Meeting startups regularly, I find they often stand between 2 schools of thought.
1.The first view holds that market research is merely a waste of time, effort, and money.
For the following reasons:
-Customers do not truly know what they really need.
If Henry Ford had asked his customers what they needed, they would not have said a car; they would have said a horse with 5 legs that could run faster.
Steve Jobs did not believe in market research, yet he and Apple created world-changing products such as Ipod, Iphone, and Ipad…
-The market changes too quickly, and while you are researching it, it has already shifted into another state.
Technology companies usually plan for only a few months, not even 1 year (“ambitions” such as 3-year business plans may merely be part of the fundraising game, while “illusions” such as the 1st five-year reform plan, the 2nd five-year reform plan… have demonstrated their effectiveness in practice)
-Market research must be done correctly; otherwise, it only brings consequences. Yet you do not know how, or cannot afford to hire someone who does.
In reality, many factors affect and “skew” the accuracy of Market Research: too small a sample, the wrong respondents, unsuitable interview methods, poorly designed questions or answer types…
There are even reasons that sound “funny” at first: the interviewer's manner is… so irritating that it negatively affects the customers' answers; a survey about a beer involves a beer promotion girl so beautiful that the men drool and their brains turn to mush, leaving them without enough mental clarity or emotional control to give accurate answers (laughs)
Outsourcing to professional market research companies may be too expensive. Today’s leading Market Research Agencies can charge tens of thousands of dollars, entirely unsuitable for a startup.
As a result, these businesses “ignore” market research and surveys, instead charging blindly into a mountainside and “fixing mistakes as they go.” They rely too heavily on luck and chance. They lean toward intuition—or “believe” they do—but forget that they lack the experience to hone it. They often see entrepreneurship as art rather than science. They have courage and resilience but lack the wisdom needed to improve their startup's chances of success.
2.The 2nd view holds that “the more you sweat on the training ground, the less you bleed on the battlefield”
Startups of this kind invest a great deal of effort, time, and possibly money in market research.
The founders of these startups may be:
-People with proper MBA degrees.
-Senior employees who leave major corporations to start businesses but transfer the corporate way of working wholesale into a tiny company.
-Specialists working for consulting companies and corporations, such as McKinsey, even dream of tangled charts surrounding them; they love numbers or are obsessed with them!
-People with high intellectual ability who consistently earned high grades in school and often believe in the power of logic.
They can “quantify” everything. They believe everything must be perfect, including a startup, and want every piece of data, however small, at hand. The philosophy they learned from past work experience is “Do the right thing at the first time”.
Over time, these “professors” make their startup machinery too bulky and heavy. The experience and tools that once brought success become “shackles,” tying their hands and feet and preventing progress as they endlessly weigh risks.
The difference between capable and less capable people lies in anticipating risks and preparing sets of solutions for them. Clearly, truly capable people do not sit around merely weighing risks and doing nothing, or let their pace of “experimentation” become so slow that they miss every rapidly approaching opportunity.
So what should a Start-up do? Should it conduct Market research when starting out?
Do not underestimate market research
In fact, many startups fail because they do not understand the market or disregard market research. Many investors worldwide and in Vietnam share this assessment.
Then, from one perspective, “Learn from Steve Jobs” is merely 1 excuse for a startup's laziness, superficiality, impatience and unwillingness to learn when deciding to “ignore the market and focus on the product we think is good; the opportunity is right ahead.”
It is like someone who has not undertaken the journey to discover their own truth, but after glimpsing ‘a narrow fragment of someone else’s truth,’ hastily assumes it is correct, relies on it, and proceeds from one failure to another.
But we must also properly assess the power of experimentation
However thoroughly you research the market, one fact remains: the company that first brings a product to market will understand that market best. Theory remains gray, while the tree of life is green.
Sometimes testing by launching a product on the market is also a way to conduct market research.
An important lesson Startups need to practice: allocate resources in appropriate proportions
Startups following the approach of “throwing plates of Spaghetti at the wall and treating whatever sticks as 1 real opportunity” will discover that by the time they find a genuine opportunity, they have run out of time or money to pursue it.
Startups following a “systematic, careful research” style may even recognize many opportunities yet fail to seize any.
There is no right or wrong here, only what is suitable or unsuitable.
In many cases, the appropriate answer is that a startup needs both 2 elements: Market Research–Planning and the ability to experiment to adjust the plan continuously. What matters is that the start-up choose the right proportion of resources (time, money and effort) to invest in these 2 activities.
Imagine a football match lasting 90 minutes: the coach and players need to study their opponents and prepare a plan beforehand. It would be foolish to enter a match with no tactical plan at all.
But the difference between a Smart Entrepreneur (Smartrepreneur) and unwise founders is this: if the ‘startup match’ also lasts only 90 minutes, the Smart Entrepreneur spends just 10 minutes on research and planning, and the remaining 80 minutes gaining practical experience to adjust that plan.
An unwise entrepreneur, meanwhile, will not bother to “understand oneself and others—know oneself and the other side,” or will spend 60 minutes preparing research and planning, leaving only 30 minutes for action.
What happens if all the research and planning are wrong? The start-up has only 30 minutes left to ‘correct its mistake,’ far too little time to discover the truth of its entrepreneurial problem.
As people often say, however difficult a problem is, it has a solution if we have enough time. But we have so little time! Time is sometimes a startup’s true enemy.
Actually, successful generals win battles because they know how to adjust their research and plans to fit reality, instead of trying to force reality to fit their plans.
Market research is a lighthouse, not a detailed map
Conceptually, we need to understand that market research is like a lighthouse, or even a few lights illuminating winding turns, rather than a detailed map.
The difference is that a detailed map tells you to go another 100m and turn right at the intersection, continue 300 meters, avoid 1 pothole 5m from the right curb, take the middle lane, turn left, continue 5 kilometers, pass 3 crossroads and 1 T-junction, then after passing the supermarket turn right at the next crossroads, proceed to the roundabout… and reach the destination. Bravo! Market research in entrepreneurship is not that kind of “magic wand.”
But it is like a lighthouse that shows you some places with submerged rocks—the ‘traps’ of starting a business (misjudging the size of the market and consequently planning an inappropriate investment, leading to conflicting expectations with investors; incorrectly analyzing target customers and consequently mispositioning the brand; failing to understand the market and consequently adopting misguided business strategies…)—helping you set sail more safely. Sometimes its light helps sailors find their way into port, determine their position at sea, and know which Direction is appropriate.
It would be terrible if your startup ship needed to sail West but you had spent nearly all your money going East. If you headed correctly from the start, then adapted and explored to draw a detailed map and reach the destination, it would be more effective. That is the smart startup approach!
To study Market Research today, you can attend Marketing schools if you wish to become a professional Market Research specialist. But to learn, understand, and apply Lean Market Research for entrepreneurs and business owners, you can turn to centers nurturing entrepreneurial dreams, such as YUP Institute (www.yup.edu.vn), the Lean Market Research training module is one of the training modules in the “500+ Startups” incubation program currently being implemented by this organization.
Finally, Entrepreneurship is a journey involving both Science and Art. Sometimes you need to trust your intuition, but you also need to learn to Control what you can, right now, before everything grows beyond your control.
TMT
Tạ Minh Tuấn – TMT – is a successful entrepreneur pioneering several startup fields in Vietnam, 1 of Vietnam's 30 most outstandingly successful and influential people in the prestigious “30 Under 30″ ranking by Forbes, the world's leading business magazine, and the founder of YUP! Start-Up Education & Incubation Centrer (www.yup.edu.vn).
