Why are there so many startups failing in the first 3 to 5 years ? One of the recurrent explanation is that entrepreneurs don’t understand their market well. Some may suffer from the knowledge corridor, and what is sure is that market research may have helped to avoid failure.
My point today is a more philosophical one. We’ll all agree that market research can indeed help find the right strategy and marketing approach. But why is it necessary to bridge this gap ? (and, to take over the words of KBC, why is is necessary to find a gap in the market ?)
Why are firm founded ?
The very reason why market research is needed is because firms are not started to satisfy the right needs. Startups are indeed founded to satisfy the needs of the entrepreneurs : the quest for money, the need of employment, the need for change, you name it.
But a company can only succeed if it satisfies the needs of customers. That’s the basic principle of marketing. How much of paradox is this ?
Market research helps reconcile divergent views
I see the role of market research as a way to converge towards a situation that fulfills both the entrepreneur’s expectations, without compromising on the customers’ needs.
Creating a firm for the sole needs of the entrepreneur is not viable; there needs to be a convergence towards filling a gap in the market. That’s the very purpose of market research.
What about you? Why did you start your company? Do you recognize yourself in the description above?