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5 Essential Market Research Questions

If you are like most software teams or companies or just like most people for that matter … you may have started building something – without a plan, with only the most cursory of research. To be sure you are convinced of your product’s value and the market need (full of people just like yourself. People who think like you do. People with the same needs, the same pain) so you are building by the seat of your pants.

At least you can take comfort in the fact that you are not alone. You are still making a costly mistake. Not a POTENTIALLY costly mistake – it’ll be costly no matter what. Stop now. Go back. It’s not too late… No seriously – STOP. Go back. Step away from that business plan …

Just because it’s not too late doesn’t mean you’ve got time to waste.

Before you put any more work into this product of yours make sure you can answer these five questions .. at length, with concrete evidence to back up your conclusions:

What is the Market Size?

This is a good question because inside this question are a bunch of other questions. If you can come up with a descent “market size” it implies that you know what your market is. Do you? It also gives you a starting point for the other questions about pricing, market penetration, and segmentation.

What is the Primary Pain Point?

What is the pain you are solving? Not the features, not the service – but the pain. Hint – this is a typical question that everyone hears and nearly no one can adequately answer. There is no room for jargon or tech-speak in the pain statement.
The role you’re selling to – If you could go to a service like D&B and pull up a list of people. by role, that are kept up at night by the absence of your service, and if you could develop an email that spoke to those people about your product that you’d feel comfortable sending to the whole list – you’ve got a pain, you’ve got a product and you’ve got a target.

What Are Feasible Price Points?

Don’t reinvent the wheel and don’t build anything without a sense of whether the market will support it. Don’t build a product that everyone expects to buy online with a credit card that needs hours and hours of handholding and commands a price point of thousands of dollars to compensate. What are the pricing systems of the competition? If you sold your product at the same prices how much would you have to sell to break even? To make a profit? Don’t forget to figure in the scaling of overhead, benefits and service delivery personnel to keep pace with sales.

What is the Sales Cycle in the Space?

Are you targeting a market that typically has a 2-year sales cycle? Is there enough of a market to make the numbers work on that kind of a cycle?

Without these 5 pieces of intelligence, you don’t have the information you need to continue without putting yourself in severe jeopardy.

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