DeepDive: Researching Your Industry
When doing research for a startup, it is generally encouraged to zoom out first. The broadest level of understanding is the entire industry. Doing this research can seem daunting at first, but really if you know where to look, it can be done pretty easily. So to start off you should go to NAICS.com. There you will find a breakdown of every known industry in the United States, along with information about those industries.
So once you find the NAICS code for the industry/ies your startup fits into, you can quickly gather some basic information for that industry right on their site. After that, you can use the code to find more helpful information from IBISworld. Membership can be expensive, but there is a way around this. You can either go to a local library or educational institution and they will usually have access to the database, along with many others.
All of this information should be relatively quantitative, so it is important to get some qualitative information as well. To do this you can join industry groups, attend conferences, find online forums, follow news and influencers in the space. With the internet at your fingertips, there is no lack of information to understand what is going on in the industry and find the people who are active in it.
The main things that you should know are:
- The size of the industry (number of business)
- Industry segments (how it is broken up)
- Economics (how much revenues, units sold, GDP, etc.)
- Employment (job creation)
- Main players (who are industry leaders, what percent and parts of industry do they control)
- Ease of entry (how many barriers there are to enter)
- Affecting factors (economy, season, technology, government, supply and distribution, etc.)
- Industry lifecycle (growth, mature, etc.)
- Trends (changes occurring within industry)
So spend some time looking up the industry and educate yourself on the environment. As a word of caution, try not to get too carried away with this. You don’t necessarily want to be an industry expert. Just knowledgeable enough to know what is going on and be able to talk to other people within the industry confidently.
The next step is to start focusing on the specific market within the industry that your startup will be competing in. That is what we will get into next week, with the Secondary Market Research. Stay tuned!
