by Peter Keers

According to the Small Business Administration, only half of small businesses survive past five years. A June 2019 Investopedia article noted that one of the top reasons new businesses fail is insufficient investigation of the target market.

In an age of constant technical innovation, it is surprising that some entrepreneurs invest substantial time and money developing a new idea without knowing enough about their potential customers and what problems they are trying to solve.

How can this happen?

Entrepreneurs are passionate about their ideas. Believing they already understand the market’s need for their product or service, they resist taking the time to test their concepts before committing significant resources. Being fast movers by nature, they see it as a needless delay.

Dangerous Assumptions

These are potentially dangerous assumptions. Success depends on understanding the market and its real needs. Investment in upfront research could save a lot of effort and cost. Conventional qualitative research (e.g. – focus groups) possibly followed by quantitative studies (e.g. – surveys) may provide the needed data.

Another alternative would be agile prototyping. After some basic research, a rough prototype is built and then tested in the assumed target market. Feedback on the prototype becomes input for iterative build/test cycles that could ultimately result in a product or service that buyers value. Alternatively, if the product/service fails, it does so earlier and with less cost than if it flopped after being fully built out.

Such intimate market knowledge not only reduces the risk of product/service failure, it also helps focus messaging about a new offering.

Lacking authentic market knowledge, entrepreneurs fall back on their preconceived notions and communicate what they think buyers want. Lacking true market intelligence, messaging to the audience could devolve into an egocentric recitation of the company’s virtuous efforts to bring the product to market.

I discussed this phenomenon with a colleague who possesses years of business writing experience. He emphatically observed,

“You are writing to an audience of one: the person who is buying your product. Do not include unnecessary information about all the sweat and toil you went through, how your investors had faith in you and other such bouquets designed to make your stakeholders feel better about themselves. What do you want to do? Preen in front of a mirror, or make sales? Write what your prospect wants to hear and nothing else.”

Know Thy Customer

Success in the marketplace depends on testing the product/service idea on potential buyers to ensure their actual needs are being met. Successful promotional messaging builds on this market knowledge.