2. Goals from the Kauffman Center
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September 25, 2012
3. Today’s Agenda
• The World of Research
• Market Research Today
• Defining and Analyzing Your Target Market
– Looking at Your Competitors
– Analyzing the Market
– Confirming Your Market
• Research Organizational Models
• Leveraging Research for Positioning
• Product Versus Technology
• Investor Perspectives
• Investment Requirements
• Wrap-up
September 25, 2012
4. The World of Research
Measure these To help refine these
(can’t control them) (can control these)
External Internal
Projected
Factors Competition
Image
Factors
Market Product/
Needs/Gaps Service Qualifications
Position
Market Talent
Perceptions
Research has a world of applications. Today’s focus is on market research
but all of these are valuable to your business growth.
September 25, 2012
5. Market Research Today
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If you’re smart about it, it doesn’t have to cost you an arm and a leg,
but doing it WILL help you understand how to ensure your
products and services are relevant.
September 25, 2012
6. Defining and Analyzing
Your Target Market
For entrepreneurs…time is money. Here are three simple steps.
1. Look at Your Competitors – know who’s doing what.
2. Analyze Your Market – know the market size.
3. Confirm you market – validate people will pay.
September 25, 2012
7. Defining and Analyzing Your Target Market
Looking At Your Competitors
1. Look at your competitors
– Who offers similar services? How do yours differ?
– Where are your competitors weak?
– Where is there a little white space?
If you are on a team, this exercise is a great one to do with them. Each of
you review your top 3-5 competitors. Which are the same ones listed over
and over? This will help you focus your efforts on analyzing the top ones.
September 25, 2012
8. Defining and Analyzing Your Target Market
Analyze Your Market
• Determine the market size. Learn as much as you can
through publicly available sources. For example, if you’re
launching an app targeting entrepreneurs, know how many
entrepreneurs there are nationally, internationally, etc.
• Segment the markets. Segment the groups into different
segments and compare the market sizes.
• Define who you want to target. Prioritize the market
based on strengths and capabilities. For example, you
launch the entrepreneur app in English and have a sales
force you can readily deploy in the U.S., so you focus on
that market first.
September 25, 2012
9. Defining and Analyzing Your Target Market (continued)
Analyze Your Market―Resources
• Edgar - http://www.sec.gov/edgar.shtml
• U.S. Census Bureau - http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml
http://www.census.gov/econ/ (look under businesses/industry)
• Local libraries (Fairfax County/Arlington County) - log in with your library card –
look for business databases – this varies county to county so ask the reference
librarian what you are seeking.
• B2C & demographic information (zip code lookup) -
http://www.claritas.com/MyBestSegments/Default.jsp
• Government contractors – GSA Schedules & procurement forecasts
http://www.gsaelibrary.gsa.gov/ElibMain/home.do
• Counties and states – many economic development authorities have information
that you can look at (example: http://www.fairfaxcountyeda.org/demographics) ; also
http://quickfacts.census.gov/qfd/states/00000.html
• Google and LinkedIn – mining through data
• Trade associations/research houses like Gartner – looking at research reports; a
lot has already been conducted
September 25, 2012
10. Defining and Analyzing Your Target Market (continued)
Confirm Your Market―Overview
3. Conducting primary market research
– Nothing in your secondary research will tell you how
customers and prospects will actually RESPOND to
your products/services.
– Test your idea with primary research:
• Traditional market research (focus groups, IDIs, surveys)
• New technologies and methodologies (1-2 questions on
websites, meetup groups, community forums, Facebook
pages, LinkedIN questions, etc.)
• Friends and personal contacts
September 25, 2012
11. Defining and Analyzing Your Target Market (continued)
Confirm Your Market―Core Methods
Core primary research methodologies:
• Surveys – good for analyzing info from large numbers
• Focus groups – good for in-depth discussions, rich info.
• Online panels – similar to focus groups but virtual
• In-Depth Interviews – good for hard to get to people
• Social media – good for general listening
September 25, 2012
12. Defining and Analyzing Your Target Market (continued)
Confirm Your Market―Interviews
Tips for conducting your own interviews:
• Do your homework. Learn as much about the market in
advance as it can. Research the company for 20-30
minutes before your meeting so that you can easily
establish rapport.
• Be very familiar with your questions. Inevitably the
conversation will take on a life of its own. The better you
know your questions the easier it will be to weave them in.
• Wrap up the conversation. Ask if you can follow up with
them after you have gathered all of the information. This
may help you connect with mentors/advisors later.
September 25, 2012
13. Defining and Analyzing Your Target Market (continued)
Confirm Your Market―Online Tools
• Launchrock – collect user interest, monitor insights
• Centercode – beta user testing
• KISSinsights – post 1-2 questions on your website
• GoogleAlerts – trends, keyword searches
• Survey Monkey – online surveys, white label, logic, etc.
• GetSatisfied – community forum
• Google Analytics – look at interests, etc.
September 25, 2012
14. Defining and Analyzing Your Target Market (continued)
Confirm Your Market―
Social Media Tools
• Facebook – monitor people’s interests in your offerings
and/or for you to see comments; pages similar to yours that
have higher saturation may provide a lot of insight
• LinkedIn – let’s you post questions to your site; allows for
great secondary research into competitors and their people
• Twitter – let’s you “listen” and monitor competitors, industry
trends, etc.
September 25, 2012
15. Research Organizational Models
Cost Pros Cons Resources
Required
In-House/Self $ Can be quick, Best results if you Self, survey tool(s),
inexpensive hard costs understand how to plan/outlet for
leverage market recruiting participants
research
Student/Intern $ Inexpensive; digital May require a lot of Student/intern; in-
natives are quick with hand holding; check house person to direct
survey and other quality stringently and manage effort
technologies closely
Consultant $$ Know the right Slightly more Consultant, in-house
questions, how to expensive than leadership
structure a study; students – require an
including timing and investment of
recruiting, objective generally $5k+
Specialized Research $$$$ Highly seasoned Requires a large In-house leadership
Firm/Marketing Firm professionals run investment. May have
studies; very other offerings they
thorough; large want to push
bandwidth to get
things done quickly
September 25, 2012
16. Leveraging Research for Positioning
Measure these To help refine these
(can’t control them) (can control these)
External Internal
Projected
Factors Competition
Image
Factors
Market Product/
Needs/Gaps Service Qualifications
Position
Market Talent
Perceptions
Gathering external market research helps you optimize your
product’s position and services and refine your product offerings
September 25, 2012
17. Product Versus Technology
Features/
Product Benefits
Attributes
Tell what the features are. How do the features help customers.
Research benefits: Research benefits:
Users tell you what they Users tell you how your
should be/what they would product/service is actually benefitting
like them to be. them – these may be things you never
would have thought of yourself.
Use research to help you inform your product/service offerings
features and to help articulate their real benefits.
September 25, 2012
18. Investor Perspectives
The core issue is always how big really is the market for a particular product, and how
expensive will it be to reach that market. Big markets are better than small ones, but they
come with other issues. The key is to get the cost of reaching the market in proportion to how
expensive it will be to reach it. I always like to know the pain that the product is addressing
as well.
—April Young, Managing Director, Hercules Technology Growth Capital
Market size is the most important. In addition, I look for:
1. A good understanding of the competition
2. Differentiation from the competition
3. Is the industry mature or growing
4. Is the industry receptive to change
—Kathleen Crow, Managing Director, The McLean Group
September 25, 2012
19. Investment Requirements
• In-house = time + money
• Independent consultant = 5-10k
• Mid-size company = 20 - 20k
• Established, large research house = 20k+
September 25, 2012
