Page 110 - 6 Secrets to Startup Success

The Pull of the Market 89

not from a product development lab, but rather from its founder’s sales
experience, his relationships within an industry, and his ability to see
a phenomenal opportunity in the making. From inception, his venture
was tightly nested within a known market space.

LEARN IT – Starting a successful business is a non-stop learning
process, most of which happens after you’re up and running. But you
can improve your odds of a solid start, and avoid some major
headaches, by doing your market homework before you start. Studies
have shown that effective market analysis can prevent up to 60 per-
cent of startup failures.9

How you collect data, and how much you collect, will depend on
the type, scale, and complexity of your startup; how much time and
money are available; how much you already know; and so on.

The simplest way to learn about a market is the old-fashioned way.
Get out and talk to people whose opinions you trust: potential cus-
tomers, industry colleagues, and respected competitors. Ask people
what they are seeing in the market, how their needs and interests are
changing, and what problems and opportunities they are dealing with.
Focus on listening to them rather than selling your idea and use their
input to reevaluate your product or service. While enhancing your
market knowledge, this approach also creates interest in your new
business. These conversations plant seeds for future sales and referrals.
Build a database of these contacts so that you can keep them informed
of your progress as you move forward.

Another informal way to learn about your market is through pub-
lished sources. Read as much relevant information as you can: industry
magazines, research reports, customer databases, census information,
etc. The Web is an increasingly broad and deep source of market in-
formation (see Appendix B for a list of good starting points for online
market research), although the accuracy and quality of Web-based in-
formation can be difficult to verify. Plenty of fee-based services are
available to provide more reliable market information on sectors most
critical to your business plan.

To ensure that you don’t bend the data to fit your preconceptions,
hearing what you want to hear, involve others in your information-

American Management Association • www.amanet.org