The thinking process of most innovators is something like this:
- Get an idea for what you want to make.
- Create it.
- Find someone who wants it.
I think any entrepreneur will immediately recognize this is a horrible strategy for starting a business (or making any decision). By making something before you see any opportunity, you may waste a lot of time building something that nobody wants and doesn’t help anyone.
Contrast this perspective to a market focus. A successful entrepreneur will look at the problem in a different sequence:
- Find something missing or needed in the world.
- Get the idea for what will fill this hole.
- Create it.
By starting with the problem, you avoid wasting effort on a solution nobody needs.
Inward Thinking Versus Outward Thinking
A product focus is a symptom of inward thinking. It starts from the perspective of the innovator who wants to create something. This type of thinking starts with you and branches towards the outside world: you first start with your desire to create, then an innovation from this desire and only then do you start looking for how to connect that innovation to the outside world.
A far more difficult, but successful thinking pattern is outward thinking. This starts outside yourself. Forget your specific desires to create and build and start with what is needed. Once you have ideas for what is needed, you can select the best of these to connect back towards an innovation and finally your desire to create something.
The reason outward thinking works better is that your internal passions and creative ability are general, while the outside world is specific. In other words, you may have the passion to create a piece of software for cellphones (general). But the opportunity might be for software that manages your social networking contacts (highly specific).
It’s way easier to start with the highly specific needs of the market and work back to a general passion, than it is to start with a general interest and hope that your highly specific product fits.
How Not to Do Market Research
When I started this website, I had a bad case of inward thinking. I already knew what I wanted to make, a game designed to teach goal-setting. I already had the specific solution, now my goal was to find people to use it.
Before I started, I went out with the goal of doing market research. Unfortunately, I got very little accomplished because I already knew what I was going to do. There isn’t much point asking questions when you already believe you know the answer. I never bothered to question whether this project was something necessary or desirable, I just knew it was something I wanted to make.
Now when I work on projects I aim for the opposite direction. I try to figure out what is wanted, and how the world works, before I settle upon what I want to create.
Why an Outward Focus Isn’t Easy
When you’re solving a difficult problem, you tend to use what you already know as a starting point. When you’re creating a product, the most available information are things like:
- Your skills.
- Your interests.
- Your creative ideas.
However the specifics about the world are often unknown when you set out. With limited information, the tendency is to use the most inward information as a starting point, because it is easy to reach. In my example, I didn’t know anything about information products and what people wanted to know, how they bought products and what they were looking for, all I knew is what I could make and what I wanted to make.
This approach backfires, because when you start with an inward focus, it is harder to find information about the outside world. When you are selling a hammer, every customer has a nail. So, if you’re writing a book on building your own boat, everyone will start to look like a potential boat maker. Even if they aren’t.
I think the key to having a market focus is to actively ignore what you already know. Don’t focus on what you want to make or what you’re interested in. These things are incredibly important, but if you use them as a starting point, you’re going to get bad results.
If you can start from a virtual blank slate, you can then spend time looking into where there are opportunities and how the world works. This way you may catch dozens of excellent opportunities that wouldn’t have fit anything you dreamt up earlier, but might fit a new idea that you have the skills and passions for.
A Simple Guide to Market Research for Extremely Small Businesses
Focus groups and customer surveys are how the big guns can do it. When you have lots of money to spend, it’s easy to focus on empirical data. If you’re a guy (or gal) like me, then you don’t have that luxury. So I think a dirty and cheap way of doing market research is closer to this:
- Forget About Your Ideas – Save your inventiveness for when you have a good direction to apply it to. Starting with a product, or worse, spending months working on something before you can answer basic questions about what people want is a waste of time. You’ll get back here later, but for the beginning, pretend your options are completely open.
- Find a Broad Area to Research – It’s impossible to find out everything. A good starting point should focus on picking several areas where you want to start looking for opportunities. Be as general as possible, but limit yourself to your skills or the type of opportunity you’re looking to exploit. So if you have lot’s of software development skills, don’t get bogged down on a specific product, but you might want to look at areas that use software.
- Write Out Your List of “Dumb” Questions – Write out all the things you would need to know before starting something new. Really basic questions like:
- What’s important to people?
- What are the start-up costs?
- Who are the people you need to know to do business?
If you don’t know them, write them down. Don’t start working on a project until you can cross off almost all these questions from your list. You’ll probably be wrong or off the mark on many of them, but at least you’re closer than complete ignorance.
- Google and Phone Calls – Internet research will get you some information and answer a few questions. For the rest, it will probably involve picking up the phone (or email) and actually talking to people for information.
- Sort Back Opportunities to Your Interests and Abilities – Once you recognize some opportunities, now you have the chance to apply that broad filter of interests and skills to weed out the ones you don’t like. What you should be left with are some real opportunities that also match with your passions and abilities.