Startups are generally considered to be companies that are in their early stages of formation. Most of them would only comprise of a few core founding members and typically operate out-of-pocket. Founders usually have a vision of a product or service which has a viable market demand or need.
These fledgeling entrepreneurs often face an entirely different set of challenges as compared to established companies. For example, most companies that have been operating for some time have already achieved market recognition. In comparison, startups must work harder to gain the trust of potential customers.
Here are the following ways
1. Online/market research
Startups are, by definition, new establishments, which means that they often don’t have the answer to many questions that other companies might have tried and proven answers to. Although the questions involved may be common, the answers are usually unique to each business.
Some questions which startups normally face include;
1. Does my product or service solve a problem?
2. Who is my target market and why?
3. Is my product unique and where can it be sold?
4. How much do I need to charge in order to make a profit?
5. Will people pay that price?
6. Who are my competitors?
Some of these questions may seem trivial, especially so to founders who often are heavily vested in the business and supportive of their own ideas. This is where market research comes in – to get honest answers to questions facing each startup.
How Airbnb grew from market research
In the early days of Airbnb, founders of the business knew that their main problem was in the acquisition of new customers. Because they were a digital platform, they knew that they needed to capture customers online.
Ultimately, their market research focused on one simple question: “Where did people who were looking for alternative accommodations congregate online”?
This led them to Craigslist, which was an independent listing platform. It had the market potential that Airbnb needed, and they had the expertise to list accommodations in the most appealing and attractive manner.
At the time of conceptualization, what Brian Chesky, one of the founders of Airbnb thought was much smaller; “It’s going to be huge – one day thousands of people will use it”. Yet the result of being able to answer the right question at the right time was an explosive growth in Airbnb customers.
Today, millions of people use Airbnb to find alternative accommodations in almost every country around the world.
2. Creating the product/challenges
Knowing the target market and your own solution may be the two haves of a whole. Yet perhaps more than anything, startups will recognize the challenges of creating an actual product that is functional and achieves all that has been envisioned of it.
Today, we live in the age of digital, so I’m going to use an example that is perhaps close to the hearts of many startups – a digital solution. The Internet thrives on sites that provide great content, but one major part of the challenge lies in performance.
Many great content creators often face technical challenges when running their websites simply because for the most part, that isn’t their area of expertise. Enter HostScore, which aimed to simplify purchasing decisions for users when it comes to web hosting providers.
How HostScore built a technically challenging business
The founder of HostScore knew that almost entirely across the board, web hosting review sites like HostingAdvice were testing web hosting solutions as ‘one-off’ experiences. Others such as TrustPilot relied heavily upon user reviews to gauge the feel of individual companies reviewed.
HostScore aimed to not only provide an easy score reference to users but to base it on consistent data for greater accuracy – with user influence counting as part of the process.
Yet because of the sheer number of web hosting providers, HostScore faced several challenges, the biggest of which was accuracy. By clearly stating limitations and providing a transparent scoring model, HostScore was able to establish itself as a trusted source.
“Reviews are measurements of the capabilities of a web hosting service and with so many providers today, the real challenge is to provide users with information that is reliable. Our measurements around based on ongoing data collection for the greatest accuracy possible” said HostScore founder Jerry Low.
3. Improvement/market feedback
Once a startup launches a project, it is always a hit or miss as far as the first round of sales goes. This is the time that they take to learn from user feedback and improve or refine their product. Thanks to the Internet, we today have what is close to the ideal platform for this.
Kickstarter is a platform that allows anyone to showcase their ideas and ask for funding form the public, usually in exchange for the promise of the product when it is done. Many companies have used this platform not just to kick off their ideas but get feedback from potential users even during the development period.
Keychron listened to its audience for success
One example of a company that did this is Keychron. This builder of mechanical keyboards didn’t have the resources to research, mass-produce and sell their product globally and turned to Kickstarter for help.
Kickstarter is a crowdfunding platform that allowed individuals and businesses alike to propose projects to be funded by the general public. It is an excellent avenue for them to not just gauge the potential of their product, but also for initial funding as well as feedback from potential customers or users.
Here, Keychron was able to garner the interest of many micro-investors who also gave them valuable feedback in the development process. Today, Keychron has launched multiple versions of its core product on Kickstarter and garnered many fans.
The best part is that these fans are essentially vested in the development of Keychron and can partially influence further development. Keychron is today in its fourth iteration and has been bought by thousands of customers around the world.
Winning customers trust
We all know that in the world of sales, the customer is king (or queen).
This has been true since the earliest days that sales have been going on. Yet today, with the huge number of people selling things and the even easier ways of doing so thanks to the Internet, the biggest obstacles to startups are also the most intangible one – trust.
Conclusion: plan and listen
Many startups often suffer from founder syndrome where the focus of the business becomes much too internalized. Businesses provide products and services, which is one part of a big equation. Unfortunately, many startups forget about the other half – the customer.
When things seem challenging and problems seem insurmountable, try to take a step back and look at the bigger picture. Make sure that the picture covers the needs and wants of your potential target market – or you might be running a business for a customer base of zero.
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Image Credit:Med Badr Chemmaoui
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