Using Paid Services
Anyone smart enough to develop innovative, new technology is smart enough to perform a market assessment. Between the Internet and new electronic research tools found at most libraries, you have access to an incredible array of secondary information in the form of published articles, papers, reports, web pages, and more. Information from these sources can go a long way in helping you understand the overall size of the market for your innovation, what trends and factors are shaping your market, and what competing technologies are out there and how they compare to your own technology.
Secondary data tells only part of the story, however. What secondary information cannot do is explore how your innovation is likely to be received by the market itself. In other words, counting the number of potential sales is one thing; determining how many sales can actually be made is another.
Primary research is the key, but for many technology entrepreneurs, it is also the toughest. It requires thinking—honestly and objectively—through such issues as:
- Who is going to buy this technology?
- Why will they buy it?
- How certain am I that they will buy it? Even though I believe it has strong competitive advantages, will my customers place the same value on them?
- What will they pay for it?
This kind of information is available only through primary research. In some respects, you are the best choice to perform this research, given that you are so familiar with the technology in question. You know better than anyone else how it operates, and more importantly, what it can and cannot do. If you have done your homework, you also know how it compares in performance and price to competing technologies.
The question is whether you have the time not just to perform this research, but to do it thoroughly. And then there's the matter of being objective. There is always the chance you won't like the answers you hear from the marketplace.
Because of the time and objectivity issues, it often makes more sense to hire someone, rather than doing it yourself. There are literally hundreds, if not thousands, of individuals and companies offering market-research services. These resources range from university students at one end to globally-oriented management-consulting firms at the other end, with small and medium-sized consultancies in between.
Technology entrepreneurs often find the decision to hire a market-research specialist harrowing, and for good reason. Expertise can be expensive (though not always), and in the end, there is no easily valued capital equipment or raw materials to show for it. Indeed, sometimes the final product is a report saying the technology in question doesn't have much of a future, and who wants to pay for that?
A good approach is to first ask yourself what information is needed to allow you to objectively assess the market potential of your technology. Understand that this is not the time to seek shortcuts. Failure to accurately assess the potential of your technology can lead to substantial investments of time, effort, and money being wasted.
Now decide—just as honestly—what part of the needed information you can collect on your own, and what part you believe would be better collected by a research specialist. A key factor will be your time: is it well spent doing market research, or would it be better spent working on the technology? If you decide to tackle some of the market research and find later that the needed data isn't readily available, you can always turn it over to a specialist.
If you eventually decide to use a research specialist, there are plenty of resources to turn to for help. It's always a good idea to ask fellow entrepreneurs for their recommendations, but you can also find prospective vendors through market-research associations or through the local Yellow Pages. Before making these contacts, it might also be useful to familiarize yourself with the market-research arena by reviewing some of the many resources available through the Web.
When considering a market-research firm, beware of public-relations firms that claim to perform market assessments. Also beware of large national or international firms. In all cases, take steps to make sure the firm you select: (1) has the experience to perform the kind of research you need, and (2) has an understanding and commitment to you as a small-business owner and technology developer. At the very least, you should expect to see samples of similar work performed for previous clients.
Expect the research specialists you contact to want to talk with you about your technology. Before revealing too much, it is reasonable for you to ask them to execute a nondisclosure agreement, regardless of whether they are the researcher you eventually choose to hire.
Reputable specialists will not push you for proprietary data, but they will need to know something about the technology. You should be prepared to provide this detail, but in a non-proprietary fashion. Once they have a basic understanding of what the technology is and does, they will be more interested in focusing on the technology's unique capabilities, features, and benefits, knowing these are what will ultimately lead to sales. Always remember—the more the specialist knows, the better s/he can help gather the specific data you need.
Finally, before making a decision, be sure to talk to a few different firms. Ask yourself which firm has the most experience researching the market potential of new technologies? Which one best understands your objectives and the challenges of your target market? How do the prices compare? Which firm seems to fit your personal style best?