6 Secondary Market Research

Introduction

This chapter provides guidance on how to conduct secondary market research at low cost as typically a startup is low on resources. Secondary market research is a form of business intelligence that is a cost effective way to summarize and learn from the ocean of primary research, and is a skill that the innovator needs to do well. The advantages of secondary market research are that it forms a good foundation for conducting effective primary market research, there is an extensive range of data that can be collected and it is cost and time effective.

Secondary research involves collecting information and data from secondary sources, which means using information that has previously been collected by some other person or entity. The internet may seem like the most obvious source to gather data but there are numerous other sources including libraries, competitor’s data, government data, trade publications, annual reports and media sources. When collecting information from secondary sources the innovator should consider the time spent and expenses incurred to collect the data, the credibility of the source and the specific nature of the data.

Secondary Market Research is a Five Step Process

Step 1: Determine the Research Question  Ask yourself what you are looking for. Do you want to know about the competitors and their products? Do you want to know the market size in general or just for the specific target market? Do you want to know the preferences of the user?

Step 2: Determine What Information is Needed to Answer the Question    You need a clear idea about what data will satisfy your purpose. For example, while some businesses need annual reports, financial reports, and other statistical data to complete their research, others might need local information, consumer information or industry survey reports. You might need patent information to determine the IP white space. You might need demographics and segmentation information to determine the market.

Step 3: Determine Where You Can Get the Information  There are many sources, including the internet. Some suggestions are provided below.

Step 4: Gather the Information

Step 5: Analyze the Results    The analysis should answer your research question. Write your report in narrative form rather than bullets.

No matter what you are searching for, always use credible, mainstream sources. Avoid wasting time on research that is not backed by proof and trust. Avoid information on independent web pages as it may be incomplete or wrong. Cross-verify the credibility of any data gathered from the internet. Peer-reviewed journals indexed in PubMed, government reports and reports from reputable companies and non-profits can generally be trusted.

Information Sources

Patents

In order of utility, these sources can be used for patent searches.

1. Free Patents Online: www.freepatentsonline.com
2. Google Patents: patents.google.com
3. USPTO: www.uspto.gov

When searching patents determine what you are looking for:

• Understand the IP for products and technologies important to your enterprise’s present and future
• Discover areas for white space inquiry, Freedom-to-operation (FTO)/patentability
• Identify key technology players and their relative IP strengths
• Understand your competitors, upstream and downstream partners, and potential acquisition/acquirer targets and their IP holdings and trend
• Tracking the evolution of a landscape relative to active IP development or R&D

Competitive Analysis

Crunchbase

The go-to source for information about public and private companies. The data includes investments and funding information, company founders and leadership positions, related mergers and acquisitions and industry trends. Covers early-stage startups to Fortune 100 companies. www.crunchbase.com

Owler

A crowd-sourced competitive insights platform with news alerts and company profiles that allows the innovator to track and research companies in real time. www.owler.com

SEC EDGAR

The electronic data gathering, analysis and retrieval (EDGAR) system of the U.S. Securities and Exchange Commission (SEC) is the go-to tool for public company annual reports (10-K filing) and other documents. www.sec.gov/edgar/searchedgar/webusers.htm

Guidestar

An information service that reports on U.S. nonprofit companies. www.guidestar.org

Market Sizing

For market size information try these sources:

• Consulting firms such as Frost & Sullivan and IMS Global Services
• Equity research reports published by investment banking firms
• Information from trade associations such as the Health Industry Manufacturers Association
• Company annual reports
• U.S.Census Bureau: FactFinder allows filtering by age, income, year, race and location, factfinder.census.gov
• Center for Disease Control and Prevention (CDC) data

Other Sources

Library

If you are affiliated with a university, your library is a rich source of curated information. For example, if you enter Google Scholar or PubMed through the library, you will have full-text access to many of the journal articles that your search turns up. Reference librarians, particularly those that specialize in business, can guide you to valuable secondary market resources after hearing your research question and goals.

Social Mention

A site for real-time social media search and analysis than can help you understand what customers are buzzing about online.

Google Trends

Analyze what people are searching for. trends.google.com

Pew Research Center

Exceptionally rich information that can be used to better understand your target market. www.pewresearch.org

SBA Tools

The U.S. Small Business Administration has a number of useful tools for the innovator. For example, the Size Up tool can benchmark your proposed business against competitors. www.sba.gov/tools