Category Archives: Business Research

Stop. Don’t Do That Survey. Talk to People Instead.

Business Mistakes, Business Research,

Yes, there are some amazing tools for doing market surveys quickly and easy. I use SurveyMonkey myself, very happily. And I know of (but don’t have reason to use) cool tools to send surveys to selected groups of respondents.

But there’s a problem with that, especially if you overuse it. Most surveys are seriously flawed. I’ve posted my problems with surveys here and here, but for today, you could read the lingering question of the survey revolution for a thorough and thoughtful treatment of some deep problems. That was posted today over at questionpro blog.

I suggest that instead of the quick and easy survey, get on the phone, or better yet in person, and have real conversations with real people. I bet you learn way more about your business by actually listening to 10 live people than you’re every going to learn in a market survey.

Of course this only works if you listen. Talking is essential, yes, but what really matters is asking the right questions and actively listening, keeping your mind open, to what people say. And that they think. Otherwise, without the listening, it’s just more wasted time.

Ask yourself: do you prefer sending an email to talking to a person? Would you rather deal with your computer and keyboard than a live human person? Do you call a phone hoping to get voicemail instead of the person? Is this what you’re doing with the quick and easy market surveys? Avoiding real conversation?

(Image: bigstockphoto.com)

Do You Believe Your Analytics?

Business Mistakes, Business Research, Marketing

What I hate about analytics ia that sometimes numbers are wrong or misleading, but when they are numbers, we’re not supposed to argue.

I like analysis when it adds information and context to human decisions. What we have now as analytics available for marketing and web development is amazing, especially compared to the “olden days” in the 1980s and early 1990s when we used to just spend the money and guess. It’s a great luxury.

But not when it substitutes for human decisions. When we do A-B testing, or surveys, it’s too easy to get the research wrong because questions are posed wrong or because of other technical reasons. But so often the analytics are like gospel, not to be questioned.

Do it right. Use the analytics to help guide you. Don’t let them stifle your own creativity.

(image: shutterstock photo)

Does the New York Tech Boom Have Clues for Everywhere Else?

Business Research, , , , ,

It was Wednesday night, a full auditorium at the 92nd St. Y in Manhattan’s upper East Side. We’d had a meeting in the late afternoon, got tied up, so we arrived late and took the only two seats left, against the wall. Even the balcony was full. The audience was a total mixup of suits, jeans, gray hair, long hair, slightly more young than old, more men than women, but a pretty diverse group.

On stage, the winners of a recent New York Hackathon. Hackathon? Yes, a 24-hour competition, producing some great results. One of them, locreep.com, includes a hilarious skit on modern singles scene. The audience loves it.

Soon after we’re looking at Bluefin Labs, a fascinating new venture doing social media analytics of mostly-television trends. This one wasn’t done overnight in a hackathon. It took several years.

All of this was at yesterday’s NY Tech Meetup. Once a month the group comes together for demos, sharing, pitches and presentations. It’s impressive. If you’re interested in watching business pitches, and tech enthusiasm, in action, they have videos of last night’s and previous meetings at http://nytm.org/monthly-meetup/livestream/

And that’s just a small glimpse of it, one evening. The hackathons, meetups, educational programs, city programs, investors, startups, and startup juice are bursting out all over. NYU professors getting together with Columbia professors, a city development committee, lots of sponsors, lots of events and opportunities.

You probably already knew about The Silicon Alley tech boom; it’s been covered in the media. But I’m a West Coast guy, with deep roots in the Silicon Valley, so I had this Silicon Valley bias that made it hard for me to see it. And now I do.

This is real. The most recent Business Insider 100 list of top 100 digital startups in the world includes 29 from New York, compared to about 45 or so from Silicon Valley, and just 2-3 each from Chicago, Washington DC, China, Seattle, France, Sweden, etc. And that’s all happened within the last few years. Silicon Valley took a couple of generations. This is time compressed.

All of which reminds me that just last week I received an email from a thoughtful woman bank president from Colorado, asking me for any advice I could offer about generating more startups in her community. That relates to this Silicon Alley phenomenon because here they’ve done it, like nowhere else; and they’ve done it fast. True, New York is a special place, with special advantages. But that was also true 10 and 20 years ago. So what happened here in the last 5-10 years, and how it happened, seems pretty interesting to me. Do you see how it relates to that question in email? And why a lot of people, not just in New York but everywhere else, might care?

How Much Should You Worry About Your Competition?

Business Research, Business Stories, Marketing, , , , ,

I’m intrigued with Steve Thoeny’s comment earlier this week to my post about market research. Steve quoted Joel Spolsky, Co-founder Stack Exchange, and one of my favorite writers, with this suggestion:

Talk to your customers. Find out what they need. Don’t pay any attention to the competition. They’re not relevant to you.

I love Joel’s (and Steve’s) advice about talking to customers. I couldn’t agree more. That’s right on point and good advice.

And I’m intrigued with his take on competition. It reminds me of what Emmett Ramey, founder of Oasis Press, said years ago when we had competing offerings:

The way I see it, we’re standing on a pier, side by side, fishing. I don’t care about the fish sniffing your bait. I’m worried about the ones near mine. And there are plenty of fish for both of us.

That made sense then. We were selling two competing offerings into the same market.

On the other hand, watching for competition is like watching what the fish like. If the fish like salmon eggs and you’re fishing with cheese, get the hint. Sometimes looking at competition is like taking a fresh look at your own business.

What do you think?

(Image: istockphoto.com)

Not All Business Plans Need Rigorous Market Research

Business Planning, Business Research,

I hate it when people think a business plan requires market research. Especially when they’re talking about expensive professional Market Research.

Yes, you need to know your market. You do. You can’t plan your business without understanding who buys, what those buyers are like, who also might buy, why they would or wouldn’t buy, how many of them are there, what motivates them, what they like about your business, what they don’t, and what other choices they have.

But planning a business doesn’t necessarily require expensive rigorous market research. You have to know the market, not prove that you know it. Not even prove that the market exists.

Sure, there are a small subset of business plans, associated with raising investment, that have to prove potential market to convince investors that the opportunity exists. But most business plans are about running the business, not proving the opportunity to outsiders.

Yes, you have to know your market. Knowing your market enough to make good decisions is different from proving your market to outsiders. Lots of entrepreneurs trust their market knowledge, take risks, and move forward. If you’re one of those, plan, and don’t let anyone tell you you’re not planning unless you have market research.

The Real Cause of Business Failure…

Business Research, Starting a Business, ,

… doesn’t turn up in research. At least, not any research I’ve ever seen or heard of.  Consider these problems with the research studies:

  1. To get valid data, you have to start with a random list. And where do you get a random list of businesses that failed? There’s no source I know of. You might be able to find businesses that were registered as legal entities, then disappeared … but if they disappeared, then what good is the contact information? And how do you know whether they disappeared because they changed names, or got bought by a larger company, or simple lapsed because the owners decided to do something else? You don’t.
  2. Businesses rarely fail for single causes. What looks to one analyst like lack of working capital will look to another like failure to collect outstanding bills, and to a third like weak marketing, and to a fourth like failing to offer value to customers.
  3. Business owners rarely know the real causes. We business owners don’t always see the real causes. We focus on one thing instead of another. If we were looking at the business and seeing the causes of failure accurately, then we might have been able to avoid the failure.
  4. And if they do, they might not share it with a survey. Survey respondents don’t always tell the truth. You can ask owners of failed businesses why they failed, and most are going to say what feels good to them when they say it.

So what? So don’t worry about research results that make conclusions of business failure. Run your own business carefully. Plan, set goals, find ways to track and measure progress against goals, and revise the plan frequently.

How to Explain Lies, Damn Lies, and Statistics

Business Research, Business Stories, ,

Don’t get me wrong: I like research. Survey information is grand. I just say don’t bet the store on it. Use it to educate your guesses, but only as long as you stay skeptical. Read it, consider it, but don’t believe it.

Mark Twain said:

There are lies, damn lies, and statistics

Blogger and business researcher Steve King, a sometimes-Twain-like research analyst (well, a smart person who lives in California, at least) gives a great example in his recent post Why Surveys Show Wide Differences in Small Business Social Media Use on Small Business Labs. Steve is a researcher, one of the founders of Emergent Research, which does a lot of work for Intuit.

Steve pulls up two surveys with starkly different results. The Wall Street Journal recently reported that 70% of small business owners think social media is important.  But a Citibank survey said only 36% of small businesses use social media and a mere 24% have found social media useful for finding leads or generating revenue.

What’s up with that? Methodology and sampling techniques, Steve explains. The survey that was big on social media was taken from people it found online using Twitter, Facebook, and other social media. The other one was a telephone survey.

So, as they say, “no duh.” Most of the business people who use social media think it’s important. Most of the ones caught on the phone don’t.

The point is that both surveys are valid in their specific context, both were done professionally, and both can help you understand what a defined group of people thought – or told survey takers they thought. But they contradict each other. So if you’re using research, use it well, explore the assumptions, look for the built-in slants, and take all of that into account.

Humans make decisions. Statistics don’t.

Meaningless Research Award: Americans vs. Entrepreneurship

Business Education, Business Research, Entrepreneurship, ,

Over the weekend I got an email from a polling company with the startling headline “College Students Aren’t Getting Entrepreneurial Skills.” I’m not going to cite the source here, though, because I want to poke some fun at the poll and its conclusions, and I don’t want to make it personal.

But here’s an opening quote:

Americans also say that traditional teaching methods aren’t the way to teach entrepreneurial skills. Overall, 73 percent report the best way to teach a student to become an entrepreneur is to enable them to create businesses or intern in start-ups. And 76 percent said that students launching a business while still in college will make them more successful [SIC] in creating jobs and opportunities after graduation.

Do you see what’s wrong with this (aside from the grammar)? It says the survey asked 2,141 Americans. Have they started a business? Have they succeeded in business? Have they taken classes? Who are these people and what makes them authorities on entrepreneurship? It doesn’t say.

What if we pointed it at, say skiing instead of starting businesses. It would go something like this (with grammar corrected):

Americans also say that traditional teaching methods aren’t the way to teach skiing. Overall, 73 percent report the best way to teach students to ski is to strap them on to skis, take them to the top of a mountain, and push them off. And 76 percent said that students who ski off cliffs immediately will be successful in ski competitions and afterwards.

The press release goes on to list these amazing answers from “the critical 18-24 age group” (and who knows better about entrepreneurship, experience, or education than people 18-24)?

  • Sixty-two percent said the most effective way to teach someone to become an entrepreneur was by creating a small business or interning in a start-up. Only 2 percent said it was through class work and lectures.
  • Sixty-nine percent said that work experience is where most learn the skills to become an entrepreneur.
  • Fifty-seven percent said that launching companies in college would make them more successful in creating companies and jobs after graduation.
  • Ninety-three percent said that entrepreneurship is “very important” to the future competitiveness of the American economy.

So they were asking teenagers whether they’d rather do something or go to class? Hmmm.

Here’s what I believe:

  1. The last thing this country needs is less education.
  2. Both education and experience can teach, but they teach different things, and in different ways.
  3. The ideal is both education and experience. Education accelerates learning. Sure, you can learn cash flow the hard way, but it’s easier, and way less expensive, in a classroom. Ideally you want both. Mix your education with experience, and vice-versa. In a pinch, if you can’t afford the education, you can still make it with pure raw entrepreneurship. But it’s harder.
  4. Here are five business fundamentals that business schools don’t teach. And here are five that they do teach.
  5. And, no offense, but the opinions of 2,141 randomly chosen Americans, much less 18-24 year-old Americans, are hardly the best way to figure what’s best for education, experience, or entrepreneurship.

(Image: Darren Pullman/Shutterstock)

Do You Know of Buy Local Frequent Buyer Programs That Work?

Business Research, ,

If you’re reading this, I’m asking your help. I’m curious about what local small businesses do about frequent buyer programs. I find that airlines, hotels, and rental car companies get my loyalty by giving me premiums, better service, and free services. I love the upgrades too.

But what about local programs? A lot of coffee shops and ice cream and the like have the classic punch cards, get the 10th one free and like that; but do you know of local programs that combine local merchants, like the hardware store, the dry cleaner, and health foods? A local buyer rewards program?

Are you a member of something like that? As a merchant or as a buyer? Is it working?

Please leave me a comment here if you’ve seen, participated in, or aware of any such programs that works.

What To do When Business Research Collides

Business Research, Economics, , , ,

I follow two reports on small business employment, one done by Intuit, the king of small business accounting, which also has a payroll service, and the other by SurePayroll, which is a small business online payroll service.

But here’s the rub: reporting on small business jobs in April, the Intuit index has good news … and SurePayroll has bad news. And both are doing the same thing, reporting on a survey of their small business payroll customers.

Here’s the key data from the Intuit report for April:

Small business employment grew by 0.3 percent in April, equating to an annual growth rate of nearly 3.6 percent. This translates to approximately 60,000 new jobs. Based on this latest data, the employment growth rate for March was revised slightly up to 0.3 percent, equating to 65,000 jobs added for the month. Since the hiring trend began in October 2009, small businesses have created 845,000 jobs.

And here’s the summary, from Inc.com, of the  SurePayroll report.

The small business economy has shifted into neutral, with hiring and wages virtually flat month over month (both down 0.1 percent from March), according to the SurePayroll Small Business Scorecard.

So who has the truth? Probably both. Most likely there is some difference in the composition of the two user sets. Here’s Intuit’s detail about the data:

The data for the Index is pulled in aggregate from approximately more [SIC] than 57,000 employers across the country that use Intuit Online Payroll and is published monthly on a close to real-time basis.

And I sent an email to SurePayroll’s person in charge, asking for similar information, but that hasn’t been answered yet, so I don’t really know what’s up and I don’t have enough background information to guess. Different kinds of businesses, perhaps? One is driven by payroll data and the other is asking people what they think? Is it politics, maybe? One group supports the current administration, the other doesn’t? I sure don’t know.

And here’s the other rub: what if your business depends on this data. Which picture do you believe? (Hint: both and neither?) And what if there’s a critical business decision to be made, based on this research, and you get only one or the other. Will you entertain an educated guess?

Do you think that ever happens?