Faster Horses or Just Invent Cars?

"If I had asked people what they wanted, they would have said faster horses"Image via Wikipedia

        ------Henry Ford

A few weeks ago, I Blogged about companies having to re-tune marketing for the our "new" (and recessionary) economy. 

Entrepreneurs also increasingly are asking me how best to understand whether the market wants their products, before they spend a lot of time investing in the wrong solutions. "You may only get one shot at success in the current economic environment and you better be right the first time" is the underlying theory.  Often, they want to do a customer survey among their friends on Facebook (seriously), visit a bunch of industry analysts, or do beta launches with potential customers.  All these are valid ways of gaining market intelligence, but some work better than others.

What are the best ways to garner information on your markets in an uncertain economy?  Let's examine some of the common and uncommon sources for understanding emerging customer needs.

1. Ask the Analysts. I know, the younger entrepreneurs reading this Blog would rather be caught dead than speak to an aged industry analyst.  Wrong.  Not only do the best analysts have an incredible network that may be valuable to you, they know a lot about your potential competitors, their offerings and their customers.  I always tell entrepreneurs that analysts should be the first stop when you are trying to figure out what your potential customers want to see in your solutions.
2. Do Beta Installs with Early Adopters. Another good tactic is to find an early partner who is willing to work with you on the design and implementation of your solution.  My most successful portfolio companies have all found an early adopter customer who believes in the entrepreneur and the proposed solution.  Their insights are invaluable as the solution gets fine tuned for release.

3. Hold Frequent Webinars. A well run webinar program, offering quality speakers with insights on how to improve potential client businesses is a great way to collect market insights.  Not only can you capture interested customer emails, you can run short surveys during the webinar to gather insights on solution features and functionality, for example.

4. Attend Industry Conferences. This is one of the best ways to collect a lot of industry information very quickly.  Go to competitor presentations, hear what they have to say, and then approach their presentation customer speaker to go to lunch. Ask them over sushi to give you some insights on their business issues and how the competitor solution solves their problems.

5. Search the Web. The amount of quality public data on your potential markets, competitors and complimentary solutions is incredible. You can put together a pretty good dossier on just about any industry problem area, along with potential solutions and customers, in a few hours. I recommend doing this before you initiate the above intelligence gathering activities.

Many entrepreneurs focus their time on building a world-class solution without much thought on how to market and sell it to customers.  In the initial stages of your company, you should devote equal time to product development and sales and marketing.  Otherwise, you may end up with a great product and few customers.

Update: My friend, Karthik Mani, VP Product Management at TrueDemand added another successful tactic (I should have thought of it!) to assess emerging/current customer needs--"One thing I learned from both Sanjiv Sidhu (CEO,i2) and Eric Peters (CEO, TrueDemand) is that sales pitches are an invaluable way to collect this information during the early stages of a company. They are a good a way to figure out the excitement factor, which is critical (and may be the best way available to clearly understand customer desires), even though it is more expensive that the others that you laid out." Thanks, Karthik for the additional insights!