This e-book provides practical advice for conducting market research on a small budget for entrepreneurs starting a new business venture or considering starting one. It discusses the importance of market research before launching in order to understand customer needs, estimate market size, identify a business model, and develop a market positioning strategy. Various low-cost methods for conducting primary and secondary market research are presented, including customer interviews, online surveys, using Google AdWords and Twitter, and analyzing publicly available data. The e-book aims to help entrepreneurs properly prepare for a new venture through initial market research rather than rushing into execution without understanding the market.

2. This e-book is for those starting a new venture or thinking
about starting a new business.
It builds on the concepts discussed in my e-book The 7
Steps to a Successful Startup, providing practical “how-to”
advice for the first three steps of the seven-step process.
For more, see www.Startup-Advisor.com.

3. Market Research on a Shoestring: Get a Reality Check on Your Big
Idea for Less than $100
Copyright © 2010 by Naeem Zafar
All rights reserved. No part of this book may be reproduced or transmitted in any form;
by any means, electronic or mechanical, such as photocopying or recording; or by any
information storage and retrieval system, without written permission from the author.
Disclaimer: The content of this e-book consists of the author’s opinions and should not
be considered legal advice.
Published by:
Five Mountain Press
Cupertino California USA
info@FiveMountainPress.com
www.FiveMountainPress.com
ISBN: 978-0-9823420-3-9
Printed in the United States of America
Other Books from the Author
(Available at www.FiveMountainPress.com)
• The Entrepreneur’s Legal Guide to Starting Up: 35 Little-Known Facts, Secrets,
Techniques, and Tricks to Making Sure You Get Every Penny’s Worth of Value from
Your Lawyer
• Finance Essentials for Entrepreneurs: A Simple Guide to Creating and Understanding
Financial Statemenets for Your Business

4. MArkeT reSeArCh oN A ShoeSTrINg | 1
Table of Contents
Section 1: Demystifying Market Research 5
Chapter 1: What is Market research? 6
1.1. Segmentation: Which Customers Will I Start With First? 8
1.2. Market Size: how Big Is My opportunity? 9
1.3. Business Model: how Will I Make Money? 10
1.4. Market Positioning: how Will I Make Myself Stand out? 11
Chapter 2: Why Do I Need to Do Market research? 12
2.1. What question are we really trying to answer? 13
Chapter 3: The elements of Market research 15
Chapter 4: how Much To Disclose While Doing Market research 18
4.1 how open Should I Be? 18
4.2 What Should I or Should I Not Talk About? 19
Section 2: The Method of Market Research 21
Chapter 5: Conducting Customer Interviews 22
5.1. Why Talking to Customers is Important 23
5.2. how to Talk to Customers 24
5.3. Where Do I Find These Customers? 26
5.4. What to Ask While Doing research 27
5.5. 28 Questions To Ask A Potential Customer 28
5.6. how to get the Conversation going 31
5.7. how To Find B2B Customers To Talk To 32
Chapter 6: online Surveys 40
Chapter 7: Using google Adwords To Conduct research 46
Chapter 8: Using Twitter To Conduct research 56
Chapter 9: Publicly Available Data To Conduct research For Free 61
9.1. Public resources You Can Use 61
9.2. hire People to Do Market research 65
9.3. Using Free Data from Trade Associations 65
9.4. Free research Using SeC.gov And edgar.Com 69
9.5. Using 10-k Wizard To Conduct Market research 74
You may not copy, post, reproduce or forward this document in any format © all rights reserved Naeem Zafar—www.startup-advisor.com

5. MArkeT reSeArCh oN A ShoeSTrINg | 2
Section 3: Extracting Meaning From Market Research 77
Chapter 10: Profiling Your Target Customers 78
Chapter 11: estimating Market Size 81
11.1. Implications of Market Size 82
11.2. TAM and Market Size 84
11.3. estimating Market Size 85
11.4. Bottom-Up Versus Top Down Analysis 87
Chapter 12: Identifying A Business Model 91
Chapter 13: Creating Market Positioning 96
13.1. What Segment of the Market to Address First? 98
13.2. Coming Up with Your Company’s Positioning 99
13.3. Validating Your Positioning Assumptions 100
13.4. What if There Is No Competition? 101
Section 4: What’s Next? 103
Chapter 14: Developing Your own Metrics And Validating Assumptions 104
14.1. key Assumptions And Metrics 104
14.2. Testing Your Assumptions 105
14.3. Using Your Assumptions for Financial Modeling 105
14.4. revisit and Tweak 106
Chapter 15: Next Steps for Your Venture 107
Epilogue & Free Supplements 109
List of Trade Associations 110
About The Author 125
You may not copy, post, reproduce or forward this document in any format © all rights reserved Naeem Zafar—www.startup-advisor.com

6. MArkeT reSeArCh oN A ShoeSTrINg | 3
The Purpose of This E-book
Most people would never think of heading out for a long hike in the wilderness without some
preparation. They would check out a map, inquire about where the trail leads, or find out
whether it will bring them back to the starting location. They would probably carry water and
some food with them. They may even talk to other hikers who have walked the same trail.
But for some reason, most entrepreneurs don’t bother with similar preparation, even though a
lot more than a day outdoors is at stake. They get excited about their ideas, jumping right into
their execution and implementation. Some people rush to incorporate their businesses and
spend thousands of dollars on legal fees. Some people
jump to patent their ideas (and also end up spending
thousands). Many even quit their jobs to pursue their ReseaRch YouR Business
dreams. They often find themselves without either a market Model BefoRe You staRt!
or customers, despite several months of hard work. They
pay a high price for this journey in terms of their time, their This may be shocking,
but I can guarantee that
savings, and the toll taken on their personal relationships.
you can have a business
that can reach $10
million in revenue within
Four Simple Diagrams! six months. Surprised?
Think about this: What if
It doesn’t have to be this way. Smart entrepreneurs take you sold dollar bills for
a different path. They discover the customers first. They 98 cents? Your business
would be sure to take
arrive at the starting point with a clear understanding of
off. Your revenue would
what they should be developing and delivering to their rise rapidly, but it would
customers—who will then be eager to hand over their be a lousy business—
money. If you follow the techniques and advice in this book, you would lose money
you too will significantly improve your chances of success. on every transaction.
Just four diagrams will give you the data you need. once This is exactly what
you can draw these four diagrams, you have completed happens to a business
with a poorly formulated
your market research and are ready to begin building your
business model. Many
business! entrepreneurs don’t
understand this concept
In this book, I will walk you step-by-step through the until they have spent
techniques and methods of conducting this essential months developing a
research for practically free. product and trying to start
a company.
You may not copy, post, reproduce or forward this document in any format © all rights reserved Naeem Zafar—www.startup-advisor.com

7. MArkeT reSeArCh oN A ShoeSTrINg | 4
If you are trying to decide whether it is really worth your time and energy to start a new venture
or business, read this book. You might think that many people can use your product or service.
But you need to find out with as much certainty as possible whether there is really a group of
people who really need your product. Starting a company without sufficient market research
can lead to unnecessary hardship, not to mention great risk to your personal wealth and
health. You are about to start a long journey. You want to make sure that this journey leads to
a clear and happy destination. True, you may take many detours. You may even change your
destination at some point. But having clarity about your destination can save you time and
money—and make the journey more enjoyable.
Performing market research and gaining such clarity is not difficult. For most businesses,
spending two to four months doing market research and discerning “deep customer needs”
will allow you to learn just about anything you need to know before you quit your day job and
launch headlong into your startup.
I have been involved in six startups myself and have counseled hundreds of entrepreneurs who
were somewhere in the process of starting a company. (See my bio at the end of this book to
learn more about my experience.) I have seen more than one startup derail in the absence of
sufficient market research. The result of insufficient market research: the entrepreneur-owner
lacked clarity about his or her target audience. In many cases, that entrepreneur was going
after too small a market.
I know that you will find this e-book useful. I hope that you read it carefully and share with me
your own experiences and tips. I want to share them with others who seek to start a fulfilling
and enjoyable journey: a life of entrepreneurship!
You may not copy, post, reproduce or forward this document in any format © all rights reserved Naeem Zafar—www.startup-advisor.com

8. Go to
www.FiveMountainPress.com/books.html
to buy this book