The young entrepreneur’s error
RECENTLY ONE of my young readers wrote for help with his idea for a product he was working on. Let’s call him George, to keep his identity confidential. The conversation went like this: George: My name is George. I am 22 years of age. I would like your advice on how to bring a software to the market; it’s a very interesting one as well. Smith: What makes your software so interesting? George: (He gives details about his software that makes it interesting). Smith: Have you done any market research? What is the market’s response to your software? George: No, I have not done any research. There lies the problem; I really don’t know how to. I firstly would like to thank George for reaching out and asking for assistance. Although his question needs to be worked out some more, he stands a great chance of getting help than if he kept it to himself. There is an even more important reason why George’s question is essential for you.
As more unemployed Jamaicans look to entrepreneurship as a means of providing for themselves and their families, this question becomes more significant. Jobless Jamaicans are not the only ones having an interest in the answer. Employed professionals are today looking for a second income, many turning to the Internet.
MARKET RESEARCH
George’s question reveals that though he is far advanced in the development of his software project, he has yet to do any market research. This means he has no idea about whether or not his prospective market will buy the software or not. He also does not know if there is someone on the market with a comparable product or not.
George has made a fundamental error that young entrepreneurs make. He has proceeded towards building out his product and he has not identified one customer. That can be one very costly error. Imagine developing a software, with its attendant costs, and then it doesn’t sell. The product must be interesting, not to you, but to the customer.
He would perhaps curse his luck, saying how the economic environment isn’t conducive to business. Yet it all could have been avoided if he had done his market research. Management icon Peter Drucker once said: “The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.”
Marketers will tell you that you have a winner in your product or service when you “enter the conversation that the prospect is having in his or her head”. They are quoting Robert Collier, a marketing guru.
The fact is that typically, what you think is valuable is not what the prospective customer thinks is valuable. That is because failure to do a market research reveals a mind that is caught up in fantasies and hopes rather that one willing to respond to results.
George, you are aware that you don’t know how to conduct market research, which is very good. Conduct a simple face-to-face interview with a few prospective customers of your software and that can give you an idea. Should you continue with the idea? Should you tweak the original idea? Let the market tell you.