So we have this great idea for a business, but where do we start? Do we just start running and pray?
The known statistics are that 90% of businesses fail within the first 5 years, so how can we minimize that chance for us, as much as we can?
Before jumping in, there are some steps that we can take in order to achieve that, and the first one is:
Research
This is quite a broad subject, so let’s break it down:
Competition
When we start a new business there are 2 options: The product exists – We have existing competition; And the product doesn’t exist – Then let’s skip to the next section.
Given we do have existing competition, we should look for
- what are they currently doing?
- What’s their target audience?
- What are their ads like?
- What’s their current market margin?
- What are they doing wrong?
- What can we do better?
- What can we offer that they don’t?
Think about those questions, and come up with ideas for a better product \ ads \ company.
Audience \ Target Market Research
This part is relevant for both existing and new products. Before we even put our product up, we need to know
- Who our product can help?
- What our their needs and how does our product fit in that?
- What is the current competition % in this market?
- Are we aiming locally or globally?
- What are the means (moneywise)?
- How much will they reasonably pay for our product?
- Is our product one-time use?
- Is it sharable with the family? Friends?
- Can we sell our product as a subscription to our clients?
- What our business model should be according to our target market means?
- What is the margin that we can get?
These are all important questions and there are so many more. These should be taken into account before starting, because they might invalidate the whole business. It could affect our whole process of ads targeting, product creation, and business model.
The more we prepare, the better our chances are. I suggest going back to the Competition section and do it again.
Example:
If you haven’t read my last blog post about the car test results site yet, you should read it first as I will now talk about it.
After I decided on the major idea, I looked for this startup idea to see if it exists or not. I got results regarding a new proposed law in the matter.
The law talked about the service that the government will provide, that will allow people to access some of the data regarding the annual car test results (which is part of the idea).
I downloaded the transcripts of the meetings about the law and tried to find what exactly the service will include; apparently it deprecates my idea…
I read 172 pages of transcripts, and I got a lot of insight from it. Except the ministers, in the meetings, were also CEOs from the car industry. Yes, that’s right.
The managers of the big companies get to sit in related government meetings, in order to push their interest… I’ll give an example.
The minister of internal affairs suggested that all the history of the car will be provided by the first owner when sold, even if it was sold several times already.
Then, the manager of a car company said, “And who will pay for that?”, the minister responded “You”, “We can’t accept that, that will incur a lot of maintenance fees, because of people that we don’t even deal with”, the manager said. This made them drop that section in the law.
You see how powerful this is? A manager gets to affect the government decisions, along with protecting his interest, which makes him richer (or not lose money in this occasion).
If you can think of more types of good research ideas, please leave them in the comment section below.
See you in the next post,
Dekel
