Sisyphus was the wily and ambitious first king of Corinth. Long story short, after a number of violent and crafty shenanigans, he was cursed by Zeus to forever push a boulder up a hill. Many of you probably already knew this story and its symbolism of pointless, unending work. But what does Sisyphus have to do with market research?
Recently, I participated in an entrepreneurship competition. As part of the judging process, they asked each contestant “did you do your market research?” I wondered what they meant by this question. Corporations spend tens of thousands of dollars on proper and robust market research. Considering the prize for the competition was only £500, I doubted this is what they expected.
Afterwards, I approached one of the judges, and I asked her what she considered to be good “market research.”
She confidently explained, “We are asking whether you talked to anyone about your idea.”
Don’t get me wrong, I think that is good advice, but to use that as your indicator of whether someone performed market research is weak at best.
So I followed with “yeah sure, but how does that help me know whether my idea is good?”
The answer I more or less received: “It’s just something you are supposed to do.”
And therein lies the problem. As much as 90% of startups fail, and I would argue that they continue to fail because they spend too much of their time doing things “they are supposed to do.” As I stated earlier, corporations spend large sums of money to get market research. Are you willing to spend 50%(or more) of your capital to get proper market research? Otherwise, any significant efforts on this front are pointless at best.
Even qualitatively, suggested market research is poor. Do a quick internet search and you will find most of the advice is vague and poorly conceived. (Unless you are the kind of person that looks beyond the first google page. You might find something good out there.)
What is the Problem?
Let’s say you want to find out how Americans feel about religion, so you ask your parents. Your parents have been going to church for their whole lives and tell you they think religion is great. But you think to yourself, “my parents are obviously biased, let me go ask my non-religious friends.” When you ask your friends, they know you are religious and don’t want to offend, so they say it is a good thing. And it goes on like this.
What good does this information do you? Does it really give you any insight into the opinions of the American people? The answer is obviously no.
But this is what startups often do! They have plenty of people willing to tell them whether their idea is good or not. They throw everything behind an idea that has been validated by the opinions of themselves and a few outsiders. Not surprisingly, 90% of them fail.
Or possibly worse, they don’t move ahead with a great idea because people around them said it wasn’t good.
The only opinions that truly matter are the opinions of your customers. But you are thinking, “wait, what about financial backers(or any other number of stakeholders)? Don’t their opinions matter?”
No! Venture capitalists have a 75% failure rate in choosing successful startups. Do what you have to to get funding, but never forget that the truly important opinion is the customers's.
So how do you create a product/service that reflects the opinions of your customers?
There are a number of alternative approaches to startups that move away from traditional market research. The Lean Startup methodology is a great example and was even suggested reading on the aforementioned competition's website.
The author, Eric Ries, holds a similiarly pessimistic view of market research. He suggests instead, a method of constant customer feedback and pivoting of your product. There are a number of other approaches to startups that get at this same idea e.g. Nail It and Scale It, Running Lean, etc.
We have all these great approaches to startups. Why do they keep failing?
These books could be a fad, but I believe something else is amiss.
Ideas that are mainstreamed often lose their meaning and purpose, e.g. design, social enterprises, innovation, cubicles. If you are going to try ideas out, make sure you have a deep understanding of what they are suggesting. Often new ideas are appropriated by old failing ideas. “Experts” will talk all day about best practices, but what is more important than taking their advice, is learning from other’s failures. Contextualize what they are saying in the broader conversation of what works and what doesn’t.
Which brings me back to the story of Sisyphus.
Our collective startup efforts are much like Sisyphus's, eternally doomed to pushing a boulder up a hill. We need to think critically about what has traditionally been done and what is currently popular. Only by doing things differently can we make startups more successful.