Why Research Is Key to Startup Growth and Customer Centricity - Entrepreneur

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This powerful process can drive a startup’s decisions with actual data rather than opinions and biases, giving companies a higher chance of meeting users’ needs and eventually succeeding.
User research is a practice used in product teams to inform business and design decisions by learning about customer problems, needs, behaviors and motivations. It can be led by product marketing, product management, design or research departments.
Those teams set up assumptions and hypotheses about their users, as well as define research goals and deliverables. Then iteratively test them, using various experiments and validation methodologies. Among those methodologies could be user interviews and surveys, concept and prototypes testing, usability studies and A/B testing or field studies in users’ work environments. User research can be empowered by UX research (design research), market analysis, competitor research and deep dive into web and product analytics.
Ultimately, research should be the main tool for every business to be data-driven and customer-centric. As a product marketing leader, I evangelize user research at every high-growth startup I worked with because the practical benefits of well-planned research are priceless. Let’s talk more about those benefits.
Related: 3 Ways Research Can Help You Create a User-Centric Business
Most new products fail. That’s why companies prefer using various lean startup techniques, iteratively releasing minimum features set to test value proposition. It’s known as building a minimum valuable product (MVP), and the first step of building every MVP is research. If done right, it allows for forming reasonable hypotheses about value prop, product benefits, main features, business model and appropriate pricing, which sets up product development to success. Great product decisions begin with a deep understanding of users, market needs, competitive solutions and upcoming trends.
While startups have limited resources and a lot of work to do, research will help keep the right, user-centric focus.
Related: This Is the Framework to Make Your Product a Smash Success
Product-market fit (PMF) proves that users need the product. It can come in the form of traction which a startup is getting. Traction could be website traffic, the number of registered users, monthly recurring revenue or product metrics, such as time spent in the product or net promoter score. If the startup can’t reach PMF, it’s on a clear trajectory to fail.
Sometimes searching for PMF is about choosing the most promising customer segment, for whom the product solves a high-impactful and frequent problem. User research, especially user interviews, helps identify the customer segment that benefits the most from the product. After forming a hypothesis about the product value and talking with users, founders will find typical answer patterns. This process is also known as customer discovery.
For some groups of users, product features will be just a nice-to-have. While for others the problem will feel much more painful and they will be ready to use the product extensively. Attitudinal and behavioral research studies, that reflect “what people say” and “what people do,” are perfect for cross-checking if a startup is on track with PMF search.
When I was running my startup, my team spent 12 months on product development without talking to users. When we finally released our first version, it failed dramatically. Our team didn’t build features that solve users’ needs and we had to rapidly pivot the product based on real user feedback.
This hard lesson proves that user research is critical for being laser-focused on user needs. Qualitative and quantitative research data should inform the startup feature strategy and decrease the risks of product mistakes. Based on research outcomes, the founders can prioritize which features should be developed first using well-known prioritization techniques. It would drive a better product strategy and planning, as well as build high-impactful features both for users and businesses.
Related: How to Research Your Business Idea
With an overheated market where dozens of products compete for users’ attention, how can the startup get its share? To understand how to beat the competition, it’s important to invest time into comprehensive market analysis, combined with competitor research. One part of this work is analyzing the competitors’ offerings gaps and identifying how to better address these customers’ needs. User research with competitors’ customers can become a valuable source of insights into creating a strong differentiation strategy.
Good research provides startups with a cheat sheet of what can be done better and gives a disproportionate competitive advantage to win more customers and increase the loyalty of existing ones. While industry statistics, market reports and competitive insights outline the startup position compared to the realistic market benchmarks.
All marketing should always be centered around its community. Research is the best way to define ICPs (ideal customer profiles) and their needs, turning research findings into actionable marketing deliverables. User research should guide messaging, go-to-market strategy and almost every marketing campaign the startup is doing. It helps tell engaging product stories from the user’s perspective.
If the marketing team doesn’t know their users and skips research, they could struggle to create value for customers and revenue for the company. While high-performing marketing teams come from the position of understanding and empathizing with their users.
User empathy is the basis of a customer-centric culture, not only in the marketing department but across the whole company. It comes from talking to users, watching how they use your product, and understanding how it feels to the company user. Almost every activity during the user research would help the startup team to better understand the users and emphasize with them
To summarize, user research is a powerful tool to drive startups’ decisions by quantitative and qualitative user data rather than opinions and biases. It gives companies a higher chance of meeting the needs of their users and eventually succeeding.
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