Competitors, technology and customer priorities are always changing, so you're never done gathering market knowledge. The real question is, "when is it enough to act?"
I often get asked, "when do I have enough market knowledge to do something?" Too much market sensing leaves you stuck in the analysis-paralysis quagmire, but investing in a bold new direction before the market for it has crystallized is risky and wasteful.
The decision to act on market knowledge is a balance of art and science, bringing together data, team skills and organizational risk tolerance. Because companies have different levels of each, your answer will be unique to you. There are questions you can ask, however, to help make the tough decision to innovate or keep learning. Here are my favorites:
#1 - Throw out every pre-COVID market study, persona and survey result
I'm saying it: 99.99% of pre-pandemic research is useless for making decisions to innovate now. Priorities and expectations of every market, for every product, in every country in the world changed to some degree during the pandemic and its aftershocks. If you haven't updated your Buyer Personas since 2018, move them to that little trash can icon on your desktop and build some new ones.
"99.99% of pre-pandemic research is useless."
Looking ahead, let the ongoing level of volatility in your market help you decide how often to check in with buyers and users. Ask yourself: is my market knowledge CURRENT enough to be relevant?
#2 - Is the new market direction ESTABLISHED enough to warrant action?
The counterweight to currency of knowledge is whether your market insights indicate established priorities, workflows and opinions, or if they represent a recent - perhaps still evolving - change. Some companies innovate for the vanguard, knowing that profitable revenue may be years away. Others are more comfortable with a fast-follower position, letting competitors go first while they watch the market need refine and solidify. Both strategies have risks, but organizations tend to succeed at one or the other. Knowing which position your leadership prefers will guide how much market knowledge you need to gather.
#3 - Are your sources VALID enough to justify innovating?
You'd be surprised how many market "facts" are, when traced back to their original source, used to back up assumptions they didn't validate in markets they didn't survey, so use caution with third-party sources. Establish a list of trusted sources of market knowledge in your world, perhaps including industry associations, analyst reports or government agencies. Dig back to the original source of any data you use. And, if you're thinking of making a game-changing decision, validate with first-hand research.
"You'd be surprised how many market 'facts' are used to back up assumptions they didn't validate in markets they didn't survey."
#4 - Is your research SPECIFIC enough to offer real direction?
This point brings us to the difference between data and insight. Too often, one survey factoid or competitor press release sends teams jumping in a new direction, but is it the right direction? If a survey comes back showing your customers think your price is too high, don't guess what to do about it - ask why, and test your response before committing to it. Do you have any evidence that the new features your competitor just launched are valuable in the market? Have you ever heard prospects say, "if you only had "x" I would buy your product..."? If not, watch and wait. Don't be the second lemming off the cliff.
"If a survey says your price is too high, don't guess what to do about it - ask why, and test possible responses."
#5 - Can the team AGREE that this market knowledge is enough?
Every organization has a level of risk tolerance that drives decision making, even if it's an unspoken and undefined factor. Some organizations never have enough market data, while others guess-and-go. Most teams have a few folks at each end of this spectrum, and a bunch falling somewhere in between. How can you align and activate a team when some are worried about taking any risk and others are pushing to get going? The best way is to be clear about organizational appetite for risk. Define it. Give examples of leadership's idea of "enough" research and encourage team members to recognize their personal risk tolerance and how to best use that in the team setting.
You never have enough market knowledge, and you always have enough, so do it your way. Define your appetite for innovation risk, leverage good knowledge sources for actionable insights and keep the conversation going.
About the Author
Diane Pierson is the Founder and Principal Market Strategist of Innovate on Purpose, a consultancy enabling successful product innovation for tech companies through strategic focus and powerful go-to-market strategies. Diane is also a visiting instructor at Pragmatic Institute. Contact Diane at dpierson@innovateonpurpose.com.