If you want advice, ask for money.
If you want money, ask for advice.
- from an entrepreneur, based on hard lessons learned
I teach a course at the Wharton Small Development Center on entrepreneurship. I've been working with the Wharton SBDC for nearly a decade and one of the most powerful tools promoted by the SBDC is Primary Research.
In short, Primary Research refers to talking to people in your startup's eco-system. This might include prospective customers, suppliers and competitors. Understanding what is working, what is broken, who is the best at this and where the industry is heading can provide powerful insight.
Years ago, I worked with a young entrepreneur who was trying to figure out how to test his model for Internet marketing to small businesses. I encouraged him to just go out, meet with small business owners and ask them if they'd be interested in such a service. When I met with him 2 weeks later, he had signed up his first five clients! I blogged about the success story that became Yodle in 2007 with an interview with Nathaniel Stevens. Yodle is now a national success story.
This week, I had the pleasure to debrief with entrepreneurs on their primary research as part of their course-work with me. Consider these two success stories.
1) One entrepreneur is investigating emerging technologies and mobile application development. In talking to some prospective clients about his idea, he actually was offered to work with the person he was interviewing. Not a bad outcome from some research!
2) Another entrepreneur did some research on her market size at the library (Secondary research - btw). She was excited to discover that people who used her target product numbered around 5 million people in the US! She then sat down with her data and consulted two entrepreneurs that she knew well. Together, they poured over her assumptions about the marketplace and the size her target market. By the time they finished, she had concluded that HER segment would be too small to create a viable business and she was going to move on to new ideas. Was this a success? Sure it was! Consider how much money, time and angst she saved herself by doing this research.
The lean startup methodology is a big proponent of this. They refer to it as "getting out of the building." That is, validating your assumptions by conducting surveys and talking to your potential target market directly. It's the fastest way to ensure you're moving along the right direction. The Lean Startup Machine recently launched a Validaton Board to help with this. It lays out the process step-by-step.
What lessons have you learned from talking to people in your target marketplace? Please share your stories and questions in the comments.
- Skip Shuda