Entrepreneurial Advice: Rethink Your Research
Executives who lead entrepreneurial firms have dramatically different attitudes about market research from their counterparts at larger established firms, according to a recent study from Saras Sarasvathy, an associate professor of business administration at the University of Virginia.
The study suggests that entrepreneurs are more focused on immediate and practical questions that will help them get their products into the hands of customers, and that traditional market research may not be the best way to get the right data and answers. That makes sense.
But according to an article in the February issue of Inc. magazine, “when asked what kind of market research they would conduct for [a] hypothetical start-up, most of Sarasvathy’s subjects responded with variations on the following:
“OK, I need to know which of their various groups of students, trainees, and individuals would be most interested so I can target the audience a little bit more. What other information… I’ve never done consumer marketing, so I don’t really know. I think probably…I think mostly I’d just try to…I would…I wouldn’t do all this, actually. I’d just go sell it. I don’t believe in market research. Somebody once told me the only thing you need is a customer. Instead of asking all the questions, I’d try and make some sales. I’d learn a lot, you know: which people, what were the obstacles, what were the questions, which prices work better. Even before I started production. So my market research would actually be hands-on actual selling.”
We heartily agree that sometimes you should get out there and sell rather than conducting more market research (see our article What You May Need Is Marketing, Not Market Research). But the problem with taking this quote at face value is that a really good market researcher would never say “How would you use market research?” She would say, “What do you need to know? What answers to questions would help you achieve your most critical business objectives?” (See our article The Art of Asking Questions.) Then she would decide whether and how market research can best be used.
At Versta Research we believe that no matter what size company you are, you should be thinking about research more like an entrepreneur. Great entrepreneurs are using, gathering, analyzing, and interpreting data all the time to help them make decisions. But their data might be coming from reports on sales calls rather than standard satisfaction or tracking surveys or another new product benchmarking study. That is a good thing, and a smarter way to approach research even if you are an established firm with a substantial research budget.
So when somebody offers you the shiny new market research tool which is now the “best practice” or the “benchmarked metric,” set it aside. Instead, outline your questions. Describe the data and information that would help you achieve your most critical business objectives. Ask whether research is the most efficient and insightful tool to deliver answers.
If you need help with that process, we are happy to advise.
—Joe Hopper, Ph.D.