Ask HN: How to do market research for product?
Hello HN,
I’m planning to build a product but how can i perform market research related to the product
Let’s say I’m launching a product for restaurant owners helping them ease some their operations for example here’s my idea.
I see a problem with restaurants keeping their menus up to date on delivery apps or even online sometimes and some restaurants aren’t tech savy so how about I build a simple product which can help ease this and help them easily update menu and publish them on all platforms
Also I want to thank everyone for commenting on this post as I have been reading each one of them and each comment is useful for me
122 comments
[ 2.6 ms ] story [ 192 ms ] threadYou could also check what people are complaining about / asking help for in relevant subreddits and see if you can build a product around that.
I ask because I often see the advice that people should look in the Shopify/Hubspot app stores for paid apps with lots of users/ratings and a low score, and while this sounds good, I've found very, very few apps that actually match these criteria. Typically a low score indicates a complaint that is outside of the technical scope that the app owners could address, and ends up being a weak signal imo.
I don’t do what you mentioned (ie. look for paid apps with lots of ratings & a low score), I look for any app with at least one 1 star or 2 star reviews and I also look for any problem (doesn’t have to be related to an app) in reddit or any forum.
To be fair, it’s quite a numbers game to dig for useful problems or insights.
A related video about the process is Amy Hoy’s Sales Safari: https://youtu.be/67JVkG4dpj4
So it doesn't matter if the app overall has a good rating, you're just looking for the signal that some subset of users isn't getting their needs met?
How do you trust a single 1 star review as validation?
[1]: https://www.youtube.com/watch?v=Th8JoIan4dg&list=PLQ-uHSnFig...
[2]: https://www.youtube.com/watch?v=z1iF1c8w5Lg&list=PLQ-uHSnFig...
Anecdotal, I once planned to build a sports related mobile app with music platform integrations. I scraped together a BuyMeCoffee page and wrote an extensive Reddit post about the app idea. The post got hundreds of upvotes and comments within hours — and three people even paid via BuyMeCoffee!
It was quite easy to tell I had hit a jackpot. The idea failed though because Spotify's et al TOS' are quite hostile when it comes to commercial apps.
That's a great idea, thanks for sharing
Some further reading/viewing on it here - https://stackingthebricks.com/video-sales-safari-in-action/
(I’ve written a book on the topic but I’d promote those others ahead of mine, any day.)
If you have the resources, conduct qualitative research like focus groups or individual interviews too.
There are thousand of market researchers like me that do this for a living. Find one you trust and ask them for help.
Don't just build the product in the hopes that people will come to you. Aside from doing market Research et Al, it's equally important that you figure out if you will be able to "market" the product. If you don't have a thoroughly planned GTM strategy that's peer reviewed by people who understand your market, you might end up with a great solution but no access to potential buyers.
Or, you're targeting individuals but there's a competitor with $300M funding who owns all marketing channels. You might not be heard in the noise.
The director of IT and CTO were reticent to base their entire data capture system that was going to be rolled out to thousands of field workers to him.
I suggested that they only sign the contract if the developer was willing to put their entire codebase in escrow and agree that we had a non exclusive right to the code under license.
Everyone agreed and the lawyers talked and made it happen.
I led a quarterly validation of the code in escrow. He would come onsite and I would watch him download the code from the escrow company and build it from scratch and deploy it and I would do a smoke test.
I had the idea from being on the other side. I worked for a small struggling startup 3 companies before then where our major customer had us do the same.
When we were bought for scraps, the customer exercised the right to the escrow and the customer negotiated the rights from the acquiring company to let me work for them under contract.
I made out like a bandit. I was one of the only three people in the world who knew how to compile and maintain the proprietary VB like mobile development platform - an SDK, a VM (something akin to the JVM)
I was brought in as the dev lead for the next phase, integrations as we acquired companies, migrations, etc.
I don’t know how they original found the software. But it became much more crucial as they expanded and the company I was working for was aiming to go public.
I've seen people invest 100k+ and years in products that never had a market but I've also seen people invest no money and years in talking about "stuff".
[0] : https://blog.geekodour.org/posts/market_research/
Thats why some UX uses matched-pair questions which have two approaches to the issue at hand, boolean opposites, so you can see if they move sliders, weight or answer both the "correct" way to align the response.
Separately:
"If I made a new service x would you like it" is not the same as "if I said it would cost you $5 to use new service x would you use it" is not the same as "do you think new service x would be useful" is not the same as "do you think anyone else wants new service x"
It's very easy to mistake these for "the same"
I am personally very skeptical of NPS and satisfaction scores in small communities. They may work for google scale entities, I don't think they do for <100 users. Many people canonicalise the results of 4-5 respondants. In my experience, if your primary job is to assess if they qualify for X or Y, and you ask them how much they liked your service delivery in denying them X or Y, they will be profoundly negative about the service, which is really not helpful because you may have written a simple direct and fast web service to deliver the negative outcome. And of course, the reverse is equally true.
Haven’t read it, but despite doing engineering and product work for decades I’m always grateful for books like this as there is always more to learn! Looks great!
Any other must haves in this category?
Here are some critical questions to ask yourself:
1. Do potential customers know they have a problem?
2. Do they already have a makeshift solution?
3. Do they have a budget to spend on a better solution?
This is one of those things that Steve Blank tries to address with the "Million dollar question." He suggests something like this (paraphrased from memory)
1. Ask your prospect (this assumes you've identified a prospect and gotten in the room, or at least on a call, with them) "If this product were available today and I offered it to you for free, would you start the process of deploying and roll it out immediately?"
If the answer is "no" then you clearly have bigger issues to deal with, considering you're offering the product for free. At this point you have to dig in and find out why. Maybe it's the case that while the current need is valid, there are simply higher priorities for the customer right now. In which case, your only issue is timing. But you may keep digging and find that there's something else. Anyway, repeat this with a few prospects, and you should start to converge on a valid understanding.
2. If the answer to question 1 was "Yes" (and I mean a solid "yes" not a bunch of hemming and hawing) then you next ask "OK, what if I charged you a million dollars for the product?"
Now... if the answer is still "yes", well, in that case you better have a purchase order ready to drop on your customer's desk Right Now. You've won, there's nothing left to do. Well, except for actually delivering the product, and successfully deploying, and integrating it, training users, creating value, etc. But in terms of sales, that would be the "Holy Shit" moment.
Probably not gonna happen though. Probably they'll start hemming and hawing and going "Well, uh... I mean, I dunno, a million dollars is a lot of money...", etc. That's OK. That's not a "no", it just means you now have an idea that the value your product represents to a customer is somewhere between 0 and a million dollars. If you find yourself in this situation, the (huge) body of material out there on sales, pricing and negotiation comes into play. But assuming you can get your customer to a "yes" at a number that would be profitable for you, then you now know that you have a product that can be sold to at least one customer for a profitable price. If you get this far, you're in pretty good shape. If the product actually exists, go ahead and sell it. Use the money to fund further exploration. Keep iterating. If it doesn't exist yet, promise the customer you'll let them know as soon as it's ready and keep iterating. Asking for a non-binding letter of intent to purchase might be useful if you're going to seek external funding.
Example: Say you are an AI graduate who has worked in AI for a while before ChatGPT.
Suddenly a competitor spins up something you were also developing - faster with ChatGPT - no problem, you launch it too.
One month later, 20 more competitors have popped up, but none really gained too much share. It seems ok.
Two months later, a competitor with funding launches, but now the product is free.
You start losing users to FreeComp, who also buy conference attention.
Your users say well, if you add this advanced feature - then we'll pay - but not now we can go to FreeComp.
Can you trust that? For how long? How would you weight it?
Markets change, many evaporate or at least lead an accerated decay. Sometimes you double down on the decaying market, as the correct decision. Organizations have abandoned products, markets, or even invested in complete pivots as a result.
There's single right answer.
If you're paying attention to your competitors, you're probably not paying enough attention to your customers.
If your customers are really just turned on by the latest shiny object, they're not customers, they're fad followers. Don't bother with them.
Elicit feedback by starting with the premise of "How does this suck right now?"
>Will you install this right now to get started with the free trial?
>Will you hand me the money so I can hand you the keys?
>Will you sign this contract here so we can start with shipping and installation?
And they really aren't even questions. We can rephrase them as simple trades/exchanges:
>You get: a free trial; I get: you at the start of my sales funnel
>You get: the keys; I get: the cash
>You get: the product/service; I get: your legal commitment to pay me
Sooner or later (we may already be past that point), serious buyers will just stop speaking to anyone at all who even just remotely gives off the vibe of being a bootstrapped startup, assuming they're all just hustlers who won't deliver.
That said, I'd suggest you start by reading The Four Steps to the Epiphany by @sgblank. His "Customer Development Process" is basically "market research" but by a different name, and with a slightly different focus than "traditional" market research.
While you're at it, I'd suggest also hitting up Alibris (or your favorite pirate e-book site, whatever) and pick up a cheap "Intro to Marketing" book. Doesn't matter which one, or what edition, but probably go for something written in the last 15 years or so. Even if it isn't super up to date, a lot of the basics will still be valid.
The book The Mom Test is also good and should probably be required reading at this stage.
If you want more, consider searching the HN archives, as a lot has been written on this topic here over the years.
I put in a version of your question:
What should I build for restaurant owners to help them ease some of their operations?
And here is the first part of the answer it gave back:
1. One of the major pain points that restaurant owners face is the difficulty in managing and tracking orders from multiple delivery platforms. A software solution that consolidates orders from various platforms like DoorDash, UberEats, Grubhub, and ChowNow into a single dashboard would be highly beneficial. This would allow restaurant owners to manage their orders more efficiently and reduce the chances of errors or missed orders.
You can use it here https://www.painfinder.co/
How is the answer I got from your service different than the answer I got from ChatGPT?
Since anyone can enter the same question for both, I won’t bother posting the replies.
How can I help consultants who have AWS skills meet potential clients that need their services and are willing to pay top dollar?
Here's what Painfinder responded with:
"1. One pain point that consultants with AWS skills often face is the challenge of finding potential clients who are in need of their services and are willing to pay top dollar. Existing software solutions in this space do not provide a comprehensive platform for connecting consultants with clients in a targeted and efficient manner. However, there are opportunities to address this pain point by leveraging the capabilities of existing software products."
All I’m getting are hallucinations
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Talk to potential customers and use very open ended questions. Be upfront that you are doing market research about delivery app usage in restaurants. Start with something like "How is using delivery apps going for you?" The opener the question the better. Most people love to complain. So your hope is that they rant about their biggest problem. If they don't ask about other areas until they start ranting.
After you found a problem, ask follow up questions about how the problem is impacting them personally. (People don't care about their company, they care about their salary, promotions, if their boss likes them etc.) This will help you later in selling your product, when you call back the person 3 months from now with a prototype.
When you have a concrete product or prototype that you show off, the best indicator is that people ask if they can buy the product right now. If they don't or you have to ask them if they are interested it's probably not solving an important problem for them.
PS: This works for B2B. B2C is probably different.
The main difference I see is, that with B2C you need to find a useful product and the rest is marketing. This is my simplistic view as somebody who doesn't do B2C. There is lots of nuance, but I believe you need a similar skillset for most B2C ideas.
B2B has a larger logical component to product design and sales pitch and a much more individualised emotional component.
The logical component is about what to sell to solve a specific problem. If you have different products that each increase a company's revenue by a million dollars, some of those won't sell for 0 dollars and for some you can charge more than a million. Why? Because the company doesn't make any decisions. The people within that company will buy what helps them and a sales representative will pay a million of the companies money to make a million more in revenue, because his numbers go up.
For the restaurants that means they might not pay anything for automation in regards to online delivery, because they don't even recognize how much time they waste. If they don't see a problem or only a temporary problem you won't sell your solution.
The emotional component is also very individual when selling B2B, because people have hidden agendas. They want a tool because their numbers go up and then they get a promotion. They want to start a project to make their boss pat them on the back. The want a tool that saves them time, so they can go home earlier and see their kids.
You see it's all about finding the right angle to solve a problem in B2B. It needs to solve some problem for the business and it must solve a big problem for the person you are selling to that they are emotionally invested in.
With restaurant owners it might mean that saving the owner two hours a week is worth nothing to them because they still need the same number of employees and it's not their two hours but their employee's.
"Product research" is talking to prospective users/customers. For me, early stage conversations are me trying to understand the customer's problem and how painful it is, not immediately going in with a solution in mind.
Rather than "I've a got a tool that will update your menus on your website", I'm asking "I noticed your website menu is not up to date, why?" "Is it hard to update? Is it expensive? too time consuming? does anyone really care? do you care? does having an outdated menu impact sales?"
Once you've talked to 10's of customers (at minimum), you think you understand the problem, and even have a solution, only then start getting feedback on your proposed product. Do NOT build anything before having customer conversations.
Some general research tips:
- Family and friends in the industry
- Twitter and reddit (looking for complaints, wish lists, people asking for alternatives)
- Product review
- Industry specific publications and forums
- If you've got serious cash, expert interviews and surveys through GLG insights or similar
- Finding people on Linkedin and ask to have a conversation
Is there a list of these areas?
Depends on what you're trying to accomplish. I assume you're trying to find government customers? Some agencies are far more proactive, easier to deal as it's in their mandate to help businesses. An example would be a Chamber of Commerce. Try and get someone within an agency onboard to advocate for you.
You could try finding gov employees on Linkedin as a more direct route. Another option is to try contacting your local elected officials and ask for help, that's what they are there for.
If you are having difficulty in your outreach, you can try finding ex-gov employees or service members who can help you navigate bureaucracy.
This last one is especially useful because if they never looked for a solution its a signal this isn't a real problem. There are millions of problems in the world and most of them are not worth solving because they don't actually matter that much. That's an important angle to think about.
There are a ton of people who currently pay for your competitor’s product, and would gladly switch to yours. You need to find those people and demonstrate your product’s value to them. They will pay you instead of your competitor - that slice of the market now belongs to you, as long as you can keep it, because bear in mind there will always be a ton of people who can make a cheaper, higher quality, or more accessible version of your product.
You might also get lucky enough to stumble across a problem no one has solved yet, or else you might be clever enough to create a problem that your product solves. Those are once in a lifetime type opportunities, big risk versus big reward. Those are the things everybody dreams about that.
But you also don’t need those to get by - if you enjoy solving problems, you can get paid for it, and not invent the microchip or split the atom or chart the sea or the sky.
If I’m a business owner, I’m not switching from “a well known piece of software that meets my needs” to a product built by a random indy developer to save money.
What is your “unfair advantage“? What do you bring to the table that hundreds of other developers couldn’t do?
Take the answers with a grain of salt of course but mostly you might learn a thing or two as it is trained on a wealth of published articles and market research that you'll never get around to reading even a tiny percentage off. You can even ask it to suggest some follow up reading.
I recently had to figure out the airline industry as they are a potential customer for our product. My questions related to understanding what kind of cost bottlenecks they are facing in their operations and how our product should be best positioned to address problems they have. So I simply asked chat gpt about common causes for flight delays and other cost factors, top n cost bottle necks, etc. I was able to get some very detailed insights out of it fairly quickly. So, when we did talk to our potential customer, we already knew a lot about their business.