New company development is at its fastest rate in over a decade, according to US government data. The pandemic-induced digital transformation has been the catalyst for increased activity across industries, and savvy business owners are flocking to take advantage of the ever-growing demand and emerging opportunities.
This means that if you have a solid vision, today’s markets will give you whatever you need to make it a reality. But getting a new company off the ground doesn’t guarantee long-term business success – as we know, most of these companies will fail. What can entrepreneurs do prior to launching their ideas to ensure they are set up for long-term success?
It all starts with rigorous competitive research
Competition is fierce, and unless you’re working in emerging tech with high levels of research and development, there are only a few truly untapped markets. It’s fundamental then, that rather than focusing on broader market trends and headlines, you’re focused on understanding current market dynamics, the most important piece of which is establishing a deep understanding of the competitive landscape you’re up against.
Start by using 2x2s market maps to scope out the landscape and understand the relative positioning of players based on different parameters. But also try to go a little further: Analyze their websites, go through their product flows, study their active social media ads on Facebook’s Ad Library, browse their team composition on LinkedIn and the hiring page, and try to get in touch with former employees. Continue to dig deeper by asking the following questions: Which companies have tried and failed in the category you’re trying to enter? Why did they fail? Is there a vertical or leading value prop that isn’t being explored?
By doing all this, you’re ensuring your ability to close the information asymmetry that exists between you and the teams already operating in the space. After all, there are two potential purposes of collecting this insight – (1) to help you find your potential wedge in the market or (2) to help you decide early on that this may not be a category worth pursuing.
Nothing beats real insight from primary consumer research
Sure, there is some validation in the problem you’re solving if you’re hearing others talking about it – be that VCs, other founders, or news headlines. But none of these alone will cut it. To understand what you need to build, you need to understand who you’re building for. I know many founders whiz through customer discovery, but I can’t stress how important it is to be thoughtful and methodical at this first stage of research. The more time you’re able to invest here, the more time you’ll save down the line because of the sense of clarity around the problem you will have established up-front.
Never fear the hard, dirty work. Recruit 10, 20, or 100 people in your consumer segment and interview them. Be thoughtful about the questions, develop a discussion guide ahead, and make sure it’s designed to address your clear learning points. Then, listen carefully and ask for clarifications and elaboration wherever you feel like there’s more to uncover. Remember, you are not just looking to validate your ideas – you’re conducting “discovery” research. So, mine new pieces of data: What’s something you haven’t heard yet? How does your identified problem fare up against the other problems in this consumer’s life? What words do they use to describe this problem? The more you care, the more unique insights you’ll find – and the stronger the basis of your business will be.
Validate your solution with in-market experiments
Once you find that there’s no one in the market addressing the problem, it’s worth looking into how to solve it and build a sustainable business around it. But as the notorious saying goes, ideas are worthless until you get them out of your head to see what they can do.
One great strategy is to build a landing page test for your idea. Through targeted advertising, drive users to a website that communicates the value proposition and see how many of them are willing to convert. By translating your vision into a coherent landing page, you are forced to simplify that big idea and see how it can fare in the real world. The interest you garner at this very early stage speaks volumes about your idea’s viability. As you start to see real numbers, experiment with the visuals and adjust the copy. Ultimately, if you’re solving something worthwhile, you’ll see some meaningful results.
While creativity is undoubtedly at the core of all venture design, applying systematic thinking and rigor early in your company building process (using the methods mentioned here) can ensure sustainable business success for the products and services you’re launching.
Aayush Gupta is a Venture Designer. His mission is precisely to create startups, from ideation to business launch. His passion for design research, entrepreneurship and innovation has taken him across various international experiences : he currently works at Create, a venture studio backed by 20 of New York City’s most successful founders and used to work for Fortune 500 clients a Frog Design – part of Capgemini Invent – helping client like McDonalds, Vanguard and Stanley Black & Decker.