Why Market Research Is Overrated (and What to Do Instead)
I love marketing and market researchers.
Back when dinsoaurs ruled the earth (the mid-1980s) I was marketing editor of BusinessWeek. I have written books about marketing, including a couple of bestsellers, and some of my favorite conversations of all time were with marketing geniuses--and there really is no other word to describe them than geniuses--like Joe Smith and Laurel Cutler.
Smith, of Oxtoby Smith, was the man who convinced NBC to choose a peacock as its television symbol at a time when most televisions still had black-and-white screens. He knew someday that everyone would have a color television set and NBC would be the network associated with broadcasting "in living color."
Laurel Cutler was the first woman to be honored as the advertising industry "Man of the Year."
But the problem with phenomenal market researchers like Smith and Cutler is they have convinced entrepreneurs--inadvertently--that they need to do a ton of market research before getting underway.
Oh, I understand why people do.
Starting means you put yourself--and your money and your reputation--out there and at risk.
Starting means you are facing head on the possibility that you may fail, and fail in front of family and friends who may have provided funding.
So instead of doing any of those frightening things, it is easier and feels safer to keep thinking and researching your new idea.
But if that is the course you take, you will never start anything. You will just put off getting underway.
There is a second problem with doing all that research, especially if you are not a trained professional.
When you do customer research, people tend to tell you what you want to hear. You show them a three-armed sweater that you are excited about; they see you are passionate about the product, so they say "maybe" when you ask them if they'd buy it. And convinced you are onto a big idea--they said "maybe," didn't they?--you head into production.
Or they will tell you what puts them in the best possible light. You are thinking of creating a new radio station, and you ask people about their listening preferences, so you can determine your programming.
"I only listen to classical music," a (surprisingly large) number of people tell you so you start a station devoted to Bach, Beethoven, and Brahms and are amazed virtually no one listens. It turns out just about everyone who said they listened to the high-brow stuff, actually had low-brow tastes.
So, while I understand why you think you have to do a lot of research before you begin, it really isn't very necessary--or helpful.
Instead, create a prototype. Or verbally sketch out your idea and ask people on the spot to write you a check for the product or service you plan to provide. If they do, you are on to something.
And if they don't? Really listen to what they have to say. What is it about what you are thinking about offering that they don't like. What would it take to get them to buy?
This is no small point. You may think you have the greatest idea in the world, but it is only the market that will tell you if you are right. And if it tells you need to change your product, then you need to change your product. So change it.
The takeaway from all this is simple.
Here's the only market research you need: Get your product on the shelf or out in the market place and see if it sells.