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 a B2B enterprise software startup that helps companies manage organizational culture. I am struggling with our go-to-market strategy. I spend a lot of time following up on inbound leads who are eager to learn about our product, only to have them become quickly unresponsive.

Everyone keeps telling me to define a specific target market, but I believe strongly that ANYONE could use our awesome software! And as a woman entrepreneur juggling so many other commitments with family and my day-job, I just don’t think I have the time to do extensive (and expensive) market research. I have some friends who know some executives in the healthcare space so I’m thinking of starting there. What do you think?

Sincerely,

Lost in Market Research Space

Dear Lost,

First, the good news: Your plight is common. Determining a target market, particularly for products and services that have a broad potential customer base, is extremely difficult. One of the Prosper Startup Accelerator portfolio companies, SmartMonitor, developed a medical device to help patients detect epileptic seizures. She knew relatively quickly who her target market was: epilepsy patients and those that care for them. But you are different. You developed some software to affect culture that could be used by any company in any industry at any stage. It sounds amazing! Yes – everyone COULD use this!

Here’s the bad news: Everyone will NOT use this amazing software. Actually, very few will to begin with. And there is a good chance that the product you have developed might not meet the needs of those customers as perfectly as you imagined. And, as you described, you don’t have a lot of time or money to solve this crazy mind-torture puzzle to identify those enlightened folks that clearly see the value in your product and are willing to (*gasp*) PAY for it.

Thanks to our sponsor

Become an SPN sponsor »
Meet our sponsors »

You may have convinced yourself that you don’t need to complete market research for a variety of reasons. I hope you’ll indulge me, Lost, as I debunk them all:

I don’t have time or money. This is true. As any CEO will tell you, time and money are your most precious resources. But let’s look at the balance of resource consumption: I recently had coffee with a women-led software business who spent 6-9 months in pursuit of the financial services market simply because she had a few connections there, only to find that there was no true demand for her product in this space.She was surprised to find that the sales cycles were 3 times longer than she thought they would be.

By the time she realized that she was heading in the wrong direction, she ran out of money and now she has no company. I guess now she has all the time in the world, right?

We have so many inquiries flooding our inboxes and a few initial contracts! We don’t need to do any market research to validate that they are real customers. Those inbound emails of excitement for your product are more than likely shiny balls that generally distract you from more important work at hand. They are a fools’ paradise.There are several startups in our Prosper Mastermind program currently in their 2^nd and 3^rd year of business that will confess that those who were initially interested in their product/service were actually not their best customer.

Remember that the “friends & family” round we all hear about in early stage capital conversations also applies to the first round of customers. They sign up because they love you. Not because they necessarily believe in you or need your product.  Use these referrals to gather market research before your big launch. But don’t assume they actually ARE your target customer.

I don’t know how to do market research. And lots of people also don’t know how to code software. But you figured it out. Or you found people on your team who could figure it out. This business function is equally critical to your success. Try harder.

I just want to get started. You have a great product and you just can’t wait to get it out to the market. You’re talking to potential investors who want to see some traction, preferably in the form of contracts and revenue.  I understand. The last thing you want to do is pause for 3 months for market research purposes.

Lost, this is a phenomenon that occurs in so many aspects of life – from dating to hiring to market research. It’s called “hot wiring” (Thank you, Brené Brown). You are succumbing to the pressure to act in an effort to find certainty. Even certainty that is potentially going to send you in the wrong direction and bankrupt your business. Uncertainty is hard. Certainty is easier. But this is what grown-ups do, Lost.

Warren Buffet famously said, “The difference between successful people and really successful people is that really successful people say no to almost everything.” Resist the temptation to chase after those shiny balls. Sit in the discomfort of not knowing immediately who your target market is so that you can do the necessary work to figure it out.

And here’s the biggest reason: I don’t want to know the results. Let’s face it. It’s hard to put your baby out there and ask for opinions. It’s uncomfortable. Vulnerable. It is easier to launch said baby on a website and sit in the sanctuary of disconnected business development email correspondence with your fingers crossed, hoping that those who stumble upon your website and sign up to try the software will be enough to sustain you through the next year. That is a risky game of entrepreneurial Russian roulette to play because you are afraid of what you might find out if you ask some hard questions.

This is entrepreneurship, Lost. It is not for the faint of heart. Grow some thicker skin and get out there.

Until next time, resist the shiny balls my friend.

Entrepreneurially Yours,

Prosper Women Entrepreneurs

—

Have a question for Prosper Women Entrepreneurs? Contact Silicon Prairie News, and your question may be featured in an upcoming story!

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.