Innovation Consultant France Sabourin Explains the Basics of Market Research
Market research is an important process that every startup needs to undertake before beginning any level of product development. And there are some basic steps and tenets to follow. Labs mentor and innovation consultant France Sabourin held a Labs session all about market research, from the tools you can use to what to do with the information that you find.
Why market research matters
Conducting thorough market research is crucial “because even if your idea is really great, if you don’t have any users, you don’t have a future,” Sabourin says. “Often, startups don’t understand that there’s somebody behind the scenes that you need to work for, which is your user. You build something for someone, and this someone is who’s going to make you money. And very often, startups get very involved with their idea and they don’t want to change it based on what they find about the market, but if you don’t make those changes then you may not find your market.”
The three parts of market research
“For me, there are three parts to market research,” Sabourin says. “First is quantitative research. It’s very often like having a perception or taking an image in one moment, so it’s not the main tool we use in market research, but it can be helpful. Second is qualitative research, and it’s mainly focus group, interviews, and ethnography. This is the main tool we use. And lastly, there are tools like business models and benchmarks that help you remember that you’re building for the consumer.”
Start by understanding the source of the problem you’re solving
If you want to do accurate market research, “you have to start by understanding the sources of the problem you’re solving,” Sabourin says. “Maybe you’ll discover it’s not a market problem but a technical problem. So start by making a list of what the sources of the problem could be. If it’s a market situation you can investigate with interviews.”
Know what information you’re after
Once you’ve chosen your method of research, “get some objectives,” Sabourin says. “You cannot write your interview questionnaire, for example, without knowing what you’re searching for. Think about what you need to know. And remember that the subject you’re focused on exists in context, or in a system, and you need to explore that first and then go into your subject more specifically. For example, say you’re building a new shoe brand. You have to first investigate the relationship between the person you’re talking to and fashion, then you go into shoes.”
Sabourin offers another example: “When I work on websites, I always start with the main subject or context because sometimes you discover that a website isn’t the main way to search for the product,” she says. “It’s a problem if you build a website to help people find something, but they usually go somewhere else for that information. If you focus too closely on your specific subject, you’re not going to understand what’s really at stake. I worked on a website where you could find boutique hotels, and it was just a website with a link to booking. And I thought, what you really search for when you’re looking for that kind of hotel is not just a hotel. You’re searching for an experience. So I told the company that their site needed to be more than just a way to find hotels. They needed to ask people about how they travel and what they search for when they look for that kind of hotel.”
How to conduct your interviews
“When you’re building your interviews, first you have to set the objectives and after that, build the moderation guide,” Sabourin says. “You also need to build scenarios. If you’re talking about the boutique hotel search example, you can’t say to people, you go to the website and then what do you do? You say things like, you need to find a hotel for a three day weekend - where do you start?”
Your interviews need to be “specific and organized because you want to build an analysis that’s supported by the research and scenarios,” Sabourin says. You also need to be specific about exactly who you’re interviewing. “You can ask people to answer your questions or test your website, but if they’re not in your target audience, the information you give you is not going to be relevant.” Remember that you want to find people who’ll give you unbiased responses, too. “Try not to use people who are close to you because they won’t give honest answers,” Sabourin says.
Create personas from what you find
“When you have all of your interviews done, you need to do a synthesis of what you learned, and then create typologies of people,” or personas, Sabourin says. “You can find a lot of persona templates on the internet but they’re often not specific to your subject and you probably need to build in some variables that are specific to your subject. Don’t make them overly personalized though. If you get too personal with each persona, it can drive you down the wrong road because it’s not the main information you need. You’ve added details that don’t matter and can distract you. Prioritize what’s important.”
The importance of positioning
As you’re conducting your market research, you need to consider your position within your market. And there are a few key things to remember. “Your positioning needs to be simple and clear,” Sabourin says. “You need to be different from your competitors and your solution needs to solve a problem.”
There are a few tools you can use to better understand and craft your position, but the most helpful one is often “the Lean Canvas business model,” Sabourin says. “If you just try to answer all of the questions it’s a really good start because you will find that some things are not clear and you either don’t need to answer it or you need to investigate it more. It’s really essential.”
Benchmarking your position
Part of figuring out your position in the market includes benchmarking it. Consider factors like “your name, the product you’re working on, the type of customers you’re targeting, and the strengths and weaknesses of what you’re doing,” Sabourin says. “Think about what you have that others don’t.” Remember though that benchmarking doesn’t mean your market or position in it is set in stone. You need to continually return to them and refine them when necessary.
“You will find something that changes the way you think about what you’re selling and then you have to adjust,” Sabourin says. It all goes back to understanding the problem you’re solving and the needs of the people you’re solving it for.
Learn more about market research for early-stage startups.