Last Updated Apr 14, 2011 2:09 PM EDT
Back in 1996, I had an idea for an audiocassette series (yes, well before iPods) sharing the stories of successful entrepreneurs. In retrospect, it was a dumb idea for many reasons, but when I asked my family and close friends whether they'd buy it, they all cheered me on. The business was a flop, and it taught me a good lesson: Out of love and loyalty, people will tell a white lie when asked about the viability of your business idea.
During the 11 years I spent building my market research business, which did new product concept testing for companies like American Express, Dell, Google, IBM and UPS, I learned a better way to ask questions about a new business idea.
Based on my own experience, here are three dumb questions you should never ask -- and some better ways to get an honest reaction to your concept.
Stupid question #1: What do you think of my new business idea? Most polite people will nod approvingly and smile at just the right moments as you describe your new business idea. Silently they're asking themselves, "Is this person nuts?" "What did he sniff this morning?" "Does she really think anyone is going to buy that?"
Market research is an art, not a science. When asking for opinions about a business idea you're contemplating, you need to nibble away at the edges of how the respondents feel about your idea.
For example, let's say you're thinking of coming out with a new sports drink for runners. It's a crowded market, with Gatorade and Powerade hogging most of the shelf space, but you're convinced there must be a niche to exploit.
If you tell a friend who's a runner that you're thinking of starting a sports drink company, he or she will probably smile and nod approvingly despite knowing that going head-to-head against Gatorade and Powerade is suicide.
Instead of asking people to react to your vague business idea, start by finding out what's lacking in the existing options on the market. You might ask your runner friend Jim how he stays hydrated before, during, and after exercising. What you're looking for is a signal of dissatisfaction.
The solution: The 5 why questions Let's say Jim reveals that he alternates between water and sports drinks during a long run to limit his intake of sports drinks. That signals some dissatisfaction with the sports drink, and it's your cue to dig further by asking five consecutive questions that start with the word why (yes, you will sound like an annoying six-year-old) to get to the root cause of Jim's discontent:
You: Why do you alternate between water and a sports drink on a long run?
Jim: Well, you know, it's not good to drink too much sports drink.
Jim: There are a lot of chemicals and sugar in them.
You: Why does that matter to you?
Jim: Because one of those chemicals is sodium.
You: Why would you want to avoid sodium?
Jim: My family has a history of high blood pressure, and my doctor has me on a low-sodium diet.
Bingo! A low-sodium sports drink would be a product this runner may well buy. It took five questions starting with why for you to get to the real reason Jim alternates between sports drinks and water, but now you have the kernel of an unmet need, which may be the basis for a new business idea. However, before you quit your job and start a line of low-sodium sports drinks, you need to know if anyone would actually buy it.