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A Starter Guide to Market Research Methods—for Government

December 17, 2021

What Is Market Research?

Market research is a common term used by both the public and private sectors to describe the collection of information on a given industry or technology. This research typically focuses on leading companies in the space, the state of the art in technological capabilities, and factors involved in acquiring goods or services ranging from investment activity to business models to growth forecasts.

Government entities conducting market research can run into several key challenges. Identifying key technology areas with private sector development and funding often requires access to resources that government users may not have. Furthermore, sharing information and resources between government offices and departments can prove complicated. This challenge is compounded by the fact that innovative research and development often occur at small or new companies, such as startups, that fall outside of the traditional government ecosystem.

The Market Research Toolkit

While there is no “right” way to conduct market research, there are a variety of tools, methodologies, and data sources that can lead to quality information and analysis. The following sections will cover several commonly relied upon sources, as well as best practices and caveats to get the most out of the data.

The methods we’ll cover include:

  • Asking Questions
  • Identifying Data on Key Market Players
  • Detecting Market Trends
  • Pinpointing Market Experience

Asking Questions

One approach is seeking answers directly from industry itself through surveys and active inquiries. Industry surveys are a common source of data for commercial market intelligence firms. For the government, this often takes the form of a Request for Information (RFI) or Sources Sought, which has the benefit of soliciting specific information, but is dependent on firms monitoring for and taking the time to respond—something the government can often count on from its established providers and those already doing business for the government. 

But it can often be insufficient to fully explore what the government calls the “non-traditional” sector—companies that are not yet doing business with the government, don’t have a federal sales team, and are not attuned and responsive to the idiosyncrasies of government acquisitions processes.

Identifying Data on Key Market Players

There are also numerous databases with significant firmographic data on companies, such as PitchBook, CBInsights, CrunchBase, and Atlas Fulcrum. Some are more deliberate about verifying and cleaning data than others, but the best will usually have profiles of companies of any significant size.

But the availability of data on individual companies varies greatly. Due to disclosure and reporting requirements, the most data is generally available for publicly traded companies. Venture capital and other private equity activity also generate signatures that are often captured in these datasets. And due to company websites and platforms such as LinkedIn, even information about small companies can often be found. 

However the smaller and earlier stage a company is, the fewer signatures and data points there will be. And some companies pursuing what they believe is a first to market opportunity may remain in “stealth” mode, deliberately minimizing such signatures and not publicizing their product or capability until they are ready to launch. 

National security use cases present additional data challenges particularly relevant for companies like startups. National security users are rightfully concerned about foreign ownership, control, and influence (FOCI) over their vendors, but FOCI data is largely self-reported, when available at all, and it can be difficult to locate reliable sources.

Detecting Market Trends

Another useful source is patent filings. Though they can be at once backwards-looking and aspirational, they can sometimes provide a good sense of the state of the art. And with the assistance of analytics tools, similar filings can be identified to illuminate others working in the same space or alternative approaches. 

Similarly, academic papers and other studies are often relevant both to new and emerging technologies as well as understood ones like batteries, for instance.

Pinpointing Market Expertise

Yet there is also no substitute for proactive engagement with the space—insiders who are actively working or investing in the space are going to know the technology and those working to develop it best. They’re also likely to have the most nuanced insights into more subtle questions of performance specifications, for example.

Even for those new to the space, most industries will have conferences of one sort or another where these questions can be explored and professional networks can be built. Indeed, many venture capitalists will cite their own personal networks as the most important way they learn about new investment opportunities.

Yet, like anyone else, even venture capital can become swept up in hype cycles and bubbles. While some of this can be accounted for by a venture capitalist’s higher risk tolerance, it is also important to anchor market research. The ease of doing so can vary greatly by industry but finding examples of demonstrated performance can help contextualize marketing materials and press releases. So too can successful partnerships—a company supporting or selling to several medium to large businesses is probably getting something right.


The Bottom Line

While the value add and importance of any organization or product will vary considerably by sector, intended use case and questions being asked, these are a few tools to get you started.

A diverse toolkit and rigorous methodology can enable a more proactive, deliberate “hunting” for answers, rather than passively receiving information from available tools. The most effective market research combines high quality data from diverse sources, sophisticated data analytics, and human-in-the-loop expertise to produce actionable insights that provide clarity and value. 

Before you know it, you’ll have a wealth of information on technologies capable of transforming the way you and your organization operate.

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