How to do market research for your side hustle
"Market research" need not be a complex topic. It is basically using data to inform the potential of your idea.
It is especially useful if you have several competing ideas in your head, and want to know which business idea you should pursue.
It doesn't replace real market validation by releasing your product to the market and charging money for it. But it is a very useful exercise for understanding your market and how much revenue you could potentially make from your product.
I outline a simple method below. It is the same method I use when evaluating my ideas (which has led to some of the current products I'm building right now, like Markfolder and Notion Invoice).
The simple market research method
Go through each question and answer each one, with some research data if required.
1: Who are your target customers?
You should be clear about which group of people you're serving.
2: What problem are you solving with your product?
You should be clear about the problem you're solving with your product.
3: How many people are searching about the problem you're trying to solve?
Why: Mainly to see if you can actually reach your customers online. If you're not able to reach your customers online, at scale, then your work is going to be a lot harder.
How: Use a tool like Keywords Everywhere or Google Ads to discover search volume for the problem you're solving. Try different keywords or combinations of keywords.
Recommended tools: Keywords Everywhere and Google Ads.
4: Is the trend growing or declining?
Why: It is better to serve a growing group of people who will need your product. If demand is dwindling, then your business's lifespan is going to be short.
How: Use Google Trends to see if the search volume above is increasing, plateuing, or decreasing. Increasing is a good sign.
Recommended tool: Google Trends.
5: How much revenue can you make per customer?
Why: This helps you work out your potential total market value below.
How: Use your competitor's price as a guide. Or work out how much your target customer is paying now to solve the problem. Consider one-off purchases as well as the lifetime value of a subscription (number of years you expect them to stay as customer x price of annual subscription).
6: How many potential customers can you reach online?
Why: If you can't reach many people online, then your marketing effort will get a lot harder and more expensive.
How: Use online ad tools to discover reach. Facebook and Google are best for consumer products. LinkedIn and Twitter are best for B2B products.
Recommended tools: Facebook ads, LinkedIn ads, Twitter ads, Google ads.
7: What's the potential market value available to you?
Why: This is when you work out if the potential income is worth your effort.
How: Take 5% of the reach you calculated (in step 6), and then multiply by the amount you can make per customer (in step 5). This is an estimate of your potential market.
Is it worth pursuing?
Now that you have this market insight, is your idea still worth pursuing? Only you know the answer.
Market research will give you an idea if the "pie" is big enough and if it's easy to reach your market online.
If the answer is "Yes", then the next thing you should do is validate it, by launching it as soon as possible.
An idea pre-validation checklist
There are other factors to consider, which I have compiled into a checklist template you can use to evaluate your ideas.
This checklist will help you pre-validate your idea before spending too much time on it.
"Going through the Start Strong checklist gave me some actionable food for thought and was well worth the price of admission. Overall, it's a quick, helpful reminder of what matters most when deciding where to put your time and which ideas are worth pursuing first."
– Rob Fitzpatrick, bestselling author of The Mom Test.
