Any Innovation Needs Structured Feedback: Amitayu Basu, NumrResearch, Talks About Importance Of Market Research Before Creating A Product
The startup boom in India has subsided. Do you think the craze is over?
Well, saying it was a 'craze' is not really being true to the explosion of innovation that this country has produced over the last few years. Yes, the total number of deals have subsided year on year, but in the total amount invested but VCs in 2018 was more than double of 2017. However in 2018, most of the deals were for late stage investments, and hence large ticket sizes. In 2019 first half, we are again seeing similar number of deals (as 2018) but with significantly smaller ticket sizes. . This may look like a slowdown. But it is not.
But so many startups are failing these days…
There have been both success and failure. Research says, most startups fail within first five years of launching business. Hence, we are seeing the first wave of failures now. This is a common phenomenon.
And, you have survived for over 8 years…
Yes. And we are thankful to a lot many people including Debra Pruent (CEO GfK), Debi Basu (MD GfK) and Ravi Jonavithula (COO Nielsen SEA) (to name a few) for that. We believed in growing slow but steady, bootstrapped the business ourselves and focusing on getting the basics right. When we started the market was used to a very traditional pen and paper way of doing things. We have worked on changing the market and run a profitable business while launching new verticals to further expand the market.
As a startup that succeeded and is now helping other startups succeed, what are your biggest learning?
Last year a research by CB Insights gave a peek into why startups are failing. 42% of the failures were attributed to lack of any market need. There were 18% startups that failed because pricing was not correct. We believe, reasons as such could have been easily avoided.
Five friends got together, everybody supported each other’s idea, their parents thought great about the idea and then they launched. This is a wrong process. How do you know if people you will be selling to actually wants to buy your service? How do you know people are ready to pay as much as you expect them to pay? One or two prospective customers boosting you up at the ideation stage doesn’t suffice. Even those people will behave differently when it comes to actually paying for the service.
Any innovation needs structured feedback. You need a proper market research even before you get down to creating your product. A methodical study on the prospective customer’s opinion about your idea, offerings or pricing can be give life saving insights to a new startup. This small investment to do market sizing and pricing pays many times over and should be one of the first things that a VC or start-up does to evaluate the idea.
When we started, we knew exactly who wants to buy (and who doesn’t) and we also knew at what price they want to buy. So, nothing for us was on the basis of gut feeling. Everything was scientifically approached.
But then, isn’t market research a costly proposition for startups?
Not exactly. Compared to how much you are putting at stake when you launch the business, this is a fractional cost. In fact, a basic market research or pricing research will cost a startup only around INR 1.5 L.
Why a market research company is important? Can’t this be a do-it-yourself (DIY) thing? There are so many platforms like surveymonkey where you can create surveys…
Yes. You can create surveys on your own. You can also select your set of respondents and collect data. But the challenge comes in generating insights from the data. It is not a set of graphs alone that you do as a project for your college subject. This needs to be approached much more scientifically.
For example, ‘how much are you willing to pay for a soap’ is never without a context. The answer will change basis a number of factors like the brand, size, packaging (box/sachet), medium (liquid/bar) etc. An experienced survey company will know how to frame questions right, how to validate a question with other follow up question, how to analyse the answers and generate the most meaningful insight for you. The best company will be able to get this all done within hours or posing the research question with industry level learning baked in the insights using advanced machine learning.
As a company offering market research services to startups, do you find enough takers of the service?
Yes, We do. Entrepreneurs today are learned. They know the grind and market research is becoming a part of their plan increasingly. So while we are already working with major unicorns, we are constantly seeing a rise of interest in market research from the ‘about to be launched’ OR ‘newly launched’ startups.
What are the way forward for Numr Research?
Our company Rebuscode has gained enough attraction as a research based technology company that specialized in analyzing survey inputs. We have been supporting big research companies like IPSOS, Nielsen, Kantar etc. with our platform.
Now, we are getting into consumer research ourselves through Numr Research. We are bringing in the best of technology and layering it up with our learning to create an affordable yet world class service for all companies. And we have just started our journey.
