The Zero Dollar, 5 Minutes Market Research
- Scratch your own itch
- Ask people what they want
Scratching your own itch is the most fun, but being too passionate about something might blind you from real business opportunities. Asking people is good but more often than not, they can’t tell you what they want. You don’t want to build what people want, you want to build what they need. If Henry Ford asked people what they wanted, I’d be sitting on a (faster) horse today. Copying is good, but you don’t want to copy something that is not successful.
What I want to show you, is a quick technique to find markets where people are looking for something and willing to pay for it. It’s not 100% accurate but it’s a good start, costs nothing and takes only 5 minutes to do.
1. Find What People Are Looking For
Go to Google Search-based keyword tool and browse the categories on the left. You’ll see how much traffic, competition and how much people are bidding for those keywords. What we’re looking for is medium-to-high traffic, low competition and bid. But not $0 bid, if nobody is willing to pay for ads for that keyword, it often means nobody is willing to pay for the products in that market.
Here I found something interesting, “flv converter”, with very high traffic, low competition and bid.
2. Look at The Competition
Next thing you want to look at is who is buying ads for those keywords and what are the top results:
You can see there’s lots of results, that means big SEO competition, but only two ads. If there’s money in that market you could buy ads to get on top before building up your Page Rank. You can also contact owners of the sites in the top results to see if they are interested in promoting your product or service.
This is also a good place to look to see what the competition is doing. Maybe they are missing something. Maybe you’ll see some forum posts about people complaining about their problem.
3. Where’s The Money?
Now the big question is: will people pay. If bid is low and there’s no competition that could mean two things: people searching for those keywords are not looking to buy stuff or that this is an unexploited niche.
Microsoft AdLabs built a tool to guess if people searching for specific keywords have commercial intention.
This tells you that people searching for “flv converter” have a 50% chance of being in buy-mode.
It’s also a great tool to refine your niche, eg.: “flv converter mac” has 0.54 probability, “flv converter windows” has 0.62 and of course “buy flv converter” has 0.97, but no traffic.
Don’t base your whole business on this, but this is a good indicator to start from and better then wild guesses or slanted surveys.
Or if you're into coding, join my free class on rebuilding a Ruby web server.