There are several scenarios when validating a problem in a market.
- The simplest situation is when this problem is already tackled by one (or several) existing companies. You “just” need to analyze their activity in that market. For example, their business model, the number of customers, the type of customers, the number of products sold over a period, and customer comments on social media. Broadly speaking, if a company is profitable, there is a positive market. Your position will be to provide a sufficiently different value proposition to get your share of the market.
- Look into statistics agencies that may already have assessed a market for you.
- The most complex situation lies in the area of innovation, or even disruption. This is unexplored territory, so little data will be available. You therefore need to find a similar market and derive initial hypotheses that will need to be proven. Neither you nor anyone else knows precisely, so you will have to go into the field to find the truth. Different techniques are useful:
a. Surveys targeting a population of potential customers (personas). Social media is useful here, and for a local business, surveying the neighborhood is best. Remember to digitize the form: it is much easier for processing data and producing reports.
b. Create a landing page explaining the concept and collect commitments and comments from people supporting or invalidating your idea.
c. Simply ask for opinions by posting on social media and look at the feedback. It is best to include an online questionnaire (Google Forms, SurveyMonkey, etc.).
d. If your concept is well advanced, you can also launch a crowdfunding campaign. Nothing is more precise than presales during the campaign. You can gauge enthusiasm and the speed of adoption (especially if you exceed your financial goal).
e. Build a prototype, let people try it, and collect the user experience results. This takes longer, but is more reliable. It also allows you to collect more information about the user experience.
Finally, you can also ask a marketing agency to analyze a market for you. If you have the means, it may be more productive to let the experts in the field do it.
Lastly, if your company is a startup, incubators have internal services that can analyze markets.
Regards, Yannick HUCHARD
Originally written on Quora: 4 oct. 2021. Original answer. Translated from the original French.
