We come across frequently that xyz startup joins the Billion Dollar club or abc startup had a successful IPO, or news about large acquisition happening and so on. While referring a Forbes post “Nine out ten startups will fail”, shocking isn’t it? It is tough to digest that failure rate of the startups is so high.This makes us wonder what happens to the investor who invests in the vision of those startups. The only apt word would be “Dead Investment” but in the midst of these scenario there are some who make calculative investments and stay on top of the table. Have you ever wondered what sets them apart? A simple answer would be a thorough research done on market and appropriate opportunity. It is easy to plant an idea but tough to validate the idea. Market Research plays a vital role in the process.
Now let’s see how a successful Investor would answer a few questions like:
How do these Investors select a particular startup?
Giving an answer to this question is like finding a needle in a haystack because there are many factors which contribute to this answer. There by the lucky ones follow their intuition and the smart ones do a detailed research on which sector to be interested based on finance, vision, impact, ROI and the authenticity of the problem statement. The investor would take a call based on the current and future market growth and their potential to scale in the market.
Which is the right sector to invest in?
The interest of the investor is validated through Sectorial Analysis, in this the sector is split into segments. Then read the market opportunities for the particular segment and its market size. It depends on the investor to invest in a dream or to invest in a duck which gives golden eggs but in either case he needs an understanding of major players in that market space. So a detailed competitor analysis and peer bench-marking gives them the right edge needed.
Now the immediate question to be asked is, how true is this analysis?
This analysis is done on data which is collected on real-time basis from variety of customers in the form of Surveys and Expert Interviews. A broad survey is conducted by collecting the data from real customers (i.e. Consumers as well as Business) in order to do realistic analysis and validate the hypothesis presented by the Startup.