In order to be a competitive applicant for the highly selective SBIR/STTR program, the applicant must determine a plan for creating a Minimum Viable Product, or MVP to prove the feasibility of their high-risk, unproven idea. The MVP will allow the small business concern to further develop its idea or product by presenting this MVP to potential customers and investors to get feedback and by completing further research on product capabilities using the MVP. It is generally understood by applicants why an MVP is needed, but many applicants struggle with determining how to arrive at a plan for the most useful MVP. Here is the secret: it is all in the legwork you do BEFORE you plan the MVP build. Market research is the determining factor in how successful the related MVP will be.
Market research for MVPs in general
We know that an MVP exists to help obtain feedback and research data on a potential proof of concept project. What many people do not know is that it’s possible to greatly reduce the margin of error in MVP user testing. An MVP is only as useful as the market research that goes into it. The groundwork research to determine if there is a need for such a product and how users are likely to react can help determine if the product is needed and how popular it is likely to be with users given the anticipated features the team intends to develop. Understanding customer needs through identifying pain points and completing a competitor matrix to understand what gaps may exist in the services provided by industry-standard products can inform the design and features of an MVP to make it more successful with users when testing commences. Market research should answer the questions of what problem your product can solve, what the target market is, and why consumers might want to buy the product. This research should enable you to make a list of features that you wish to develop within the MVP.
Market research for MVPs specific to SBIR/STTR
Performing market research for an MVP for SBIR/STTR proposals is actually easier than you might think. Instead of starting from scratch in determining what questions need to be answered during market research and customer discovery, you already have a solicitation in front of you with direct questions pertaining to market fit, market potential, competitor comparison, revenue assumptions, and commercial viability. This helps inform the market research that goes into the MVP from the very beginning. Some things to consider in your market research prior to planning your MVP for SBIR/STTR based on specific solicitation include:
- What are the size of the current overall market and specific industry segment? What growth is projected and what market drivers are enabling this trend?
- Who are your nearest competitors and how does your product outperform them from a user’s perspective (cheaper/faster/easier)?
- How do you plan to reach potential customers? What is your sales channel and how will you sell (B2C, B2B, SaaS)?
- What are your revenue assumptions?
One segment of market research that SBIR/STTR will require for an MVP that other opportunities may not is a well-researched segment on market risk. Applicants will be asked to consider what possible barriers or risks may exist between MVP and commercialization as well as a solid strategy for how these risks can be mitigated. These can include regulatory risks, privacy and security risks, risks that exist due to competitors, Intellectual property risks, user adoption, and retention risks, and many others. The goal is to show the reviewers that you have a well-thought-out strategy to sell this product and that you fully understand the risks and barriers that may be present and that you already know how to avoid those risks before the MVP is even built.
The great thing about the requirements for market research in SBIR/STTR (or any innovation grant) is that we have the solicitation to use as a guide to determine what our potential users want to see in terms of market research. Market research will then directly inform the features and capabilities that must be built into the MVP. Another convenient aspect of the SBIR/STTR program is that these grants are annual. That means smart applicants will develop a plan and do plenty of research (market or otherwise) to put together a competitive proposal (rather than waiting until the last minute and cobbling something together into a sloppy application). Research takes time. Smart applicants will start early. Many applicants also benefit from the guidance of subject matter experts on proposal preparation and SBIR/STTR protocol. Talk to us. We can help.