Doing market research right

Any good product management process, sales and marketing strategy, or business growth strategies in general, will involve some form of market research.

As part of the operational support that OpenView Venture Partners provides in addition to its venture capital investment, we often help our portfolio companies with market research.

Probably the largest pitfall I see is this backwards process:

1. Decide you want to do market research to figure out how to do something better for your customers
2. Come up with a bunch of questions that you are curious to have answered
3. As you add more questions, come up with more great questions that you’d love to ask, and keep on adding, feeling great about yourself for coming up with all these great questions
4. Turn the questions into an online survey
5. Send the survey to everyone in sight
6. Get the data back, and spend hours trying to figure out what to do with it, what to make of it
7. Determine that the data is too scattered, there’s not much new there you didn’t already know, and so you move on

I have seen it happen too often.

Try this instead:

1. Get super clear on a business goal you’re trying to achieve
2. Identify gaps in your knowledge and assumptions that are super critical to whatever strategy you intend to execute to hit the goal
3. Turn those gaps and assumptions into questions and break them down into sub questions. What data do you need to have to answer your key high level questions?
4. Get super sharp on whom you want to survey or interview. How do they think?How do they talk? How are they likely to answer your questions?
5. Refine your sub questions until you have a survey or an interview guide.
6. Go through it question by question, imagine different answers to each question, and imagine different distributions of answers to each question from many different participants. What do you see yourself doing with the different possible outcomes? If you’re not sure, or the answer is ‘nothing’, change the questions until you can look at each question and say, ‘If the response distribution is A, then I will adjust my strategy by doing X. If it is B, then I will keep my strategy the way it is. If it is C, I will have to do deeper research on Y.” And so on. 
7. If you’re doing a survey, make sure you can create an actionable report with actionable analysis in the survey system. Generate a report with mock data, and make sure it gives you what you need. If not, adjust the questions and the report until it does. You may even need to change survey vendors. 
8. Execute the research.
9. Review the results and take action! 
10. Document any learnings from the market research project, what you wish you had done differently, and incorporate those into the next project.

Trust me, this works much better. And if you’re an expansion stage software company, doing this right is even more important, since sharper focus allows you to conserve your resources while getting the data you need.