Secrets of Survey and Research Design: Key Points You MUST Need to Know
Surveys may seem simple, but they hold a wealth of complexity. Without clear objectives and goals for your business, you won’t know what needs clarification. Many plunge into survey design without a clear understanding of what needs attention, leading to suboptimal decision-making.
Here’s a compilation of recommended articles to guide you:
Understanding the Concept of Objectives and Research Design
- Common Pitfalls in New Business Marketing/Research Methods: Examples of Successes and Failures
- How to Create a Survey: Principles for Foolproof Research Design
Detailed Insights into Foolproof Research Design
- Creating a Survey: Making Choices MECE (Mutually Exclusive, Collectively Exhaustive) – With Examples
- Calculating Sample Size in Surveys: A Comprehensive Guide with Statistical Basics
- Struggling to Get Responses in Your Survey? Enhance Survey Accuracy with These Tips
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The Harsh Realities of New Businesses and Industry Issues
As someone familiar with the challenges of launching new ventures and understanding the problems in the research industry, I’ve structured essential information that may not be widely known.
Whether for new businesses or any venture, a lack of research can lead to significant failures in marketing and business. The documented expertise on this matter has proven to be highly popular.
The Pitfalls of New Business Marketing: Cautionary Insights
When resources like funds and talent are scarce, especially in startup or venture phases, challenges and hardships abound. Even achieving seemingly impossible Key Performance Indicators (KPIs), such as becoming the top youth research user in the country with zero ad spend, is possible.
My experience, despite lacking marketing knowledge and being risk-averse, demonstrates the importance of strategic customer validation. In an effort to reduce the tears of failure, I generously share the knowledge accumulated during this process.
Caution: “No Research Budget for New Businesses!”
Even major players struggle to allocate resources for customer needs verification in the early stages of new business endeavors. However, it’s precisely in these resource-scarce initial phases that proper customer needs validation becomes crucial.
You can conduct effective validation without a hefty budget. While the speed of launching a new business may be affected, it significantly boosts the probability of success.
For a detailed breakdown of research needed in each marketing phase for new businesses, refer to the articles linked above.
The Lie of “It’s Okay to Fail” in New Business Ventures
While the idea of embracing failure in new business ventures is common, it’s crucial to clarify that controlled failures within set investment and withdrawal criteria are viewed as “validation.” However, unclear hypotheses and untraceable factors in success or failure diminish the chances of success.
Moreover, failures exceeding the assumed costs and scope can lead to irreparable losses, jeopardizing business continuity. Taking responsibility for your actions is vital. Clearly define your investment in terms of funds, time, and verification goals to continuously enhance the chances of success.
Pitfalls in New Business Marketing
The challenge of launching a new business is compounded by the need for accurate needs verification. Framing a proposal within the framework of a new business is insufficient; real-world validation with the target audience is imperative. Relying on assumptions or misinterpreting needs, even if none exist, poses a severe risk. I’ve witnessed numerous cases where substantial costs led to hellish scenarios, especially in companies attracting top talents, both in large corporations and startups.
With the increasing use of simple surveys for preliminary research, it’s crucial to note that incorrect research methodologies can be perilous.
Why Do Even the Best and Funded New Businesses Fail?
Success in new businesses boils down to aligning basic customer needs with what you can offer. It seems simple, right?
Yet, why do 74% of companies fail in new business ventures?
To improve the success rate, it’s essential to provide what aligns with customer needs and determine how profitable it is. While this sounds straightforward, the reality is that only about 26% of companies, including major corporations, survive after ten years.
New Business: Cases Where Research and Customer Understanding are Not Necessary
Research may not always be necessary.
Some scenarios where research might be skipped include:
- “Taking risks to create significant value, prioritizing speed.”
- “Having a clear desire to do something, prioritizing speed.”
- “Abundant funds with minimal damage in case of failure.”
- “Having a strong conviction about sufficient customer understanding.”
- “Being well-acquainted with customer challenges, with an existing network in the target industry.”
For those falling into these categories, new business research (customer needs verification) is unnecessary.
It’s a significant mistake to skip customer validation due to limited resources. Even for serious startups with limited resources, proper customer validation is essential!
For those with limited resources or any concerns, the following information might be helpful.
Some may argue that research is unnecessary, and they should just try it out. However, this is a mistake. Without the right validation perspective, trying something out without proper verification can lead to failures like those mentioned earlier.
Ensure careful consideration of who to survey (setting conditions) and pay attention to sample composition and size.
Beware! Correct Research for New Businesses Often Neglected
Incorrect research can accelerate the failure of new enterprises. Even with ample funds and prior research, big corporations sometimes fail. For instance, a major electronics manufacturer incurred a 300 million yen loss in a new business venture – a VR app development.
Example 1: Major Electronics Manufacturer’s VR App Failure The company conducted an internal survey, assuming an 80% interest in the new VR app. With a development cost of 300 million yen and extensive advertising, the actual user base did not grow, leading to a substantial loss.
In this case, internal surveys led to a mistaken belief in existing demand. The target audience was misidentified, resulting in a significant setback.
Such cases highlight the importance of proper validation, especially targeting and verifying the level of latent needs in the actual user base.
Common Pitfalls in New Business Research
Let’s explore common mistakes in existing research practices.
Example 2: Profit Projection Discrepancy in HR Service New Business
A survey conducted with 1000 HR professionals estimated a profit of 5 million yen. However, a thorough reevaluation considering active and latent users resulted in a loss of 68 million yen.
These examples emphasize the importance of user segmentation, accurate estimation of user needs, and the costs associated with reaching different user groups.
Other Common Failures in New Business Research
Many new business failures are linked to user needs. For more insights, refer to the article on signs of startup failure.
Related Article: 8 Signs of Startup Failure
Caution in New Business Target Selection and Research/Analysis
When constructing a fail-proof marketing strategy or validating a strategy for course correction, consider the following points.
Points to Note in PMF Validation Research and Analysis for New Businesses:
1. User Response Overload: Avoid overwhelming surveys with too many questions or choices. Keep surveys within a 10-minute response time, 25 questions, and 30 choices.
2. Bias in Responses – Design Bias-Free Surveys: Design questions to avoid influencing responses. Consider the flow of user thinking, and be cautious about bias in question order.
3. User Demographic Imbalance: Ensure survey participants represent the target audience. Be wary of biases introduced by using friends or early adopters.
4. Inability to Elicit Honest Feedback: Be mindful of biases introduced when the surveyor is revealed as a service operator or when non-specialist personnel design and conduct surveys.
PMF Testing and Surprising Failure Points
Discover unexpected failure points in PMF testing.
1. Calculating Market Size: Focusing on market size might not be meaningful for new businesses. Instead, simulate and estimate achievable revenue based on current and future trends.
2. Explaining MVP: Avoid explaining MVP during user testing. Let users explore without interference, and gather feedback on real experiences.
These points stress the importance of practical simulations, segment-specific user needs, and understanding actual achievable revenue rather than focusing solely on market size.
In conclusion, user-centric, precise, and strategic research is critical for new business success. Avoiding common pitfalls and conducting thorough research can prevent costly failures. Always remember, understanding user needs is the key to sustainable and successful new ventures.
New Business and Marketing: Avoiding Failures with Effective Research
Starting a new business can be daunting, and successful marketing is crucial for its growth. As a writer, professional marketer, and researcher passionate about preventing business failures, I aim to provide insights to help individuals and businesses succeed. Let’s dive into the translation and adaptation.
New Business Ventures: When Research Isn’t Necessary
Research might not always be a necessity in new business ventures. Some scenarios where research may seem unnecessary include:
- “Taking risks leads to significant value creation; prioritize speed.”
- “There’s an absolute desire to do something; prioritize speed.”
- “Abundant funds, minimal damage in case of failure; surplus funds, major players.”
- “Confidence in thorough understanding of customer needs; familiarity with industry challenges and a network in the target industry.”
For individuals falling into these categories, researching new business ideas or validating customer needs might not be necessary.
It’s a significant mistake to skip customer validation simply due to a lack of resources. Adequate customer validation is essential, especially for serious startups with limited resources.
Understanding potential needs through comparisons with existing or competing services and investigating past behaviors via web surveys can provide a baseline for latent needs.
Common Mistakes in New Business Research
Even with research, businesses can fail due to flawed research methods. Let’s explore some common mistakes:
Case 1: Misleading Survey Results at a Major Electronics Manufacturer
A major electronics manufacturer invested in VR app development based on an internal survey. Despite 80% expressing interest in using the app, the product failed to generate revenue due to a mismatch with the actual target audience.
Case 2: Pitfalls in Predicting Profits for a New HR Service
A survey about a new HR service predicted a profit of 5 million yen based on responses from 20% of the surveyed 1000 HR professionals. However, reevaluating the research by focusing on latent and visible users revealed a potential loss of 680,000 yen.
Effective Research Strategies for New Business Ventures
To avoid the pitfalls of inaccurate research, adopt these strategies:
Identify Latent and Visible Users: Assess the proportion of users with decision-making authority and compare service value and costs with competitors.
Competitive Analysis: Compare your offerings with competitors, focusing on strengths and weaknesses. Identify your unique selling points.
Segmented Cost and Revenue Projections: Break down potential users into segments and estimate their willingness to buy at different price points. Project costs and revenues for each segment.
User-Centric Approach: Conduct surveys and interviews without revealing your business affiliation to extract honest opinions and identify genuine challenges.
Introducing “Makech”: Your Research Support Partner
Overcoming the challenges of research requires time and resources. If you lack human resources, worry about effective validation, or struggle to pinpoint the right target audience, “Makech” is here to help.
Our Services Include:
- Uncovering latent needs
- Refining business ideas
- Validating needs and business concepts
- Launching and monetizing support
- Acquiring initial users
For those interested in new business ventures, feel free to reach out for more information.
“Makech” is committed to supporting businesses from planning to execution. Unlike traditional research and consulting services, we go beyond assisting with ideal plans and commit to generating the first 10 million yen in revenue. We prioritize regular reviews, issue resolution, and can introduce partner collaborations or assist with grant applications.
Free Access to 300 Professionals for Recruitment Diagnosis
“Makech” offers comprehensive support for your business plans, including recruitment. Whether hiring full-time employees or selecting freelancers, we ensure the right fit. Our Business Skills and Aptitude Assessment for remote or external workers are available for a limited time. Feel free to inquire if interested.
Leader Profile: Shion Yamanaka
As the Founder and CEO of “Makech,” Shion Yamanaka started the company after recognizing structural challenges in the marketing of small and startup businesses. With a background in linguistic studies from Sophia University, Yamanaka led business divisions at a marketing research platform, achieving top-tier results with almost zero advertising budget. “Makech” has since supported over 100 companies, including major corporations, government agencies, and startups, contributing to their commitment and revenue growth.