- 1. What problem do you solve?
- 2. Are people willing to pay?
- 3. Who do you compete with?
- How reliable is this quick and dirty research?
The odds were clearly stacked against her. After the motor got hit by lightning, the plane Juliane had boarded with 91 other passengers broke apart mid-air. Strapped to her seat, she fell for 10,000 ft…and survived. But that was just the beginning of her journey, since the seventeen-year-old landed in the middle of the Amazon, one of the most hostile environments on earth.
Armed with just a bag of sweets she found at the crash site and the knowledge she gathered from living with her parents in several research stations, Juliane was less than ill-equipped to make it through the next day. But instead of losing her mind, she put to use the one thing she knew about the jungle: most people lived near waterways. Finding a stream and following it became her only shot to get back into civilization and survive.
Starting a new business from scratch is about surviving, too
When starting out, you might have nothing but an idea. Resource are spare at best, and you don’t even know if your idea is viable. Before you can raise any funds, you have to conduct some basic research to present to a possible investor, even if these are just friends and family.
Sure, you could ask them if they were interested in what you have to offer, but more often than not, people say one thing and do another. A cheap way to get an objective idea of the viability of your business idea is research on the internet. Asking the right questions will provide you with enough data to secure funding to proceed further. Let’s look at the first of the three most important questions you need to answer:
1. What problem do you solve?
Every service or product is tied to a problem or deficit of some kind. Otherwise, there would be no reason for a customer to trade money for it. If they weren’t hungry, they wouldn’t buy food, if they needn’t transportation, they wouldn’t get a car. But the true motives for making a purchase are not always straight-forward as that–why would someone buy a thirteenth car or order a gold-laden sundae for $25,000.
Not all motivation for making a purchase is conscious but a great place to be a fly on the wall or internet forums. If your business idea is centered around a specific topic, chances are your prospects already connect with each other on a niche forum.
Finding the right forum
The easiest way to find popular forums is googling
business idea +forum
There is no space between the + symbol and “forum” on purpose. Every word with a plus right in front of it signalizes Google that this word HAS TO BE in the search result. In the case above, every result will have the word forum in it somewhere. This increases the focus of your search, leaving out a lot of non-relevant sites that have nothing to do with a forum. You don’t need to look only in forums either, you can expand your search with these search terms as well:
You might notice that I used the term “keyword” instead of “business idea”. Instead of looking at the topic from your own perspective, try to put yourself in a prospect’s shoes. In case you’re health coach, it wouldn’t make sense to search directly for “health coach”, since you’d find other coaches and not the problems of your prospects. Before knowing they need a health coach, prospects would look for something like this first:
In most cases, this will offer you a lot of choices among different forums. If the choice is too big, you can focus your search more precisely through “allintext”:
forum allintext: Keyword1 Keyword2
forum allintext: nutrition health
This search allows you to show only pages that contain both keywords in its text. You can use as many keywords as necessary to tighten your search. Once you found a couple of promising forums, you can start to dig in.
Finding the problems within the forum
Once you entered the forum, there’s different choices and none of them is right for all the cases. Generally, you can take one of two approaches: manual and search.
Manual: The first approach requires a bit of elbow grease. You basically go through all the forum pages looking for threads that look like they contain useful information. An interesting title is a good indicator as well as many replies to the original post. The livelier the discussion, the more likely the topic is important for your group of prospects.
Search: The second approach works faster, but depends a little bit on luck. Instead of combing though each post, you could search the forum for threads that include certain trigger words, like
Also, threads that contain emotions are great, like
Lastly, you can search for words that belong to your specific niche. A health coach might search for words like
But like I mentioned above, the success of this approach depends on how well you already know your prospective clients and their problems. The search can get you started, and if you don’t find enough, you can supplement it by manually checking the threads in approach one. The most successful threads contain two things:
- a problem is being brought forth
- it evokes a lot of emotions in he person who asks and everyone that answers
Quick Summary: What problem do you solve
Especially in the first world, we objectively don’t need most of the products we purchase. And yet, we buy them because we experience a problem of some kind or we feel the lack of something. It’s not always obvious what that lack is and most people, if asked straight ahead, could not name that lack. That’s why forums are a great place to play fly on the wall. Whenever a group gathers around a specific topic, you can find some gold nuggets in their exchanges. The biggest if which contain specific problems and lots of emotional reactions.
2. Are people willing to pay?
After finding people with a definitive set of problems you can help with, you want to know if they are actually willing to pay money for your solution.
Let’s say you’re a chef and your specialty is French Toast. According to Google, there’s 135,000 people who search for “How to make French Toast” every month. That means there’s quite the demand for a solution. But very few people are willing to pay for it, as you can see in a minute.
Rather than spending a lot of time in preparing, raising funds, building a website and business before finding out if people spend money on it, you’d want to know right away, in the second step of your research. As it turns out, there’s a quick and dirty way to find that out.
One surefire way to determine if money is in an idea is to see if competitors are advertising in it. An investment itself, nobody would advertise if it wouldn’t create a profit down the line. Equipped with your prospects’ problems you can type them into Google and see if anybody is advertising on them.
“How to make French Toast”, for example shows one lonely advertiser: Nutella. A huge brand like this can afford to burn through an ad budget, but the absence of ads from smaller business is an ominous sign. Let’s take a look at “health coach montreal”:
That’s a good sign! Lots of ads, both on the top of the search results as well as on the bottom. But a closer looks reveals the advertisers to be schools rather than actual health coaches. More research in step one is necessary.
The presence of ads on Google is a great sign, the more the merrier. In terms of keyword research though, this is just the tip of the iceberg. The Google Adwords Keyword Planner offers a lot more detail on each keyword, for example the volume of monthly searches as well as how much advertisers are willing to pay for their ads to be clicked.
Another indicator of a profitable business are products.
Any profitable business sells one of two things: products and services.
the problem is that just because a product exists, it doesn’t mean it’s successful. If there just was a way to see how many people ordered it and how they felt about it…wait a minute…there is: Amazon to the rescue!
The world’s biggest retailer offers a lot of insights through its reviews. Originally meant as a way for customers to evaluate a product they cannot touch with their own hands, Amazon reviews are a treasure chest for every marketer.
A search for “healthy nutrition”, one of the main topics of a health coach, yields more than 25,000 books alone. This is a positive sign, but let’s dig a little deeper.
Integrative Nutrition, one of the contenders in the category, has garnered 139 reviews. Assuming only a fraction of customers write a review, the book seems popular. When digging into the reviews themselves, we find out what makes the book (and topic) so particular successful.
On the other hand, we can also see what’s missing:
If you look at reviews of the top ten books in your category, you will get a good grip on what customers are looking for. Actual customers who already have paid money for a product in your category. To take yet another perspective on success in your niche, let’s look at websites.
Another sign of success of a business shows when you are trying to sell it. Flippa, a marketplace for websites, gives us another quick and dirty clue of how valuable a business is being estimated. If you click on “websites” and then choose “Advanced Search”, you can narrow your focus to all the sites interesting for you.
You are specifically looking for listings of websites that
- are related to your niche (health, in this case)
- have been sold successfully
- have made a profit of more than, say $10,000
And voilà, 111 websites fall into that search. You can then further refine your results by choosing the category: blog, content, reviews or service. Looks like we got some winners:
None of these websites are directly related to health coaching, but they all cover the same topics. But the very cherry on top of the cake is that you get rather intimate information into HOW each website generated the profits:
- where do the site’s visitors come from
- how much cost was involved in running a site like that
- what were the income sources: advertising, products, etc.
Quick Summary: Are people willing to pay
It’s not enough for a business to have a possible audience with a problem. Customers need to be willing to pay for your product or service if you want your business to survive. Three quick and dirty questions:
- Do competitors advertise?
- Are products sold?
- How much are businesses valued at?
In itself, each answer might not be too revealing, but taken together, they give a good overview for an hour of research.
3. Who do you compete with?
The last step in your research process is to look at the competition, mainly for two reasons: the good and the bad.
What your competitors are doing well gives you an idea of how strong they are. If there are some huge competitors that rely on a big team to produce articles, interviews and videos, you’d have to apply a different strategy than if you niche mainly consists of lone wolves.
But what they are doing well also gives you an idea of what works. Maybe it’s a specific social network where your prospects spend their time, or they are particularly interested in some type of topic, say recipes.
What your competition is doing badly is as interesting, because it gives your a “way in”. No niche needs another Me-Too that rehashes everything that everybody else already said. No matter how saturated, there is always a way do differentiate yourself from others. But before you can set yourself apart, you need to find your competition.
Where to find your competition
Finding your competition might be as easy as searching for them on Google. After entering your search terms, take note of the results on the first two pages. Do you see any ads that look like a competitor? Click on then and note them down. The same applies to the organic search results.
You might also have spotted some competitors in a forum you visited earlier.
You can also find whole lists of competitors in a round-up or best-of list.
Once you have compiled a list of websites, you want to see which ones are the biggest and most successful.
How big are my competitors
The quickest and dirtiest method to determine the size of a website is through alexa.com. Once you enter a site, you’ll be shown the ranking. The lower the number, the bigger the site.
That’s not all. If you scroll down you learn which countries the traffic comes from, how much time they spent on it and even which keywords lead it there.
The only downside is that Alexa lists only websites of a certain size. You might not find your competitors if they are too small. No matter the size, you want to check out your top competitors in detail, beginning with their marketing.
If you are the only one inhabiting a niche, it doesn’t really matter what you say. You’re the only choice. The opposite happens in saturated niches, where everything has been said already. Answering the following questions allows you to find where your competitors stay within the whole niche.
- What differentiates this competitor from others in this niche?
- Which problems does you competitor promise to solve?
If you look at the following two screenshots, you’ll see two very different approaches to the same topic emerge.
Another point to look for is how these sites generate their leads. How do they attract their audience?
- What are the main topics/categories your competitors talk about?
- How do they turn visitors into customers? Via blog posts, a newsletter or a report?
Last, but not least, check each competitor for their frequently asked questions. You are likely to encounter the same questions from your own future clientèle.
Before diving deeper into social media, let’s look first at how your competitors pay their bills.
One of the main purposes of a business is to generate an income. How to your competitors earn money? Do they monetize their site through advertising? Are they promoting a book? Or even a course? Maybe a recurring membership? Or is the purpose of their website to find clients?
The last step in the competition research is to evaluate social media.
Social media is constantly rising in its importance for small businesses. The different networks allow to connect with a specific audience and demographic. At the same time, each network has its own set of strengths and weaknesses. Facebook might work better for your business than Pinterest, or the other way around. Especially in the beginning when you can’t afford to be active everywhere, choosing the most receptive network makes the difference between success and defeat.
Keep your friends close, and your competitors even closer. They can teach you more about business than anyone else: what works and what doesn’t, how to monetize your efforts and which social network is the most receptive. You don’t have to reinvent the wheel and your competition will spare you many mistakes if you learn from theirs.
This concludes all the steps of a quick and dirty business research. There might just be one question left.
How reliable is this quick and dirty research?
Of course, you can spend days if not weeks staking out your business. And you should. But what good is your week of research if the idea is not right and you need to pivot? Or if the investment you need to proceed is denied?
There will be a time when thorough research is due. But in the very beginning of your journey, it’s better to test and discard several ideas quickly if they would not lead your anywhere. Especially on a shoe string, this quick and dirty method will answer 80% of your questions in 20% of your time, probably even just 5% of your time. In a matter of hours, you learned
- the biggest problem of your future clientèle
- what drives them, both intellectually and emotionally, toward your services
- if they are willing to pay for it
- what they like in existing solutions
- what they are still missing
- who your competitors are
- how strong they are
- their positioning in the niche
- which social networks work best for you
If you are thrown in a hostile environment, all by yourself without support, you have to make due with what you got. Like Juliane Koepcke after she fell from the sky. With the only difference that you don’t have to wander through to Amazon Jungle to reach your goal.
If you want to learn other quick and dirty strategies that will get you ahead of your competition without breaking the bank or spending weeks away from your business, get in touch.