Conducting Market Validation With Little Cash

Conducting classical market research is usually quite expensive and time consuming. You are looking at $5K+ and several weeks of waiting. Before going that direction you may want to consider more affordable self-service solutions.

If you have a lot of people who you can ask - the easiest way is to put together a survey at a site like Survey Monkey and distribute it to your peers. That works especially well when you have a list of existing prospective clients or a large network of people who represent your target market. Not many startups have such a list though so your second option is to use an affordable market research service with a built in consumer panel such as AskYourTargetMarket.com. It's a target market research service that has a very attractive price point - starts at under thirty bucks and delivers quality results in a matter of hours. You can narrow the panel to fit your target market, launch the survey on your own and get a well presented report within a few hours.

You may not get as much sense out of the data as if you would hire a professional market research firm but hey - you spend only a fraction of the standard cost and you get fresh responses from US consumer nationwide.

Hope this helps,

Cheers, Sasha

If you hire a marketing firm, you'll not only need to pay them to understand your product/service, but to understand the niche that you operate in. You might find someone that specializes in your area (such as SaaS), but now you're paying even more for a specialist.

You certainly can do this sort of market research on your own, but you won't do as good of a job as an expert. In my experience, the consultants you hire will do "A" or "B" work (and obviously, you drop the "B" folks in search the "A"), and you'll do "C" work. For a lot of things -- speculative market research included -- a "C" could be perfectly adequate.

As for market research costs... it all depends on how much data you want to get. To vet a B2C idea we had a copule years ago, we paid $5,000+ for a telephone survey (and obviously, all the services surounding it).

If you want to do this on the cheap, your best bet is to find a similar market survey from a competitor or one you have taken in the past.

There are great on-line ways to collect the data but if you have access to customers and thought leaders, then interviewing them is a gold mine.

Market validation can be tricky when done via a survey or interview. Clearly the best market validation is when the market buys your product. So you really have to ask yourself what do I want to get out of this:

1. Market Validation
2. Feedback on the product
3. Both

The way I have done this is the past is to analyze the customer pain and then demonstrate how the product solves it. That way, you get some insights into what customers value. Being objective is important but not as important as gauging your end customers needs and how you fulfill them.

Another approach would be to figure out what competitors (with similar products) are doing and use their data, if available. You can also use industry reports as well but those can cost $1k-$3k.