Entrepreneurial Market Research

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Entrepreneurial Market Research

What's this for?

It may be easy to make speculative assumptions about your market and the percentage of potential customers that will flock to your product, based on a bird’s-eye view in a generic market research report ... but unfortunately it is not very useful.

Don’t make this mistake. Facile market assumptions are an instant turn-off to potential investors or collaborators. An innovative product will usually first appeal to an initial niche market or "addressable market segment" before it can gain wider traction. Finding that promising first market, and understanding how to engage with it, is key to a good launch for your business.

Brand new ventures can rarely address a mass market at the start – they don’t have the resources, the reach, or an established brand.

The best way to form a picture of the quality and size of attractive market segments for your business is to start with 'bottom-up' or 'primary' research, by interviewing experts with insider knowledge of the market segments you're considering; these are your ‘preferred witnesses’. Secondary ‘desktop’ or 'top-down' market reports come in handy later, alongside these interviews, to put your primary research into context and extrapolate some size estimates.

Recommended easy reading for context: Chapter 4 of The Smart Entrepreneur.


• Build a clearer picture of the most attractive market segments for your business, based on qualitative, primary research with 'preferred witnesses'. Also look at some top-down data from market reports or other statistical sources for background and a wider perspective.

• Make a realistic 'guesstimation' of your potential market size and value by combining your bottom-up (primary) and top-down (desktop) research

• Test the assumptions you made in the past about your market and modify your business case if necessary. Are you solving the right problem? Do you need to adapt product features to better fit the needs of the target market segment?

Suggested steps

1. Click the link to access the Learning Manual: IE&D Entrepreneurial Market Research.

2. Make a product/market matrix, as explained in the slides.

3. Perform desktop research to get some general market information and some basic ideas of different segments (see resources and links in the 'Trend Analysis' Tool).

4. Find ‘preferred witnesses’ in your most interesting potential market segments, and interview them (use your network).

5. Try to obtain the following types of qualitative and/or quantitative information about each of your market segments (or clusters of segments):

  • How big is each market segment (estimates by preferred witnesses, desktop information from reports, databases)?
  • Can customers be identified easily (try to obtain lists of possible customers)?
  • Is the segment growing (desktop information, information from trend analysis, witnesses)?
  • If applicable, Government standards and regulations: do they help me or work against me (desktop research, but also preferred witnesses and experts)?
  • Is there an unmet market need? How many players could be assumed to have a substantial interest in a new solution/service/product (perform qualitative market research using preferred witnesses)?
  • How large a segment would be likely to adopt your solution, service or product (preferred witnesses)?
  • How strong are the alternatives or direct competitors (see ‘Competitive Analysis’ activity, but focus on each market segment)?
  • Compatibility with other products used by customers (information from qualitative market research)?
  • How are purchase decisions made in each segment; what is the decision cycle like (preferred witnesses and experts)? This will be important later for estimating a sales plan.

6. Indicate segments that you will definitely NOT address and indicate why: e.g. segment too small or shrinking, your competitive advantage in this segment is too weak, weak demand or need, etc.

7. Try to make an initial bottom-up calculation of market potential based on your interviews, and a top-down calculation based on your desktop research, and compare the two.

8. Consider whether there is a sizable market for your proposed business. If necessary, reconsider some of your assumptions and your business proposition in the light of your findings (for instance, should you target a different market than you initially thought?).

If you need to print out a copy of the learning manual(s) for offline use, please follow these steps:
    - Click the "Create PDF" button at the top right hand corner of the page.
    - Scroll to the "Attachment" section (at the end of the last page).
    - Click on the paperclip icon next to the manual.