I wonder how many times in the past month I have asked myself, “Why didn’t I think of that?”  There are so many creative, entrepreneurial-minded people out there who come up with ideas for addressing needs or solving people’s problems that would never occur to me.

Sadly, however, the vast majority of the innovative people who pursue the dream to create the latest and greatest product or service will fail. There are many articles and books written on why the success rate is so incredibly low. I won’t quote any of those here.

After working at MarketStar for nearly 15 years, I have my own perspective on why great ideas don’t translate into successful businesses. Too many times, critical business decisions are based on intuition or gut instinct. In other words, the start-up trusts input and insights from a “sample size of 1” (the entrepreneur), or maybe a sample size of 4 or 5 if it is a team effort.

(Since I used the phrase “sample size” in a sentence, I must confess; I am a statistician and proud of it! To the person who told my mom years ago that being a statistics grad student meant I had to be either ugly or weird, I have yet to scare a single small child away when they see me, and I prefer “quirky” to weird, thank you very much!)

What goes wrong? Typically, instinct tells people with great new ideas that they are the masterminds behind a unique, one-of-a-kind product or service that everyone will want to buy. They don’t have any competitors because this is their “brain child,” and of course, customers will pay the price required for them to be profitable – it’s an awesome product, right?

The reality is that only certain types of people or businesses will actually want or need any product or service, no matter how innovative or useful it seems to be. And, I have yet to find a client that truly has NO competitors – sometimes they are not obvious, but they are nearly always there. In addition, people almost always assign a higher value (think price) to their own “creations” than a typical customer would.

What can be done to significantly increase the likelihood of a great idea becoming a viable product or services offering? Use instinct and intuition to ask the right questions at the beginning, while it’s still a concept, and before significant financial investments are made.

• Find out who will actually be most interested in your product – who is the target market?
• Figure out where they would expect to learn about the product, how they would most prefer to purchase it, and ask the dreaded question – how much would they really be willing to pay for it?
• Learn reasons they would decide not to buy it and find ways to address those issues.
• Look for potential competitors – be creative because even if their product doesn’t look like yours, if it’s a viable alternative, you have identified a competitor.

Minimizing the importance of potential sales barriers and competition when taking a new product to market is risky; I would never invest in a company that hasn’t “done its homework.”

Is there a way to answer questions like these in an objective, unbiased manner? Absolutely! It is called market research.

Typically Confusing Chart

Sadly, when most people hear “market research” they cringe because they think of complicated charts and graphs, confusing buzzwords, 50-page reports, etc. I learned early in my career as a market researcher that the quickest way to put a group of regular people (i.e. not statisticians) to sleep is to start talking about p-values, sample sizes, and margins of error. Yes, the statistics themselves can be boring. But, the insights they can provide are not.

Here’s a simple example:

Statistic

The average rating for the importance of proven product reliability was 6.6 on a 7-point scale (yep, kind of boring).

What it Means

When targeting resellers, the client should strongly focus on the reliability of its solutions because that is an extremely critical partnering factor. This could be demonstrated using technical documentation, case studies, testimonials, competitive comparisons, etc.

I love my job because gathering data in a valid, unbiased manner using the appropriate method (telephone surveys, mystery shops, depth interviews, online focus groups, online surveys, etc.), and then using the results to help uncover insights and recommendations for my market research clients is very rewarding. Yes, gut instincts are often confirmed, but clients always learn new things to help them make sound business decisions.

And, they can have confidence in the results because they didn’t come from a “sample size of 1.”