For research-based deep tech ventures, inventions serve as the engines propelling businesses’ growth, requiring years of testing and development, and funding. While it’s easy to prioritise rapid scaling and technological advancement; integrating market research as a continuous and parallel activity to turn inventions into innovations is vital. This post seeks to highlight the significance of market research as it is the backbone for successful fundraising campaigns, customer satisfaction, future revenue, and more.
1. Your Business Plan Relies on Market Research
Market research forms the bedrock of the business plan for any new venture. Even if research-based deep tech ventures often focus heavily on technological development, these organisations are no exception. Delving into your potential target market(s), comprehending market sizes and their opportunities, identifying your competitors, understanding your place in the value chain, and surfacing risks; are all essential components in crafting your business strategy. Access to market insights, and continuously seeking it, not only facilitates proactive decision-making but also provides a foundation upon which your business can build upon and define its purpose.
2. Market Research Steers Your Technological Solution
The success of your technological solution leans on insights derived from thorough market research. While the temptation to focus on developing a prototype or a minimum viable product (MVP) may be strong, understanding and validating market needs, technological and testing requirements, price expectations, etc., as early as possible is paramount. Feedback from market research activities can steer research and development (R&D) so that you can take the right iterative steps to prove that your solution matters.
Market research helps you clearly answer questions such as what problem your venture is solving, how you’ve validated the need for your solution, what price your target market is willing to pay, and why your technology is unique. It will lower the risk of investing both time and money in developing a solution that in the end might have a difficult time generating revenue. In short, market research supports the alignment of your technological solution with real market needs and helps achieving product-market fit.
3. Your Potential Investors Require Market Research
Potential investors place significant reliance on your market research to assess the viability and potential of your start-up. While comprehensive market research should ideally be conducted before seeking investments, it’s important to realise that market research is an ongoing process that can be performed as a core function for your business, which ultimately builds investors’ trust.
Investors seek evidence of a start-up’s comprehension of market dynamics, adaptability to changing market conditions, market demand, and alignment with customer needs. Continuously staying up to date with the latest trends and needs will enable your start-up to demonstrate a strong commitment to build a long-lasting business that can give the investors the return on investment (ROI) they seek.
4. It’s an Opportunity to Find Early Advocates or Off-Takers
Market research also presents a golden opportunity for your venture to identify initial adopters or off-takers (future customers) through stakeholder dialogues. Therefore, market research can be argued to be an ‘indirect’ sales activity. By changing your intention from selling your solution to learning about your stakeholders needs and expectations, you might have a greater chance to build long-lasting relationships, ideally ending up as a revenue-generating activity.
Furthermore, engaging one-on-one with stakeholders can also unveil crucial partnerships or early advocates. These nascent relationships not only validate your business concept but also play a crucial role in attracting further investments needed to develop and test your proof-of-concept or market-ready product. By leveraging market research to identify and nurture business and customer relationships, your venture can expedite its growth trajectory and enhance the likelihood of success.
5. Market Research Builds Intellectual Property
Finally, continuous market research contributes to enhancing your own, and your start-up’s, knowledge. By continuously gaining market insights, your start-up builds intellectual property that both bolsters competitiveness and credibility with stakeholders. In-depth market and application-focused knowledge not only instils confidence in pitching your venture but also serves as a foundation for cultivating enduring relationships with customers, investors, and partners. Start-ups that prioritise ongoing market research showcase their dedication to understanding their target audience and adapting their strategies to meet evolving market demands and application needs.
In conclusion, market research serves as a pillar for research-based deep tech ventures, permeating every facet of development. From shaping the business plan to attracting investors and identifying early adopters, market research plays an instrumental role in guiding them towards success. By prioritising ongoing market research, research-based deep tech ventures can quicker find their unique market positions, better steer its R&D efforts to adapt to their customer needs, and enable sustained growth and prosperity.