Execution in a New Venture

We start with understanding the customer (“market research” and how to go about it), as this is the first thing that has to get “done” in a new venture.

At the heart of every start-up, there is an unmet need or unsolved problem. Validating that the need is real, that it can be solved  in a way that is acceptable to the prospective customer and that the customer can be reached and persuaded to buy and use the product are the key questions that lie at the heart of whether a new venture is viable. Once these questions are answered, the entrepreneur can move on to answer other important questions about technology, competitive position, the economics of the venture, the availability of financing, etc.

The work of understanding the customer is the foundation for the venture.

• Understanding customer needs and preferences is the basis for deciding whether the venture is worth undertaking at all.
• The quantitative understanding defines the scale and scope of the venture.
• Understanding customer processes dictates the selling and sales fulfillment plans of the venture.
• Understanding customer decision making is the foundation for the marketing activities of the venture.

The work of understanding the customer is market research.

Market research is ongoing

Market research is the process by which you understand your customer base or your potential customer base. Market research is the first thing that an entrepreneur must do, and it never stops:

We generally divide market research into primary and secondary. This table is a high level overview of market research from the perspective of the entrepreneur.

Primary
	Observation	The process of careful observation of a pattern of behavior or process Involves understanding purpose, context and related activities Requires understanding motivation (positive and negative) surrounding various components
	Dialog	Structured conversation with potential customer Involves listening and gathering data that is offered spontaneously and unprompted Allows for getting direct feedback on a specific product concept Opportunity to probe on many aspects of the customer’s environment that may affect likelihood of success of the venture’s product
	Experiment	Allows for getting information which the potential customer may not be able to provide explicitly, such as “Would you actually use this? Requires some vehicle (like a prototype) for performing the experiment To provide reliable information, the test must be carefully planned with explicit criteria
Secondary
	Company websites	Often good source of information regarding relevant factors in the company, such as financial position, strategic priorities, culture as well as the basics of the business
	Industry reports	Usually the primary means of quantifying opportunities, segments, primary customer attributes Good source of information about current solutions and alternatives Important supplement to primary research
	Media and other public sources	Good supplement to above