How to do Market Research for a Startup (+Examples)

Have you ever had a business idea strike you out of nowhere—maybe while you’re in the shower, taking a morning stroll, or jotting down thoughts at 2 AM? It feels like you’ve hit the jackpot, right? 

But before you go all in—designing logos, building websites, or daydreaming about your future success—you need to take a step back and do some market research for a startup.

I get it—research might not sound as exciting as launching your idea into the world. But believe me, skipping this part is like going on a road trip without a map (or even worse, without snacks). Market research helps you figure out if people actually want what you’re offering, who your competitors are, and how to position yourself for success.

So, where do you start? Don’t worry—I’ve got you covered. Let’s break it down step by step, using real-life examples to make everything clear.

What is Market Research?

Market research is how companies get information about their target customers and decide what to do with it. It also helps companies analyze new products and services. Market research helps marketing and sales professionals create customer-focused products and services. They can measure client satisfaction, similar product sales, and cost per customer acquisition during marketing campaigns using market research.

Companies get qualitative information like client demand and brand impression during market research. Depending on how an organization works, market research may help its teams work together and decide what goods or services to make and how to bring them to market successfully. Market researchers often consider:

• Where do their ideal customers look for goods and services now?
• What trends are happening in their field or industry? 
• Who their customers are and what are their challenges or their specific needs?
• What urges and drives their target market to act or buy something?
• Which competitors does their target market look to for knowledge, other products, and other choices?

Read more about email marketing campaigns for startup

How to Conduct Market Research for a Startup

When performing market research, you should use the steps below as a guide:

1. Define your Target Market

You must identify your target audience before you start your market research. The first step is to conduct research to identify who your target market is. For instance, companies that make apps for college students to help them keep track of their classes and tasks might start by finding out what age groups, locations, and types of apps those people use.

To better prepare for the introduction of your products or services, you can develop buyer personas based on the information you gather about your target customer.

Several characteristics to consider when identifying your target market and creating a customer persona include:

• Age
• Gender
• Location
• Challenges
• Field of work and financial status
• Household members’ total count.

2. Conduct Primary and Secondary Research

When it comes to primary and secondary research, there are specific questions and methods you can use to get customers familiar with your brand. When you’re doing your primary research, take some time to look at the customer personas you created while identifying your target market.

Think about the challenges or issues that these personas might face. Consider how your business can turn these challenges into chances to develop solutions that inspire your target market to buy from you.

While secondary research looks at data and records through a quantitative lens. This type of research can show you trend reports, industry content, sales data, and market statistics. Bringing together this info with the qualitative data you gather from creating buyer personas and doing some primary research can help you boost brand awareness and make an impact in your market.

3. Follow a Market Research Process

Using a market research method can help your team stay on track during each step of your analysis. Depending on your business and what you provide to the public, there are various research methods you can use to plan your process, track your findings, and assess them.

Here are some types of research that could be great for your startup:

• Analyze competitors
• Brand awareness survey
• Market segmentation research studies
• Research on user experience
• Analysis of pricing frameworks
• Surveys, interviews, and focus groups.

Read more about e-commerce metric

4. Analyze your Competitors

You can look at businesses in the same industry as you to see what products or services do well. You can also find out what products and services your target customers buy from competitors and compare them to what your startup offers.

Doing a competitive analysis can help your business set and change sales goals to keep up with or beat competitors. With this information, you can talk to your team about how to make your business stronger compared to the competition.

For example, a startup might look at competing businesses to learn about pricing strategies and unique selling points to better position itself in the market and make money.

5. Evaluate Your Results

Once you’ve done your market research, take some time to go over what you’ve found. Look for any patterns or themes that might shed light on how customers behave, what influences them, and the challenges they face in your market.

Think about the target customers you engage with and what you’ve learned about them—like what drives them to make a purchase, where they like to shop, and other important details.

It might be helpful to discuss with your team how to create products and services that tackle customer challenges, meet their needs, or encourage regular use. You can use this evaluation phase to brainstorm ways to introduce your products, announce services, and other strategies to get your startup noticed in the market.

6. Develop and Implement Strategies

The research you do can help you make an action plan that explains how you will launch products and services or raise awareness of your brand. In your action plan, outline some strategies for your campaign that aim to grab your target audience’s attention, build a connection, and present products or services that address customer needs.

So, let’s say your market research shows that customers are choosing your competitors mainly because of better prices. In that case, you can come up with pricing strategies that encourage those customers to shop with you instead.

Read more about market strategies

Benefits of Market Research for Startup

Market research is all about figuring out what your customers want and need. It helps you address challenges and meet the demand for your products and services. When you do some research, the info you collect can help you create products and services that better match what customers want.

Some additional benefits of startups doing market research are:

• Identifying your target audience: Doing some market research can give you insights into the specific demographics of your potential customers, like their age and income level.
• Creating sales and marketing strategies: Doing some research can help you figure out which ways to sell your products or services resonate the most with your target market.
• Checking out the competition: You can also do some competitive analysis as part of your market research to see how your target customers view and engage with other businesses in the field.

3 Examples of Market Research for Startups

Let’s explore how to do market research for a startup example with real-life cases that have opened doors for different startups, showcasing the best market research for startups that can drive early business growth

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

Big Potato Games, the people behind fun board games like Mean Girls and Blockbuster, started by making some guesses about who their customers were because they were working with a tight budget.

So, with a new managing director on board, they decided to dive into some consumer research. They ended up identifying seven different customer segments, which included everyone from hardcore enthusiasts to casual players.

They were able to customize their marketing strategies well thanks to this research. If you want to explore how Big Potato Games used consumer insights to boost their growth, check out the full case study! 

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

Odeo, a podcast platform that started back in 2005, ran into some hurdles when Apple decided to roll out its own podcast service.

You know, this competition really pushed Odeo to change direction, and that’s how Twitter came to be. Later on, Elon Musk ended up buying it for a whopping $44 billion!

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

Tune In Hook Up, a video dating app, had a tough time getting off the ground. The team saw the promise in their technology and decided to pivot, leading to the creation of YouTube.

So, Google ended up buying YouTube for a whopping $1.65 billion.

Tips for Effective Market Research for a Startup

When you’re outlining your research process, keep these tips in mind for doing market research for a startup:

• Make sure to define your goals clearly: Set up your research goals and metrics to guide your market research plan and help you stay on track during your observations.
• Make sure to do market research regularly: Since markets are always changing, it’s really important to track what your customers are buying, searching for, and using.
• Use a mix of research methods: Trying out different ways to learn about your customers can help you and your team get the best insights about your market.
• Consider working with market researchers: Have you thought about teaming up with experts to refine your strategy? Partnering with a company like Techdella can take your market research to the next level.

With data-driven insights and expert analysis, Techdella is here to help you understand customer behavior, industry trends, and the best way to know how to market a startup successfully. Let our expertise guide you in making informed decisions that drive real results. Contact us today to get started.