Almost Every Entrepreneur Screws Up By Not Doing Proper Market Research.

Here’s A Mini Guide.

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PS. The final 10% of this article at the end has a paywall for paid subscribers. This includes practical steps to solve the problem mentioned.

Due to my line of work, a lot of people approach me and get on calls with me telling me that they want to start a new business or that they want to improve the business they're working on. And for that, after 12 years of work, I've noticed one single mistake that almost all entrepreneurs do when it comes to starting their own business, and that is they never do proper market research. I don't entirely blame them for this.

You see, you could be creating market research, but with the intention of succeeding in that market research. And if you're thinking of that, then you're going to find the answers you're looking for and you're not going to have a successful company per se.

Let's roll out an example.

So let's say I have an interest in creating a big farm. That's my business. It's just an idea of a big farm. Nothing creative, nothing too fancy, no blockchain, nothing. So I just want to build out a farm somewhere in the US, for instance.

I would simply start by having to do market research because I just have to do market research, even though the truth is all farms can make money one day or another. And that's what your entrepreneurial motivation is telling you, that this is going to work out because you want it to work out.

So you start doing your research and you find that there's a huge market opportunity for farming in the world. We need more crops and that people are going, building more concrete everywhere in the world and that there are food shortages in a certain crops everywhere in the world, and it's a very good idea to do so.

So you would see one or two warnings along the way, but you would subliminally just ignore it. Things like, "Ah, it might be a little bit of an over-competitive market. It's not easy to grow crops. You need an expert." Things like that. But you would just swipe through them because your mind wants to see one thing, which is a guarantee that this is going to work.

So after a week of work, you decide that this is enough market research and you've looked at the numbers and the numbers are supportive and you apply for a bank loan, which subsequently would accept it because bank loans are generally just looking money out of your loan and you would start your business, only to find yourself not seeing around 10 years.

Due to the fact that it was a bit of an over-competitive field or that you didn't have enough experience to run it and so on. So the sort of pit-hole or this sort of mistake that almost every entrepreneur falls into is simply because of having a biased view of their own entrepreneurial life. Let me elaborate.

Psychological Bias in Entrepreneurship

Most entrepreneurs start their business looking to get some excitement in their lives. "This is what I want to do. This is what I want to change the world with." And that's why they start building their own business. Some of them are 95 jobs just to pursue this, stories of others who change their lives.

If you have such a mentality and if you're doing this because of this motivation of you changing your life or you building something to change the world, it is almost impossible for you to look at actual facts and be unbiased. Now what you're going to do is to hire a market research expert to actually do an unbiased market view of yours.

But the reality is the reality is 90% of market research specialists are going to want to retain you as a customer so that you would pay for their services again and again running your business. So they have another issue at hand looking from their perspectives. They would want to tell you that it is possible. That's what they want to tell you.

Now they would state facts like, "Yes, it's a competitive market. These are the competitors and this is how you could do better." And they would clear their conscience and say, "Well, I told you that there are competitors. There is a risk of succeeding and failing in every startup or every company so I did my best to ensure that you get the full vision." But they have another psychological subliminal reason to give you the answer you want to hear which makes them unbiased as well.

Detachment and Objectivity

The only way to go through this in the right way is to psychologically detach from your startup which requires a huge level of psychological stability in your life. And that's why I recommend to a lot of entrepreneurs to assess what they are doing in their lives right now, to assess what stage they are in right now, whether they are needing this or whether they are wanting this or whether it's just something that could be done.

If you needed more than a specific amount, a lot of people would argue that this sort of push would make you succeed in your business. This sort of persistence would make you succeed in this business. And that's partially true. Most entrepreneurs are so stubborn to get it done. They do get it done.

But that's not because of proper or improper market research. That has nothing to do with it. It's because of the fact that they are able to pivot their product. So if they had their initial idea at hand, they are having the stubbornness and persistence to keep going around this idea until they find the perfect sweet spot. So the market research is actually absolutely useless at this stage as they will definitely pivot and most entrepreneurs did this exact thing.

Practical Steps Towards Unbiased Research

Hence, if you or anyone else wants to start a new business from scratch before starting to create a proper market research with absolutely no bias whatsoever, one has to understand that you as a human being want this to work out and start working on detaching your personal from your professional, which sounds easy, but is almost impossible to do.

The more you acknowledge and be aware of that, the more you can take it a step forward by starting to just gradually see the things that your mind doesn't want you to see. And when that happens, you can finally reach a conclusion whether this idea is for you or whether you should pivot or whether this business is not going to work out or whether it needs a little bit focus on different areas.

All of that could be determined by a proper market research when you are looking with the bright, clear eyes. So how do you achieve this?

Practical Steps