MARKET RESEARCH 2 - HOW TO DO MARKET RESEARCH FOR YOUR NEXT BIG IDEA
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6 years ago (i.e. 2005 and before) it was a lot more difficult to find startup ideas. To follow trends of invention required inside knowledge, and any ideas you’d come up with would require too much money for you to realistically do. Now, you can read Techcrunch for a year, and pick from a million startup ideas that would make sense in the market as a natural progression. Tons of other startups are showing you every day how you can embellish on what’s already out there to make a successful company/business. The best way as a budding entrepreneur to figure out what market you want to tackle is to read these tech blogs--daily!
Whenever I first meet someone that wants to do a web application or mobile application, etc, the first thing I ask them is: “Do you read Techcrunch?” And then I ask: “Do you read it every day?” And then: “Do you read every single article?” If you don’t skim through every article every day and devour the ones that are most aligned with your interests, you’re a fake-ass software entrepreneur and you shouldn’t undertake any startup any time soon. I’m not speaking to super programmers that deal with coding down to the level of the CPU or are immersed in building a new solid state hardware-accelerated database, or hadoop masters that have a genius way to produce answers out of “big data,” or whatever. I’m speaking to guys that don’t yet code and want to build an application. At the very least, they should be reading techcrunch every day to do their market research. You can’t code for godsake--you at least need to be a master of the market, and therefore a master product guy. In addition to Techcrunch, they should also read gigaom.com, mashable.com, and readwriteweb.com. That’s the lineup.
That said, there is a very specific type of market research you must be doing. You could have a great idea, and then search techcrunch for competitors and call that market research when you find none. But that’s not the sort of market research I’m talking about. Sure you need to be able to do that. It’s surprising as hell to me how often I show people how to search for competitors on Techcrunch (by appending "site:techcrunch.com" to my google search for industry keywords), and they’re elated with how easy I did the competitive research. It’s even more surprising how many people think they have no competitors. But that’s another story.
If you’re serious about being yet another Web 2.0 wannabe Techcrunch baby, you need to be scanning all the markets, and application entrants they have in order to find the perfect niche and pocket for you to enter with your startup. You need to say to yourself, I don’t really care about what my product does. It could be social, based around advertising, a new way to search information, or some new form of communication. It doesn’t matter to you. You’re looking for the perfect opportunity that you can execute to a point where it’s defensible before you have too much competition, and you don’t care what the market is. If you’re serious about being a tech entrepreneur, you need to have many ideas you’re juggling and always in pursuit of a better idea (until you finally start executing it of course).
In my Market Research 1 - How to Choose Your Own Startup tutorial, I discuss how important is to pick a startup that is dear to your heart and that is what you want to do for the rest of your life. I’m not negating that. In my case, I spent years just scanning these tech blogs looking for market opportunities based on the technologies and applications whose launch they covered daily. I was looking for idea inspiration, and holes these products left in the market. I didn’t care what market the product was going to be in, so long as I could make a successful company out of it as efficiently as possible. I think you basically have to go through that if you ever want to have a personal knowledge-base big enough to allow you to pinpoint what the final startup for you will actually be. You need to become adept at crafting market opportunities by comparing your ideas to what’s coming out. Once you have that muscle worked out over years, then you can figure out what you truly want to do. You'll also be able more easily figure out how to make what you want to do make money and solve market needs.
So back to the research. My point is that you don’t research an opportunity in relation to an idea you already have. You research the markets, and constantly run through new ideas. It’s what VCs basically do all day, automated by your help when you bring them your latest and greatest idea (hopefully executed already to some degree if you have any hope of getting any investment). Analyzing all the applications that come out also teaches you about the latest technologies to use and how you can use them, what APIs are available, ideas for fresh user interfaces, etc. You learn how these products progress from their initial launch as an easy product to something more advanced that can make money. You learn from all the struggles these companies have so you don’t make the same mistakes. You learn about all the different markets available in the first place, so you can find where you best belong. In the end, you’ll most likely mash up ideas from hundreds of different startups to create what ends up being yours, which is the most important reason you need review everything that comes out on Techcrunch. Everything you ever read and learned on Techcrunch and Mashable will find its way into your product. Also, you’ll most likely copy many interfaces from other applications, knowingly or unknowingly.
Making a software application isn’t like inventing the next style of Jazz. You don’t need to be Miles Davis or John Coltrane. Have one truly innovative aspect, but for everything else, copy copy copy. It will save you tons of time, and in the way you combine different influences your product will be unique too. And to do so, you need to read the big 4 daily: Techcrunch, Mashable, Gigaom, and ReadWriteWeb. End of story...And wait at least 1-2 years before you go for it with your own idea. Until then, hone your skills. That’s the right way to do market research in the Techcrunch era. God bless ‘em!