I'm sure every person starting out knows that you must always research your targeted market and competition. However, I have to reiterate the importance of research.
So Lesson Number One I learned while creating my application was: Always research your competition and target market, thoroughly. I can't stress the throughly part more. As most of you know, I am developing an iPhone application which in a simplified form is an average price finder for auction sites.Of course, before we created the application, we needed to find out if an application like this has already been created. Luckily, the selection of eBay applications was mostly ebooks on eBay strategies. Most importantly, there was no other application like ours. Now we were ready to go- this is where I made a big mistake... I was too limited in my research. My partner and I failed to look beyond the app store. We didn't think of other markets where this could of been done. Mainly the web. When we searched for average price finders on Google there were several websites offering a similar service. Fortunately, we were saved by good fortunes as all of the sites didn't work. To ensure your idea is viable and potentially profitable - here are a couple of research methods and questions I learned through my project.
1) State your idea as a question. For my project I stated it as: "How do I find the average price on ebay?" To optimize your search on Google you should just search "How find average price eBay". This way it helps you find out if your idea is actually solving a problem. We found out that finding the average price of eBay items is actually quite difficult. A good place to look is Q&A sites like Yahoo Answers, Wikianswers etc.
Another good source of information are forums. Forums allow you to ask questions and discuss topics directly with your intended market.
2) Find out if there is a market for your product. Google Trends and Google Keywords can help you find out the extent of the market. Enter some keywords related to your idea/product. For example, I entered keywords like "eBay average price" "ebay buyer tool" etc. and found out that there are about 10,000-50,000 monthly searches worldwide with those keywords. Meaning there was a pretty active market.
3) Do you have an easy way to market your product to 'specific' customers. For example, my iPhone application is best marketed to eBay consumers whom are looking for deals, are savvy buyers, or eBay sellers. So, we needed to research if there was an easy and cost-effective way to 'talk' to these specific consumers.
4) Do the potential consumers currently use similar products or services? This can help you focus your marketing efforts, giving you insight in the demographics (age, sex, etc.) of your potential consumers. It also allows you to see wether your facing any competition, where you can market your product, and how saturated your specific market is.
5) The final key question is: What does your product do, that similar products don't. Your idea doesn't have to be particularly original or inventive but it does have to be different. You have to offer new features that will make your product more appealing than anything on the market currently.
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