Does not doing homework sound like a good idea?

Ideas can be pretty amazing tools. At certain points in time, great ideas laid down the foundation for great inventions, remarkable commercials, masterpiece paintings, and every single book at your local library. Does that mean that every idea is good enough to seed your next victory? Maybe not. In fact, all the novels lying in publishers' slush piles without use, and all those projects that send well-established corporations into the red, also have the ideas of well-meaning individuals behind them. Nevertheless, the mere possibility of failure should never discourage you, especially considering that market research can significantly lower a project's riskiness.

So what is research? On the easy end, it can come down to a simple Google search for the information you need. On the other extreme, you might need to spend hours in a lab, hire test subjects, or conduct a survey at a mall. Take our word on it - there are many ways to go about researching and testing a business idea, and it is therefore important to know about the attributes of effective market research for a successful venture.

The main goal of it all

Setting the right goals is paramount to a useful outcome. These do not have to be too detailed if your project is just at its beginnings, but specificity helps get the project started on the rightest foot possible.

Here are some example questions for an entrepreneur researching his idea of a new vegetarian restaurant in St. Paul, Minnesota:

"Do humans enjoy vegetarian food?"

"How much money do people in St. Paul, Minnesota, spend on eating out every week?"

"How many St. Paul residents adhere to a strict vegan diet?"

This short list of things allows the entrepreneur to arrive at the ultimate goal of his research, and that is whether the market for vegetarian dining in St. Paul is big enough to support a new restaurant. Once he is able to answer this question, he will know for sure if his idea of a vegetarian diner is viable.

Beware of the confirmation bias monster

The same way the parent of a human would tend to see his child's accomplishments as signs of genius and dismiss his child's flaws as unimportant, the parent of an idea is predisposed to view his project favorably. So, idea parent, beware: The confirmation bias is out to get you. Ways to combat it include hiring an independent party to conduct the research, blinding all parties so that no participant in research is aware if its ultimate purpose, or just constantly reminding the ultimate aim of market research to yourself.

Questionnaires

Surveys are relatively simple to arrange. Thus, if you decide that this is the tool of your choice, it's important to keep some survey questions open-ended to allow for unpredicted responses. Other things to keep in mind are the various biases that can arise from question wording and from the order in which questions are asked.

Focus Groups

Focus groups can serve as a source of rich material, but are difficult and costly arrangements that require skilled moderators. Before setting one up, consider the following ways that these groups can go wrong: participants influence each others' reactions, and no response is genuine; the moderator intimidates the group into his way of thinking, or the participants do not take their job seriously. These pitfalls see a variety of researchers break their informational legs, including large corporations like Apple.

Market research is a fundamental task that goes into new product development and management. Ideas generation, another major task in the new product offering field, will be the next topic for discussion on the NVSBS blog.