6 Market Research Strategies for Hyperlocal Startups | Street Fight

6 Market Research Strategies for Hyperlocal Startups

6 Market Research Strategies for Hyperlocal Startups

Fiber optics

For new businesses entering the hyperlocal sphere, identifying an audience of potential users or clients — whether that’s as broad as smartphone users across the U.S. or as narrow as yoga instructors on the East Coast — is critical. By conducting in-depth market research, and investigating the needs of their target market, hyperlocal vendors can determine everything from potential pain points and market segmentation, all the way to competitive trends and ideal pricing structures.

Hyperlocals shouldn’t take a one-size-fits-all approach to market research. A strategy that worked great for one startup may be a total failure for another. While many successful hyperlocals have been systematic in their qualitative and quantitative market research measurements, others have taken a more relaxed approach by cold calling potential clients and simply asking what they’d like to see.

Here are six strategies for conducting marketing research as a hyperlocal startup, from executives at firms that have been through before.

1. Interview early adopters. “Reach out to people who are an ideal fit for what you’re thinking about making. [Before launching inDinero, I] talked to dozens of small business owners about their accounting problems. I learned about what they did, who they purchased services from, what they liked and what they didn’t like. I just called friends who run their own businesses. I also had a bunch of small business users who came in from the PR influx, and I emailed them to set up in-person visits to get feedback.” (Jessica Mah, inDinero)

2. Run a market analysis. “We ran a huge market analysis, including a competition study and long discussions with industry leaders and industry analysts. The analysis confirmed that it was a niche market, so we decided to launch the conceptualization of the solution.” (Alexandre Rambaud, Agendize)

3. Cold-call businesses. “In each category or vertical of interest, I personally cold-called several businesses in the Bay Area and secured 15 minutes of time with owners of businesses. I indicated to them that I was an entrepreneur interested in learning about their business and not in ‘selling’ them because, well, I had nothing to sell them then anyways. I tried to understand what worked for them and what didn’t. I tried to elicit pain points. I compared notes between businesses and tried to form my own understanding of their pain points.” (Saumil Mehta, LocBox)

4. Ask open-ended questions. “I strongly believe in face-to-face interviews where potential users can come with a lot of insights and strategic information. This is why startups should ask open questions to customers and really pay attention to what they have to say. It’s also important that startups should meet with users in their own environment.” (Alexandre Rambaud, Agendize)

5. Show mockups to potential users. “We mainly focused on consumers, consumers, consumers. We wanted them to validate the idea and the concept before anyone started developing the online scheduling app. With the help of designers, we were able to draw some mockups in order to show the concept to potential users and customers. Then, we organized two focus groups where potential users were able to interact with visuals and give us input.” (Alexandre Rambaud, Agendize)

6. Gather commitments to validate an idea. “Once I had my value proposition dialed in, I visited several businesses, showed them a simple PowerPoint pitch deck, and attempted to test a low subscription price for my software to see if they would verbally agree to pay it. For a few, I actually collected small subscription amounts to validate that I actually ‘had something’ by way of customer commitments.” (Saumil Mehta, LocBox)

Interviews have been edited for length and clarity.

Stephanie Miles is a senior editor at Street Fight.

4 thoughts on “6 Market Research Strategies for Hyperlocal Startups

  1. You could also engage a marketing research professional, who could help you get exactly the information you need in a way that ensures you don’t inadvertently come to erroneous conclusions, as many research neophytes do — thereby magnifying the potential risk you face, rather than mitigating it. Or, do a couple roll-your-own focus groups and screw it up. It’s your business, after all. #MRX

    1. When you are looking to launch a new startup/idea, the worst thing you can do is outsource this phase to a 3rd party. I’m not saying they aren’t valuable, just not at this phase. The founder has to be “all in” – they are the most knowledgeable, they know what they are trying to achieve, and they need to hear the feedback directly from potential customers.

      1. Scott,

        I’ve participated in eight start-ups which I can recall at the moment – three as a principal – and agree wholeheartedly that founders need to “hear the feedback directly from potential customers.” But the rest of your premise is dogged by a couple big fallacies.

        The first is that by hiring someone who knows how to do research properly, the clients/founders would become disengaged from the research/feedback process. That’s simply not the case unless the client wants it to be so. To extend your argument to an extreme, if you wanted to offer your product/service to a market in which you didn’t speak the language, would you hire an interpreter or wait until you learned to speak that language fluently? I assume that you’d hire someone who could properly get the information for you and report back. Same principle at work here.

        The second hole in your argument is the assumption that a founder knows the best way to solicit and make sense of feedback. That is, in most instances, assuredly not the case, especially in complex markets or with complicated products or questions. As someone with experience in pricing research, for example, I chuckled when I read Saumil Mehta’s comment in the story. The idea that anyone would simply toss out one or even a few prices to “several [potential customers] … to see if they would verbally agree to pay it,” and expect to get reliable, projectable information is laughable. I might expect this from a first-year marketing undergrad, but from an actual businessperson with money and livelihood on the line?

        I wonder: Do those arguing for roll-your-own research advocate DIY accounting and legal services as well?

        If you meant to suggest that in the very initial, formative phases of a business idea, structured research is not useful… well, I’d still take issue with that, as there are a number of research businesses that make bank as ideation factories. That said, none of the examples above was of an idea at the super-early stage of formation; all seemed well on the road to launch. That being the case, being your own research doctor (i.e., to your business) is liable to harm more than help.

        Thanks for the exchange,

        MD

        1. Mike – we can certainly agree to disagree here. Before a business has reached product/market fit, the founders need to be intimately involved and become experts (if they aren’t already) in the field they are trying to enter or disrupt. If they can rally other experts to help them, that’s great – but they have to lead the effort. This is not like legal or accounting work – those are functions that support (but don’t drive) the business and the founder is best to delegate those functions to experts. The vision is core to the entire being of the business – this needs to be the founders main focus.

Leave a Reply

Your email address will not be published. Required fields are marked *

Name *

4 thoughts on “6 Market Research Strategies for Hyperlocal Startups

  1. You could also engage a marketing research professional, who could help you get exactly the information you need in a way that ensures you don’t inadvertently come to erroneous conclusions, as many research neophytes do — thereby magnifying the potential risk you face, rather than mitigating it. Or, do a couple roll-your-own focus groups and screw it up. It’s your business, after all. #MRX

    1. When you are looking to launch a new startup/idea, the worst thing you can do is outsource this phase to a 3rd party. I’m not saying they aren’t valuable, just not at this phase. The founder has to be “all in” – they are the most knowledgeable, they know what they are trying to achieve, and they need to hear the feedback directly from potential customers.

      1. Scott,

        I’ve participated in eight start-ups which I can recall at the moment – three as a principal – and agree wholeheartedly that founders need to “hear the feedback directly from potential customers.” But the rest of your premise is dogged by a couple big fallacies.

        The first is that by hiring someone who knows how to do research properly, the clients/founders would become disengaged from the research/feedback process. That’s simply not the case unless the client wants it to be so. To extend your argument to an extreme, if you wanted to offer your product/service to a market in which you didn’t speak the language, would you hire an interpreter or wait until you learned to speak that language fluently? I assume that you’d hire someone who could properly get the information for you and report back. Same principle at work here.

        The second hole in your argument is the assumption that a founder knows the best way to solicit and make sense of feedback. That is, in most instances, assuredly not the case, especially in complex markets or with complicated products or questions. As someone with experience in pricing research, for example, I chuckled when I read Saumil Mehta’s comment in the story. The idea that anyone would simply toss out one or even a few prices to “several [potential customers] … to see if they would verbally agree to pay it,” and expect to get reliable, projectable information is laughable. I might expect this from a first-year marketing undergrad, but from an actual businessperson with money and livelihood on the line?

        I wonder: Do those arguing for roll-your-own research advocate DIY accounting and legal services as well?

        If you meant to suggest that in the very initial, formative phases of a business idea, structured research is not useful… well, I’d still take issue with that, as there are a number of research businesses that make bank as ideation factories. That said, none of the examples above was of an idea at the super-early stage of formation; all seemed well on the road to launch. That being the case, being your own research doctor (i.e., to your business) is liable to harm more than help.

        Thanks for the exchange,

        MD

        1. Mike – we can certainly agree to disagree here. Before a business has reached product/market fit, the founders need to be intimately involved and become experts (if they aren’t already) in the field they are trying to enter or disrupt. If they can rally other experts to help them, that’s great – but they have to lead the effort. This is not like legal or accounting work – those are functions that support (but don’t drive) the business and the founder is best to delegate those functions to experts. The vision is core to the entire being of the business – this needs to be the founders main focus.

Leave a Reply

Your email address will not be published. Required fields are marked *

Name *