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Is it better to really understand the market before going in? (alien.top)

submitted 1 year ago by TrainingPossible7536@alien.top to c/entrepreneur@indiehackers.space

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People advice me to just go ahead and do businesses and learn from the mistakes, I think it’s just plain stupid to invest on things where I don’t even know who I’m going sell products to. What is your opinion about this?

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[–] Prior-Acanthaceae-31@alien.top 1 points 1 year ago

I believe it’s crucial for you to do market research but I understand where your question is coming from. Being a sole entrepreneur or even with a small team, you might not have the budget to do a full blown market research even I struggled with our question before starting my business but I would suggest you to at-least know about the TAM,SAM &SOM even from a top down approach and also have an idea of the competitors product and pricing because this gives you a clear idea about the market you want to capture and where you are headed. I would advice for you to also consider the porters five forces to test the long term strategic effectiveness of the business. These are basic efforts in market research you have to do or else you would be heavily underprepared affecting your cost metrics as well as your sale metrics because at the end of the every deviation in plan will affect the operational cost resulting in hurting the net profit of your business. This also gives you a fair chance to see if the capital you are planning to employ is at least 2x to 3x above the government bond yield for the risk you are taking. Hence you can decide if the business is feasible to start or not.