Importance of Market & Customer Discovery

August 13, 2010

The essential first step in creating a business is defining your business model which requires two steps: Realizing your customer, and defining your website accordingly. The first step in defining the business model requires you to realize who will make up your customer base, and that requires going out talking to the public and vendors. In simple you want to understand your customer, how they purchase, and what problems they encounter. After you’ve thoroughly gone through the market research step, then and only then could you start thinking about product development, which in this sense would be which features to include on your eCommerce platform.The reason you go this step is to avoid over spending during the development of your platform, and avoid confusing your consumers with unnecessary features.

Many of you think you already know your market completely, but when you start asking yourself the right questions you’ll notice the tendency of human biases towards considering you already know the answer, when in reality you don’t. The best way to get to the reality is keep asking yourself probing questions such as (but not limited to):

  1. What the needs and problems of our customers are?
  2. How are we going to satisfy and solve these issues?
  3. What type of customer segment are we approaching?
  4. Do all the numbers make sense?
  5. Is it clear what we have to achieve to be profitable?
  6. Are we realistic with our goals and plans?
  7. Do those plans consider future growth (scalability)?
  8. What kind of relationship will it require?

From this information you can start constructing your business model in which you approach how you will create, capture, and deliver value. From the market research you can start addressing the foundation of your business by defining who your customers are, what you’ll be providing to them and how, understanding the different methods and techniques you’ll use to reach them, and create your financial model and what you’ll need to accomplish your plans. I could go on and on about methods to realizing your customer, but there is plenty of literature out there on the topic.

If you’ve already completed the proper market research, then there is the step of defining your website. This step is easy, all you have to do is go to big and successful websites such as Amazon, Bestbuy, Bluenile, or Zappos and just copy whatever features they have and you’ll be an instant success like them, right? Well for you that thought it was that easy, that you could surf the web and compose a list of features, think again. I found this step the hardest in creating an eCommerce store, mainly because you have to apply what you learned from the market research, what customers said they wanted feature-wise, see what’s out there, and have some innovation of your own. You can find strategies in narrowing down features to a list of the most useful to your users, cost to develop, and profitability under future posts.

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