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I work for a startup that is into building speech related applications for mobile phones. We have a number of ideas and want to jump right into product development. Recent developments (I cannot go into details) have made me feel that some research into the potential (read possible number of users etc.) of such applications would be prudent before we begin developing them. However, when I look around, I see that many applications that have become popular (facebook, twitter, angry birds etc.) were launched without a lot of feasibility studies carried out on their viability. So my questions are the following:

  1. How important is it, if at all, for a startup to conduct market research for ideas before developing an application? Should we just "build-them-and-they-will-come" or wait and watch?
  2. How does a startup go about market research, given that pockets may not be too deep?

P.S: If the question is not clear, please let me know, I will be only too happy to elaborate.

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The fact that many popular applications were launched without a lot of feasibility studies is not evidence than market research is not needed. No one can really eloborate why Facebook and Twitter took. It may just be that they were in the right place at the right time. Given the pure number of Web startups that there are at any one time, SOMEBODY is going to end up looking successful. Make sure you do your research! – Ralph Winters May 23 '11 at 15:38

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PRO:

  1. The field of dreams business approach is viable if you are in college and are working on an idea you are passionate about. Warning BIAS (I have an MBA and a Masters of Entrepreneurship and have been trained to do Market Research): I think other than in that scenario it is important to at least do preliminary Market Research for viability, size, scope, competition, & competitiveness of the market.
  2. Google. Seriously, there are better methods, but if you are limited start googling the hell out of your topic and read everything you can. Guess what, its healthy to do that anyway. Keep a list of all the tidbits that are worth keeping and source the URL or the original source. Universities sometimes have connections with research and report companies and can get you copies of their materials... catch you need to be a student or an alumni who donates to typically get this information. MEGAHINT: go to a University and explain your product to the business professors and ask if anyone might want to use your product as a project for a semester. Some companies get extremely good Market Research done this way for FREE or a token donation (usually free).

CON:

  1. Depending on the technology if the IP is solid enough that you have (or think you might develop) and it is in a nascent or competitive field - there is a chance you could sell the company or license the technology. If you feel this is the case and every minute is needed for the product then perhaps you can skip the market research.
  2. Without proper funding market research can be hard. I have done some IP investigations where I needed $15-30k reports to get all the information I needed.
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Thanks for the insights! Pretty balanced answer. I think I will convince my boss to go in for at least a small survey.. – Sriram May 26 '11 at 10:40
@Sriram: Glad to help. – Chris Kluis May 26 '11 at 14:02

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