Have an idea for a new app but not sure if it will be a success? That’s where market research comes in. Make sure you’ve got these four areas covered and get your startup off to a flying start.

In our last post we briefly looked at the market research you need to do when you’re planning an app. This time, we’ll be delving further into the research you need to complete to fully understand what the market wants – and how you’re going to provide it.

The customers

Most founders come up with ideas that solve problems they’ve personally observed – or experienced – themselves. For example, you might have been working in your industry for quite some time before noticing a niche for specialist software that could make your life easier.

‘What spending power does my customer base have?’

But even if you have a solid idea of who your potential audience will be, it’s still a good idea to do your research and challenge any assumptions you may have.

What you need to know

• How big is my potential customer base? Is it as big as you think? Or could there be clients in similar industries that could also benefit from your solution?
• What spending power does my customer base have? Does your client base get sign-off on how money is spent? What’s their budget likely to be?
• What’s the best way to reach my customer base? Are they likely to be tech-savvy or not? When they get stuck on this problem, where are they likely to go for help?
• How should I talk to my customer base? How do these people prefer to be communicated with? What kind of marketing is likely to be most effective?

How to find it out

The most effective way to learn about your customers is to speak to them directly – interview potential customers before you create your product, test out your prototype and MVP on them during production and ask for feedback once you’ve launched.

And don’t just listen to what they say they want – put the product in their hands whenever you can and see how they interact with it. If you can, record usage stats with your app and analyse them.

You could also:

• Go to conferences and speak to your target industry directly
• Use a specialist survey company to get your questions in front of your target audience
• Ask for feedback on relevant forums, Facebook groups and Reddit pages
• Ask industry bodies and unions for stats and help assessing the size of your target demographic
• Use Google’s keyword tools to find out what people are searching for online
• Create a landing page that displays your proposition and gathers feedback.

The competitors

There’s little point in launching a product that’s similar to an existing product, unless you have significantly improved it in some way. But to know what not to do, you need to know what’s out there already.

‘Is there a way I can benefit from working with my competitors?’

In addition to your direct competitors (those selling the same sort of product or service as you), there’s also your indirect competitors (those competing with your business digitally). With so many voices shouting online, it’s hard to get noticed – making it even more crucial that you promote your unique selling point (USP) and reach the right people.

What you need to know

• Has anyone tried to solve my problem before? How successful were they? Are they likely to compete with you for customers?
• What weaknesses do my competitors have? Do they have flaws you can use? Can you learn from their past mistakes?
• Who are their suppliers, contacts and partners? Can you benefit from building contacts with these people? Should you avoid them and find your own?
• Could we work together? Is there a way you can both benefit from working together? Can their IP be combined with your own to create something even better?

How to find it out

First, think of all the different ways someone might describe your app and try Google searching different keyword variations to see what comes up. Get a feel for the technologies a company is using by checking what kind of developers they’re advertising for in their job ads.

You could also:

• Go on forums and ask if anyone has heard of a solution to the problem you’re trying to solve
• Search through the alumni or current startups of specialised incubators
• Ask any suppliers if they’re serving businesses similar to yours
• Visit BetaPage and CrunchBase to search their comprehensive dataset of startup activity.

The economy

Economic factors can have a massive impact on the success of your business. It’s a good idea to do a thorough SWOT (strengths, weakness, opportunities and threats) analysis on your business before you launch, and at regular intervals along your journey.

‘Are there policies and incentives I can take advantage of?’

It’s also worth looking at opportunities and threats in closer detail with a PEST analysis, which examines how political, economic, social and technological factors could interact with your startup.

What you need to know

• Will my profits be affected by fluctuations in the exchange and interest rate? Are you hoping to sell your product or service abroad? What effect could these fluctuations have on your cash flow?
• How would a financial downturn affect my sales? Is your product an essential or a luxury? Are customers likely to cut back on how much they spend with you if money is tight?
• Is my industry supported by the present government? What impact are future governments likely to have on health, education and infrastructure to support your workforce? Are there any organisations that want to restrict or help promote your kind of product or service?
• Are there policies and incentives I can take advantage of? Could you receive a grant to hire apprentices or train your workforce? Are there tax cuts available for your kind of business?

How to find it out

Smaller businesses have the advantage of being able to pivot quickly when it comes to adapting to economic swings – the trick is to stay on top of trends.

You’ll need to stay up to date with financial trends for your industry as well as the wider economy. Big publications like TechCrunch and Wired can provide news on a national or global scale, but be sure to read up on what’s happening in your local area too.

You could also:

• Keep an eye on your government’s website for changes to policy
• Track potential changes to societal attitudes to your product or service through surveys and customer feedback
• Ensure you have back-up funds or a plan for where to source finance if you need to weather an economic downturn
• Stay aware of employment rates and the availability of certain kinds of workers in your vicinity.

The law

Last but not least are the legal considerations you need to take into account when planning an app. Depending on the nature of your product, there may be rules and regulations governing how you build your app, how you store your data and how you market it.

‘Are there regulatory bodies that need to sign off on my product?’

There are other external legal forces that could affect your business too, for example – could Brexit have an impact on your workforce or the laws governing your industry?

What you need to know

• Am I impinging on someone’s IP? Is it possible somebody already has a patent on your idea? Or a trademark on your app’s name?
• Are there regulatory bodies that need to sign off on this kind of product? Will your app contain content not suitable for under 18s? Do you need permission from a regulatory body to create this app, e.g. gambling?
• Are there law changes coming up that could affect my business? Can you assess changes yourself or will you need expert help? Could HR and health and safety laws apply to your team?
• What laws do I need to abide by to offer this product? Can you be certain your product is legal? Is there anything you can do now to future-proof the legality of your product?

How to find it out

The easiest way to take stock of your legal obligations is to hire a specialised lawyer, or find a mentor with considerable relevant experience. There may also be industry bodies and unions that can advise what laws may apply to your business.

You could also:

• Make use of services like StartupDocs and TermsFeed to generate legal documents and terms and conditions when you’re just starting out
• Do a trademark search of your desired product and business name before committing
• Check all your ideas with an IP regulator
• Talk to other businesses in your sector at networking events or conferences
• Sign up to get newsletters from sites and blogs focused on legal issues in your sector.

… and that’s it!

Well, not quite. See the thing about research is that you’ll need to examine these factors continuously to ensure you stay on-trend and ahead of market changes. What you sell and how you sell it will need constant tweaking if you want your startup to be a success.

This may sound intimidating but it needn’t be. Build processes for research and self-improvement into your schedule and it will become habitual. Make small adjustments often to ensure you won’t need to change course suddenly – and save yourself a lot of work in the long run.

We can help

Need a hand working out your market fit? For more in-depth advice on planning and building an app, get in touch to arrange a chat.