TL;DR
This guide covers what exactly market research is and why it is essential for every business. You will go over a 6-step guide to conduct market research that includes finding your target customers, studying the market, researching competitors, primary research, and analyzing your findings. Understand what questions to ask during market research, how to research competitors on a low budget, and realistic market size numbers to include. We conclude with how to use your research data to build a business plan or a convincing pitch for potential investors. If you're interested in building a business with a strong foundation and guidance, Young Founders Lab’s Startup Incubator program might be worth a look.
Market research on the surface might sound like quoting a market size figure or quoting an industry report but there's so much more to it. For most teen entrepreneurs, launching the business sounds easier than conducting market research, but it's more practical than you think.
Business plan and pitch competitions offer guidance through the early stages of building a business, including market research. Check out our additional guides on 12 business plan competitions for teens and elevator pitch competitions for high school students with prize money.
What is market research?
Market research is gathering market, customer, and industry data to validate your business, refine your idea, and identify your positioning, which will help you launch your business successfully.
Market research is essential groundwork that will help you build a strong business foundation. Your research will define target customers, market segment, positioning and market trends that will help guide your business launch and other business decisions going forward.
Three essential parts of market research include industry research, customer research, and competitor analysis.
Industry Research helps you identify current demands, market trends, and market size.
Customer Research is where you talk directly to your target customer to learn their problems, current habits, frustrations, desires, and what they're willing to pay.
Competitor Analysis covers who's already solving the problem you are targeting. It helps you see what is already working, where the gaps are, and how to define your position.
6 Steps to do Market Research
Follow a streamlined path to market research where you conduct research first. Define your target customer, the problem you're solving, and how they'll benefit from your solution. Study the market size, research competitors and then prepare questions that will give you insight into your target customers' current habits, willingness to spend and pain points.
1. Define Your Target Customer
Before you start researching, write down who your potential customers are, what problem you are solving, and how they might benefit from your business. Market research can validate or change these assumptions. Be specific about your customer by defining their age bracket, what kind of work they do, or even where they live.
Try this: Write down three assumptions about your business. This can include pain points such as “teens having no clear path to publish a research paper in high school.” We will test these assumptions during research.
2. Study Market Size, Demand, and Trends
Research market size to understand if there is enough demand for your product. This is an estimate that you can also track by searching for competitor revenue. Look up discussions on forums and social media to understand industry trends. You will come across common pain points or discussions that you can ask about in customer interviews.
Try this: Use Google Trends to compare search interest and related keywords over the past year.
3. Research Your Competitors and Their Pricing
Look at businesses already targeting the same problem, study their pricing, features, customer reviews and complaints to understand what's working and where gaps exist. This will help you identify opportunities and build a strong differentiation for your business.
Try this: Create a spreadsheet and input information about five competitors including their pricing, target customers, features, trends and common customer complaints. Identify an area where your business could solve the problem better.
4. Find and Interview Your Potential Customers
Start by finding any people who are your target customers through online forums or local community groups. Schedule interviews with them to ask about the problem that your business will solve, what their current habits are, what they're willing to spend and if they've tried existing solutions.
Try this: Reach out to 5 people that fit your target customer profile and ask to schedule 10-minute interviews.
5. Analyze Your Findings and Look for Patterns
Analyze your collected responses and identify recurring problems or discussions. Look for patterns including what solutions your target customers are already using, what their frustrations are, and what kind of solution they would like to see.
Try this: Organize your responses in a spreadsheet and tally recurring answers. For example, 10 out of 20 people mentioned the same problem with existing solutions, but only 5 have bought a solution to solve it.
6. Use Your Research to Refine Your Business Idea
Compare your findings with original assumptions and identify what you need to change, including target customers, adjusting pricing or improving your product. Test your revised idea on a small scale to see if your target audience finds it better and is willing to take action.
Try this: Reach out to 5 people you interviewed with the upgraded idea and ask for feedback.
What questions should you ask during Market Research?
To see whether your idea has potential and willing customers, ask the right questions during customer interviews. Focus on questions about the problem, their behaviors, and spending habits instead of plugging your idea too early.
Good questions will help you uncover the problem they are facing, understand past behavior, find gaps in the existing market, and test their budget. Here are some questions you should avoid and what you should ask instead.
| What to avoid asking | What to ask instead |
|---|---|
| Would you buy this [your product]? | What tools, products, or services do you currently use to fix this? |
| Do you think this is a good problem to solve? | Walk me through the last time that happened, how did you handle it? |
| How much would you pay for this? | Have you ever spent money to solve this? If so, how much? |
| If I built X, would you use it? | What would make an alternative solution worth paying for? |
| Don't you hate how hard it is to do X? | What is the biggest challenge you face with [specific task]? |
| Would you pay for something that does X? | What would stop you from using or switching to a new solution? |
How do you research competitors without a budget?
Short practical section. Look at what is already being sold, read reviews, check pricing, and talk to people who use the alternatives.
1. Look up competitors and their offerings
For local businesses, start with a Google Maps search to develop a list of similar businesses. If your business is broader or online, find competitors on LinkedIn. Do a deep dive into the products/services each competitor offers and their price points.
2. Inspect their online/offline customer experience
For online businesses, review your competitors' websites, fill out their contact forms, and understand how they guide customers through their sales funnel. For local businesses, visit in person and understand how they market their business and what their customer experience looks like.
3. Go through social media and ads
Visit their social media profiles such as TikTok, LinkedIn, X or Instagram. Look at what they're posting, what is getting more traction, and how they respond to customers. The Meta Ads Library will show you active ads of any brand when you look them up. For local businesses, check brochures, hoardings or even mail marketing.
4. Read customer reviews
Read customer reviews of your competitors on Google Maps, Amazon, TrustPilot, Reddit, or even social media. Look at what customers like about their business, and pay attention to negative reviews to find gaps and pain points, such as missing features or poor customer service.
5. Synthesize findings in a SWOT analysis
Put all your findings in a simple spreadsheet. Add every competitor and break down their strengths, weaknesses, opportunities and threats (SWOT) to understand how you can position and differentiate your business.
Where do market size numbers come from, and should you use one?
Market size is usually estimated by multiplying the total number of potential buyers in a market segment by the average revenue they would spend in a single year.
This first number is called Total Addressable Market (TAM) and is then narrowed down into Serviceable Addressable Market (SAM) and Serviceable Obtainable Market (SOM).
| TAM (Total Addressable Market) | Total Number of Potential Customers × Average Annual Revenue per Customer |
| SAM (Serviceable Addressable Market) | TAM × Target Segment Percentage You Can Actually Serve |
| SOM (Serviceable Obtainable Market) | SAM × Realistic Market Share Percentage (often 1% to 10%) |
How to use market research insights in business planning or pitches
Once you've gathered customer pain points, market gaps, and pricing data, turn these insights into a business plan you can follow.
Organize Your Research Findings. Categorize your findings into market demand, customer problems, competitor information, and pricing. Create a final spreadsheet to record key insights along with supporting numbers and sources. Identify three findings that you can highlight in your business plan or pitch to investors.
Write a Clear Problem Statement. Use customer interview insights to identify the most recurring problem that your target audience faces and why existing solutions have not helped. Write a problem statement and support it with evidence such as “13 out of 20 people struggle with this issue”.
Estimate Your Customer and Revenue Potential. Using data from your research, calculate potential revenue from customers you can realistically reach based on the percentage of people in your target audience who have this problem and what they're willing to pay. Use this number in your business plan for goal setting and to show to potential investors.
Highlight Your Competitive Advantage. Use competitor data that you've aggregated and compare it with your own business based on pricing, features and complaints. Identify one or two gaps that your business addresses and use customer feedback to explain why this will be a competitive advantage.
Show How Research Influenced Your Decisions. Integrate this research into your business decisions, such as adjusting pricing, refining the product, fixing positioning and targeting a specific customer group. Write a summary of what you've learned through research and why you made changes. This shows potential investors that your business decisions are backed by research.
Frequently Asked Questions: How to do Market Research for Your Teen Startup
1. How will market research help your business?
Market research is essential to understand whether your idea has potential and is worth pursuing. It will help you understand what potential customers actually want, what they're willing to pay and what the market and competitors already offer so you can refine your idea accordingly.
2. How many people should you talk to during market research
You should start by talking to at least 10 to 15 people who fit your target customer profile. Conduct in-depth interviews to understand their problems, what they want, and what they are willing to pay. After the interviews, look for recurring problems and feedback to help establish a consensus on how you can improve your business idea.
3. Can you conduct market research online?
Yes, you can conduct market research online. You can explore online communities such as Reddit and Twitter to understand customer problems, run social media polls and conduct interviews and surveys through Zoom and Google Forms. Being online also helps you do in-depth competitor research, see what solutions already exist, and identify market gaps. If you want a more streamlined journey, Young Founders Lab is a startup incubator that gives you the tools and resources to build a revenue-generating business so you can focus on building.
4. How to do market research with AI?
At the start of your research, use AI to track industry trends, analyze competitor positioning, find market gaps, and extract discussions happening on public forums. Once you've conducted customer interviews, you can use AI to aggregate common pain points, gaps and opportunities. AI also helps analyze brand positioning and test campaigns and assets before you publish them.
5. How to find people for market research?
Find forums and discussions where your target customer is spending time. Track user profiles and conversations to identify your who fits your target customer profile. Reach out with a short message explaining your idea and politely ask for a ten-minute conversation for their feedback on it.
6. What can go wrong if market research is not done properly?
Many things can go wrong, including building a business with no demand, targeting the wrong customers, or setting prices people aren't willing to pay. Avoid relying on assumptions or AI to validate your business idea, you need to talk to real people. Reach out to your target customer, understand their problems, habits, desires and spending habits.
The challenge in market research is asking questions that get honest answers. Acting on these answers means changing the initial plan you had made for your business. Nobody likes doing this alone and this is where a lot of founders lose their momentum. Young Founders Lab offers a peer-based business program that helps you build your business through an immersive curriculum and mentorship support, so you don't have to do it alone.