For starters, we’re an investment preparation agency. If you don’t know what that means, it means we help startups prepare for investments. To do that, we most certainly need to conduct tons of market research. We’re often asked by our startups, “What tools do you use to do market research for startups?”
The reality is, if you’re working on market research, you can’t use a single tool. You have to use a combination of tools. For example, when writing, you could use some AI tools like Claude. When searching for a specific number about a company, like its valuation or its funding raise, you have to head to Crunchbase. There is a website for everything.
Market Research Tools for Startups: Our Top Recommendations
So, our recommended process and our four most recommended market research tools for startups are mentioned in this mini-guide. Let’s get to it.
The Investment Preparation Process
Here’s how the process goes. A client in the startup world, who most probably raised a few million dollars and is looking to work on a new fundraising round, gets in touch with us. They ask us to start reviewing and preparing their documents. These documents are usually a business presentation or a pitch deck, a financial model, a business plan, or whatever they need to get ready for their readers. We review whatever the readers are going to be interested in.
The biggest problem with investment preparation documents is the market research section. This is simply because there are a lot of industries that require constant data refreshing. A good example is the cryptocurrency market. If you’re working in the crypto market, in a company like Coinbase, for example, and you start to put together market research for your business presentation, the next month, this information might be so outdated that it needs a total revamp. So, we are required to do a lot of market research in this sense. For that, we have to use tools, processes, and methodologies.
Writing Startups Stories for Market Research
Now, which tools do we use for startups when it comes to market research? We always start by writing a story for this market research. Many people just go and search for the crypto market size and take the first information they get from sites like Statista.com, which is quite horrible because it’s not really valuable information. It’s mostly designed for good search engine optimization and shows you what you want to see. But in terms of actual business data, this is probably not realistic.
So, we start with a Google Doc or Microsoft Word document and begin drafting the story of this research. This is important in a later stage because, without doing this, you’re going to be doing research without a plan. All those tools won’t prove helpful to you.
PS: We’re actually working on a tool on our software branch of the company, Intensify.ai, that would facilitate this process. It will help with the storyboarding as well as the execution of the research. It should have a beta version around the end of 2024.
Using AI Tools Like ChatGPT and Claude
After you start putting in the structure of the market research, you know what you need to research. It’s probably a number. The more numeric the research is, the more valuable it is. The first tool that we use is ChatGPT.
Now, there are a lot of criticisms around the data that ChatGPT provides, and we agree entirely. A lot of the information that ChatGPT provides in terms of market research is garbage. That’s why it’s all about the prompt.
We ask it to search a specific website and a specific number. So, if we’re doing market research for cryptocurrency, for example, I would start by saying, “Hey, GPT, can you research the website of Coinbase and its reports to find me the total market capitalization of cryptocurrency in 2024?”
It’s going to start searching. It might result in some data, or it might say that it didn’t find anything. If it does provide some data, you should ask it, “Where did you find this? Send me the reference.” Then it would send you the reference, and you would check it yourself.
Sometimes GPT is wrong in its data, but at least you know where to look. I personally use ChatGPT in this way, but I start by downloading the annual report of Coinbase for 2024 and then uploading it to GPT. This decreases the amount of error drastically.
If I upload a report to GPT and tell it, “Can you skim this report for the total market capitalization of cryptocurrency in 2024?” The results are going to be acceptable.
Reviewing Documents with AI
So, that’s the first stage we do. We always keep ChatGPT or, in this sense, Claude. But if you’re using Claude, you’re not going to use it for the online research part. You’re just going to use it for document reviewing and understanding. This is honestly much more valuable than just doing the online research part because it would also consume a lot of time for you to read all those reports.
Researching Company Funding and Valuations
When it comes to startups, one of the most important variables you will definitely need to research is how much a company raised. Usually, they are competitor companies, and you need to see how much they raised. Why is that important?
Because I can tell you that the market of ride-hailing is $2 trillion. I can keep talking and talking, but this is all talk, not action. The amount of funding raised by Uber, Lyft, or any company in ride-hailing showcases that there is an interest from investors in this market. This proves to the reader that they’re not going to be the black sheep or the first one in.
It shows them that there is an opportunity in the market and other investors already saw that, so it’s more reassuring. Of course, they have to do their due diligence, but at least it’s one step forward.
Crunchbase: The Go-To Research Tool for Valuations
In order for you to find the best company valuations, there is only one website that is actually useful for this, and that’s Crunchbase. I would say it’s 90% accurate, but nevertheless, it’s very good in the sense that it gives you an idea of how much funding each company raised, whether that’s a competitor or a player in the market.
Considering Pitchbook for In-Depth Analysis
Another tool that is extremely recommended by a lot of clients is Pitchbook. Now, there isn’t a limit to what Pitchbook can actually provide you in terms of valuable information for your competitor analysis. The only problem is it’s extremely expensive.
For that reason, we don’t really recommend startups to subscribe to Pitchbook. Why would you subscribe to something costing thousands of dollars if you can use this money to build your product? It is still a recommended market research tool because it’s very good for competitor analysis if you have the funding for it. But if you don’t, just skip this recommendation.
The Role of Big Market Research Firms
Finally, our last and most recommended market research tool or directory includes a few websites: McKinsey, Deloitte, and PwC. These three websites are huge market research firms, or they have market research arms that generate data that is very useful and credible.
That’s what makes them perfect. If you combine the market research documents or insights from these three websites with GPT or Claude, you have yourself a very good market research.
Simply put, you just have to Google “McKinsey Market Research Cryptocurrency” and go on their website to find the latest version. Cryptocurrency is all about the date. Then, you simply download the PDF of the document, which they allow easily, and upload it to Anthropic’s Claude or GPT. You can then tell it to provide you with the information that you need, which is going to get your research done in no time.
Conclusion: Mastering Market Research Tools for Startups
These are our five most recommended market research tools for startups that you can use. If you get used to them, it might take a few tries, but once you do, we assure you that you’ll be able to refresh your research and design it perfectly every time.