list of respondents for a few hundred dollars.

They don’t tell you they won’t do your survey for free. Raffles can help, but they often want a reward per response (e.g., a $5 coffee gift card for their time).

What usually happens is startups buy these email lists because the price is attractive, send the invites to their survey through their platform, and receive no responses. 

So, in the beginning, the price seemed cheap, but now you are stuck in a situation where you paid $250 for an email list to generate 1 response. That’s $250 per response.

Panel companies with vetted participants will also sell you samples of respondents for $0.50 or $1 per complete, but you have to be very careful with the quality of those responses. 

Usually, if someone is willing to complete a survey for that low of a reward, they are taking hundreds of surveys a day, are sneaky good about knowing what will qualify them (thus lying on screeners), and will speed through your survey to end it as quickly as possible to move to the next one.

To do it right, you have to invest a little more.

Ballpark estimates and recommended budgets

A good ballpark investment for startup research is about $3,000. $3,000 is good, $8,000 is better. A budget of $10,000 to $15,000 is best.

With $3,000 in your budget, you will likely be able to commission a market research firm or consultant to help you...

• Design a short survey
• Have them program it on your behalf, launch it to respondents
• Obtain n100-400 respondents
• Have access to online reporting portals with the ability to export the results

The cost structure for market research goes up from there where $8,000 would include additional responses to your survey and likely some form of reporting and interpretation of the results with full consultation and management of the study.

The $10,000 to $15,000 is ideal for a single-component project. 

With a consumer audience that will help you obtain n1000 in your sample to increase validity, allow the research team to prepare a comprehensive report, and experience a full-service project with the kickoff, debrief, and all of the bells and whistles.

If you begin adding components (e.g., I want to do a focus group and a survey) or you are looking to conduct a full feasibility study for a development project (includes market analysis, competitive assessment, and market survey), the cost would be beyond the $15,000 range.

Be willing to pay for the expertise and guidance

Although that amount may seem like a lot to get started for some, it’s better than launching a much larger investment into your startup idea and having it fail miserably. 

That’s an investment of more than just money but also your time wasted over months or years. If you are going to do market research and are serious about your startup idea, do it right and hire an expert.

There are dangers to DIY market research

If you choose the do-it-yourself route (DIY), your results could be biased

Whether it's in how you phrase the questions to get the desired outcomes you want or the interpretation of the results where you see blue but the objective direction is red, you could make poor decisions without guidance from a market research firm.

Also, if you plan to use the results for funding or capital, the do-it-yourself market research tools will likely be an issue because a third party did not do it.

Learn more about the dangers of DIY market research .

Be aware of professional survey takers

There are professionals whose sole focus is market research day in and day out

These consultants are often trained in Voice of Customer (VOC) and customer experience (CX) and understand a project's nuances. 

They have the foresight to see issues before they happen and prevent them. Market research can be tricky to design and tough to field. Consider hiring out. 

What Should You Look For in a Market Research Partner?

This section is for you if you are considering hiring a professional to assist with your startup market research. Not sure what firm to hire that is the best fit for your needs?

Outside of price and some basic criteria, here are a few items to look out for.

Item 1: Experience working with startups

Working with startups is much different than working with massive Fortune 1000 conglomerate organizations. Your needs differ, you need more customization, and you need them to help guide you on best practices. 

Some of the larger market research companies often lose sight of this and are so focused on execution they operate more as an order taker than a consultant.

Therefore, look for market research companies that specialize in small businesses or can share case studies of working with startups.

Item 2: Providing perspective

This is a bit of a unique one, but necessary. If you are looking at a company to assist, how did they start, were they an acquisition, have they been a corporation for over 50 years, etc.?

I think it makes more sense for your startup to work with another small business, startup, or relatively younger market research company. 

They have been there, realize what you are going through, know what it takes, and the kind of perspective that can help you with your research design.

Item 3: Find a fast, agile, and efficient firm

Large market research companies are often dinosaurs. 

They are stuck in their ways, refusing to be flexible or budge during the project.

A “nope, this is how we’re doing it. This is how we’ve always done it,” type of mentality.

Find a firm that is agile and willing to work with you to get you what you need to ensure every penny you spend on market research is worth it.

Item 4: Treats you like a priority

When you reach out with project requests and ask for a proposal, are you getting the sense you are at the bottom of their list? 

Are they taking days, if not weeks, to respond to your emails and calls? Probably not a good sign of things to come.

I always say the best service you will get from someone is if they are either applying for a job or trying to sell you something. If it’s not an A+ experience, it’s all downhill.

Item 5: Overdelivers

This can come in many forms. Quick responses. Additional details. More suggestions. Guidance. Adding an additional cut on the reports. 

Adding some insight to your findings. Whatever it is, try to seek a partner who gives you a little extra value throughout the project.

Startup Market Research Case Studies

At Drive Research, we have helped many startup brands create data-driven strategies based on the information collected from our studies.

Here are a few mini-examples of clients we have helped over the years.

• Case study #1. Drive Research worked with an app company to run focus groups and in-depth interviews to explore the appeal of a new adventure app that coordinated group treasure hunts. The participants provided feedback on likes/dislikes of the experience, navigation of the app, pain points causing dropout, and many other insights. The client could reduce his dropoff rates within the app that was increasing over the years and increase retention within the app to drive revenue. More on that story, here .
• Case study #2. Drive Research worked with a healthcare technology company that provided a patient portal to help manage IBD. The portal was developed to help coordinate care between gastroenterologists, primary care physicians, nutritionists, and the patient through a full 360-degree view of the patient. Our team conducted nearly 10 studies with this brand, leveraging the research in its marketing messaging to help grow the brand and acquire additional funding from Mount Sanai in NYC. More on that story, here .
• Case study #4. Drive Research contracted with a real estate development company to understand the potential success of a real estate analytics tool. The tool aimed to provide forward-looking metrics for brokers and potential real estate investors in different markets across the United States beyond what the competition offered. The research identified critical differentiators for the concept, optimal price point, and many other insights leveraged to launch the tool.
• Case study #5. Drive Research worked with a developer to manage a feasibility study on a potential senior living apartment building . The client wanted to understand if the investment would be successful, could the market sustain more apartments, what the rental rates should be, what amenities should be included, and what the property should lead within its marketing campaigns. The research was leveraged for funding, building strategy, and shared with the local economic development agencies to help with permitting. More on that story, here .

Our market research for those with startups has helped clients in the following industries:

• Property and real estate
• Communications
• FinTech and FinServ
• Manufacturing

FAQs About Startup Research With Answers From Our Experts

The Drive Research team loves working with new businesses and startup organizations.

Based on their years of experience, I asked commonly asked questions they receive from these entrepreneurs. Here are their answers. 

What is the best type of startup market research project for a startup?

In my opinion, one of the best types of market research for a startup company is in-depth interviews.

Regardless of a company's product, service, or target audience, conducting qualitative exploratory research (via interviews) will help inform business strategy and future direction. For start-ups, there are two primary audiences to consider for in-depth interviews. 

• First, speaking with other businesses, organizations, or individuals who are deeply knowledgeable about a space you're looking to enter will be able to provide your business with valuable insight. Often, these individuals can also help save you from making costly mistakes based on their past experiences and industry knowledge.
• Secondly, interviews should also be conducted with potential customers. Individuals who are not invested in your company will be able to provide you with a valuable, unbiased perspective on what you plan to offer, and how you offer it. The feedback provided from either audience leads to a strong return on investment for this type of project for start-ups. 

Oftentimes, the feedback you receive from even a single interview can make the entire project worthwhile.

Chris Coville , Director of Research

Should a startup conduct market research, and why or why not?

Before entering the market, a startup business should consider conducting market research.

Market research can answer critical business strategy questions like usage habits, perception of key competitors, satisfaction levels, measuring the appeal of a new concept/service, and more. 

In addition to gathering information about competitors, market research can identify target markets, answer how to best reach target consumers, and test ads/messaging before entering the market. 

Fine-tuning business strategies before entering the market can make your startup successful.

Emily Taylor , Research Manager

Does market research provide an ROI for startups?

It can, but it's too difficult to anticipate an ROI of the research. Research should be considered more of an insurance policy or risk mitigation plan.

Going into market research with the idea that research results will lead to an economic guarantee or revenue gain is not advised. It really should be considered more of an operational cost of doing business. Typically the ROI of research isn't realized until after an organization observes the longer-term impact of a decision based on research results.

Here are a few examples...

• Did you decide to spend your advertising budget differently based on the research? If so, was your advertising successful?
• Did you pursue a new target audience or limit your target audience based on research findings? If so, was your targeting decision profitable?
• Did you rework your product or service offering after launch based on research? If so, did you see an increase in leads or sales as a result? 

Professionally executed research will help you make better decisions and/or help make you feel better about your decisions.

Zach Adams , VP of Strategy

Final Thoughts on Startup Market Research

The best way I can summarize my thoughts on the value of conducting market research for a new brand, product, or service is with an analogy. 

Picture yourself on stage in front of an auditorium of 1,000 people.

You walk up on stage, and the speaker tells you that you will receive a $1,000,000 reward if you can guess the most commonly mentioned favorite football team among the 1,000 attendees. And you have 1 minute to respond with an answer.

The anxiety kicks in. Your mind begins racing. You immediately start thinking through potential answers. 

• The conference is in Upstate New York, so could it be the Giants or Jets? Or would it be Buffalo?
• But the speaker said football, so could it be college football, will people mention Syracuse?
• Or wait, if it’s football, could we be in a town where high school football is huge, and it’s a local school?
• But, the speaker said football, I hope she was asking about football and not “futbol,” as in soccer.

With only 60 seconds, you have to take all of those things into account and make an educated guess, or in this instance, maybe just an uneducated guess. How confident would you be in selecting the correct answer?

You blurt out the New York Giants 🙈🙈

Unfortunately, being in Syracuse, NY, about 5 hours from New York City, you learn the answer is the Buffalo Bills due to the audience’s location near Western New York.

You were close but not close enough, and you lost your chance to cash in.

At that moment, you think, wow, I wish I could go back in time and just send a text or quick poll to all 1,000 attendees and ask that question: What is your favorite football team?

Phrasing it that way, I could gather all of the responses and tabulate that data to give the speaker the exact answer and actually tell her that not only is the answer the Buffalo Bills, but it was chosen by 56% of the 1,000 people in this auditorium. 

In that poll, I also asked about their favorite college football team, their favorite high school football team, and their favorite futbol/soccer team. 

I also thought ahead and asked each attendee their age, gender, so if you want to know about the profile of a Buffalo Bills fan, I can provide that too. Basically, anything you want to ask me for $1,000,000 - I can give you facts and evidence.

Would you be more confident in your decision with that data or guessing in front of 1,000 people based on what you think you know? The answer is likely pretty clear.

Essentially that’s what market research for startups can provide.

Rather than basing a massive business and life decision to launch a new product, service, or business on internalized knowledge, you can go directly to your market and potential buyers and ask.

Instead of a sample size of 1 making decisions, market research helps you take a sample size of hundreds or thousands of potential customers to collect feedback to make data-driven decisions.

Do you think your startup idea or product is better than other options out there? Well, in commerce, better is the opinion of the buyer of the product, not the seller.

Contact Our Market Research Company

Are you a startup looking for market research assistance? The first step is to reach out to Drive Research with more information on your needs and some of the objectives you are trying to answer through a project.

Drive Research is a market research company based in New York. Our team will show you all how to conduct market research for a startup , and can help you choose the best option. 

Would you like to learn about our market research services ? Get in touch with us through the ways below.

• Message us on our website
• Email us at [email protected]
• Call us at 888-725-DATA
• Text us at 315-303-2040

George Kuhn

George is the Owner & President of Drive Research. He has consulted for hundreds of regional, national, and global organizations over the past 15 years. He is a CX-certified VoC professional with a focus on innovation and new product management.

Learn more about George, here .

Categories: Other Market Research Services

Need help with your project? Get in touch with Drive Research.

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9 Best Marketing Research Methods to Know Your Buyer Better [+ Examples]

Published: August 08, 2024

One of the most underrated skills you can have as a marketer is marketing research — which is great news for this unapologetic cyber sleuth.

From brand design and product development to buyer personas and competitive analysis, I’ve researched a number of initiatives in my decade-long marketing career.

And let me tell you: having the right marketing research methods in your toolbox is a must.

Market research is the secret to crafting a strategy that will truly help you accomplish your goals. The good news is there is no shortage of options.

How to Choose a Marketing Research Method

Thanks to the Internet, we have more marketing research (or market research) methods at our fingertips than ever, but they’re not all created equal. Let’s quickly go over how to choose the right one.

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1. Identify your objective.

What are you researching? Do you need to understand your audience better? How about your competition? Or maybe you want to know more about your customer’s feelings about a specific product.

Before starting your research, take some time to identify precisely what you’re looking for. This could be a goal you want to reach, a problem you need to solve, or a question you need to answer.

For example, an objective may be as foundational as understanding your ideal customer better to create new buyer personas for your marketing agency (pause for flashbacks to my former life).

Or if you’re an organic sode company, it could be trying to learn what flavors people are craving.

2. Determine what type of data and research you need.

Next, determine what data type will best answer the problems or questions you identified. There are primarily two types: qualitative and quantitative. (Sound familiar, right?)

• Qualitative Data is non-numerical information, like subjective characteristics, opinions, and feelings. It’s pretty open to interpretation and descriptive, but it’s also harder to measure. This type of data can be collected through interviews, observations, and open-ended questions.
• Quantitative Data , on the other hand, is numerical information, such as quantities, sizes, amounts, or percentages. It’s measurable and usually pretty hard to argue with, coming from a reputable source. It can be derived through surveys, experiments, or statistical analysis.

Understanding the differences between qualitative and quantitative data will help you pinpoint which research methods will yield the desired results.

For instance, thinking of our earlier examples, qualitative data would usually be best suited for buyer personas, while quantitative data is more useful for the soda flavors.

However, truth be told, the two really work together.

Qualitative conclusions are usually drawn from quantitative, numerical data. So, you’ll likely need both to get the complete picture of your subject.

For example, if your quantitative data says 70% of people are Team Black and only 30% are Team Green — Shout out to my fellow House of the Dragon fans — your qualitative data will say people support Black more than Green.

(As they should.)

Primary Research vs Secondary Research

You’ll also want to understand the difference between primary and secondary research.

Primary research involves collecting new, original data directly from the source (say, your target market). In other words, it’s information gathered first-hand that wasn’t found elsewhere.

Some examples include conducting experiments, surveys, interviews, observations, or focus groups.

Meanwhile, secondary research is the analysis and interpretation of existing data collected from others. Think of this like what we used to do for school projects: We would read a book, scour the internet, or pull insights from others to work from.

So, which is better?

Personally, I say any research is good research, but if you have the time and resources, primary research is hard to top. With it, you don’t have to worry about your source's credibility or how relevant it is to your specific objective.

You are in full control and best equipped to get the reliable information you need.

3. Put it all together.

Once you know your objective and what kind of data you want, you’re ready to select your marketing research method.

For instance, let’s say you’re a restaurant trying to see how attendees felt about the Speed Dating event you hosted last week.

You shouldn’t run a field experiment or download a third-party report on speed dating events; those would be useless to you. You need to conduct a survey that allows you to ask pointed questions about the event.

This would yield both qualitative and quantitative data you can use to improve and bring together more love birds next time around.

Best Market Research Methods for 2024

Now that you know what you’re looking for in a marketing research method, let’s dive into the best options.

Note: According to HubSpot’s 2024 State of Marketing report, understanding customers and their needs is one of the biggest challenges facing marketers today. The options we discuss are great consumer research methodologies , but they can also be used for other areas.

Primary Research

1. interviews.

Interviews are a form of primary research where you ask people specific questions about a topic or theme. They typically deliver qualitative information.

I’ve conducted many interviews for marketing purposes, but I’ve also done many for journalistic purposes, like this profile on comedian Zarna Garg . There’s no better way to gather candid, open-ended insights in my book, but that doesn’t mean they’re a cure-all.

What I like: Real-time conversations allow you to ask different questions if you’re not getting the information you need. They also push interviewees to respond quickly, which can result in more authentic answers.

What I dislike: They can be time-consuming and harder to measure (read: get quantitative data) unless you ask pointed yes or no questions.

Best for: Creating buyer personas or getting feedback on customer experience, a product, or content.

2. Focus Groups

Focus groups are similar to conducting interviews but on a larger scale.

In marketing and business, this typically means getting a small group together in a room (or Zoom), asking them questions about various topics you are researching. You record and/or observe their responses to then take action.

They are ideal for collecting long-form, open-ended feedback, and subjective opinions.

One well-known focus group you may remember was run by Domino’s Pizza in 2009 .

After poor ratings and dropping over $100 million in revenue, the brand conducted focus groups with real customers to learn where they could have done better.

It was met with comments like “worst excuse for pizza I’ve ever had” and “the crust tastes like cardboard.” But rather than running from the tough love, it took the hit and completely overhauled its recipes.

The team admitted their missteps and returned to the market with better food and a campaign detailing their “Pizza Turn Around.”

The result? The brand won a ton of praise for its willingness to take feedback, efforts to do right by its consumers, and clever campaign. But, most importantly, revenue for Domino’s rose by 14.3% over the previous year.

The brand continues to conduct focus groups and share real footage from them in its promotion:

What I like: Similar to interviewing, you can dig deeper and pivot as needed due to the real-time nature. They’re personal and detailed.

What I dislike: Once again, they can be time-consuming and make it difficult to get quantitative data. There is also a chance some participants may overshadow others.

Best for: Product research or development

Pro tip: Need help planning your focus group? Our free Market Research Kit includes a handy template to start organizing your thoughts in addition to a SWOT Analysis Template, Survey Template, Focus Group Template, Presentation Template, Five Forces Industry Analysis Template, and an instructional guide for all of them. Download yours here now.

3. Surveys or Polls

Surveys are a form of primary research where individuals are asked a collection of questions. It can take many different forms.

They could be in person, over the phone or video call, by email, via an online form, or even on social media. Questions can be also open-ended or closed to deliver qualitative or quantitative information.

A great example of a close-ended survey is HubSpot’s annual State of Marketing .

In the State of Marketing, HubSpot asks marketing professionals from around the world a series of multiple-choice questions to gather data on the state of the marketing industry and to identify trends.

The survey covers various topics related to marketing strategies, tactics, tools, and challenges that marketers face. It aims to provide benchmarks to help you make informed decisions about your marketing.

It also helps us understand where our customers’ heads are so we can better evolve our products to meet their needs.

Apple is no stranger to surveys, either.

In 2011, the tech giant launched Apple Customer Pulse , which it described as “an online community of Apple product users who provide input on a variety of subjects and issues concerning Apple.”

"For example, we did a large voluntary survey of email subscribers and top readers a few years back."

While these readers gave us a long list of topics, formats, or content types they wanted to see, they sometimes engaged more with content types they didn’t select or favor as much on the surveys when we ran follow-up ‘in the wild’ tests, like A/B testing.”  

Pepsi saw similar results when it ran its iconic field experiment, “The Pepsi Challenge” for the first time in 1975.

The beverage brand set up tables at malls, beaches, and other public locations and ran a blindfolded taste test. Shoppers were given two cups of soda, one containing Pepsi, the other Coca-Cola (Pepsi’s biggest competitor). They were then asked to taste both and report which they preferred.

People overwhelmingly preferred Pepsi, and the brand has repeated the experiment multiple times over the years to the same results.

What I like: It yields qualitative and quantitative data and can make for engaging marketing content, especially in the digital age.

What I dislike: It can be very time-consuming. And, if you’re not careful, there is a high risk for scientific error.

Best for: Product testing and competitive analysis

Pro tip:  " Don’t make critical business decisions off of just one data set," advises Pamela Bump. "Use the survey, competitive intelligence, external data, or even a focus group to give you one layer of ideas or a short-list for improvements or solutions to test. Then gather your own fresh data to test in an experiment or trial and better refine your data-backed strategy."

Secondary Research

8. public domain or third-party research.

While original data is always a plus, there are plenty of external resources you can access online and even at a library when you’re limited on time or resources.

Some reputable resources you can use include:

• Pew Research Center
• McKinley Global Institute
• Relevant Global or Government Organizations (i.e United Nations or NASA)

It’s also smart to turn to reputable organizations that are specific to your industry or field. For instance, if you’re a gardening or landscaping company, you may want to pull statistics from the Environmental Protection Agency (EPA).

If you’re a digital marketing agency, you could look to Google Research or HubSpot Research . (Hey, I know them!)

What I like: You can save time on gathering data and spend more time on analyzing. You can also rest assured the data is from a source you trust.

What I dislike: You may not find data specific to your needs.

Best for: Companies under a time or resource crunch, adding factual support to content

Pro tip: Fellow HubSpotter Iskiev suggests using third-party data to inspire your original research. “Sometimes, I use public third-party data for ideas and inspiration. Once I have written my survey and gotten all my ideas out, I read similar reports from other sources and usually end up with useful additions for my own research.”

9. Buy Research

If the data you need isn’t available publicly and you can’t do your own market research, you can also buy some. There are many reputable analytics companies that offer subscriptions to access their data. Statista is one of my favorites, but there’s also Euromonitor , Mintel , and BCC Research .

What I like: Same as public domain research

What I dislike: You may not find data specific to your needs. It also adds to your expenses.

Best for: Companies under a time or resource crunch or adding factual support to content

Which marketing research method should you use?

You’re not going to like my answer, but “it depends.” The best marketing research method for you will depend on your objective and data needs, but also your budget and timeline.

My advice? Aim for a mix of quantitative and qualitative data. If you can do your own original research, awesome. But if not, don’t beat yourself up. Lean into free or low-cost tools . You could do primary research for qualitative data, then tap public sources for quantitative data. Or perhaps the reverse is best for you.

Whatever your marketing research method mix, take the time to think it through and ensure you’re left with information that will truly help you achieve your goals.

Don't forget to share this post!

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Market Research for Startups – Types & Step-by-Step Guide

Our confidence in this statement stems from a recent study conducted by renowned entrepreneur Bill Gross, the co-founder of Pacific Investment Management Co. In-depth market and marketing research provides budding companies with insights into critical aspects such as launch timing, unique features to include, and more, allowing them to plan their launch effectively.

In 2019, the failure rate of startups was around 90% . The research concludes 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year.

According to business owners, reasons for failure include money running out, being in the wrong market, a lack of research , bad partnerships, ineffective marketing, and not being an expert in the industry.

source: www.investopedia.com

So before you try to soar in your business field, you must understand the art and science behind startup market research. It is with this goal in mind that we present the following article.

In this article:

What is market research for startups?

What types of market research can startups engage in, a step-by-step guide to conducting market research for startups, how to analyze your results, and who should participate in the analysis, real-world examples of successful market research.

In essence, market research is a business strategy applied at the very beginning of conceptualizing a business idea, which involves acquiring a thorough understanding of the target market, its dynamics, the attitudes of potential customers, the buying behavior of focus groups, and other important factors.

The results of market research are used to make business-oriented decisions and plan the launch accordingly. When done and implemented with the desired diligence, market research holds the power to leverage the success of a startup.

Market research is so widespread it has become one of the fastest-growing industries in the world, surpassing the $74.3 billion mark in 2019 . While market research is crucial for any business, it plays a particularly important role for an early-stage startup, ensuring its victorious launch and increasing the chances of long-term success.

The statistic illustrates the harsh reality of founding a startup. Most of the new companies fail. The good news is that entrepreneurs’ belief in their success is stronger than statistics. That’s why new companies are created all the time. || source: https://medium.com/glassdollar/estimating-the-number-of-startups-in-europe-5d28286307f8

Market research is one of the few viable ways for companies to improve their decision-making and survive in today’s competitive world. It’s used to ensure the best results from the efforts invested in product development , marketing, and service expansion.

While planning to conduct market research, it is crucial to know its types. Here are the two most common:

#1 Primary research

Primary research is conducted either by the startup itself or by a third party and involves collecting data by engaging directly with customers. The information is gathered by asking relevant questions. It’s the most common type of research.

Primary market research is best suited for startups that:

• want to know the average customer spend for a specific service or product;
• are unaware of customer perceptions and attitudes toward their brand;
• need to find out what their customers would like to see improved.

Based on research requirements, startups list relevant questions and interact directly with customers.

In addition, it’s always a good idea to gather customer insights on your direct competitors and the latest trends employed by other small businesses.

During the exploratory primary research phase, most startup owners collect feedback on their businesses through surveys, scouring online forums related to their target market, and conducting one-on-one interviews with potential customers.

Example: Digital service-delivery surveys you receive after using a service.

• Pros Results in more authentic digital marketing strategies. The startup has exclusive rights to data and findings.
• Cons It’s expensive, extensive, and time-consuming. Because the startup is in charge of the research, acquiring suitable resources and maintaining quality standards becomes difficult.

#2 Secondary research

Secondary research is conducted by analyzing data collected by a third party that has no direct involvement with the startup and its customers. Usually, all research begins with secondary research, as it doesn’t require any direct investment .

Through secondary market research for startups, you can figure out:

• the total market value of a specific industry;
• the current market situation and future growth projection;
• the latest market trends and emerging technologies.

Example : The government-ordained public studies on a particular area/domain can be called secondary research studies for the market.

• Pros Cost-effective. Provides required data instantly. Covers more fields and concerns a broader group.
• Cons You have to make peace with whatever data you have. The data is difficult to customize.

Brainstorming, feasibility analysis, and critical thinking can be your few cost-effective ways to derive success from market insights data.

Many businesses mistakenly believe they know their market solely based on anecdotal evidence, yet the landscape is often far more nuanced and dynamic than they realize. Proper market research doesn’t just validate assumptions; it unravels misconceptions and casts a guiding light on uncharted territories. This process is not merely about data collection but about sculpting a clearer, evidence-backed vision. Paul Jackowski CEO, ASPER BROTHERS Let's Talk

Conducting market research is a tedious task for many.

Startups face additional challenges during market research due to limited investment, resources, and talent. However, excelling in market research is possible, and you can start by paying close attention to the points we mention below.

Step 1:  Define the purpose of your market research

Why : Every research initiative should start with a clear understanding of its purpose. Without a purpose, your efforts can scatter, and results may not be actionable.

How : You should outline your specific objectives. For example, are you trying to validate a new product idea? Understand shifts in consumer behavior? Explore potential markets?

Step 2:  Pick the proper research methodology

Why : The research methodology will shape the type of insights derived.

How : Evaluate your objectives. Quantitative research (surveys, structured interviews) yields structured, numerical data. Qualitative research (focus groups, open-ended interviews) offers deeper, nuanced insights.

Step 3:  Get to know your target market

Why : You need a clear understanding of who your customers are to provide meaningful solutions.

How : Create detailed customer personas. These are semi-fictional representations of ideal customers based on real data and market insights.

Step 4: Formulate your questions

Why: By asking the right questions, you’re able to gather relevant data.

How: Prioritize questions or areas of investigation that align directly with the research purpose. Some of the key questions to include:

• Who are your direct and indirect competitors, and what’s their market worth?
• What particular feature can make my service stand out?
• What’s the scope of my service/product in the target market?
• What are the current trends in the market?
• What is the buying behavior of the customers in your target market?

Step 5: Choose your tools

Why : Tools facilitate data collection, analysis, and visualization. The right tools streamline the process.

How : For surveys, platforms like SurveyMonkey or Google Forms can be used. Analytics tools like Google Analytics or Tableau are great for data analysis.

Google Alerts , Google Trends , Simpleweb , Statista , and Ahrefs are a few tools to help learn industry and brand-specific trends.

Step 6:  Pilot test your research instruments

Why : Ensures that the tools used are effective and capture intended information.

How : Run a mini-version of your study with a small group, tweak based on feedback, then proceed to the main study.

Step 7:  Consider secondary research

Why : There’s a wealth of existing information that can be leveraged to inform decisions.

How : Explore industry reports, competitor analysis, and existing market studies. Tools like Statista or industry-specific publications can be invaluable.

Step 8: Validate your findings

Why : This adds credibility to your findings and ensures they’re accurate and reflective of reality.

How : Revisit some respondents for clarifications, or cross-check findings with secondary sources.

Step 9:  Analyze the data and apply your findings

Why : Raw data must be turned into actionable insights.

How : Depending on the methodology, data can be statistically analyzed, charted, or interpreted through themes in qualitative feedback. To organize this process, decide on the KPIs to base your analysis on those KPIs. Present the gathered and analyzed data in a report.

Step 10:  Update and iterate

Why : Markets, consumer behavior, and technologies evolve. Research should too.

How : Set periodic reviews of previous research. Reassess the market situation and adjust strategies accordingly.

Step 11:  Communicate your findings internally

Why : Ensures everyone in the team is aligned with market understandings.

How : Host meetings or workshops to discuss findings. Use visual aids like charts, graphs, and presentations for clarity.

2021 is a record year for new unicorns, companies valued at more than $1 billion. || Source: https://news.crunchbase.com/news/unicorn-startup-investors-2021-tiger-global/

The process of analysis is like translating raw data into a compelling story—one that informs, guides, and ultimately drives strategic decision-making. Proper analysis not only illuminates what’s happening but also why it’s happening.

So, how should startups approach this analysis, and who should be involved?

#1 Distinguishing quantitative from qualitative data

Before diving into specific methods, it’s essential to differentiate the two main types of data:

• Quantitative data : Numerical data that can be counted or measured.
• Qualitative data : Information that is descriptive and interpretive.

#2 Analyzing quantitative data

Quantitative data provides a measurable and numeric insight into the behavior, opinions, and patterns of your target market. Whether obtained from structured survey questions, website analytics, or sales figures, these numbers provide clarity and objectivity. Quantitative analysis often falls into two primary categories:

Descriptive statistics

Descriptive statistics offer a summarized overview of the main aspects of data:

• Mean (Average) : The sum of all data points divided by the number of data points.
• Median (Middle value) : The middle point of a data set, especially useful when outliers might skew the average.
• Mode (Most frequent value) : The number that appears most often in a data set.
• Variance & standard deviation : Measure the spread or dispersion of a set of data.
• Range : The difference between the highest and lowest values in a set.

Visual tools like histograms, bar graphs, and pie charts can also be part of descriptive statistics, offering visual representations of these metrics.

Inferential statistics

While descriptive statistics describe a data set, inferential statistics make predictions or inferences about a population based on a sample. Here are the key methods:

• Hypothesis testing : Determines if a certain premise or condition is valid for the population.
• Regression analysis : Understands relationships between variables, e.g., how does price affect sales?
• Confidence intervals : Provides a range within which the true population parameter will fall.
• Chi-squared tests : Evaluates the relationships between categorical variables.

#3 Analyzing qualitative data

Qualitative data analysis seeks to understand underlying reasons, opinions, and motivations. Techniques include:

• Thematic analysis : Identifying and analyzing patterns or themes within qualitative data.
• Narrative analysis : Analyzing the stories respondents tell to understand their experiences.
• Grounded theory : Builds theory from data, systematically obtained and analyzed using comparative analysis.

#4 Who should participate in the analysis?

The analysis is often a collaborative effort. Depending on the complexity and scope, consider involving:

• Research Analysts : Professionals trained to handle and interpret data.
• Subject Matter Experts (SMEs) : Individuals with deep knowledge in the area being researched.
• Stakeholders : Product managers, marketers, or sales professionals who can provide context and implications.
• External consultants : Sometimes, a fresh set of eyes or specific expertise is needed.

To truly appreciate the power and importance of comprehensive market research, you should look at the most successful businesses today. Their achievements often stem directly from insights derived from meticulous market research.

The 5 examples we list below underscore the fundamental truth in business: understanding your market is pivotal. When companies listen, adapt, and innovate based on research, they set themselves on a path to sustained success.

An online platform that connects travelers with local hosts offering their spaces for accommodation. It revolutionized the hospitality industry by offering unique and personalized lodging experiences worldwide.

• Challenge In its infancy, Airbnb wasn’t growing at the expected rate in New York.
• Research The founders decided to visit their hosts in New York to understand the problem better.
• Insight They discovered that the property photos on the platform weren’t appealing.
• Action Airbnb provided professional photography services to hosts.
• Outcome A significant boost in bookings and a realization of the importance of high-quality visuals for their platform.

A Danish company renowned for its iconic interlocking plastic bricks. These construction sets have sparked creativity in both children and adults, making Lego a household name in the toy industry.

• Challenge Sales were plummeting in the early 2000s, and Lego was nearing bankruptcy.
• Research Lego decided to conduct ethnographic research, observing children playing in real time.
• Insight They noticed kids were looking for more detailed and intricate storylines and play experiences.
• Action Introduced products like ‘Bionicle’ and ‘Ninjago,’ which combined building with immersive narratives.
• Outcome A massive turnaround in sales which solidified Lego’s position in the toy industry.

An American streaming service that offers a wide array of TV shows, movies, documentaries, and more. Initially a DVD-by-mail service, Netflix transitioned to streaming and later to producing original content, becoming a dominant force in the entertainment industry.

• Challenge Transitioning from DVD rentals by mail to a streaming platform and predicting viewer preferences.
• Research  Used vast amounts of user data to understand viewing habits.
• Insight  Recognized patterns in what users watched, how they watched, and when they stopped watching.
• Action  Introduced AI-driven recommendation systems and even produced original content based on user preferences (like ‘House of Cards’).
• Outcome  Dominance in the streaming industry with a highly personalized user experience.

A personal care brand owned by Unilever. It’s best known for its moisturizing soap, but its product range includes deodorants, body washes, shampoos, and more. Dove has also been recognized for its marketing campaigns that challenge conventional beauty standards.

• Challenge  Differentiating themselves in a saturated beauty market.
• Research  Conducted a global study on women’s beauty perceptions and confidence.
• Insight  Found that only 4% of women viewed themselves as ‘beautiful’.
• Action  Launched the ‘Real Beauty’ campaign, celebrating natural beauty and breaking conventional stereotypes.
• Outcome  Widespread acclaim, increased brand loyalty, and impressive sales growth.

#5 McDonald’s

A global fast-food chain known for its burgers, fries, and the Golden Arches. Founded in the U.S., McDonald’s expanded worldwide, adapting its menu to local tastes and becoming one of the most recognizable brands globally.

• Challenge  Declining sales and shifting perceptions about fast food.
• Research  Extensive market research on changing consumer preferences around health and diet.
• Insight  Recognized a growing demand for healthier options and transparency in ingredients.
• Action  Introduced salads and wraps, and highlighted nutritional information prominently.
• Outcome  Managed to retain core customers while attracting a health-conscious clientele.

The landscape of market research has, over the decades, transformed from mere number crunching to a sophisticated blend of art and science. As we stand on the precipice of a future punctuated by AI-driven insights, augmented reality market simulations, and even neuroscience in consumer understanding, startups must recognize the boundless possibilities ahead.

However, amid this whirlwind of technological advancements, the essence remains the same: understanding people. The tools and techniques will evolve, but the quest to connect, empathize, and serve the ever-changing needs of the market will always be at the heart of successful entrepreneurship.

As startups chart their course in this vast sea of opportunities, the compass of well-conducted market research will be more crucial than ever.

Mike Jackowski

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How to do market research for a startup

For startups, a successful marketing strategy depends on understanding the competitors in your space. Here's what you need to know about market research for startups.

Start your company in a few clicks and get ready to charge customers, hire your team, and fundraise.

• Introduction

What is market research?

What market are you targeting, who are your customers, who are your competitors, what are your target customers currently using, where are the opportunity areas in your market, work out your budget, identify research goals, make a plan, use what you learn, aligning your roadmap to market opportunities, avoiding wasting time and resources, impressing investors with your market knowledge.

• Get started with Stripe 

During the exciting early days of building your startup, taking time to do market research might feel a bit like slowing down too much. Starting a new business or startup means perpetually staring down a never-ending list of things that need to be done – there's so much to do and it feels like all of it needs to be accomplished immediately. But market research is the method that gives purpose to the madness. It's the slow-and-steady work that unearths everything you absolutely need to know in order to tackle the rest of your to-do list with true strategic direction. It's worth slowing down for.

This is because market research explores all the factors that dictate how a given company exists in the world. Your market research will build a body of information that provides context for whatever your new business is trying to do. Market research is the most consequential exercise that a small business or startup can undertake. If you don't understand your market, you cannot approach your business plan with any functional clarity.

With this in mind, we're all on the same page: market research for startups is extremely important. Now, let's talk about what it is and how to do it.

At a high level, market research is the practice of gathering and analysing all the pertinent information about a business's target customers and the market in which it's operating. Tactically, market research can be executed through a wide range of activities, which we will run through later.

Why you should do market research

Market research will tell you if there's a need for your business. Doing market research will answer questions such as the ones listed here.

Before you can build a business, products, services and messaging, you have to define the market space in which you're going to operate. Everything else tracks back to this.

Understanding your prospective customers is arguably the most meaningful endeavour that you can undertake to achieve product-market fit. This is especially true early on in your business, when you are planning to launch a new product or when scoping out areas for growth. Creating personas that outline the needs, pain points, interests and triggers of your key audiences by segment will help you to build every part of your business.

Market research for startups is about gaining a detailed understanding of three things: who you're trying to sell to, who else is trying to sell them something similar and what your audience actually wants. Working out your position in the market means carving out a differentiated position in that market compared to your competitors. It's only possible to build a brand and a unique offering if you know who is already operating in your space.

Which products or services are your target customers favouring at present and why? Are different brands more popular with certain audience segments? What distinguishes these brands? The more detail you have, the more clearly you can start to piece together a comprehensive model of what's happening in your market space.

Market research for startups isn't just about seeing what is happening in your market – it's about noticing gaps. Which needs or pain points in your target audience's lives aren't being fully catered to or could be addressed better?

Knowing how important it is to do market research is one thing, but how do you actually tackle it? Let's take a look at how to do market research for a startup.

When thinking about how to do market research for a startup, there are countless ways to approach and scale your work. Some research routes require little effort and cost but still produce incredibly valuable insights. Meanwhile, others require considerable time and cost to execute but might be worthwhile, depending on the goals of your particular business.

You're probably very familiar with making budgetary trade-offs within your business – this is just another one. An important part of market research for startups is looking at your goals, researching the outcomes of different types of market research, seeing what budget is available and going from there.

Beyond the basic research goal of determining whether there is a market need for your products or services, it's good to single out any additional, specific research goals that could provide your team with valuable information. For example, you might know that a certain competitor's product is selling incredibly well with a particular audience segment. Through your market research, you might want to find out why.

There are two main categories of market research for startups: primary research and secondary research. Each of these can be further broken down into different research methods. What you decide to do depends on your budget and timeline, as some of these methods take longer to conduct and require more investment.

Primary research

Primary research involves gaining original insights directly from customers, people in your key audience segments or other primary sources. This type of research also falls into two categories: qualitative research and quantitative research.

Qualitative research Qualitative research focuses on individual feedback that's examined in depth. It gives a huge amount of insight, even if it doesn't provide statistical data about your market or business. Methods include:

• Individual interviews
• Focus groups
• Reviews from existing customers
• Ethnography studies

Quantitative research Quantitative research is all about collecting and analysing numerical data. This method is aimed at generating insights that are statistically significant, as opposed to anecdotal. Examples of quantitative research include:

• Questionnaires

Secondary research

Secondary market research involves analysing previous studies that your team hasn't created or conducted itself. Examples include:

• Public databases
• Published studies
• Institutional research

Whatever approach you use to conduct your market research, you must act on your findings. This involves making sure that it's available to everyone in the company and that it's actively employed as a framework for developing marketing, sales and product strategies.

Why market research matters for a startup

The earlier that you conduct market research for your startup, the better. If you can get a firm grasp on everything that's happening (and not happening) in your area of the market in the early stages of your startup, you will give yourself a number of powerful advantages.

You will be able to lay out a roadmap for developing products and services that address known market opportunities.

Without adequate market research, you might develop products that will fall flat because they don't respond to a real need or are too similar to what dominant competitors are offering. Doing market research ahead of time will diminish the chance of this happening.

Investors will appreciate how much you know about the market. Early-stage startup founders are primarily asking investors for funding based on their acute understanding of market conditions and opportunities, as their startups have not yet demonstrated performance and growth. The more you know about the field that you're working in, the more likely it is that investors will want to back you.

The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.

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How to do market research for startups

If you’re reading this blog, you’re probably starting a new business and researching it right now, or you’re already running a successful startup business, hoping to conduct a startup market analysis. If you’re somewhat a new startup, get some expert advice. Talk to experts, try out tools, understand their pricing and features , book a demo, do your research, and then make your choice. It’s no secret that new companies often face an uphill battle. But they often fail due to lack of planning. Do some research. It is a good starting point, especially when you need to make informed decisions. Only startups that manage to focus and capitalize on the right opportunities manage to survive. Conducting well-structured market research helps you identify mistakes and assists in informed decision making.

LEARN ABOUT:  Market Evaluation

Market research for startups – why you need it

With the aid of target market research , your startup gains access to vast amounts of actionable data from various sources. Conducting a market survey for startups brings in data that is paramount to making decisions at different stages of your business. Here are the business benefits that startups gain from conducting market research: 

• Industry and market outlook: Market research helps you gain insight and forecast future trends regarding the economic segment, target market, stock market behavior, and consumer behavior.
• Market size: Understanding the size of the market is a crucial component of strategic market planning and decision making.
• Market trends: Startups must capture market trends too, understand, analyze, and make future business decisions.
• Competitor research and understanding: Knowing your competitors will help you better price and place your product in the market with the right business plan.
• Customer buyer persona: Understanding your buyer persona is vital to driving product development, sales pitches, and everything that relates to acquiring customers and retaining them.
• Market segments: Divide your customers into smaller parts based on characteristics like gender, age, income, occupation, etc. to optimize products for them.
• Competitor market share: Identify the leading players of the market and their performance compared to yours to take further improvement steps.
• Product pricing: Understand the value held by the customer towards the product and set competitive pricing.
• Product marketing: Identify the areas to conduct targeted marketing and market the product based on the requirements of that market.
• Customer experience: Understand your customer’s satisfaction levels, his/her knowledge of the product and make and give them a better customer experience.
• Customer satisfaction: Know what your customers expect, provide them what they need, and juice out a ton of satisfied customers.

QuestionPro’s research software for startup market analysis:

Choosing an appropriate research tool is undoubtedly a huge decision, which can be a costly affair. Startups, especially those limited by funds, often tend to cut costs in these areas. As a startup, include market research tools in your business plan to boost your business.

QuestionPro’s free survey software is too good to be true. Here’s why:

• With the ‘Essentials’ license, ask questions to survey respondents in more than 25 different ways.
• The account is free for life and never expires.
• Get unlimited access to the software, run unlimited surveys with unlimited questions, and collect unlimited responses and insights – all without the need for a credit card.
• Design intelligent surveys applying skip logic and branching.
• Share insights collected with your team with the shareable dashboard.
• Export your survey data to xls or csv formats and apply basic quota management to surveys.
• Get 24*7 expert support – applicable to all account holders.

Create a free account. Sign up free .

Guide to Business startup market research

Before diving into any new business, it is imperative for startups to do thorough market research – be it primary research or secondary research. There is a range of techniques to survey the target market. Identifying the style that suits your business type and your business goal the best is key to making smart decisions. Here’s your guide to market research for startups.

LEARN ABOUT: Pricing Research

Below are some market research tips for startups:

Conduct quantitative market research

Quantitative research implies collecting first-hand information directly from a target audience in an organized manner using research tools like surveys, questionnaires, and polls.

Reasons for you to conduct quantitative market research

• Generalize results: Use the quantitative data to make generalizations of the general population based on the results of the sample respondents.
• Draw conclusions: Use quantitative research methods to draw conclusions about different areas of the business and take data-backed decisions.
• Gauge customer perception: Quantitative research is a great tool to use before launching products into the market to understand the potential customer’s perception.
• Product feedback: Ask feedback from your current customers to know the areas you’re lacking in and take measures to improve the product or service.
• Market plan: You need data, a lot of data to make a market plan before entering the market. Quantitative market research provides you with the data necessary to build a market plan. 

You need an audience to conduct quantitative market research . Often, your personal email list of potential clients and people interested in your business or similar business is just not enough for market research. To get a better understanding of a wider market, you need to have genuine respondents. Make use an online market research panel if you have a limited email list of potential survey takers. Online panels are great to use because of their global reach. Make use of a reliable panel services provider. QuestionPro Audience has a panel of 22+ million mobile-ready survey respondents around the globe, who are pre-screened and double opted in to take research surveys on the go.

LEARN ABOUT:  Market research industry

Conduct qualitative market research

Qualitative market research implies using research techniques like in-depth interviews, focus groups, discussions, idea boards, etc. Quantitative research involves fewer audiences compared to quantitative market research.

Reasons for you to conduct qualitative market research

Often, primary research is not enough to make decisions, especially those involving finances and money. It is essential to conduct a qualitative market survey for startups.

• To understand the ‘whys’: Don’t just try to find out ‘what’ the client is thinking; focus and understand ‘why’ he/she feels that way with qualitative research.
• Accurate decision making: A mix of quantitative research strongly backed by qualitative research is paramount for decision-making.
• Specialist advice: As a startup, consult and take advice from specialists on topics that you care about. Conduct in-depth, one-on-one interviews, and gain insights from the subject-matter experts.
• Focus group study: Focus groups are places where great business ideas are born. Conduct a focus group study under a trained moderator to gain new business ideas.

Qualitative research is much harder and more complicated to conduct; but very crucial for decision making. It allows determining a particular frequency of characteristics. Collect real customer issues through qualitative research data. If you plan to conduct qualitative research for the first time, find an online research panel partner or expert to guide you. 

Build an online community

Online communities are taking over the qualitative and quantitative market research insights world and are the newest way to do market research. Here’s why: 

• Online research communities help you gather real-time insights at a fraction of the cost.
• Running high-frequency research among your community with a particular set of audience is cheaper than running a one-off study and getting new samples all the time.
• The community members are always available to respond to research activities on the go, which is not the case when approaching survey panel providers.
• Ask questions on topics you care about and collect honest feedback from members.
• Nurture the community by engaging customers, act on their feedback, make them feel wanted, and make sure they don’t go astray from your brand.
• Companies are now taking notice and adopting communities – in one form or another to capture customers’ voices and original ideas.

How can an online community help boost a startup?

Communities play a massive role in the lives of startups. As online research communities are ongoing, and last for a long time, startups must build a research community at the early stage of the business.

• The online community helps members discuss problems, exchange ideas, because of the shared enthusiasm for products.
• As a community manager and moderator, run surveys, polls, and discussions and monitor their inputs as moderators.
• Use these consumer insights from real-time analytics to develop and tweak your products or services.
• Keep the community members engaged by replying to, or acknowledging their voices and original ideas to win over their loyalty.

Take a free trial of QuestionPro’s Communities to build your community and get the hang of the community experience. Create, recruit, and grow your thriving community. Intelligently engage your customers and potential clients in real-time through surveys and polls, live chats and forums, and keep them interested by offering them gamification rewards. Take advantage of the feedback with enhanced analysis, customized reports, and charts, and statistical models and analysis.

Tips for startups conducting market research

Here are some tips that your startup can use to do market research:

• Be clear: Before beginning your market research, have clarity about your objectives.
• Target audience: Know your target audience – the who and the how many. Choose a sample for quality insights. Also, choose a relevant and representative sample.
• Social media: Don’t ignore social media feedback. Incorporate feedback you receive on social media or review sites. 
• Give it a personal touch: Add a personal touch to the research. Say thank you at the end of the survey. Give respondents a background of the study at the beginning.
• Use open-ended questions: Provide space for open-ended comments to help respondents express themselves fully.
• Mixed research methodology: Have a mix of qualitative and quantitative data collection and be open to discussion forums.
• Include clients and customers: Make it a point to collect client suggestions at every interaction.
• Robust survey software: I can’t occupational stress this enough, but the survey tool you choose is of paramount importance and will directly affect the quality of your surveys, data collection, and decisions.
• Embrace criticism: Don’t ignore criticism you receive on surveys. It is the most valuable and honest feedback you receive.
• Reward respondents: Use cash (in the form of gift cards), or e-rewards as a motivation factor for your respondents.

Is your startup ready for market research?

It’s better to gather principal facts before spending a lot of time and money on the startup. Gaining real-time responses will make it easy for you to adjust your product in the initial stages of business. It also gives you a chance to identify mistakes and shortcomings sooner and gets you prepared to take corrective actions. Whether you do consumer research on your own or with market research experts like QuestionPro, collecting the right data is your key to starting on a positive note in the business world.

LEARN ABOUT: Market research vs marketing research

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Top 24 Market Research Startups in 2024

Description

Think Market Research is boring and everything’s been done before?

Think again.

If you’re in the Market Research industry or are interested in starting a company in this space, this article dives into 24 of the hottest fast-growing Market Research startups.

24 Market Research Startups

Everything you need to raise funding for your startup, including 3,500+ investors, 7 tools, 18 templates and 3 learning resources.

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Information about their valuation, HQ's location, founded year, name of founders, funding amount and number of employees.

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List of 250 startup investors in the AI and Machine Learning industries, along with their Twitter, LinkedIn, and email addresses.

1) Viberate

We want to map and standardize the whole global music ecosystem as the world's greatest source of accurate information on all things music.

Details of the startup:

• Country: Slovenia
• State: Ljubljana Urban Commune
• City: Ljubljana
• Started in: 2015
• Founders: Dejan Roljic, Matej Gregorčič, Uroš Umek, Vasja Veber
• Number of employees: 101-250
• Funding: $12,000,000
• Funding rounds: 3
• Number of investors: 2 (George Burke, ABC Accelerator)

You can find their website here .

2) Morressier

Morressier is a publishing platform and virtual conference solution for professional and academic organizations.

• Country: Germany
• State: Berlin
• City: Berlin
• Started in: 2014
• Founders: Justus Weweler, Rino Montiel, Sami Benchekroun
• Number of employees: 11-50
• Funding: $24,200,000
• Number of investors: 6 (Owl Ventures, Cherry Ventures, Redalpine, Emerge Education, Jan Reichelt)

3) Drop Technologies

Platform for mobile rewards that is intelligent

• Country: Canada
• State: Ontario
• City: Toronto
• Founders: Akhil Gupta, Cameron Dearsley, Darren Fung, Derrick Fung
• Number of employees: 51-100
• Funding: $56,170,000
• Funding rounds: 4
• Number of investors: 18 (New Enterprise Associates, Gaingels, HOF Capital, White Star Capital, Sierra Ventures)

4) quantilope

Quantilope is an Agile Insights platform that improves traditional market research's speed, complexity, and quality.

• State: Hamburg
• City: Hamburg
• Founders: Lucas Bremer, Mark Heitmann, Peter Aschmoneit, Thomas Fandrich
• Funding: $40,000,000
• Number of investors: 5 (Dawn Capital, Silicon Valley Bank, Senovo, Digital+ Partners, Surplus Invest)

A consumer insights platform that links organizations with high-quality respondents that are easily accessible.

• Country: Indonesia
• State: Jakarta Raya
• City: Jakarta
• Started in: 2018
• Founders: Dr Timothy Astandu, Eileen Kamtawijoyo, Jonathan Benhi
• Funding: $2,200,000
• Number of investors: 4 (Pegasus Tech Ventures, Quest Ventures, Intudo Ventures, Gobi Partners)

6) Market Logic Software

Market Logic Software is a data-driven organization.

• Started in: 2006
• Founders: Elizabeth Parsons Morgan, Olaf Lenzmann
• Number of employees: 501-1000
• Funding: € 46,523,054
• Number of investors: 4 (Summit Partners, Sycamore Partners, bmp Ventures, GENUI Partners)

7) QuestBack

Questback is a web-based experience management firm that specializes in employee, customer, and market research software.

• Country: Norway
• State: Oslo
• Started in: 2000
• Founders: Ivar Kroghrud
• Number of employees: 251-500
• Funding: $40,402,588
• Funding rounds: 2
• Number of investors: 3 (Capital IP Investment Partners LLC, First Fellow Partners, Reiten & Co)

8) SimpliField

SimpliField is a B2B SaaS application that specializes in field intelligence.

• Country: France
• State: Ile-de-France
• City: Paris
• Started in: 2013
• Founders: Benjamin Zenou, Georges Plancke, Jonathan Attal
• Funding: $15,450,000
• Number of investors: 10 (Kima Ventures, Runa Capital, Five Elms Capital, CapHorn Invest, Oleg Tscheltzoff)

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Roamler is a mobile workforce platform that may be used to complete location-based tasks across huge areas.

• Country: The Netherlands
• State: Noord-Holland
• City: Amsterdam
• Started in: 2011
• Founders: Martijn Nijhuis, Wiggert de Haan
• Funding: € 26,260,000
• Funding rounds: 5
• Number of investors: 3 (Endeit Capital, SmartFin, Achmea)

10) Atheneum

Atheneum is a marketplace for industry experts who provide better data and faster insights.

• Started in: 2010
• Founders: Ammad Ahmad, Mathias Wengeler
• Funding: $21,260,398
• Number of investors: 3 (Senovo, Crosslantic Capital, Vogel Ventures)

11) Lifesight

For Real-World Intelligence, The Trusted Data & Analytics Company

• Country: Singapore
• State: Central Region
• City: Singapore
• Started in: 2017
• Founders: Rohit Maheswaran, Tobin Thomas
• Funding: $2,000,000
• Funding rounds: 1
• Number of investors: 1 (Provident Capital Partners)

12) Foxintelligence

For e-commerce, Foxintelligence provides trustworthy data.

• Started in: 2016
• Founders: Edouard Nattee, Florian Cleyet Merle, Louis Balladur, Nicolas Remia, Thibaud Elziere
• Funding: $17,142,128
• Number of investors: 11 (Kima Ventures, Global Founders Capital, eFounders, Partech, Daphni)

13) Kdan Mobile Software

Kdan Mobile is a Taiwanese company that specializes in cloud-based software for workplace mobility.

• Country: Taiwan
• State: T'ai-wan
• City: Tainan
• Started in: 2009
• Founders: Kenny Su
• Funding: $6,198,878
• Number of investors: 6 (WI Harper Group, Accord Ventures, Darwin Venture Management, Ian Kung, Ventek Ventures)

14) CryptoQuant

CryptoQuant uses machine learning to give institutional investors with complete on-chain data and analytics.

• Country: South Korea
• State: Seoul-t'ukpyolsi
• City: Seoul
• Started in: 2020
• Number of employees: 1-10
• Funding: $256,000
• Number of investors: 1 (POSTECH Holdings)

15) Square Yards

Square Yards is India's largest real estate platform, with over 20 cities and 9 countries represented.

• Country: India
• State: Haryana
• City: Gurgaon
• Founders: Kanika Gupta, Tanuj Shori
• Number of employees: 5001-10000
• Funding: $73,000,000
• Funding rounds: 6
• Number of investors: 11 (Singtel, Boon Hwee Koh, Bennett Coleman and Co Ltd, Alto Partners Multi-Family Office, Lohia Group)

16) Neogrowth

NeoGrowth Credit Pvt Ltd is an RBI-registered non-deposit taking NBFC that provides short-term business loans to Indian merchants.

• State: Maharashtra
• City: Mumbai
• Founders: Dhruv Khaitan, Piyush Khaitan
• Funding: $107,798,787
• Funding rounds: 7
• Number of investors: 9 (Flourish Ventures, Quona Capital, IIFL, Omidyar Network, LeapFrog Investments)

17) MAILMAN GROUP

Mailman Group is a social media technology and innovation firm that offers social media services.

• Country: China
• State: Shanghai
• City: Shanghai
• Started in: 1999
• Founders: Andrew Collins
• Funding: $18,000,000
• Number of investors: 4 (We Capital, Yao Capital, WeSai, Kaixin Capital)

18) Innolight

InnoLight Technology is a prominent high-speed optical transceiver supplier in China, specializing in research, design, manufacturing, and distribution.

• State: Jiangsu
• City: Suzhou
• Started in: 2008
• Founders: Sheng Liu
• Funding: $39,000,000
• Number of investors: 6 (CapitalG, The Jordan Company, Lightspeed China Partners, Majuven, China Singapore Suzhou Industrial Park Ventures)

19) Affectiva

Affectiva is a company that makes software that recognizes emotions by analyzing minor facial and speech cues.

• Country: United States
• State: Massachusetts
• City: Boston
• Founders: Rana el Kaliouby, Rosalind Picard
• Funding: $62,550,000
• Number of investors: 17 (National Science Foundation, Horizons Ventures, Pegasus Tech Ventures, Kleiner Perkins, MIT Media Lab)

20) Morning Consult

Morning Consult is a multinational enterprise technology firm that provides smart data to help leaders make better decisions.

• State: District of Columbia
• City: Washington D.C.
• Founders: Alex Dulin, Kyle Dropp, Michael Ramlet
• Funding: $91,030,000
• Number of investors: 3 (Susquehanna Growth Equity, Lupa Systems, Advance Venture Partners)

DISQO is a platform for audience insights where actual people exchange knowledge that improves the human experience.

• State: California
• City: Glendale
• Founders: Armen Adjemian, Armen Petrosian, Drew Kucharian
• Funding: $16,500,000
• Number of investors: 2 (Alpha Edison, Bonfire Ventures)

IRI is a market research firm that specializes in big data and predictive analytics development.

• State: Illinois
• City: Chicago
• Started in: 1979
• Founders: Gerald Eskin, John Malec
• Number of employees: 1001-5000
• Funding: $181,040,000
• Number of investors: 2 (Vestar Capital Partners, New Mountain Capital)

23) Numerator

Numerator combines omnichannel marketing, merchandising, and sales data to simplify the pursuit of new opportunities.

• Started in: 1990
• Founders: Jared Schrieber, Jon Brelig
• Funding: $21,400,000
• Number of investors: 11 (Bain Capital Ventures, Founder Collective, MHS Capital, dunnhumby Ventures, Horizon Partners)

24) UserTesting

UserTesting is a human insight tool that may be used on demand to increase consumer insights.

• City: San Francisco
• Started in: 2007
• Founders: Darrell Benatar, Dave Garr
• Funding: $152,742,068
• Number of investors: 7 (Insight Partners, Accel, Greenspring Associates, Scottish Enterprise, Bradley Horowitz)

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Placer.ai boosts valuation to $1.5B after quietly raising another $75M

Location data, for better or worse, continues to be a part of the bedrock of how apps are built. Now a startup developing AI market research based on that location data, Placer.ai , has quietly raised $75 million at an expanded valuation of nearly $1.5 billion, TechCrunch has learned.

The startup provides a wide range of location-based analytics to companies in verticals like retail, events and entertainment, CPG, real estate, financial services and healthcare by combining AI with anonymized data that it sources from third-party apps.

We first became aware of the funding by way of a Form D filed in July detailing Placer’s intentions to raise $75 million. We have confirmed with the company’s CEO and CFO that it has closed the full amount, with a new valuation of $1.45 billion, up nearly 50% since its last round, a $100 million Series C made at a $1 billion valuation. 

The investment underscores the growing value of location data for businesses beyond the app publishers themselves. And, at a time when more people are aware of data protection around mobile apps, not least due to a growing number of data breaches , it also serves as a reminder of just how much data we generate through modern life.

Placer’s analytics cover general trends like foot traffic at a particular location or for a particular store — factoids like Aldi currently ranking as the fastest-growing retailer based on visits — but also more detailed data about who buys what and and when, people’s demographic profiles and more.

Such methods are a little creepy, as some have noted , but also not totally uncommon. (Others that track location data include Foursquare, Esri and many others offer location analytics.)

Like other mobile analytics firms, the startup picks up data by way of an SDK that it installs with hundreds of app publishers, as well as through other third-party sources. It describes itself as a “privacy by design” business: All of the data it uses is anonymized before it comes to Placer, the company said.

The company declined to disclose specific participants in this latest fundraise except to note that existing backers participated. PitchBook notes that real estate investment firm GEM Realty Capital is also in this most recent round. 

Overall, Placer has more than 50 investors — both firms and individuals — on its cap table. They include Josh Buckley (the former CEO of Product Hunt), WndrCo (Jeffrey Katzenberg’s investment firm), Lachy Groom, MMC Technology Ventures, Fifth Wall Ventures and Array Ventures, alongside J.M. Schapiro (CEO of Continental Realty Corp), Eliot Bencuya and Jeff Karsh of Tryperion Partners, Daniel Klein of Klein Enterprises/Sundeck Capital and Majestic Realty.

Numbers have been strong for the company. Placer’s CEO and co-founder Noam Ben-Zvi told TechCrunch in an interview that the company crossed an annual revenue run rate of $100 million in February, and it has grown 80% in the last year and expects to grow another 60% this year. It has also passed 4,300 customers (up from 1,000 in 2022 when it raised the $100 million). The list includes the likes of Sony, various city development organizations, Wegmans, and Century 21. 

“What ties them together is that they all have a stake in the physical world,” he said. 

The funding was raised based on inbound interest, CFO Dean Neese said. The plan will be to use the funding for business development and to add more features and datasets to the platform. It says it already provides users with “hundreds” of these datasets.

Placer was founded in 2018 by Ben-Zvi and fellow Israelis Zohar Bar-Yehuda (data scientist), Oded Fossfeld (CTO) and Ofir Lemel (CPO), and it was just two years later that the company faced what you might assume would be a death knell for a location analytics company: the arrival of the COVID-19 pandemic and the world turning away from physical gatherings. It turned out to be the opposite.

At an especially restricted time, Ben-Zvi said, “Our data provided a lot of visibility into what was working and what was not working.”

Having that foothold with customers meant that the company expanded its reach along with the world “reopening” for business.

While Placer has always used machine learning and inference to build more detailed profiles based on the data that they glean from apps, that has now also been a strong point with its end users, who have been given a green light to explore how to build more AI into their workflows. 

“Customers want a holistic one-stop-shop platform for market research,” he said. “They may ask themselves: Should I expand to this market? How are my competitors doing? What they want is all the underlying data that’s relevant, and all the aggregations and the tools on top. Analytics is a core ingredient.”

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Fastest Growing AI Chip Startups to Watch in U.S 2024

• By Mansi Singh
• Published on August 6, 2024
• Market & Industry

As artificial intelligence continues to revolutionize industries across the globe, the demand for specialized AI hardware has surged. The AI chip market, valued at $53.6 billion in 2023, is forecast to grow by over 30% to reach $71.3 billion in 2024.

In 2024, several AI chip startups in the United States stood out for their rapid growth, groundbreaking technologies, and substantial funding. These companies are poised to make a significant impact on the AI landscape, offering solutions that cater to a wide range of applications from edge computing to deep learning and robotics. Here are the fastest-growing AI chip startups to watch in the U.S.in 2024:

Founder & CEO: Jonathan Ross

Specialty: AI inference chips optimized for speed and executing commands of pre-trained models. 

Funding: Raised $640 million in a Series D round, valued at $2.8 billion. Groq is known for its high-performance AI accelerators that deliver low latency and high throughput. The company’s chips are designed to handle demanding AI workloads, making them ideal for machine learning and deep learning applications. With substantial funding and innovative technology, Groq is positioned to be a major player in the AI chip market.

Cerebras Systems

Co-Founder & CEO: Andrew Feldman

Specialty : Wafer-Scale Engine (WSE), the largest chip ever built, designed to accelerate deep learning models

Funding: Over $720 million Cerebras Systems has developed the Wafer-Scale Engine (WSE), a groundbreaking chip that significantly enhances the performance of deep learning models. The company’s CS-2 system, powered by the WSE, offers unparalleled computational power and memory bandwidth, making it a game-changer for AI research and applications.

Co-Founder & CEO: Deepak Pathak

Specialty: General-purpose AI models for robots

Funding: Raised $300 million in a Series A round Skild AI, founded by former Carnegie Mellon University professors, is pioneering a general-purpose AI model designed to bring human-like adaptability to robots across various environments, from construction sites to homes. Their innovative approach aims to revolutionize the robotics industry by providing a scalable AI “brain” that can be integrated into different robotic platforms, making advanced robotics more accessible and versatile.

Celestial AI

Co-Founder & CEO: David Lazovsky

Specialty: Photonic Fabric optical interconnect technology to enhance AI computing and memory infrastructure

Funding: Raised $175 million in a Series C round Celestial AI is revolutionizing AI computing with its Photonic Fabric optical interconnect technology, which addresses latency and bandwidth bottlenecks. This innovation aims to significantly improve the performance and efficiency of AI applications, particularly in high-performance computing and data center environments.

Founder & CEO: Krishna Rangasayee Specialty: High-performance, low-power AI chips for edge computing applications Funding: Raised $270 million, with a recent $70 million Series C round SiMa.ai focuses on delivering high-performance, low-power AI chips tailored for edge computing. Their Machine Learning System on Chip (MLSoC) platform is designed to handle various machine learning tasks efficiently, making AI more accessible for embedded systems and IoT devices.

CEO: Gavin Uberti Specialty: Developing specialized processors optimized for specific AI models, particularly transformers, which are widely used by OpenAI’s ChatGPT and Google’s Gemini. Funding: Raised $120 million in a Series A round Etched AI is focused on creating specialized processors tailored for transformer models, which are essential for applications like OpenAI’s ChatGPT and Google’s Gemini. With significant funding, the company aims to develop chips that enhance the performance and efficiency of these advanced AI models.

Co-Founder & CEO: Dinakar Munagala Specialty: AI computing platforms for edge and automotive applications Funding: Raised $106 million   Blaize offers AI computing platforms designed for edge and automotive applications, focusing on delivering high-performance, energy-efficient solutions. Their Graph Streaming Processor (GSP) architecture is optimized for AI workloads, making Blaize a key player in the edge AI market.

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What are carry trades and how did they contribute to this week’s global market mayhem?

Currency traders watch monitors near a screen, back, showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, Aug. 6, 2024. (AP Photo/Ahn Young-joon)

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BANGKOK (AP) — The mayhem that swept across world markets this week was partly caused by a market strategy known as the “carry trade.”

Japan’s benchmark Nikkei 225 plunged 12.4% on Monday and markets in Europe and North America suffered outsized losses as traders sold stocks to help cover rising risks from investments made using cheaply financed funds borrowed mostly in Japanese yen.

Markets recovered much of their losses on Tuesday. But the damage lingers.

They were jolted by a combination of factors, including dread of a possible recession in the United States, the world’s largest economy, and worries that technology shares have shot way too high this year.

But the scale of the declines was exaggerated by the rush to sell U.S. dollars due to carry trade deals that had helped drive markets to record levels.

What are carry trades?

Carry trades involve borrowing at low cost in one currency to achieve higher returns from investments in another currency. One of the most recent examples has been to borrow Japanese yen, expecting the currency to remain cheap against the U.S. dollar and for Japanese interest rates to remain low. The borrowed funds would then be invested in U.S. stocks and Treasury bonds in anticipation of a higher return.

Why have traders been unwinding their carry trades?

The key factor behind a carry trade is a difference in interest rates. The Bank of Japan has kept interest rates at or near zero for years, trying to encourage more spending and spur economic growth. Last week, it raised its main interest rate from nearly zero . Higher interest rates tend to boost the value of a nation’s currency, and the Japanese yen surged against the U.S. dollar. Traders scrambled to sell higher risk, dollar-denominated assets to cover suddenly higher borrowing costs, plus losses from foreign exchange rate changes and losses in asset values as share prices plunged. Also, hedge funds that conduct carry trades use computer models to help maximize their returns versus their risks. They needed to sell shares to maintain acceptable risk profiles.

Why do carry trades have an outsized impact on markets?

Carry trades tend to make the most sense when foreign exchange rates are relatively stable and investors can tap into higher yielding market opportunities, like the recent runups of stock prices in places like the United States. The recent market upheavals obliged traders to cover their debts by buying yen and other carry trade currencies and selling relatively more of the higher risk assets they bought under more favorable conditions. Also, carry trades are very lucrative when stocks or other investments are rising, but losses can snowball when thousands of traders are pressured to sell stocks or other assets all at once. “A massive global carry trade unwind was the spark that lit the fuse for this market Armageddon,” Stephen Innes of SPI Asset Management said. “One defining characteristic of these self-perpetuating market melts is the vicious cycle where a sell-off increases realized volatility.”

What’s the future risk from carry trades?

The gap between the main interest rate in Japan, now at 0.25%, and the Federal Reserve’s benchmark rate of 5%-5.25% is still wide but is likely to narrow as the Fed cuts rates and Japan raises its rates. Financial markets appeared to have calmed Tuesday, with Japan’s Nikkei 225 index gaining 10.2% and other markets mostly higher. Analysts are divided over whether this bout of volatility in the markets has passed or if there is more to come. Regardless, carry trades have been used for decades. They contributed to a meltdown in Iceland’s financial sector in 2007-2008 where investors borrowed in yen or Swiss francs to take advantage of high Icelandic interest rates. During this latest market upset, Mexico, another focus of the yen carry trade, has seen its peso fall more than 6%. The popular but potentially complicated trading strategy is likely to remain a wild card for investors, especially in times of high market volatility.

This chart suggests the current bull market rally in stocks will extend into 2025

• The cyclical bull rally starting in October 2022 is expected to last into 2025, according to Ned Davis Research.
• The firm highlights a chart that shows the historical trends of cyclical bull market rallies, and when they typically end.
• "We expect to remain overweight equities, with the correction leading to a buying opportunity," it said.

The cyclical bull rally that started in October 2022 is set to last well into 2025, according to historical trends highlighted by Ned Davis Research.

The research firm published a note last week that included a chart illustrating prior cyclical bull rallies within a secular bull market, as is the current rally.

What Ned Davis Research found is that the average rally, based on the start date of the October 2022 stock market bottom, should last into the summer of 2025.

And it could last even longer into 2026 if it follows the footsteps of the 2011 to 2015 cyclical bull rally, or well into 2030 if it follows the path of the technology-fueled cyclical rally of 1990 to 1998.

The bullish outlook from Ned Davis Research comes amid a slight correction in the stock market, with the Nasdaq 100 falling nearly 10% from its recent peak in July.

But the correction is just that, a short-term decline, and it doesn't mark the end of the bull rally, according to the note.

"The global soft landing evidence and accommodative monetary policies continue to bode well for long-term equity performance," Ned Davis Research said. "We expect to remain overweight equities, with the correction leading to a buying opportunity."

The research firm currently recommends its maximum overweight target to equities at 70% in a balanced portfolio, with the remaining 25% and 5% being allocated to bonds and cash, respectively.

Ned Davis Research said risks of a new bear market remain low, and that the current correction in stocks is perfectly normal given the seasonal weakness during the summer.

Solid valuations, subdued investor sentiment, an ok macro environment, and falling bond yields mean "the weight of the evidence has remained consistent with an ongoing secular bull," Ned Davis Research said.

To monitor the current health of the bull rally in stocks, the research firm suggests investors closely monitor earnings results.

The rate at which US companies are beating analyst profit estimates has topped 75% for five straight quarters, according to the note, and results announced so far for the second quarter suggest the streak will increase to six straight quarters.

But if momentum in the earnings beat rates starts to decline, that would be a warning sign.

"If the beat rate starts declining with momentum turning negative, the increasing disappointment could trigger more selling. But if the beat rate remains elevated as the earnings season matures, the chances for a market recovery will improve," Ned Davis Research said.

Ultimately, the recent correction "should give way to another leg higher in the continuing bull market," Ned Davis Research concluded.

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UGA startup CytoNest Inc. launches its 1st commercial product

University of Georgia startup CytoNest Inc . released its first commercial product, a fiber scaffold that optimizes cell manufacturing and tissue engineering, last month.

The product, called CytoSurge 3D fiber scaffold, has applications in cell research,  biopharmaceuticals, cell therapeutics, and cultured meat and seafood development.

UGA is ranked No. 1 among U.S. universities for number of commercial products to market based on its research, according to an annual survey conducted by AUTM. The university has seen over 1,200 products make it to market.

“Congratulations to CytoNest on launching their first product and adding to UGA’s legacy of translating research discoveries into products,” said Derek Eberhart, UGA’s associate vice president for research and executive director of Innovation Gateway , UGA’s technology transfer organization. “For the past eight years, UGA has ranked either first or second among U.S. universities for new products brought to the market by companies like CytoNest.”

CytoSurge 3D fiber scaffold also has applications in meat, seafood production

Nataraja Yadavalli and Sergiy Minko , CEO and CSO of CytoNest, respectively, are the minds behind the new product, an edible fiber-based scaffold safe for living tissues that provides a point of contact for cells to adhere to and grow three-dimensionally in high densities. This provides a scaleable solution to those working on cultiviated meat and seafood.

After nearly a decade of research, publications and patenting, Minko and Yadavalli optimized the technology and built a working prototype in 2019.

The scaffold’s fibers are made from generally recognized as safe (GRAS) materials and formed into individual ultra-long strands through CytoNest’s proprietary fiber drawing technology. They are then fused or overlaid on top of each other to create one layer of the scaffold. With the addition of spacers and more fiber layers, a multilayered, 3D scaffold is formed to which cell cultures can attach and grow.

These edible scaffolds have use in commercial-scale production of different kinds of adherent cells, as well as cultivated meat and seafood products. Using these scaffolds helps the cells build a structure that mimics the way real meat grows, including how nutrients flow through it. The new product could allow for the production of whole-cut meats, like fish fillets, at scale, furthering a budding industry.

Graduate, undergraduate students, postdocs helped develop technology

Yadavalli developed the breakthrough technology for creating nanofiber scaffolds using the new fiber-spinning method as a postdoctoral fellow in Minko’s lab.

Through research and development on its prototype, CytoNest learned that current commercial nanofiber fabrication technologies are limited to older electrospinning technology.

“That is when we realized the potential of our touch-spun technologies at commercial scale,” said Yadavalli, now a senior research associate in UGA’s Complex Carbohydrate Research Center .

Minko credits the hard work and dedication from postdocs, and graduate and undergraduate students in his lab for the breakthrough.

“At that time, Alex Tokarev, a postdoctoral fellow in my lab, was very enthusiastic about this direction. He made a major breakthrough in the development of the new nanofiber spinning technology,” said Minko, Georgia Power Professor of Fiber and Polymer Science in the College of Family and Consumer Sciences . “Many graduate and undergraduate students were also involved and helped in these developments. These combined efforts and successful developments were very inspiring.”

Minko and Yadavalli were able to investigate the commercial potential for their product through Innovation Gateway’s NSF I-Corps program . After two sessions of its customer-discovery program, they decided to start CytoNest Inc.

Support from GRA, NSF, UGA key to bringing product to market

Bringing products to the market is not an easy task.

But through grants from the Georgia Research Alliance, the Good Food Institute and the U.S. Department of Agriculture, CytoNest has been able to acquire the necessary tools, lab space, equipment and services needed to make these advancements and release their first product to the marketplace.

“It is impossible to underestimate the help and support of UGA, NSF I-Corp, Innovation Gateway and the Georgia Research Alliance, which were critical to establishing and shaping the startup company,” Minko said.

This work was supported by the United States Department of  Agriculture ,  National Institute of Food and Agriculture , USDA/NIFA under Award 2023-51402-39329. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and should not be construed to represent any official USDA or U.S. Government determination or policy.

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