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Thread: Market Research

  1. #1
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    Question Market Research


    I am a new user and have spent a little time reading this forum. I feel that I could get a lot by asking and reading, but fear that I may not be able to contribute much, although I'll try.

    I was hoping for opinions on market research for a new business. I have a pretty good idea that the product that I want to develop will have a good market as I have typical customers (not Joe Public, as this product is for a specific industry) in the family and have bounced the idea off them for a while now with great feedback.
    So to make this easy, lets say I'm developing an egg counter for chicken farmers that counts the eggs as they get laid (not really, but it should do as example).
    Now my uncle is chicken farmer and said that he will buy 100 units if it works as I describe and costs below R100. He also said that there are no competitors that offer this solution without forcing you to pay for all kinds of bells and whistles (they have laser printing and sends an sms per egg) which are standard. His opinion is that the market will go crazy for this.

    So, of course I am happy that this product will sell (and I have an order for 100 already). Thing is, I must invest my last cent (yes, the very last one, and I have a family to support as well!) to get this off the ground and 100 units will not carry the bill.

    The chicken farmer counsel of SA simply does not even respond to my requests for an estimate of how many chicken farmers there are, let alone for how many chickens. Market research companies charge me the price of a small car to get that info, but of course for that money, I would also like to know how many farmers seems interested and to what extend, but you dont get that...

    Heres what I'm thinking about:
    1. Sell vapour ware. Sell it as if its there already and work in a special price for deferred delivery (8 months). The customer understands that they are 'funding' the development of a product and get this product at a very good price because of that. This will add enormous pressure sure, but I'll know its selling, so its good pressure...right? This will be a very difficult sale and of course, my plans are on the table then, open for them to use themselves...

    2. Simply do my own research. Send all the farmers an e-mail or brochure or pay them a visit and introduce the product taht will be launched in a few months and ask them what they would want from it - what would they change if they could, what would they pay for it, would they want it? How many? How would they want to pay for it?

    3. Get a partner. Get a farmer that will partner the business (silently) and therefore get this product for 'free' and get a small return from each sale of course...This could work actually, but giving away equity is probably not too smart...

    4. Go big or go home. Take the risk. Go for broke. Book a spot under a good bridge for in case... My wife does not like this option too much as could be understood...

    5. Keep on working, do it in my part time and hope the window does not close before its done...

    What do you think?
    (sorry for the loooong first post..)

  2. #2
    Site Caretaker Dave A's Avatar
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    To be honest, there are merits with each of your "options."

    Tough to give you solid advice without knowing more about you. But some thoughts that occured:

    Personally, I'd do a bit more market research before making any heavy decisions unless your sample chicken farmer is Rainbow.

    No.4 - "go big or go home" is a great option when you've got nothing to lose. What is the worst that can happen anyway?

    Option 5, by contrast, is the "safe" way, but tends to produce undramatic results. That can be good or bad - depends on your idea of what you want and the price you are prepared to pay.

    Now if only you can go with option 5 - but go after the project like you'd gone for option 4. The challenge there is human nature. There is some magic that comes with being totally commited and most people need their backs to the wall to give at that level.

    On partnerships - You're married, right? About the same thing. You've got to pick the right partner for the right reasons and it's a real problem if you don't.

    Just yell if there is anything there you'd like me to expand on.

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