Mompreneur Example: What I learned from “Negative” Market Research

[tweetmeme]Those of you who have followed my Stikitty journey know I didn’t listen to my head, just my heart when I first launched my entrance mat product in 2009. 

That’s why when it came to the Stikitty, I was adamant I wasn’t going to make the same mistake twice.

Instead of trying to convince myself and others that the Stikitty was a good idea, I started from the opposite perspective. I told myself that the world didn’t need another cat litter mat. I did full-time research for weeks and used inexpensive market research resources to see if I could prove my negative hypotheses. I knew if I could prove them, that my idea wouldn’t stand the test of time–or a limited budget!

Market research provided guidance for the Stikitty's retail packaging.

Below are examples of my hypotheses and what I found through research:

The Pet Industry is Saturated & There’s No Room for Growth

Through my alma mater I was able to gain online access to industry overviews, articles, and snapshots on the pet industry. I found the Datamonitor reports especially helpful. In addition to industry information, I looked at the strategic and financial performances of key companies.

I found that the $45 billion pet industry has grown for the last 7 years and it is projected to grow for the next 5, albeit at a slower pace. There are extremely large competitors but the industry is fairly fragmented with the top companies commanding only ~35% of the market. New companies are able to thrive with strong branding and good sales strategies.

People Only Spend Money on Dog Products

Through networking, I connected with a retired high-level executive from a leading international pet company. He told me it’s true that the biggest chunk of the ~$10 billion pet supplies sub-segment goes to the dogs; specifically to dog toys, collars, leashes, and more. However, when cat owners spend they spend big on litter and litter supplies–to the tune of nearly $1.9 billion annually.  

No One Wants a New, Different Kind of Cat Mat

This hypothesis was critical–if I could prove that no one needed or wanted a more advanced cat litter mat, I would have to stop right there. Because I knew direct customer insights were crucial and I couldn’t afford formal customer research, I used what resources I had available to “hear” from as many cat owners as possible. So, I:

  • Conducted dozens of in-person focus groups with family, friends, and neighbors with cats; I asked them about their current litter mats and what they’d like in a new solution
  • Visited large and small pet retailer Web sites to read online reviews of cat litter mats
  • Lurked on pet forums to learn of frustrations about cat litter tracking and possible solutions
  • Polled contacts in my LinkedIn pet groups
  • Asked friends on Facebook to ask their friends about cat litter mats and how they’d make them better

What I Learned from Being Negative

I learned that the pet industry is more recession proof than others and it is projecting growth; that cat litter products are a strong segment within this very large industry; and, that cat owners are eager for a lighter, easier to clean cat litter mat that is the right size for their specific needs. I found that cat owners were open to something different and if it solved their issues with traditional litter mats (e.g., too heavy, too hard to clean, not large enough), they would buy something innovative. Additionally, I found a lot of practical information such as how to price my product, which retailers carried competing products, and how to package and display the Stikitty.

Though I wasn’t able to completely fool myself, looking at my product idea from a negative perspective allowed me to listen to my head. I was able to step aside and bring my future customers’ needs and desires to the forefront. I was able to look at things from a business perspective.

I wish you the very best of luck with your venture. If you’re ready to share, please let me know what you’re up to, too!

The next post will be about the 5 Things You Should Do Before Launching Your Company

7 Mompreneur Tips for Market Research on the Cheap

[tweetmeme]Especially if you’re boot-strapping your business, it’s easy to convince yourself that you can’t afford market research.

Don’t fall for it.

Before you go into production of your product you need to understand your market and how it will respond to your offering. Market research can help you answer many critical questions such as who your target audience is; what needs do they have; whether competing products are solving their problems; if not, how will your product do a better job;  how much will your audience pay for your product; etc.

If you can afford to hire an advertising or research agency to test your product or service idea, go for it. But if you can’t, try some of these inexpensive tips to get important insights before you spend your first dollar:

1. Get your hands on an industry report.  

Industry monitors provide critical information about whether your industry is growing, how big your segment is, the key players, and more. Some of these monitors can be quite expensive but you may be able to find full reports or snapshots of your industry online. Your local library or alma mater may provide free access to subscription services that carry these full reports too.

2. Read reviews of competing products online.

Online reviews are goldmines of information because they’ll tell you what real buyers like and find lacking in current offerings. Often, they’ll tell you customers’ perceptions of the product’s value for the money as well. And you’ll know which retailers carry products like yours.

3. Conduct your own focus group.

If you’re creating a product based on something you need and can’t find it’s a good bet that the people you associate with may be in the same boat. For example, if you’re a computer programmer who sees a need for an ergonomically correct armrest, your coworkers are probably computer programmers with arm strain too. Get a group of friends, family, and co-workers together in person to talk about your idea. Sure, in the beginning they’ll all say it’s a wonderful idea, but dig deeper and ask specific questions. Be sure to listen with a critical ear–you’ll be surprised by what you learn!

4. Facebook your friends.

With the new features of Facebook, you can easily limit the views of your posts. Share your product idea and ask for genuine insights from your friends.

5. Ask the social world for feedback.

Several sites like LinkedIn and WordPress let you create online polls. If you’re comfortable sharing your idea, ask your connections to give you specific feedback, including how much they’d pay for your product. You can also mask your idea by asking what your connections like or don’t like about what’s currently available.

6. Check out SCORE or other startup associations.

SCORE started out as the “Service Corps of Retired Executives.” The organization counsels small businesses and their mentors can help you put a magnifying glass on your idea and examine it from an experienced businessperson’s perspective.  And, if you make the decision to move forward, they’ll provide you with inexpensive training on starting and growing your company.

7. Visit an industry trade show.

While displaying in a trade show can be quite expensive, attending one is usually a lot cheaper. This is especially true if you don’t have to travel to the show and just have to pay the price of an entrance ticket. There are a few types of trade shows; some target end customers and others target retail buyers. By attending either of these, you can gain a lot of information about what types of products are hot and what consumers or buyers are looking for right now.

In the next post, we’ll talk about the dreaded B word — the business plan!