Structured conversations
When it may fit: The customer and problem need testing.
Evidence needed: A list of people and a few questions about behavior and spending.
Trade-off: Only worth doing if the questions are not leading.
Create a Business Brief
How to Research Your Market Before Investing in a Business
Market research is not a report. It is a short set of conversations, observations and comparisons that tell you whether anyone will pay and what they pay now.
1. The business problem
What do I need to know about my market before I spend money, and how do I find it out?
Founders often treat market research as something to buy: a report, a survey, a consultant’s deck. Those can help, but the information that matters most for a small business is closer to hand: who the customers are, what they do today to solve the problem, and what they pay for it.
Good research is specific and cheap. It produces a short list of facts about customers, alternatives and prices, and a clear idea of what remains unknown.
2. What the evidence can reveal
Early market research answers four questions:
- Information gap Who is the customer, and how many are within reach?
- Information gap What do they do today, and what does it cost them in money and time?
- Information gap Who else serves them, at what price, and with what weaknesses?
- Information gap What would make them change, and what evidence is there that they will?
The tool below does not supply market data. It counts the evidence you enter and flags where it is thin, which is itself a useful form of research discipline.
3. Investigate the problem
In the sample, Illustrative the founder has had six customer conversations, no pre-sales and has researched two competitors. The evidence table rates each of these as thin. Calculated A rough rule shown in the tool is that a founder should have at least 15 focused conversations before treating demand as understood, and that two competitors is too few to describe a landscape.
Calculated The research gaps matter because the numbers lean on them. The sample’s economics need about 600 sales a month at maturity and break even at about 374, around 62% of that. Whether 374 customers exist within five miles, and at what price they would buy, is a market question the numbers cannot answer.
Hypothesis Six conversations might reveal a real problem, but not how many people share it or what they will pay. Information gap The founder should add conversations, record what each person does and pays today, and extend the competitor review to cover price, offer and reviews. Each added item moves the evidence table from “thin” toward “supported.”
4. Explore the interactive experience
Investigate it yourself.
Business Idea Investigator: a guided investigator that separates evidence from assumptions, a startup financial simulator with three cases, scripted answers from APIS, and a printable preliminary assessment, all running on what you type.
The experience below starts with a sample idea. Replace it with your own, or clear it. Nothing you type leaves your browser, and APIS supplies no market data here.
- Change the number of customer conversations from 6 to 20. What happens to the evidence status?
- Change competitors researched from 2 to 6. Which flag clears?
- Ask APIS “What are the biggest risks right now?”
5. Evaluate possible solutions
Market research can be done in stages, from cheap to expensive.
6. What leadership should do next
Questions to answer
- Who is the customer and how many are within reach?
- What do they do and pay today?
- Who are the alternatives and what are their weaknesses?
- What evidence shows they would change?
Data to gather
- Conversation notes
- Competitor prices and reviews
- Local demographic data
- Notes from observation
Steps to take
- Reach at least 15 conversations.
- Record behavior and spend.
- Map ten competitors and alternatives.
- Update your numbers with what you learn.
7. Engage Two Pillars
Turn Your Business Idea Into a Structured Plan
Two Pillars can help founders evaluate business concepts, research markets, build financial models, plan operations and coordinate the professional guidance a new business needs. A good first step is a market evidence review that organizes what you know, rates how strong it is, and sets out what to learn next.
Sources and data notes
- The organization, its figures, and every number in this article and its interactive experience are synthetic and illustrative. They are not real data, a benchmark, or a forecast.
- Reviewed October 2026. This article describes an approach to investigation. It does not replace review by qualified professionals, and it is not legal, tax or financial advice.