This article is part of our Dear Prosper Women Entrepreneurs series, in which the St. Louis-based accelerator Prosper Women Entrepreneurs answers common questions from women entrepreneurs.

Dear Prosper Women Entrepreneurs,

I am the CEO of an enterprise software startup, struggling to find my target customers. I read last week’s article on the importance of market research to define/validate a target market. I see the importance of doing my homework, but I’m struggling to find the resources. Do you have some tips you can share on ways to do this on a budget?

Sincerely,

Another Lost in Market Research Space

Dear Lost,

Last week we debunked all of the reasons you are telling yourself that you don’t have the time or money to embark on market research. Now let’s discuss a few market research methods that you CAN and SHOULD consider to define and/or validate your target market for your software startup on a startup budget.  

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Important to note: These suggestions are not methodologies to define the size of your total or addressable market. Rather, these are primary research tactics to validate that you are pursuing the appropriate market in the first place, and with a product or service that effectively addresses the pain point that you are trying to solve.

Another important note: Consider completing a few of these strategies prior to your public launch (even public beta). I know, I know, Lost. Everyone is telling you to go from idea to full market launch in 24 hours. While I wish all entrepreneurs who attempt this superhuman feat the best of luck, I implore you, Lost, to consider completing a few of these strategies prior to telling the entire world that you are launching:

Electronic surveys – With numerous free-to-inexpensive online survey tools available, you can generate some cheap initial market research in a matter of minutes. Check out SurveyMonkey, Pollfish and even Twitter (who recently announced that they are launching Twitter Polls). Surveys are excellent tools for gathering qualitative feedback in volume on your product, as well as valuable quantitative data on actual propensity to use it and whether they will (*gasp*) PAY. In my opinion, the best surveys are no more than 10 questions long and take less than 5 minutes to fill out.

I recently filled out a survey for one of our PWE Startup Accelerator portfolio companies who was looking for quick feedback in picking a name for a new service line she is developing. It was 4 questions long and took 2 minutes to fill out. And she even offered a gift card prize drawing incentive. As you attempt to identify your best customer market, send the same survey out to three targeted industry groups and require that they specify to which industry they belong. The comparison data between the groups will be extremely interesting to you, the customers you hope to find, as well as potential investors.

Focus groups – Because of the amount of time required to successfully host a focus group, you are not going to obtain large quantities of data here. However, if facilitated correctly, the organic, verbal feedback you receive could be invaluable.

When Prosper Women Entrepreneurs decided to launch a program to direct more early stage capital to women entrepreneurs in the region, we were confident that an angel network was the perfect solution. We hosted three information sessions with over 80 accredited investors in attendance. We gave a great presentation, exchanged excellent Q&A, and at the end of each night ZERO people signed up. We heard a lot of “I am so interested in being involved in the ecosystem,” “I would love to invest.”  Sounds like they were IN, right? Wrong. We also heard a lot of “I have zero time to be an angel investor. Can you just invest the money for me?” We were deflated.

The local media were emailing us with requests for updates on our network membership. But we picked the wrong product. An angel network was not the answer at the time. We realized later that, while unsuccessful at recruiting angel investors, these information sessions had actually provided valuable market research via the questions we asked at the end of each pitch. We had hosted informal focus group sessions without even knowing it. If we had completed these sessions as focus groups first, we would have saved ourselves the embarrassment of coming to market with one product, only to have to quickly pivot to something quite different.

Thankfully, we were able to change directions with our new research in-hand and launched a program that successfully met the needs of our target market: the PWE Startup Accelerator. To this day, though, I still have people ask me, “What happened to the angel network?”

Industry conferences / personal interviews – Lost, you are hoping that your software is the perfect organizational culture solution for the healthcare space. You need to speak to as many healthcare professionals as you can to determine if there is true demand for your product outside of your personal connections in the space. So how do you find these professionals, aside from purchasing an expensive list? Pack your bags and head to some trade shows, my friend. Better yet, head to a few trade shows in a few different industries. No travel budget you say?  You may find that there are some local professional chapters with monthly meetings that you could attend.

This is one of my favorite primary market research techniques – it is essentially the equivalent of a survey + focus group in one. Load a tablet with a quick demo of your product, prepare a 30 second elevator speech, and memorize the 4 questions you want to ask. Bring a couple of college interns with you and walk up and down the aisles pitching to attendees and asking those same 4 questions. Then document their answers, one by one. If you are lucky, you could speak to over 100 industry professionals in one short day and have some real market research to bring back to your product team, your sales team and your future customers and investors.

So there you are, Lost. Instead of a Startup Weekend, you might have a startup month or two. It’s OK. The entrepreneurial ecosystem gods won’t judge you. (Well, not too much anyway.)  Sit in the uncertainty just a little longer. Put a plan together to embark on 1-2 of the above strategies to gather market research over the next 3-4 weeks. Enroll Aunt Marge and your other friends and family to help via recruitment, polling, etc. Resist the temptation to drop the project at the sight of the next shiny ball that shows up in your inbox.

Ask the hard questions. And then listen to the answers. You may find that your product is beyond perfection and your initial hunch at a target market was spot on. Or you might not. Regardless of what you find, I guarantee you will feel more confident taking the next steps to pursue that market in earnest and grow this wonderful business of yours, Lost.  And then we’ll have to call you “Found.”

Warmest regards,

Prosper Women Entrepreneurs

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Prosper Women Entrepreneurs was created to address the entrepreneur gender gap in the St. Louis region. We are a group of business leaders, thinkers, doers, innovators and students who want to make sure that our community is well positioned in the new economy and, more specifically, that women entrepreneurs are a vital part of its future.

Prosper Women Entrepreneurs is comprised of two separate divisions: Prosper Institute, a non-profit organization focused on training and mentoring women in the entrepreneurial community, and Prosper Capital, a for-profit organization focused on increasing women entrepreneurs’ access to growth capital and the number of women investing in early stage capital markets.