Top 10 Entrepreneurial Research Mistakes, Part 1: Which Methodology to Use?
Being an entrepreneur sometimes feels like you’re playing the guitar while you’ve got a tambourine on top of your head, a harmonica in your mouth, and cymbals between your knees.
It therefore follows that there are many things that entrepreneurial companies of all sizes take a crack at doing themselves, even if they’ve never done it before. Customer and market research is often one of these areas.
Because most entrepreneurial companies are not in a position to hire a market research professional, we recently created a basic how-to research class for 1871, Chicago’s tech incubator. While it was formally titled How To Conduct Effective Research, it’s really an overview of the Top Ten Research Mistakes Made By Entrepreneurs.
The most common research mistakes I encounter fall into three main camps:
- Research methodology selection
- The questions asked and the answer choices provided
- The care & feeding of respondents/participants
Today’s blog post addresses the first category, research methodology. This really boils down to how to decide whether you are going to conduct Quantitative or Qualitative research.
Mistake #1. Thinking Quant is better than Qual
While achieving statistical significance can be very useful, most of my clients don’t have easy, inexpensive access to 600 relevant potential respondents. That’s what would be necessary to get the bare minimum 30 responses required for results to be statistically significant, assuming a somewhat high 5% response rate.
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Defining Your Competitive Set
At the core of every positioning statement is the reason a product/service/brand is different and better than its competitors. Because of this, how you choose to define your competitive set is a critical piece of developing a compelling positioning statement.
Here’s a quick 3-minute video of how to strategically approach defining your own competitive set. It was filmed during a workshop Argentum gave at the University of Chicago’s Polsky Center for Entrepreneurship. Examples included two of our favorites, KRAFT Macaroni & Cheese and Chicago’s venerable Goodman Theatre. Watch the segment.
Easy Customer Research
Last week I met with a potential B2B client who has been fortunate to have her product accepted by a major distributor in her category. Phone calls and new orders have begun to come in, which is very exciting!
However when I asked her how most people were finding her, she did not know the answer. So I suggested the most basic, most inexpensive research she could do: Keep a list. The few data points a week she’ll be able to gather won’t be immediately useful. But over time the information will help her begin to see patterns and learn things about her business and the effectiveness of different business development efforts.
I recommended that she keep it simple and make a spreadsheet with columns for things like:
- Date contact received
- Person’s name
- What they were interested in
- How they found out about her product
- How the lead came in (phone? email?)
I’ve done lead tracking for Argentum using this methodology since 2006. Naturally, it took 11 months before I could calculate a rolling 12-month average of leads in, but after almost 8 years, I have a really robust data set! And along the way this simple spreadsheet has enabled me to get a strong sense for where my leads come from, and that helps me better focus my business development activities.
Are there any basic metrics you track for your business?