Why Knowing Your Market Is More Important

When you're thinking about starting a business, most people get stuck on the product first. But that's not where your focus should be. Before you even think about creating a product, building a list, or positioning yourself, you need to know your market.

I was reminded of this when a friend came to me with an idea for an online membership site. The idea was solid, but the market research was missing, and that's where we started.

The First Step: Research, Not Product

It's easy to get excited about a new idea and want to jump straight into product creation. But the first step is always research. You need to understand the landscape of the market you're entering.

When my friend came to me with their idea, the first thing I said was, “Let's not worry about the product yet. Let's do some research.” This approach allows you to make informed decisions about whether the market is big enough, whether there's demand, and who the key players are.

Identifying Market Size Through YouTube

We started by doing something super simple: heading to YouTube. I asked them for the most common search term related to their idea (we'll pretend it was “scuba diving”). We typed it in and looked at the top videos.

What we found was eye-opening – some videos had anywhere from 500,000 to 2 million views. That’s huge. Right off the bat, we knew this was a big market. I’ve been in markets where top videos only get 5,000 to 10,000 views, so seeing millions of views showed us there was serious interest here.

Looking at the Key Players

Next, we dove deeper into the top YouTube channels. One of the channels we found had 2 million views on their videos and over 300,000 subscribers. That’s impressive, but there was a problem – when we clicked through to their website, it was a mess.

The website was nice to look at but didn’t communicate clearly who it was for or what it offered. There was no clear headline, no benefit statement, and worst of all, no option to subscribe to an email list.

Instead, the site was littered with ads. This told me that the person behind the channel didn’t really understand marketing.

Here’s the thing: ad revenue, especially from networks, is a tough way to make a living these days. Five or ten years ago, maybe, but now? It’s not enough.

The site we looked at was getting traffic but wasn’t converting it into leads or sales. Without a strategy for collecting email addresses, they were missing out on building a direct relationship with their audience – and that’s critical for long-term success.

Analyzing Market Trends

This is just one example, but the research doesn’t stop at YouTube. To really understand your market, you need to look at multiple platforms. We went through this same process across the top 20 YouTube channels, forums, Facebook groups, Instagram accounts, and more.

You quickly start to see patterns. In this case, we found that while YouTube had big numbers, Instagram didn’t. That told us this was more of a YouTube-driven market, and understanding that helps you focus your efforts where your audience is actually spending time.

What to Look for During Market Research

Here are a few things you should always investigate when researching a market:

• Top Channels/Influencers: Who are the big players? Are they collecting email addresses? Are they selling anything? If they aren't building an email list, they may not be running a serious business.

• Forums and Hot Topics: Many markets have forums where people gather to discuss the latest trends. Look for the most active threads – these will give you insights into what people really care about.

• Revenue Models: How are people in this market making money? Is it through ads, products, joint ventures? Understanding the revenue model is key to planning your own business strategy.

The Key Takeaway

The bottom line: before you build a product, before you try to grow an email list, before you do anything – do your research. Know who the players are, understand how they’re making money, and find out where your opportunities lie.

This research will inform every decision you make moving forward – from the kind of content you create to the type of partnerships you pursue. And ultimately, it will save you a lot of time and money.

So, before you dive in, take a step back and learn the landscape. It’s the most important thing you can do for your business.

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