DeepDive — Doing The Research
Let’s continue through the steps of this startup journey. Now that a problem has been identified, what’s next?
Well, of course the immediate answer is to define the solution, and that is somewhat correct. However, before you get too focused on the solution, try to keep an open mind. It is perfectly fine to have a proposed solution, just be comfortable with the fact that there is always more to learn and that the perfect solution will be pieced together along the way. It is highly unlikely that the first idea that you come up with will be the best idea.
Many entrepreneurs want to spend all their time building and perfecting the solution, but really the best ideas will come from shifting the focus externally. This means doing the research, networking, talking to customers, understanding everything you can. Understanding everything about the business, starts with understanding the industry and market. Hopefully you wouldn’t just try out for the football team without already understanding how the sport is played, who the coaches and teammates are, what equipment is needed, etc. The same goes for starting a business, you are much more prepared to succeed if you have a good base understanding of things.
Anyways, let’s assume that you have identified a real problem. One that people would pay to have solved. That was the first big milestone to this startup journey. Now it is time to do some thorough research. This is the next step on the journey, and one that so many entrepreneurs fail to do correctly.
The reason why this part of starting is often done incorrectly is pretty obvious. It is not fun. It can be difficult to find the right information you are seeking. It is time consuming. It is never-ending. This can be discouraging, draining, intimidating, and downright unappealing.
As a founder this results in rushing through, neglecting the in-depth work that is necessary. Understanding that it isn’t going to be fun or easy, but is critical for the foundation of the business should help motivate you to stick with it.
Also, try to be proactive in this process by making it easy on yourself. Organize everything that you find, so that you can access it easily later on. Even the things that seem irrelevant now, could be the exact information you need later on. All of this will be a continuous loop that is adding much more value to the business than you may think. Compiling information and understanding what it means for your business will situate you to make better decisions as a founder, but it will also help you share the reasoning for your decisions with people that join the company.
Here is how all of this works, and some advice on how to go about it.
First off, let’s be honest with ourselves. If you have found a problem that has proven monetary opportunity, it is extremely unlikely that you are the first person to recognize it. So as long as you are not coming into this next step with the naive mindset that you are the first person to uncover this issue, it will allow you to be more open-minded when scanning the landscape. Looking at the problem with as minimal bias as possible is necessary for doing this right.
After you have mentally prepared yourself you should take time before you go too deep into this endless abyss of information available (thanks to the internet), to plan out a high-level objective of what you want to find out, how you are going to organize that information, and when you have enough information to make confident insights. This will give you a game plan, and a more focused approach to the chaos. That way you aren’t just digging wherever you find dirt, but instead where you know there is a high probability of gold.
Once again this will be time-consuming, and you have to be obsessed with understanding the details, maniacal even. However at the end if you stay determined, what you find will bring immense value that you otherwise could never have gotten.
Here is a broad breakdown of the 4 parts of this researching process you will need to cover:
- Industry Research — high level details to guide the understanding of the whole industry
- Secondary Market Research — (quantitative) finding out the size and macro details of the market
- Primary Market Research — (qualitative) getting specific customer insights
- Competitive Research — who else is competing, what are their UVPs
The first two of which are less in depth and with the right tools (databases, etc.) can be tackled in a couple of long nights. This is like basic training, and if you can grind through it, then you will be semi-prepared for the next parts. Doing the primary research and competitive analysis will be the true battle. You will always be outnumbered, but staying on the offensive will be crucial to making it through with the right knowledge.
Each of these different research areas can be broken down into an article separately, so that is exactly what I will do over the next couple of weeks. Stay tuned! Next week we’ll dive into Industry Research.
