At Practical Startup, we have a process of developing and evaluating new business ideas. This is the second in a series of two posts on this process. If you missed it, read the first post here.
MARKET DEMAND
Demand is important. Really, really important. Without a large group of people who want your product, you’re doomed. You can do everything else perfectly and still fail. So it’s crucial to ensure there is a legitimate market for your product before investing time in building your business. The best ways to estimate demand is to actually try selling a minimally viable product, but this can be time consuming. For our purposes we are going to look at a few online tools to quickly analyze demand before investing significant resources and time in other methods.
Google Keyword Tool (www.google.com/adwords)
The Google Keyword Tool shows you how many people are searching for a particular term each month. The search volume for a term can be a proxy for consumer demand and interest.
To Use: Sign-up for a free Google Adwords account and select Keyword Planner from the Tools menu at the top. Enter your product or category in the search window, and any demographic targeting information. The resulting chart will show you how many people searched for that term every month, and can be used as an indicator for consumer demand.
MARKET DEMAND
Demand is important. Really, really important. Without a large group of people who want your product, you’re doomed. You can do everything else perfectly and still fail. So it’s crucial to ensure there is a legitimate market for your product before investing time in building your business. The best ways to estimate demand is to actually try selling a minimally viable product, but this can be time consuming. For our purposes we are going to look at a few online tools to quickly analyze demand before investing significant resources and time in other methods.
Google Keyword Tool (www.google.com/adwords)
The Google Keyword Tool shows you how many people are searching for a particular term each month. The search volume for a term can be a proxy for consumer demand and interest.
To Use: Sign-up for a free Google Adwords account and select Keyword Planner from the Tools menu at the top. Enter your product or category in the search window, and any demographic targeting information. The resulting chart will show you how many people searched for that term every month, and can be used as an indicator for consumer demand.
Google Trends (www.google.com/trends)
Google Trends identifies the number of searches for a term over time and can be used as a proxy for forecasting increasing or decreasing consumer demand. An increasing number of searches can be interpreted as an in-demand product, while a flattening or declining trend can be interpreted as a product loosing consumer interest.
To Use: Go to www.google.com/trends and search for your product or category. The resulting graph shows the percentage of searches compared to the peak date. The highest number has a score of 100, and every other date is rated 0-99 in relation to this point.
Google Trends identifies the number of searches for a term over time and can be used as a proxy for forecasting increasing or decreasing consumer demand. An increasing number of searches can be interpreted as an in-demand product, while a flattening or declining trend can be interpreted as a product loosing consumer interest.
To Use: Go to www.google.com/trends and search for your product or category. The resulting graph shows the percentage of searches compared to the peak date. The highest number has a score of 100, and every other date is rated 0-99 in relation to this point.
Topsy (www.topsy.com)
Topsy is a twitter analytics tool that searches all mentions of keywords to determine how many people are actively talking about a product or topic. Twitter is an effective source for looking at market potential and product interest. Use Topsy to search for the volume of tweets per day mentioning your product / service category
To Use: Enter your search term on the Topsy website and hit enter. Then, click on the graph labeled “Tweets Over Past 30 Days”. From this graph, you can determine how many people are tweeting about your product / service and see what they are saying.
Topsy is a twitter analytics tool that searches all mentions of keywords to determine how many people are actively talking about a product or topic. Twitter is an effective source for looking at market potential and product interest. Use Topsy to search for the volume of tweets per day mentioning your product / service category
To Use: Enter your search term on the Topsy website and hit enter. Then, click on the graph labeled “Tweets Over Past 30 Days”. From this graph, you can determine how many people are tweeting about your product / service and see what they are saying.
MARKET SUPPLY
It’s important to understand your competitors in the marketplace before deciding to establish a business. Unless your idea is truly novel, there are likely to be existing businesses that are tackling the same problem. While you don’t have to be first to market your business should address an unmet need either by targeting a different customer, a different location, or a different method. The following tools will help you understand the nature of competition in your area, how many companies exist, and where they are located.
SBA’s SizeUp Tool (www.sba.gov/tools/sizeup)
The Small Business Administration’s SizeUp tool lets you crunch millions of data points to get customizable reports and statistics about your potential competition. Enter your industry, city, state and other details. The tool then runs various reports and provides maps and data related to your competition, suppliers and customers. This tool is applicable to both consumer and B2B industries.
To Use: At the tool, enter in the industry category and city you plan to target, then select competition. The resulting window will show you a list of businesses in the geographical area you selected. Try using various data filters to better understand your competition and customers.
It’s important to understand your competitors in the marketplace before deciding to establish a business. Unless your idea is truly novel, there are likely to be existing businesses that are tackling the same problem. While you don’t have to be first to market your business should address an unmet need either by targeting a different customer, a different location, or a different method. The following tools will help you understand the nature of competition in your area, how many companies exist, and where they are located.
SBA’s SizeUp Tool (www.sba.gov/tools/sizeup)
The Small Business Administration’s SizeUp tool lets you crunch millions of data points to get customizable reports and statistics about your potential competition. Enter your industry, city, state and other details. The tool then runs various reports and provides maps and data related to your competition, suppliers and customers. This tool is applicable to both consumer and B2B industries.
To Use: At the tool, enter in the industry category and city you plan to target, then select competition. The resulting window will show you a list of businesses in the geographical area you selected. Try using various data filters to better understand your competition and customers.
Google Competition Search (www.google.com)
The majority of people use search engines like Google to find businesses and services, so it’s a great place to start when looking for competitors. Google is able to identify physical locations of retail businesses or online websites for service and web based businesses.
To Use: Search your product / service category in Google and note the search results that come up on the first 3 pages. When customers are searching for you, the other companies listed are likely your competition. Identify any clear market leaders and the services they provide.
The majority of people use search engines like Google to find businesses and services, so it’s a great place to start when looking for competitors. Google is able to identify physical locations of retail businesses or online websites for service and web based businesses.
To Use: Search your product / service category in Google and note the search results that come up on the first 3 pages. When customers are searching for you, the other companies listed are likely your competition. Identify any clear market leaders and the services they provide.
Next Steps
Analyze each of your business ideas to determine which ones have the best market demand and competitive environment. With this information, you can prioritize which ideas you would like to proceed with. Still need more help? For a more detailed step-by-step guide, check out the complete edition at our website, Practical Startup.
Analyze each of your business ideas to determine which ones have the best market demand and competitive environment. With this information, you can prioritize which ideas you would like to proceed with. Still need more help? For a more detailed step-by-step guide, check out the complete edition at our website, Practical Startup.