Successfully exited B2B media entrepreneur Charles Green recently joined the Collingwood ranks as a Strategic Adviser. As listeners of his excellent Bootstrap Confidential podcast will know, he has a wealth of expertise on what to do – and not to do – to scale your business. One of his specialist subjects is the role of market research in scaleup strategy.
As the founder and former CEO of RFI Global, a data and insights provider to the financial services sector, Charles knows more than a little about the value of market research. The firm not only conducted market research at scale to inform its content, but was also consistently customer-centric in its product development approach, routinely engaging its customers to better understand their needs and build the products they’d pay for.
We couldn’t resist the opportunity to ask Charles’s opinion on the role of market research for fast-growth B2B media businesses. After all, at Collingwood we’ve conducted hundreds of market research projects to inform our clients’ most critical decision-making, covering every stage of the product lifecycle from opportunity assessment to new product build to go-to-market approach through to legacy product transformation.
Collingwood’s Chief Customer Officer and head of our Insights (market research) practice, Jenefer Thoroughgood, spoke to Charles about why research matters and what ‘good’ looks like.
JT: Charles, market research is sometimes seen as a luxury rather than a necessity. What’s your argument for why it’s the latter?
CG: Simply, the one essential that every growing business must have is product–market fit. This is vital for startups and scaleups, but also highly necessary for bigger businesses keen to ensure their products become or remain market-leading. So, every business.
Product–market fit means that you must have a product that is solving a problem. The problem must be of a severity that makes the solution worth paying for and the solution must be a painkiller, not a vitamin.
By this I mean, it needs to be a must-have. If it’s just nice-to-have, it will fail. If there’s a gap in the market but no market in the gap – i.e. people will not pay money for the solution – then it will fail. Yet, the world is full of startups looking for a solution they can monetise, scaleups struggling to monetise the solutions they have developed, and more established businesses falling out of relevance. Therefore, we have to ask: “What’s going wrong?”
The issue is that identifying products that solve problems, which people will pay money for, isn’t easy. But it’s critical for every business to ensure they don’t build a ‘vitamin’ that is fine to have, but that people will stop taking when times are tough. They must build a ‘painkiller’, which people will always find money for.
I would argue that – unless you are very lucky – it’s especially hard to create a painkiller if you don’t do your research. An additional problem is, however, that too often traditional market research processes and providers fail to deliver insights that lead to product–market fit.
JT: As a proud market researcher, should I be affronted by this?
CG: Well, it depends on how you do market research! Just to be clear here, I’ve worked in market research for over 25 years and have spent much of the last 20 years founding two market research businesses and building them up to successful exits, so I am a huge advocate of the benefits of market research.
JT: So, what’s the issue?
CG: The issue lies in the nature of market research, and the nature of what’s required to identify a painkiller. If market research providers were consistently good at this, then more of them would be busy launching a startup and very few startups would fail!
For me, I see the problem being that market research operates within a framework. While there is a huge amount of breadth and depth within the framework, the process – by definition – can only occur within known parameters.
In basic terms, the role of market research is to qualify or quantify certain ideas or concepts within the set and known parameters, using a host of admittedly powerful methods, which range from structured surveys and statistical modelling to psychological techniques designed to surface attitudes people can’t easily articulate themselves. To do all this well requires a high degree of skill, and when done well it can absolutely unearth startling, incredibly insightful and valuable results.
JT: Ok, I certainly agree with that. What is the argument then for using alternative approaches?
CG: While I have conducted and commissioned scores of ‘traditional’ market research projects, the type of research that I personally found most helpful as a founder is too often overlooked. It is unstructured and ‘journalistic’. To my mind, this type of research does not seek to qualify or quantify – at least not initially – and there are few or no set parameters.
The aim – via a series of research conversations – is to observe, listen to and understand your target client, and reflect on the nuance and context of what was discussed, especially focusing on what is not being said. Through this process you gradually uncover the pains they have and the painkiller they need.
JT: Interesting. It’s the fact that the conversations are unstructured and part of a series that makes the difference?
CG: Yes, in part. To do this well often requires a longitudinal viewpoint, i.e. you need to speak to the same people several times over a sustained period, focusing not on any specific topic but allowing the conversations to freely flow. Each interaction unveils more insight into true behaviours and needs and adds more meaning to your reflections.
The ideal number of conversations with each individual person is usually five before you can be sure that you have arrived at a true understanding. It takes this number of sessions to peel back the layers and get to the essence of what is being said, and what that means for any potential product.
JT: What else is required to do this well?
CG: Well, there is no doubt that if you are neurodiverse and have ADHD then you have a head start! I am not sure if there is any academic research to back up this claim but, in my opinion, having spoken to many successful founders, it is an advantage. ADHD is much misunderstood but the ability to hyper-focus in areas that interest you, coupled with pattern recognition from divergent thinking (both of which are typical of ADHD) helps enormously.
Victoria Mellor, a multi-time founder, investor and adviser, calls it the ability to “recognise weak signals”.
Do you need to be neurodiverse to research well? Absolutely not. It just gives you a slight edge. Like any skill, journalistic research can be learnt, and when practised enough it can be developed to the point where some founders become very, very good at it. But getting good at weak signal recognition requires commitment to the process, either from you or people who can do this for you.
JT: Well, I agree on the need to get good at this. It’s why we insist on our market research being conducted by current or ex-media operators. We not only rely on our market research skills, but also our ability to immediately interpret findings based on lived experience. We believe this helps us to spot signals and patterns that others not familiar with the customer dynamics of B2B media may miss.
CG: Exactly. This is why who is conducting the research really matters, be they neurodiverse or otherwise. Weak signals are, of course, not obvious, and sometimes not even stated, but I have found that they are much more likely to be spotted by someone who already understands the customer, be that the founder of the business or a really specialist researcher.
One good litmus test of how well you have understood an important signal is that, when you go back to potential clients with your proposed solution, they will often admit that they hadn’t even realised they were facing the problem you could solve. Or that it was a problem that could be fixed. Or that they could benefit from the fixing, until you uncovered it.
JT: We find this all the time. In fact, I’d say that products that have developed organically from these types of conversations often have faster initial uptake than the “tell us what you think of our product idea” type of research, which is a real bugbear of mine.
CG: For sure! If you ask people whether they want the product you are thinking of building, they will usually tell you they do, but that is very often a false positive because people are naturally agreeable and bad at predicting their own behaviour. The best market researchers of course know how to avoid these pitfalls, but for the founder who isn’t skilled in market research, deliberately having more open, needs-based conversations can really help.
JT: What’s in it for the participants? The people who spend time with you over multiple conversations to help establish your product–market fit.
CG: This question often stops market research before it starts, as founders fear these types of conversations are too big an ask, or that it’ll become prohibitively expensive to pay people for their time. However, the reality is the opposite. You usually don’t need to pay participants at all.
One reason for this is that the conversations won’t feel like market research. They will feel like a mutually inspiring peer conversation that delivers as much value to the ‘research subject’ as to the ‘researcher’.
JT: 100%. Because most B2B media research is conducted with senior, sector-specialist decision makers, we typically deploy senior, sector-specialist interviewers on our Insights projects to ensure the research interview is a peer conversation.
I’d of course make the argument for employing a specialist firm to conduct your market research, but we do also support founders and their teams in conducting their own research. What’s your recommended approach?
CG: Ideally every founder would have this skill, but the reality is that many founders will need to find advisers who are already good at this, and, preferably, who are ex founders, or operators of businesses of the type you want to run. They speak your language, understand the freedom and constraints of the job, and can help develop these skills in you with an awareness of how they will be applied.
The best advisers – be they individuals or advisory firms – will take the time to have a coffee with you and explain how it’s done. How to do research and how to find product–market fit. They have been where you are and will be happy to help you avoid the pitfalls they encountered.
Building a startup into a scaleup means that you don’t just do research once, but you do it again and again and again as you grow and scale. You have to become very good at it – or find a partner who is great at it – in order to succeed. Almost all the successful businesses I know have made market research part of their process.
JT: What do you want people to take away from our discussion?
CG: That, while finding a painkiller doesn’t guarantee success when you’re founding a business (there is a lot more to building a good business than just a must-have product), it is an essential foundation and without one, you will fail. Make journalistic market research part of your operating model. Find an adviser who knows how to do this and tap into their experience. Or learn yourself. Or even better, do both.
