In one episode of the Ali G show, Ali presents his idea of the “ice cream glove,” which helps people keep their hands warm and drip free while they enjoy their ice cream, to Donald Trump. Within 30 seconds he has Donald running away and probably calling security on Ali. That said, the ice cream glove is definitely not the worst example of an inventor, or even a multinational corporation, failing to do market research on their idea.
It’s important to distinguish between ideas and opportunities. An idea is just a concept with some potential. An opportunity is something that will add value to peoples’ lives and is something they will exchange cash with you for. So how do you tell if you have an opportunity?
How to know if customers will “bite”
Once you’ve figured out something that other people and businesses really need, you should determine if there’s actually a market for what you have to offer. Here are some ways to find that out:
1. Google Ads- This is perhaps the cheapest (free) and most effective way of seeing if there’s a market for your product. Figure out what niche-keyword describes your product (e.g. “sleep technology” if you invented some MP3 audio that instantly puts insomniacs to sleep) and see if the search results are littered with sponsored listings. These text ads that you see over the top and on the side of Google are paid for by companies expecting to reach customers. Since companies generally wouldn’t be paying expensive advertising money unless it was converting into sales, it’s a good sign that the niche associated with your product has a bunch of paying customers. You might even go so far as to create your own ads advertising your product and the benefit it brings to see if people click.
2. Ads in niche magazines and newspaper sections- For the same reasons as above, advertisements in publications associated with your niche can give you valuable clues as to whether people are actively searching for solutions such as the one your product offers.
3. Related products- Have you invented something completely outrageous and avante garde? If so, you might find it difficult to gauge the market demand for what you have. In this case, look for the presence of many related products and services. See if you can identify a customer group purchasing a related product that would be willing to hand you money for another solution-that you offer.
4. Survey, survey, survey. This is perhaps the most overlooked tactic because of its simplicity. Go to your peers, people in your niche who could likely be your customer, and even market research firms that can set up a focus group for you (or form your own focus group here) and present them your idea/product. Ask them if they’d use it and pay for it. WARNING: Do not ask friends- they don’t know how to not bullshit you if you have a bad idea.
5. Hire a market research consulting firm- Yes it costs money, but if you’ve done all of your other homework in deciding whether your idea is a great one, then the gamble your taking has much better odds. You will get honest opinions from people who have access to data, people, and their own industry experience-all of which will help you plan and save you many tears down the road. has a feature article on how to get primary market research on a bootstrapping budget.
6. Use market research tools- You should at least know about the status of your industry, what the customers are buying, and who your competitors are. Some helpful tools (commonly available for free at business schools if a college campus is nearby and you can sneak in-I did not just say that) are Hoovers and IBIS industry and market research reports.
If you notice a theme to all of the things I mentioned here, it’s that you should get into an area where there’s already a market. I know it sounds counterintuitive-you’re probably thinking, “don’t I need to come up with something radically different?” That’s what gets most people in trouble. Think of it this way: if there’s many competitors, it’s likely that a large base of customers with different wants and needs exists. If you can take advantage of a larger pie instead of trying to cut smaller and smaller pieces of a pie to share with your competitors (or worse, have to find out how to make your own pie if you’re trying to be radically different), your chances of winning soar from the beginning.
A-S
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