Comment: Research can help you to market

Jul 9 2009 By Jacquie Potts, The Journal

FOR technology businesses, the need to win investment can dominate the months and years to market entry.

That can mean the business planning phase focuses on generating statistics and projected accounts to make investors sit up and take notice.

Unfortunately, it can also mean not enough attention is paid to issues, such as ‘how warm is the market to the benefits of this product?’ and ‘what possible barriers exist to successful market penetration?’.

That’s why most marketing-savvy investors insist on detailed market research.

After the University of Sunderland came up with the idea for a new software tool to tackle financial fraud, it invested in proof of concept research. Researchers are working on smart computer software they believe will be able to detect insider trading within the stock exchange.

Called CASSANDRA (Computerised Analysis of Stocks and Shares for Novelty Detection of Radical Activities), the project was awarded £90,000 by Northstar Equity Investors to investigate the feasibility of combining Artificial Intelligence technologies with analysis of stories to track suspicious share dealing.

The university used some funding to buy in independent market research.

Research is all about minimising risk. In this case, the risk that the entrepreneur's time, and the investors’ money, will be squandered.

Effective research will produce the kind of market insights that help to shape product development. And ensure it meets market needs.

It will go beyond an entrepreneur’s understanding of the market. It will dig deeper and produce more than just statistics. It will produce actionable insights and new perspectives on customer needs and wants, and become valuable information that can inform the business model and give confidence.

In recent months, access to business investment and to loan funding for pre-start and early stage businesses has tightened. There is more competition for money and more emphasis on reducing risk. For technology-based businesses, the need for funding is as great, but the hurdles seem to have grown taller.

Which brings me back to my point about hard-hitting statistics. When the emphasis is on numbers, it is easy to lose sight of the objective – to enter the market successfully and build market share. My tip for 2009’s tech-focused new starts is to understand your market – the customers, the competition, and build the numbers for your business plan.

Jacquie Potts is managing director of market research agency Marketwise Strategies