Confirmation Bias: Where To Perform Market Research
85% of all business startups fail within five years. These statistics have not changed in decades in the USA. 40% of these businesses fail because there is no market. Why do people still launch a business that has no hope of success? Perhaps their market research was based on confirmation bias?
Where do business owners go to test a business idea? Many cannot afford to hire a marketing research firm. While seeking input from friends and family can be tempting when conducting market research for a product idea, there are several reasons why business owners should exercise caution and avoid relying solely on them:
- Friends and family members might not provide objective feedback due to their personal relationships with the business owner. They may want to support you by giving positive feedback or might hesitate to be critical, fearing that it could damage the relationship.
- Your friends and family likely share similar backgrounds, lifestyles, and perspectives. This limited diversity can result in a skewed understanding of potential market demand. A successful product needs to appeal to a broader and more diverse audience.
- Your friends and family might not have the expertise or experience in the industry to provide valuable insights. Their opinions might be based on personal preferences rather than a deep understanding of market trends and customer needs.
- People close to you might provide feedback based on their knowledge of your intentions and passion for the project rather than the product's actual merits. This can lead to unrealistic expectations and misguided decisions.
- Relying solely on friends and family means you're working with a small sample size, which might not accurately represent the broader market's opinions and preferences. Market research should involve a larger and more diverse group to ensure a comprehensive understanding.
- Friends and family may be reluctant to express concerns or criticisms, fearing they might disappoint or hurt your feelings. This can lead to a lack of constructive feedback that's essential for improving your product.
- Outside perspectives can challenge your assumptions and help you identify blind spots. Friends and family might not provide this level of challenge, hindering your ability to refine your product idea effectively.
While friends and family might genuinely like your idea, that doesn't guarantee it will succeed in the market. Successful products need to fulfill genuine market needs, solve problems, and provide value beyond personal relationships.
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