How to scale market research for your startup

According to Crunchbase data, Global startup investments saw a 38% decline in 2023 compared to 2022. These cutbacks affected startups at all funding stages, with early-stage and later-stage companies both witnessing a decrease of about 40%.

This isn’t to say that funding is the key to success—because that isn’t true either. According to a PitchBook survey, some 3,200 venture-backed U.S. companies—that raised a combined total of more than $27 billion—went out of business in 2023.

While we don’t know how much these particular companies invested in market research, we do know that a recent CB Insights analysis of failed startups shows that 35% of the 100+ companies they analyzed went under because there was no market need for their product or service. 

Market research acts as both a compass and anchor for startups navigating the tumultuous seas of entrepreneurship. It shows you where you need to go and how you can get there, but it also keeps you safe and ensures you don’t drift off course in the face of unforeseen challenges. 

In this guide, we’ll explore the strategies and tools startups can use to scale market research efforts and gain the insights needed to succeed, even with limited resources. 

Beyond demographics and buyer personas, getting to the bottom of who your customers really are takes plenty of diversified efforts. 

However, the brunt of this work should focus on primary market research, which involves collecting information through interviews, surveys, phone calls, focus groups, and user testing.

Target audience surveys are often the most direct avenue for cementing your understanding of critical customer data, like demographics, values, and habits. Unlike live discussions, which are unscripted and sometimes tricky to navigate, surveys are created in a controlled environment. They give you complete control over formulating and presenting your questions to customers.

Target audience surveys can gather comprehensive insights into the preferences, behaviors, and needs of the target audience by asking:

• Demographic questions that gather basic information about respondents, such as age, gender, location, income, education level, and occupation.

• Behavioral questions that ask about things like purchase history and preferred channels to identify patterns and trends in consumer behavior.

• Satisfaction questions that gauge how happy or unhappy customers are with your products, services, customer support, and overall experience to identify areas of strength and opportunities for enhancement.

There are also less direct but equally relevant channels for understanding who your target customers are. For example, you can use media and social listening tools. 

Social listening platforms analyze online media coverage, social media conversations, and market trends to provide actionable business insights based on customer behavior trends. You can set them up to track things like keywords and brand mentions to monitor what your customers are talking about, where they tend to hang out online, and even what they’re saying about your product/service. 

Once you have a clear picture of who your customers are, the next step is to understand their needs and preferences. Focus on “jobs” instead of personas. When we say jobs, we mean what it is that customers expect your product to do for them. 

When you can figure out what job customers want you to perform for them, it’s much easier to differentiate your product offering from those of your competitors. For example, Typeform’s obvious job is to collect data. Our differentiator is that we offer a conversational and highly customizable experience that collects information and helps you build customer relationships.

Surveys are great tools for collecting both quantitative and qualitative data. Quantitative data helps you understand who your customers are, while qualitative market research goes beyond the “who” and seeks to discover the “how” and “why.” 

These surveys work on a smaller scale and are less structured. They’re exploratory and provide insights into customer preferences. Here are some examples of what these types of questions could look like:

• Does our product/service meet your expectations?

• What is the most valuable feature we offer?

• Are there any features that you never use?

Customer intent is another metric startups are measuring more than ever. According to Zendesk’s latest Customer Experience Trends report, “70 percent of organizations are actively investing in technologies and tools that automatically capture and analyze intent signals.”

Customer intent and sentiment analysis tools, powered by machine learning (ML) and natural language processing (NLP), can automatically detect what each customer conversation pertains to (intent) and whether the customer’s message is positive or negative (sentiment). These types of insights help pinpoint preferences and better define what customers really want to gain by using your product/service. 

Industry research involves taking a step back from focusing on your customers and gathering/analyzing more general data about your industry. It can help you:

• Understand the dynamics of your industry, including the size of the market, growth trends, and potential opportunities.

• Identify underserved markets or areas with unmet needs to inform your product or service development strategy.

• Anticipate and mitigate risks that may arise, like regulatory requirements. 

• Create more informed business decisions on things like pricing strategies, marketing efforts, and resource allocation.

To get started with industry research, you can look into platforms that offer aggregated market and consumer data. These platforms pull ‌data from a wide range of sources to provide a holistic view of your industry, including data from government agencies, research firms, and industry associations. 

You can also use a tool like Google Trends (which is free) to perform online industry research by analyzing search data and trends that are most pertinent to your industry. Trends provides insights into how often specific keywords or topics are searched for on Google, as well as the relative interest in those topics compared to one another. Insights into consumer interests, preferences, and behavior, especially in the realm of online search, can help you make informed decisions about product development, marketing strategies, and market positioning.

Competitor analysis isn’t about copying the strategies that are working for your competition. It’s about understanding them so that you can find your own niche and determine what you’re going to do to stand out from the crowd.

It’s yet another way to gain indirect insights into what your customers want by seeing what’s working for your competitors, what isn’t, and how customers are reacting to your competition’s products and marketing efforts. 

There are plenty of strategies and tools for evaluating your competitors from a variety of angles. SEO tools help you evaluate your competition’s online marketing efforts, providing insights into their content marketing activities, backlink profiles, the keywords they are targeting, how their pay-per-click (PPC) ads are working, and much more. 

You can also use search analytics tools that show you the keywords your competitors are buying on Google Ads and all the ad tests they are running. 

There are also technology profiling tools that help identify the technologies your competitors are using, like software, frameworks, programming languages, content management systems, hosting providers, and other tools utilized to build and run a website.

This type of data can help you from a technological and product development standpoint, and it can also inform marketing strategies. For example, you can identify which advertising platforms your competitors use and start using them yourself. 

You can also use surveys to gather competitor analysis. Whether they close the sale or not, your sales team can send quick surveys to discover data like which competitors they evaluated, why customers chose your product over a competitor, or why they decided to go with a competitor in the end. 

There are no guarantees in business, especially in the world of startups. However, market research can provide much-needed clarity—a realistic prediction of your chances of success.

The first step in being able to perform market research effectively is identifying the strategies and associated tools that can help you gather the data you need. The best market research tools provide firsthand data about what people think about your product or service and, more importantly, whether they need it. 

The customer, industry, and competitor data you gather through market research helps inform your business decisions from top to bottom with real, quantifiable data, not guesswork—enabling your product, marketing, sales, and support teams to act effectively on the insights you’ve gained.