Some time ago I was contacted by the Master in Management and Creation of Innovative and Technology-Based Companies at the UB (Universitat de Barcelona) to give a lecture to their students about market research in this field.
After the initial excitement about the assignment, my next reaction was fear and uncertainty, since in 15 years of experience in market research I had hardly done research for this type of company. Did I have anything to explain to those young, technological entrepreneurs who, in my head, were completely up to date with the latest innovations and trends? Well, it seems that yes.
Finding out about the subject and chatting with various gurus and investors in startups, I saw that these young people did carry out market research, but they did not hire professionals, but rather they did it themselves at their own risk. The first reason for this was foreseeable: the lack of resources to invest in market research. On the contrary, the other reason was a surprise to me and even seemed more questionable: this is what the Lean Startup philosophy suggested (The Lean Startup by Eric Ries, the bible of how to set up a startup without burning in hell) . From this approach they are told something like:
“It is the entrepreneurs themselves who must carry out market research. At first, an entrepreneur must invest their time in non-scalable activities (activities that will no longer be carried out when the company grows) such as market research. You must spend time with your potential users in order to test your value proposition (through prototypes and minimum viable products) and improve it, with the aim of going to market (or even looking for investors) with an already validated proposal. ”
From this perspective, success stories are presented such as that of Airbnb, where its founder, Brian Chesky, rented rooms in his house himself to understand who rents his rooms and also to be closer to the user. Every time I had a guest I asked them, I accompanied them, I spent a lot of time with them…
In short, they are advised to do the research themselves and that it be ethnographic (methodology, as you know, not simple).
And the risks, didn’t they see them? I’m not saying the young and brilliant entrepreneurs, but the gurus who advised them this way. Well, it seems that they did see them, and, to solve them, they proposed techniques such as the Mother Test (The Mom Test: “How to interview clients and prevent them from lying to you” by Rob Filtzpatrick), to counteract the more than possible lack of sincerity. on the part of the interlocutor knowing that the interviewer is at the same time the founder of that proposal that you intend to destroy with your relentless criticism.
Or they explain how to conduct an in-depth interview in a few simple steps. To do this, they talk about the Problem Interview (as a pre-test before having the minimum viable product) and the Solution Interview (as a post-test once the prototype is available).
Welcome
Demographics
Main problems
ranking
Time to dig deeper
Brief Pitch
Comments
I summarize the risks that I see in having the entrepreneurs themselves carry out the research. I think that you have experienced many of these problems when a client has accompanied you to an ethnographic interview and “takes the opportunity” to ask something directly to the interviewee.
You oversell/explain your product.
Reveal aspects of the product that would be better for the customer to mention spontaneously.
Jumps from one topic to another without a clear prior structure.
Does not know the techniques to get deep into the consumer’s mind and bring out emotional motives
It will hardly get sincerity from the user.
Risk of the user feeling used (entrepreneurs do not usually reward the sample)
Difficulty in approaching the potential public (since they only know how to access their current clients)
He lacks experience to analyze the information received.
In relation to this last point, an investor in startups told me that he agreed that the entrepreneur does not know if the research results are valid. But he added a disturbing tag line: “He doesn’t know at the time. That’s why he has to do experiments with the product. But traditional market research isn’t going to tell you either. His method of testing hypotheses is to do experiments with the product, not to do market research. His fieldwork is simply a way of reporting his hypotheses.”
I wonder if precisely this way of undertaking (based on trial and error) is what explains the very high failure rate among startups and inspires lapidary phrases such as those of the well-known investor Robert Kiyosaki:
Don’t get me wrong. I am not against the entrepreneurial spirit, much less the philosophy of valuing failures for what they are: an unbeatable source of learning. But I think that market research is precisely there to minimize the risks of any investment. The philosophy of Making progress (which we could translate as “experimentation”), of testing the minimum viable product, discarding hypotheses, confirming facts, modifying the business model until finding a business model that really works, sounds good on paper. . But we must not forget that a startup is a human institution designed to offer a new product / service under conditions of extreme uncertainty (nothing to do with the size of the company, economic sector or industry).
In this framework of extreme uncertainty, can entrepreneurs afford not to have the opinion of market research experts to make their decisions? I leave the answer in your wise hands.
Article also published in Direct Markting on 04-28-2016
