Every now and then, a new product is introduced that seems to contradict common sense, conventional wisdom and sometimes even deeply-held beliefs. Sometimes it seems a company is so enamored with their new product idea that they fail to do their research, or they ignore what the research tells them. (Anyone remember New Coke? The Gap's logo change?)Flying on Instinct
Going with a gut feeling is the first and most common mistake business people make. Basing business decisions on anecdotes of friends and family without validating them with a survey or other quantitative market research analysis is like flying blind without a parachute.
Flying with Blinders
Enthusiastic entrepreneurs with big ideas take heed: conducting and analyzing your own research without an unbiased research partner (or a trained professional, in-house or consultant) is just as dangerous as doing no research at all. Test your target market survey with a business confidant to make sure you're not seeing the results through rose colored glasses. Play devil's advocate and write a survey that is designed to prove your business would fail. The correct survey is probably somewhere in between.
Flying between the Clouds
As important as defining what the research means is to make sure you understand what the research is NOT telling you. Building a business plan on logical deductions, assumptions and inferences is a business plan that is as solid as a house of cards. One weak link can bring the entire house to the ground. Some of the most common assumptions a business can err on include:
- Size of the target market
- Importance of a product feature
- Traffic flow for a location or distance to be travelled
- Price sensitivity of the target market
- Knowledge or sophistication of the target market