Research, in an entrepreneurial context, is the process of determining whether there is a problem worth solving in order to build a business case. Research is useful for potential funders and incubators as an objective yardstick to test the assumptions that a business idea is based on.
Business documents such as business plans and proposals usually require research in sections such as market analysis (customer size, customer segments, competitor analysis) and industry analysis (supplier analysis, threat of substitutes).
Another major reason for conducting research is to get a sense of whether customers would respond well to the solution that you have in mind. An article from Harvard Business School titled Why Companies Fail—and How Their Founders Can Bounce Back tells a story of a startup in the dot.com era called Webvan that bought warehouses all over USA with the intention to deliver groceries to consumers only to realize that there wasn’t enough demand for their services. In my personal experience, I have come across entrepreneurs who threw themselves into businesses based on a hunch and ended up losing a small fortune.
There are basically two types of research, primary and secondary.
Primary Research is the physical engagement with customers, suppliers or any other stakeholders in your business. Examples of primary research include surveys and interviews. I would advise conducting primary research after conducting secondary research as primary research requires more resources.
Secondary Research, also known as desktop research, is the discovery and collection of already existing research. Examples of existing research include publications from reputable institutions such as universities and research organisations. Desktop research is an inexpensive type of research as the research results are published and only need to be obtained (if they are free) as opposed to the time and money (developing surveys, making phone calls, transportation costs etc) that come with primary research.
Founder and Director