Quantitative VS qualitative research: which does your startup need?

All books on business development say that a startup must thoroughly research its customers with a combination of quantitative and qualitative research methods. But what’s the principal difference between these two types of research, and how do you know which of them you need?

Quantitative research

Quantitative research is normally the first step a startup takes when developing a new product. The goal of any startup is to earn money, so when you have just a vague outline of your future product, you should check if there’s even a market for it, and enough potential customers to make it worth your time. Generally speaking, at this stage, you check if a problem you want to solve even exists and what’s the scale of it.

Quantitative research poses questions like “how many” or “how much”, and gives answers in a numerical format. Are your customers individuals or businesses? How many of them are out there? In what countries do they live or work? What’s their average age (for persons), size, or revenue (for businesses)? What are they doing or using now to solve the problem that you target? How much do they pay for it? How often? Who are your main competitors and how much money do they make off solving this particular problem? And so on.

At this stage, you don’t need problem or solution interviews. You need to gather raw numerical data — for instance, with online surveys or by analyzing market research digests.

Qualitative research

Once you have numbers that prove to you (and your potential investors) that a problem you want to solve actually exists, it’s time to check whether the exact product you envision is going to solve it.

Startups fail not because their products are bad, but because customers don’t need them. At the quantitative research stage, you verify if customers have the problem you want to solve. Qualitative research shows if this problem can be solved by your product in particular.

An example: office workers get hungry when they’re at work. They need to eat during the day, but they might not have kitchens or canteens at work. There may be no restaurants in the vicinity either. They need access to prepared food — that’s their problem. Imagine a startup that sells innovative frozen meals that you have to microwave first. The product itself is good, and it formally qualifies as food so it can potentially solve that problem. But since the startup’s potential customers don’t have access to microwaves in the first place, why would they buy those frozen meals? This startup will probably have no customers.

Qualitative research lets you dig deeper into what the numbers mean. If you have 10M potential customers, what kind of people or organizations are they? What does their everyday life or work look like? How do they make decisions? What influences their decision-making? What do they think of the problem you want to solve? Why is this problem important to them? What’s important to them when choosing a solution? What are they ready to try out, and what is a no-go to them?

With this information, you know if your solution can potentially fit into the lives of your customers. If not, it gives you valuable data on what you can change, redesign, or adjust to make it happen. Are there features your customers need that you didn’t think of? Are there things you can discard?

This information is sourced using problem and solution interviews — long conversations consisting of open-ended questions for your potential customers.

So which does your startup need?

In short, you need both. Quantitative research is used at the onset of product development you have just an idea of what problem you want to solve, and need to know the size of the available market. Once you’re sure it is financially feasible, you should move on to qualitative research to validate how your particular product solves that problem. If you skip the quantitative research stage, you may be building a solution for a problem that may not even exist, or for a market so small it’s not worth your time. If you forego qualitative research, you risk wasting a lot of time and money on building a product that no one will buy. (If you already suffer from low demand, here’s another article of ours on why this might be happening to you.)

Need quantitative or qualitative research for your product? Drop us a short note at unicorn@smartstartlab.com — we’re always looking for new exciting projects!