The ridiculousness of asking market research to solopreneur?
6 comments
"Idea extraction" is a method of doing market research that is taught/popularized by Dane Maxwell.
Idea extraction doesn't cost a lot of money and in some ways is probably more effective than companies like Bloomberg or Gartner.
Dane first came onto my radar after the product (based on Gartner surveys) my company wasted 144+ man months building failed to garner a single sale. Meanwhile I heard Dane single-handedly built an SaaS with over $50,000 MRR despite lacking any coding skills and being borderline technology-illiterate. (He actually built several of these SaaS's). I had to find out what the difference was...
The goal of market research is to find a pain point people will pay money to solve. You don't need to survey thousands of people to find that pain. Dane actually built https://www.paperlesspipeline.com/ as a solo entreprenuer after a single person told him exactly how it should be built. (He spent months before finding that person and then having the right conversation with them, though.)
After building several profitable companies, Dane tried to codify his method into a process he called "idea extraction."
Dane has discussed his process a lot. I'll share two examples below:
- https://startfromzero.com/
- https://mixergy.com/interviews/dane-maxwell-foundation-inter...
Idea extraction doesn't cost a lot of money and in some ways is probably more effective than companies like Bloomberg or Gartner.
Dane first came onto my radar after the product (based on Gartner surveys) my company wasted 144+ man months building failed to garner a single sale. Meanwhile I heard Dane single-handedly built an SaaS with over $50,000 MRR despite lacking any coding skills and being borderline technology-illiterate. (He actually built several of these SaaS's). I had to find out what the difference was...
The goal of market research is to find a pain point people will pay money to solve. You don't need to survey thousands of people to find that pain. Dane actually built https://www.paperlesspipeline.com/ as a solo entreprenuer after a single person told him exactly how it should be built. (He spent months before finding that person and then having the right conversation with them, though.)
After building several profitable companies, Dane tried to codify his method into a process he called "idea extraction."
Dane has discussed his process a lot. I'll share two examples below:
- https://startfromzero.com/
- https://mixergy.com/interviews/dane-maxwell-foundation-inter...
I've raised twice in previous startups and currently work as a consultant with experience doing this kind of work.
You don't need to subscribe to any expensive data sources. These are more relevant for management consultants and senior execs working on strategy a bit further down the line.
At early stage - incubators and investors just want to know how well you understand the competitive environment, your vision of the space, and your progress (product/customers). You can piece all that together using publicly available data and first hand knowledge.
Good luck!
You don't need to subscribe to any expensive data sources. These are more relevant for management consultants and senior execs working on strategy a bit further down the line.
At early stage - incubators and investors just want to know how well you understand the competitive environment, your vision of the space, and your progress (product/customers). You can piece all that together using publicly available data and first hand knowledge.
Good luck!
Thanks, this was particularly interesting "These are more relevant for management consultants and senior execs working on strategy a bit further down the line."
If it's really that small of a startup, then they probably aren't looking for something super official. They probably want to see some numbers you came up with to confirm your own idea.
I've looked up stats about markets when I thought I had a good idea. Just knowing how many potential customers you might have, what competitors are out there (including patents), and cost of existing products can give you a theoretical max revenue and estimated max product price.
Oftentimes this is enough to rule out an idea. By discovering the market is too small, or existing products are too cheap to compete with. Sure there are other things to consider like how mobile the customers are, regulations, growing markets, etc. Those will require more research. If your investor is considering putting in a lot of money I would hope they do their own in depth analysis.
I've looked up stats about markets when I thought I had a good idea. Just knowing how many potential customers you might have, what competitors are out there (including patents), and cost of existing products can give you a theoretical max revenue and estimated max product price.
Oftentimes this is enough to rule out an idea. By discovering the market is too small, or existing products are too cheap to compete with. Sure there are other things to consider like how mobile the customers are, regulations, growing markets, etc. Those will require more research. If your investor is considering putting in a lot of money I would hope they do their own in depth analysis.
Thank you for your reply. Although I do believe that even a patent search is demanding (at least I've seen companies already offering the service), it is a good advice.
I've done my own preliminary patent searches to see what is out there. I've had multiple ideas that were not on the market but turned out to be patented. There are tutorials on how to do them.
How do you do it, do you have to go looking for database leaks?
It seems that the whole game of technology entrepreneurship is already prearranged.