Startups approach us on a weekly basis to work with them on business plans, financial models, and pitch checks. To do this effectively, we always dive into the market research aspect of the startup. This is the most important aspect when it comes to business documents because we can theorize as much as we want. The difference between theory and fact is that facts have already happened or are happening, making them reality. But putting a theory like “flying cars are going to be available in the year 2030” is just a theory, which could be wrong as much as it could be right. A fact, such as “this company released a flying car in the year 2024,” is useful information. Market research is all about fact, of course, if it’s implemented correctly. So we looked into the current market research tools for startups.
Utilizing AI in Market Research
So, we use a variety of market research tools for startups when working on such documents. First, we use ChatGPT, but not in the way you might think. We don’t ask ChatGPT to simply research a market for us. What we do is conduct the initial research and gather references, like annual reports from pharmaceuticals or whatever companies we are researching. Then we take those PDFs and send them to ChatGPT.
Optimizing Data Processing with AI
ChatGPT can read these documents for us and answer questions much faster than we could. This is the perfect way to use artificial intelligence at this stage in market research for data processing. You should initiate the research with your own methodology and mentality. For example, if you’re working on a new health tech startup, you need to analyze all the pharmaceutical data from those annual reports and extract information about sales. This piece of information could be helpful to you.
Structure and Preparation Before Data Processing
Before you actually start the data processing phase, you need to create a structure for the research and determine questions that need to be answered. Especially when you know the questions, it will be easy to find the answers.
The Importance of Clean References
Secondly, clean references are crucial. This is not really a tool, but it is extremely important to pick the right references for research. Startups often show us documents stating that “Grand View Research states that our industry is going to grow by a compound annual growth rate of 100% until the year 2030.” These references and this data are absolute rubbish.
Fact-Based Research Over Projections
Projecting financials or projecting an industry’s growth is usually the worst thing you could do for your startup’s market research. A good market research tool for startups would state facts, not projections. And if it did state projections, then it would be from a very credible source, like Deloitte, McKinsey, PwC, KPMG. These firms release market research with some projections, which I believe are sometimes closer to accuracy than anything else you can find on the internet.
The Problems of Internet-Based Market Research
The problem with the internet is that it is search engine optimized. Everything you see on Google when you do research is designed to be shown for you to search for it. If you search the paper clipping market in Asia, then those websites would see that you’re searching for that, and they would use this as inspiration to write an article or a report. Then, they generate a report that is far from real when it comes to facts.
Other Startup Tools and Their Reliability
Other market research tools used by startups include websites like Crunchbase, which has a lot of data on how much fundraising a startup or a company has. Another website would be LinkedIn, which shows how many employees a company has as well, although this is tricky because anyone can state that they are employees of a certain company without validation. Similarly, anyone could actually put the funding that they’ve achieved on Crunchbase. So these two sources are okay, but they’re not to be depended on.
The Human Element in Market Research
To wrap up when it comes to the topic of market research tools for startups, I would say that it’s really wise for you to either hire someone or do it yourself when it comes to the structure of the market research. This requires the human brain at this stage. You or a freelancer on platforms like Upwork, Fiverr, or Toptal should understand your company’s unique selling point, understand what it works on, and then write the narrative of the market research. Once you’ve written the narrative, you can start your manual research of some solid references, and only after that, you could use data processing tools to actually get the numbers and put them in any form you want.
You can also use these AI tools like Gemini or GPT in this last part. That’s the process we go with, and that’s the process we highly recommend for any startups working on market research.
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