In 2009, Kevin O'Connor (former DoubleClick CEO) was fed up. He would try to research the best college for his son, or the best ski resort for a family vacation, but all the information was disorganized, misleading, or sugar-coated by a marketing team. He wanted a place where he could indicate his specific preferences, review the facts, and make a smart, personalized decision. That summer, he and Scott Leonard set out to fix the problem, building out the basic structure for FindTheBest.com, and hiring a small team (including me) to help perform the proper market research.
We had a lot of questions out of the gate. Who were our competitors? How big was the market? What kind of resources would we need to pull this off? We were going to be competing in hundreds of markets, from life insurance to motorcycles to antivirus software. Many people thought we were insane to even try (and some still do). We started by examining our potential competitors, placing them in a few rough categories. There were comparison shopping sites like NexTag, PriceGrabber, and Shopping.com.
There were content sites with product reviews, like CNET and PC Mag. Finally, there were so-called "vertical search" sites like Kayak, Zillow, and LinkedIn. These companies had sophisticated technology and smart preference-matching, but were each focused on one specific market (travel, real estate, and professional networking, respectively). We decided we wanted to be a vertical search site for the thousand other things not covered by Kayak, Zillow, and LinkedIn. We would need to have the breadth of Amazon but the sophistication of Kayak.
Key Takeaway:
- Differentiating yourself is a crucial early step of market research. Our CEO likes to say that unless you can do something 10 times better or 10 times cheaper, it's probably not worth trying to compete directly with an established, successful company.
By borrowing the best parts of several existing companies, yet forging our own unique approach, we set up FindTheBest to take a leadership position in an emerging industry. Next, we had to determine just how big we wanted to be. Would we try to cover every topic on the Internet, just a few, or something in between? We quickly realized that not every topic was worth pursuing. Smaller, commoditized markets had never worked well on sophisticated comparison sites, and so we decided not to bother either. People don't need smart tools, filters, and visualizations to pick what kind of muffin they want or which type of basketball they prefer. From studying sites like Kayak and Zillow, as well as testing our own content over the first six months, we resolved to focus on big decisions; that is, purchases that tended to cost over $100 and usually took more than a few minutes to decide. Our users have verified our initial research: topics like cars, colleges, and financial advisors remain some of our most popular site-wide.
Key Takeaway
- Knowing where your company can add value—and where it won't—is a crucial aspect of market research. Many companies have cratered by focusing on products and services they simply aren't good at.
Finally, we knew we would need a lot of capital to cover so many markets…the question was how much. We had the benefit of a few prevously successful founders. With almost a million dollars up front, we had enough to test our operation before seeking additional funding. As a start-up, we knew we couldn't build out everything right away, so we focused on creating a minimum viable product. We quickly found that we could enter new markets extremely cheaply—no more than a few thousand dollars to get started in each new category. Our technology was a huge benefit here. Larger, more established companies would spend tens of thousands entering new markets, needing months of engineering work just to build out the foundational features. At FindTheBest, we leveraged the power of our existing platform over and over again, allowing only semi-technical employees to create incredible tools.
Key Takeaway:
- As a start-up, you won't know exactly how much your products will cost until you've actually tried building them. By studying the market, you'll be able to start with a general estimate, which you can refine as you move your process forward.
To learn more about how market resaerch can benefit your business, check out our new eBook.
Thanks for reading!
Ben Taylor is a marketing manager at FindTheBest, a research hub that helps people think like experts.
