"Modern business building is based on facts, ideas hardly matter".
(Nils de Witte, 2013)

Ideas hardly matter, neither do beliefs, gut feelings, assumptions or guesses. Entrepreneurs manage risks by managing uncertainties and uncertainties are managed by learning through trial & error and research. 

Entrepreneurs become truly successful when they:

  • thoroughly understand their business environment;
  • thoroughly understand their customers and their customers desires and anxieties;
  • thoroughly understand the nature of their business (what their product/service means to their customers);
  • understand costs and revenues and how to balance them.

Since 80% of the new entrepreneurs time is spend on by learning by experimenting and doing research its good to consider some strategies and methods to improve the effectiveness of the learning and research efforts. Entrepreneurial research is more an art than a science. Its a special form of applied research that is very contextual, therefore the methods used to do the research are dependent on the phase of the companies development and the knowledge of the entrepreneurs about their business environment, the nature of their business, their customers and their customers desires and anxieties.

Research is not a linear progress. You think, you plan, you start, you run into unforeseen circumstances, you need to track back, plan again, start again and run into unforeseen circumstances again. 

Below you'll find a nice video, where you'll see that scientific research is not a linear process either, so my advice is: "Don't treat you business research as if it could be a linear process".

Research methods:

There are many ways to do proper research:
  • Traditional business research:
    • Problem definition;
    • Desktop research and selection of theoretical framework;
    • Research design;
      • methodology
      • research question
      • sub-questions
      • scope of research
    • Data collection;
    • Data analysis;
    • Report findings;
  • Mc Kinsey approach to business research:
    • Observe and analyse observations;
    • Formulate hypothesis on "what's wrong";
      • research hypothesis;
      • reject hypothesis when "not true;"
      • formulate new hypothesis;
      • research new hypothesis;
      • continue until hypothesis is true;
    • Formulate hypothesis on "solution to the problem"
      • research hypothesis;
      • reject hypothesis when "not true;"
      • formulate new hypothesis;
      • research new hypothesis;
      • continue until hypothesis is true;
    • Report findings.

Doing research:

First check you business design for critical assumptions. Then formulate a main research question or hypothesis for each critical assumption and add sub-questions that specify the main question. Then elaborate on: 
  • Research strategy and methodology
  • Research activities
  • Obstacles in obtaining information
  • Your strategy to overcome those obstacles
  • Reflection on the research process
  • List of papers and publications used
  • List of other resources and sources of information

ndw 2014