How to do market research on your startup idea

When you’re starting a startup, one of the first things to wrestle with is: Does something like this already exist?

It sounds like a simple question, but it can tell you a lot about the market you're stepping into. It helps you figure out if you're solving a real problem and, more importantly, if you can do it better than what’s already out there.

A lot of founders don’t do enough research. Some rush in, assuming their idea is brand new. Others get stuck overthinking and never take action. Both can be costly mistakes.

But good market research doesn’t mean drowning in data. It means getting a clear picture of where you fit in the market and whether you have a real chance of success. Done right, it can save you months (or even years) of wasted time on an idea that was never going to work.

Why you need to know your market

The best startups are solutions to problems. But not just any problem, a problem that's either:

• 1. Not yet solved
• 1. Solved poorly by existing alternatives.

Market research helps you figure out where your idea fits.

If your solution already exists and works well, you're wasting your time. If it exists but is poorly executed, there’s an opportunity. If it doesn’t exist at all, that’s either very exciting or a red flag.

Asking "Is there anything that already does this?" grounds you in reality. It forces you to:

• Understand what alternatives your potential customers are already using.
• Assess whether those alternatives are good enough.
• Determine if there's enough demand for something better.

Step 1: Define your problem in detail

Market research starts with clarity about the problem you're solving. Often, founders think in terms of solutions rather than problems. That’s backwards. Focus on the problem first, and make it as specific as possible.

For example, let’s say your idea is a tool for remote teams to collaborate more effectively. That’s not a problem—that’s a solution in search of a problem. What’s the actual issue? Is it that remote teams struggle with asynchronous communication? Or that project management tools feel too rigid for creative teams?

Narrowing down the problem gives you a better lens to evaluate whether something already solves it.

Step 2: Hunt down market competitors

Once you’ve nailed down the problem, the next step is to uncover what’s already out there solving it.

This is where many founders go wrong—they either skim the surface, convincing themselves their idea is unique, or avoid the research altogether, assuming there’s nothing worthwhile. Both approaches are recipes for disaster.

Start with the obvious:

• 1. Google the problem: It sounds basic, but it’s a step too many skip or rush. Use keywords, variations, and questions your target customers might ask. Look beyond the first page—dig into reviews, forums, and blog posts. Bonus: Use Google Trends to gauge how interest in the problem has evolved over time. You can also use Google Trends to analyse interest over time.
• 2. Check app stores: IIf your idea involves software, scour platforms like Google Play, the App Store, and SaaS directories like G2 and Capterra. Study competitors’ user ratings and reviews.
• 3. Talk to potential customers: Ask potential customers what they’re currently using to address the problem. You’d be surprised how willing people are to share their frustrations, preferences, and workarounds. Listen carefully for insights into what they love, hate, and wish existed.

After identifying existing solutions, the next step is to evaluate them. You can evaluate on a number of different criteria, with some better than others. A great way to do this is to use a Competitive Analysis Matrix.

This is a simple tool that organises key information into a grid to help you compare your business to your competitors. It lists the competitors down the side, and the headings (the areas of comparison) across the top.

Here are some questions and recommended criteria framework for your matrix:

• 1. Who uses them? What types of customers do these solutions target? Are they the same customers you want to serve?
• 2. What do users like about them? Read reviews, forums, or ask users directly. Understanding their strengths helps you see what you’re up against.
• 3. What do users hate about them? This is where opportunity lives. Every negative review is a clue about what could be improved.
• 4. Are they priced fairly? Sometimes a solution is adequate but overpriced, leaving room for a cheaper alternative.

When evaluating competitors, try to be objective. It’s easy to dismiss them as “bad” because they don’t align with your vision. But remember, they’ve likely already done some heavy lifting in educating the market.

If you can improve on their offering, you’re building on their foundation rather than starting from scratch.

Step 3: Talk to real people who might be customers

You can only learn so much from internet searches and competitive analysis. The most valuable insights come from talking to real customers.

Reach out to people who experience the problem you’re solving. If you can't get directly in front of them, tools like Google Forms and SurveyMonkey offer templates that make it easy to ask key questions

If you see them in person, do it. Nothing beats having a face-to-face conversation. Ask them:

• What’s your current solution?
• What do you like about it?
• What frustrates you about it?
• What would an ideal solution look like?

Notice the pattern here? You’re not pitching your idea yet. You’re listening.

As you listen, focus on uncovering pain points—the specific frustrations or unmet needs people face. These could include:

• Inefficiency: They’re wasting time or money trying to solve the problem.
• Lack of options: They feel stuck with no good alternatives.
• Complexity: Current solutions are too confusing or hard to use.
• Emotional drain: The problem is causing stress, frustration, or anxiety.

Once, you've got these, dig deeper. A simple answer often hides a bigger story. For example:

• Customer: "It's too expensive to store my customers data!"
• You: "What makes it feel too expensive? Is it the upfront cost, recurring fees, or unexpected expenses? Why doesn't it feel like you're getting your money's worth?"

Dig into what "too expensive" really means. Is it a budgeting issue? A mismatch in perceived value? Or an alternative solution that seems cheaper?

When these pain points start to surface repeatedly, take note. They’re gold. Not only do they highlight gaps in the market, but they also help you shape a solution that deeply resonates with your audience.

Step 4: Look at the broader market

When you're building something, it's easy to think of your competition as just the other companies making similar products. But customers don’t always solve problems in the way you expect. Their “solution” might not even look like a product at all.

Take a recipe app, for example.

You might assume your competition is other recipe apps, but that’s not the full picture. Customers could just as easily turn to YouTube cooking channels, Pinterest boards, or even their old cookbooks. Some might not use a tool at all—they might rely on a family recipe written on the back of an worn envelope.

The mistake is thinking people approach the problem like you do. They don’t. They find something that works, and often, it’s not the obvious solution.

When you're doing market research, don’t just look at the products like yours. You need to broaden the lens. Think about all the ways people are solving the problem you’re tackling, even if they’re not using a “real” solution.

• What alternative methods or tools are people using right now? These might not look like competitors at first, but they are.
• What do those alternatives offer that appeals to your audience? Maybe it’s not about features—it could be about ease of use, trust, or even fun.
• What needs do those alternatives satisfy? Often, it’s emotional. People stick with something because it feels comfortable, not because it’s the best solution.

When you get a clear picture of what your customers are already doing, you’ll uncover gaps they didn’t realise existed. That’s where you carve out space—not by competing head-on, but by giving them something better they didn’t know they needed.

Step 5: Find what makes you unique in the market.

Once you’ve mapped the competitive landscape, the final question is: What makes us different?

Being a little better isn’t enough. People don’t switch solutions just because one is marginally better, they switch because the new solution is dramatically better or solves the pain in a different way.

Here are some ways you might differentiate:

• Simplicity: Is the existing solution too complicated?
• Specialisation: Can you focus on a niche audience and serve them better?
• Price: Is the existing solution too expensive for most users?
• Distribution: Are you better positioned to reach customers where they already are?
• Features: Is there one critical feature missing from all the existing solutions?

Your differentiator needs to be clear, compelling, and valuable. If you can’t articulate it in a sentence, you might not have one.

What if there’s no competition?

Sometimes, you’ll do the research and discover that nothing already solves your problem.

At first, this feels great. I’ve found a completely untapped market! But tread carefully. The lack of competition could mean:

• 1. The problem doesn’t actually exist.
• 1. The problem exists but isn’t painful enough for people to pay to solve it.
• 1. Previous attempts to solve the problem have failed.

This is where customer conversations become crucial. If you can’t find people who are genuinely excited about your idea after hearing it, you’re in dangerous territory.

No competition is only good if it’s paired with clear demand.

When do I take action? The 80/20 rule of market research

Market research can spiral into an endless rabbit hole. Don’t let it. The goal isn’t perfection; it’s clarity.

You want enough research to answer three key questions:

• 1. Is the problem real?
• 1. Are existing solutions good enough?
• 1. Do I have a compelling differentiator?

If you can answer those, you’re ready to start building. If not, keep digging—but set a deadline. Too much research leads to indecision. Startups thrive on action.

Final thoughts

Asking, “Is there anything that already does this?” is a humbling exercise.

It forces you to confront the reality of your market, not the fantasy in your head. But that’s a good thing. The sooner you understand where your idea stands, the sooner you can refine it into something that has a real shot at success.

Market research is a tool to help you think clearly. Done well, it saves you from wasting time, energy, and money on ideas that were never going to work – and helps you focus on the ones that might.

Great startups don’t just solve problems. They solve problems better than anyone else.

Market research is how you figure out whether you’re on that path. So don’t skip it. Learn everything you can, and be brutally honest with yourself. That’s how you win.