By Enrico Donelli, Creative Commons
Did you know that 90 percent of start-ups fail? Now that is a high number. In fact it seems way higher than it should be, but it’s true. So, what’s the cause of this phenomenon? A major reason start-ups fail is a lack of market research and strategic planning. The “if you build it, they will come” philosophy really only works in the movies. Wide-eyed newcomers to the business world often follow it anyways and get so focused on building the perfect products that they don’t stop and take the time to find out if there is someone out there that will actually buy the product that they are building. For the sake of this blog post let’s give these entrepreneurs the benefit of the doubt and say that they are actually building a product that people will buy. While people may want to buy their product, often these entrepreneurs don’t know who these people are, where to find them, what message they need to send to them to get them to pay attention and how they need to send that message so that it actually gets to their potential customer.
Most aspiring entrepreneurs understand that they need people to find out about their product so they think to themselves, “I’ll buy an ad or I’ll try to get in the paper, yeah, that will work.” But will it? Without doing market research there’s no way to know if your target market even reads the paper. Simply buying an ad or trying to get in the paper without knowing who you’re trying to reach, how to reach them or what to say to them is similar to firing a gun at a shooting competition without knowing where the target is, how far away it is and what gun and ammo you need to reach it. By firing the gun you will certainly get people’s attention and your bullet will definitely hit something, but it will most likely not be the target. It’s important to know who you are aiming at, how to reach them and what to say to them before you pull the trigger on an ad or a press release, otherwise you may be making a whole lot of noise and blowing a lot of smoke but not hitting the target. Remember what mom said, “It’s always important to think before you speak.”
At this point you may be saying to yourself, “I get it already, market research is important, so why are all these startups just winging it without doing their homework?” A common reason is that companies feel that market research is important but feel it is just too expensive and time consuming for them to attempt. It’s unfortunate that this line of thinking keeps them from skipping an important step that is so often the difference between success and failure. The truth is it’s much more expensive to go all in on a product that nobody wants, or to spend money on television advertising when your target market doesn’t watch T.V. and spends all their time on social media.
Smart companies know how important it is to do market research. Google knows exactly who their target market is and even what color of links they prefer to click on. Google was able to earn an extra $200 million in revenue by doing research to find out what shade of blue its customers prefer.
Now I’m not saying that you need to do such detailed research like finding out what color of blue your customers prefer, but what I am saying is that if such a small insight will earn Google a cool $200 million, just imagine the difference it would make for a start-up to do market research and find out the really basic and important things, like who will buy their product, what message to send to them and how to send it.
Make sure you don’t spend a lot of money firing blindly and missing your target market. You don’t want to fall into that 90 percent failure category. Make sure your dream succeeds. Invest in market research and use it to come up with a killer marketing strategy that actually reaches your target market and gets results. If you need help, the team at Laura Burgess Marketing is always there. Not to brag or anything, but this isn’t our first rodeo, I myself have conducted market research countless times and created quite a few successful campaigns. Send us an email at laura@lauraburgess.com and we’ll talk.
