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How to do market research for a service for other startups?

I plan to create a service that will be used by other startups. Do you recommend some strategy to to market research for that?

15 Replies

David Austin
0
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David Austin Entrepreneur
Entrepreneur
Very hard to do as a 3rd person. It requires customer interviews ... getting to really know the customer ... and that's what they should be doing. If they don't then they're not going to succeed. It's probably the most critical part of a new startup ... knowing and understanding the customer, figuring out the correct pricing, and pivoting to meet the customer's needs.

What I do see as a very valuable market research service that you can provide however is an A/B testing service. They tell you what the different things they would like to have tested, and you create the A/B tests. I think there are similar services out there but by no means is it a crowded field. If you can provide a simple turn-key solution ... especially targeted for business non-techie users to integrate with then you'll have a winner. Most technical founders will roll that themselves ... but even then, they might have their hands so busy building an MVP that they'd gladly outsource it to you.

Good Luck! Please keep me personally posted if you do this as I like to keep abreast of startup-startups (startups designed to assist startups).
Danny (Duc) Duong
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0
Danny (Duc) Duong Entrepreneur
Lead Software Engineer at Platphorm
David, thanks for your response. I actually built that service for a startup and I thought to myself, even with my expertise, it took months to build. Not many startups have all the fund/expertise/hardware to do that job. I can create a shared service for many of them, which is much easier to integrate and cost effective so they can focus on their main idea.

The challenge is I know there's a market for that, but not sure how big that market is and if it's worth investing in it.
Gonzague PATINIER
0
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Gonzague PATINIER Entrepreneur
Looking for new opportunities in ASEAN
David has already answered, you need to meet and talk to your prospects, to quickly identify if your solution is a nice to have or must have for those startups.
Nadir Ait-Laoussine
2
0
Nadir Ait-Laoussine Entrepreneur
Growth Strategist | Analytics Consultant | People, Capability, Business Builder
There's no better market research than actually selling the service (especially given your second articulation of the problem space). It tells you a lot more about willingness to pay for services.

While all startups are different, a common theme is that they move fast, and don't rest on decision too long. Additionally they tend to be at very different stages of funding and financial viability, making validation that much harder.

If what you're after is market sizing of the opportunity, then assuming you have a fully packaged offer that you think you can go out there and sell, then go out there and sell it.
Marie Šnajderová
0
0
Marie Šnajderová Entrepreneur
Marketing
It is possible to define what services you might provide for startups. You can find it out by conducting research and it is not always necessary to do it with primary sources. It is possible to do it on the information collected from secondary sources too. It's quite a lot of work and for that you have to specify what you are tarteging to. Location, type of startups (as you cannot cover all of them), then you will have to do data collection and to do the competitive analysis.
If you go for interviewing, you will need to have a descent number of people of certain profession and position. It's important to know what you going to ask to get the right data for you to be able to analyse it afterwards.

Better if you get in touch with the specialist and get help to do such work including business concept compiling and marketing strategy.
Or find an experiences marketer who knows how to conduct research, analysis and planning who will help you with your idea.


Neil Licht - HereWeAre
1
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Want To find-close Business Online without competition Before They Google Search? We solve this problem 1(508)-481-8567
Without knowing what you plan as a service, its a bit difficult to advise you on what to do but there is absolutely research to be done first.

As someone who does consult to startups and established businesses as well, I've seen first hand what can lead to failure for a startup and even a new direction for an established business.Consider the summarypoints below asa possible area to concentrate on and do research in BEFORE you jump in full steam ahead:

Why do so many startups not make it and shut down?

A) Unfortunately, The startup forgets from the day of their idea that there is quite a difference between what you see as a great idea and a "needed something or other" that folks or businesses would actually spend money for. This unfounded "belief" in a market for their products is why a startup cannot sell and frankly why they do not succeed in the first place.

B) Many startups don't have the inbuilt team sales person who loves to and can actually find real markets and, for the reasons of the target audiences, not the startups pitch, know how to acquire paying customers. Instead, if it doesn't do this, the startup goes around pitching to everyone as a "we have this, it does this, isn't that great,buy it" and usually the answer is No.

Its not a product Pitch that sells nor can it connect with what may actually be someone who, for their reason's not yours actually need the product or solution but, unfortunately, many startups think that's what works.

C) Nothing in their pre-business launch exploratory other than checking with friends and colleagues most of whom have no buying power is present or was done that actually deeply and honestly analyzed

--who were the natural target markets
--what really are the markets issues that if solved were truly natural prospects for their "product"
--revealed an understanding of the issues each natural target audience faced and its resulting adverse "cost"
--understood if their idea had a real market and one that was on a large enough scale and if properly approached would say "Hey that's me! I need that product, service, software, solution to solve my x issues so I can gain a better ROI, faster production, competitive edge, leaner operating, etc. I need to call these guys now"

D) They said in justifying their reason for starting up that

--"there are x gazillion global prospects who because of their industry they were in and or the way they do business could use the solution."
--"If we get just 3%, we are golden" and the dove right in with development, maybe even production for that "giant" market opportunity to get their 3% share

E) They forgot to dig deeper, reveal what actual portion of that giant number they actually might logically fit into and then how exactly to ID the people to contact, how to approach them, what to say that could get powerful receptivity and how to define/implement a great acquiring paying customers approach to get those real opportunities as customers.

That's why they cannot gain traction and why so many startups fail.

So please consider theses as essential steps for research, validating the market and knowing that folks and enough of them will spend money for your offering, not assuming that they will. REgards, Neil Licht


Danny (Duc) Duong
0
0
Danny (Duc) Duong Entrepreneur
Lead Software Engineer at Platphorm
Hello, thank you everyone for your opinions and advices.

I'm targeting a very small market so it's important to evaluate it correctly before jumping in. The service I plan to build is a simple/easy API for other startups to PAY their users (opposite from Stripe that helps you to charge users). The service also handles encryption and storage of sensitive data so other startups don't have to worry about all the hassle of PCI Compliant if they go that route.

I know there's some demand for it (we need it for our business), but not sure if it's big enough to make it a standalone service.
Neil Licht - HereWeAre
0
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Want To find-close Business Online without competition Before They Google Search? We solve this problem 1(508)-481-8567
Your assessment of "we need it in our business" and "I know there is some demmand for it" is not enought to decide you have a business idea. In my earlier post, I suggested what you should do to evaluate what you still say is a ? opportunity.

Please put in that work. There is no getting around it if you want to be reasonably sure thereis a market and there are enough real prospects to spend money on your solution.

I'm also a bit confused-"startups paying their users?"Neil

Danny (Duc) Duong
0
0
Danny (Duc) Duong Entrepreneur
Lead Software Engineer at Platphorm
Hi Neil, we needed it, built it, and used it for years. We are a market place where some users make money through the site, we use it to send the money to them automatically, to their bank account.
David Austin
0
0
David Austin Entrepreneur
Entrepreneur
I was going to say marketplace type apps (like Uber or Airbnb). Then I saw you just said you were using it for that. Startups designed to create a new marketplace for goods and services are one of the more common types of startups so I think there is a fairly good market for it. What does the competition look like? Startups pay you? Or do you make a % of the transactions? You might want to provide both options. Is the API dedicated to your financial institution ... is it a big enough player that anyone can integrate it into their services?

Just my take, it looks like a fairly large market within the startup sector, but I haven't really looked at who your competition would be or what their offerings are.
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