Market Research

When to Activate

Use this skill when entering a new market, launching a new product or feature, validating business assumptions, sizing a market opportunity, analyzing industry trends, preparing investor materials, building a go-to-market strategy, or when someone asks you to "research the market," "size the opportunity," or "analyze the competitive landscape." Also activate when a marketing strategy seems to be based on assumptions rather than evidence.

First Questions

Before starting any research, clarify:

1. What decision will this research inform? (go/no-go, positioning, pricing, channel selection, audience targeting)
2. What do you already know or believe? (existing assumptions to validate or challenge)
3. What is the market or category? (specific industry, geography, segment)
4. What is the timeline? (quick directional research vs. comprehensive study)
5. What resources are available? (budget for tools/reports, access to customers, internal data)
6. Who will consume this research? (executive team, marketing team, investors — affects depth and format)

Core Rules

1. Research serves decisions. Every research activity must connect to a specific decision. If you can't name the decision, don't do the research.
2. Assumptions are hypotheses, not facts. Document all assumptions and seek data to confirm or deny them.
3. Triangulate. Never rely on a single data source. Cross-reference at least 2-3 sources to build confidence.
4. Distinguish signal from noise. Large datasets can mislead. Small but targeted qualitative insights often reveal more than broad surveys.
5. Recency matters. Market data older than 18-24 months is suspect. Industries shift fast. Always note the date of your sources.
6. Actionable over comprehensive. A 5-page brief that drives action beats a 50-page report that sits in a drawer.

Research Types

Primary vs. Secondary Research

Type	Definition	Examples	Best For
Primary	Data you collect directly	Interviews, surveys, focus groups, observation	Unique insights, customer understanding, validation
Secondary	Data others have collected	Industry reports, government data, analyst research, published studies	Market sizing, trend analysis, competitive context

Start with secondary research to understand the landscape, then use primary research to fill gaps and validate hypotheses.

Qualitative vs. Quantitative Research

Type	Purpose	Methods	Output
Qualitative	Understand "why" and "how"	Interviews, focus groups, observation, open-ended surveys	Themes, insights, hypotheses
Quantitative	Measure "how much" and "how many"	Surveys, analytics, market data, A/B tests	Numbers, trends, statistical significance

Rule of thumb: Qualitative first to discover what matters, then quantitative to measure how much it matters.

Market Sizing: TAM, SAM, SOM

Definitions

• TAM (Total Addressable Market): The total revenue opportunity if you captured 100% of the market. The theoretical ceiling.
• SAM (Serviceable Addressable Market): The portion of TAM you can reach with your current product and business model. Your realistic playing field.
• SOM (Serviceable Obtainable Market): The portion of SAM you can realistically capture in the near term (1-3 years). Your actual target.

Top-Down Sizing

Start with a large number and narrow it down.

Method:

1. Find total industry revenue from analyst reports or government data.
2. Filter by your geography, segment, or product category.
3. Apply your realistic market share assumption.

Example:

• Global CRM market: $80B (TAM)
• CRM for mid-market B2B companies in North America: $8B (SAM)
• Realistic capture in 3 years at 2% market share: $160M (SOM)

Pros: Fast, uses available data, good for investor conversations. Cons: Often inflated, relies on broad assumptions, ignores real-world constraints.

Bottom-Up Sizing

Start with your unit economics and scale up.

Method:

1. Define your target customer profile.
2. Count the number of target customers that exist.
3. Multiply by your expected annual revenue per customer.
4. Apply a realistic penetration rate.

Example:

• Target: B2B SaaS companies with 50-500 employees in North America
• Number of target companies: 45,000
• Average annual contract value: $24,000
• Realistic penetration in 3 years: 5% = 2,250 customers
• SOM: $54M

Pros: Grounded in real assumptions, more credible, forces you to define your target. Cons: Requires accurate customer count and pricing data.

Best Practice

Present both methods. If they converge, your estimate is more credible. If they diverge significantly, investigate why and document the assumptions that drive the difference.

Industry Analysis Frameworks

Porter's Five Forces

Analyze the competitive dynamics of an industry:

1. Threat of New Entrants: How easy is it for new competitors to enter? (barriers: capital, regulations, brand loyalty, network effects, switching costs)
2. Bargaining Power of Suppliers: Can suppliers raise prices or reduce quality? (few suppliers, no substitutes, high switching costs = high power)
3. Bargaining Power of Buyers: Can customers demand lower prices or better terms? (many alternatives, low switching costs, price-sensitive = high power)
4. Threat of Substitutes: Can customers solve the problem differently? (different product category, DIY, doing nothing)
5. Competitive Rivalry: How intense is competition among existing players? (many competitors, slow growth, low differentiation, high exit barriers = intense rivalry)

Marketing implications: High buyer power = invest in differentiation and loyalty. High rivalry = invest in brand and positioning. High substitute threat = invest in education and category creation.

PESTEL Analysis

Analyze macro-environmental factors:

• Political: Government policy, trade regulations, tax policy, political stability
• Economic: Growth rates, inflation, exchange rates, consumer spending, unemployment
• Social: Demographics, cultural trends, lifestyle changes, attitudes, education
• Technological: Innovation rate, automation, digital adoption, R&D spending, disruption
• Environmental: Climate, sustainability requirements, resource scarcity, waste regulations
• Legal: Industry regulations, data privacy laws, employment law, consumer protection

Marketing implications: PESTEL reveals tailwinds (trends you can ride) and headwinds (risks to mitigate). Use it to spot opportunities in social and technological shifts.

Market Trend Identification

Where to Find Trends

• Google Trends: Search interest over time for topics and categories
• Industry analyst reports: Gartner, Forrester, McKinsey, CB Insights, Statista
• Earnings calls and investor presentations: Public companies reveal market direction
• Patent filings: Leading indicator of technology direction
• Job postings: What roles companies are hiring for signals strategic bets
• Venture capital funding: Where money flows, innovation follows
• Social listening: Rising conversation volume on topics in your space
• Academic research: Emerging frameworks and discoveries that haven't hit mainstream
• Conference agendas: What industry events are featuring this year vs. last year

Trend Evaluation

Not all trends matter. Evaluate each trend against:

Criterion	Question
Relevance	Does this affect our market, customers, or competitive position?
Velocity	How fast is this trend accelerating?
Durability	Is this a temporary fad or a structural shift?
Impact	If this trend materializes, how significantly does it change our business?
Actionability	Can we act on this trend with our current resources and capabilities?

Data Sources

Free / Low-Cost Sources

• Government data: Census Bureau, Bureau of Labor Statistics, Eurostat, World Bank
• Google Trends: Search interest trends and comparisons
• Social listening: Reddit, Twitter/X, LinkedIn, industry forums
• SEC filings: 10-K reports for public company strategy and financials
• Industry associations: Often publish free research summaries
• Crunchbase / PitchBook (free tiers): Startup funding and company data
• SimilarWeb (free tier): Website traffic estimates and benchmarks
• Google Scholar: Academic research papers

Paid Sources

• Statista: Statistical data and market research
• Gartner / Forrester: Technology industry analysis and Magic Quadrants
• IBISWorld: Industry reports and market sizing
• CB Insights: Technology market intelligence
• Semrush / Ahrefs: Search demand and competitive intelligence
• SparkToro: Audience research and media consumption
• Nielsen / Kantar: Consumer research and media measurement

Research Methodology Selection

Research Goal	Best Method	Sample Size	Timeline
Understand customer pain points	Interviews	8-15 people	2-4 weeks
Validate market demand	Survey + search volume	200+ responses	1-3 weeks
Size a market	Secondary research + bottom-up modeling	N/A	1-2 weeks
Evaluate competitive landscape	Desk research + mystery shopping	5-10 competitors	1-2 weeks
Test pricing sensitivity	Van Westendorp or Conjoint survey	200+ responses	2-3 weeks
Identify market trends	Trend analysis + expert interviews	3-5 experts	1-2 weeks
Understand buyer journey	Interviews + analytics	10-20 interviews	3-4 weeks

Actionable Insight Extraction

Raw data is not insight. Transform data into action using this framework:

The Insight Formula

Observation → Implication → Recommendation

• Observation: What the data says. Factual, specific, evidence-based.
• Implication: What it means for the business. "So what?"
• Recommendation: What to do about it. Specific, actionable, prioritized.

Example:

• Observation: "72% of survey respondents said they evaluate 3+ vendors before purchasing, and the #1 evaluation criterion is customer reviews, not feature comparison."
• Implication: "Our investment in feature-comparison content is misaligned with how buyers actually evaluate. We're losing to competitors with stronger review presence."
• Recommendation: "Launch a structured review generation program targeting G2 and Capterra. Goal: increase review volume from 45 to 200+ reviews within 6 months. Reallocate 30% of comparison content budget to review acquisition."

Market Research Report Template

1. Executive Summary (1 page)

• Key findings (3-5 bullets)
• Primary recommendation
• Market opportunity size

2. Research Objectives and Methodology

• Decision this research informs
• Methods used and data sources
• Sample sizes and limitations

3. Market Overview

• Market size (TAM/SAM/SOM)
• Growth rate and trajectory
• Key trends shaping the market

4. Customer Analysis

• Target segments defined
• Key pain points and needs
• Buying behavior and decision criteria
• Unmet needs and opportunities

5. Competitive Landscape

• Key competitors and positioning
• Competitive strengths and weaknesses
• Market share estimates
• Competitive gaps and opportunities

6. Key Findings and Implications

• Finding 1 → Implication → Recommendation
• Finding 2 → Implication → Recommendation
• Finding 3 → Implication → Recommendation

7. Risks and Assumptions

• Key assumptions underlying the analysis
• Risks to monitor
• Recommended follow-up research

8. Appendix

• Raw data tables
• Survey instruments
• Interview guides
• Source bibliography

Quality Gate

Before delivering market research:

• The research is tied to a specific decision or set of decisions
• Multiple data sources have been triangulated (not relying on a single source)
• Market sizing uses both top-down and bottom-up methods when possible
• All assumptions are documented and labeled as such
• Data sources are cited with dates (recency verified)
• Findings follow the Observation → Implication → Recommendation format
• The research distinguishes between facts, estimates, and opinions
• Limitations and gaps are acknowledged
• The output format matches the audience (executive summary for leadership, detail for analysts)
• Recommendations are specific, actionable, and prioritized