If you are one of these people who are seeking to create a new startup, you might have some ideas that you believe in and want take a new adventure. But before you start you need to tap the ground and discover the readiness of the market. Every project must have a market study to assess its viability. If you have big bucks in your pockets you can delegate this task to a company to do it for you and hand you the result while you are playing golf. However if you are startup creator, the last thing you need to do is to spend money uselessly. Every penny counts for entrepreneurs and their startups.
Market study is used to determine the consumer interest in your product and to weigh the competition. Based on these results you consider your decision whether to enter the domain or not.
Although there are professional companies that are specialized in making market studies, you can do it by your own using simple tools for free. These tools are:
- Google Trend
- Google Search
- Alexa.com
At start you might be interested in getting data about consumers needs. People usually use Google to search for what they are looking for. Luckily Google gives you a way to find out what they are looking for. By going to Google.com/trends you will discover the keywords that people used in their search. Put the keywords related to your new business and check the results. Try several combinations in order to get the best results. For example if you want to give online photography courses you might search for the following “online photography courses” or “photography courses online” (order of the keywords matters). If you are interested in one region of the world you can specify it too. In case the index given by Google Trend is not sufficiently high, you might not have a real market or you might be using the wrong keywords to describe your business or you need to find other ways to get data.
Once you are satisfied of the keyword results and you think there might be enough demand, what you need to do next is to determine the competition. Use Google search to find sites in your domain using the same keywords you used in Google Trend. Start by checking the commercial links displayed by Google because these companies are being aggressive at the market and you surely need to know what they are offering. Then take most of the results that appear on the first two pages of Google; check them one by one and see how they differ from your ideas and what features they are offering to the users.
After you have determined the quality of these sites you need to know how popular they are and if you will be able to compete against them. To know that go to Alexa.com and search for each of these websites and check their ranks and the traffic rank history. The current rank tells you how strong in popularity they are. If their rank is below 10 000 that means they are very strong and you might expect a fierce competition. The traffic rank history will give you an idea of how much time they took to reach their current position. This gives you an overview of how hard or easy is the road ahead.
In some cases you can get additional info about their financial situation such as sales and revenues either directly from their website or by searching for this info on some sites such as Tracked.com, although it is not always guaranteed that you will find useful data.
Now you have all the information in your hand. Based on these figures you can take a moment to study and evaluate your chances of success and the stiffness of the competition.
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