Two co-founders,  Sean and Aiden, just published their master’s thesis on integrated pest control. Motivated by the warm response of the academic world, they were motivated to convert their research findings into something of practical use. After months of hard work, they developed an AgTech product to automate pest control to alleviate local farmers’ struggles. 

Upon launch, they anticipated high adoption rates, but to their dismay, farmers were hesitant and uncomfortable with the new technology and its data-sharing requirements. The high upfront costs deterred many, and the unclear ROI made others skeptical. Despite the clear benefits, the lack of trust and financial constraints made farmers reluctant to adopt the innovation, leaving the two young founders with the unexpected reality of their venture’s uncertain future in the market they were once excited to serve. 

According to a study by CB Insights, 14% of businesses fail due to poor marking, while 42% fail due to unoriginal or unwanted products and services. Like Sean and Aiden, you’re probably here because you need help with identifying and validating your market research. 

In this article, we provide five practical ways to identify and validate your target market as a startup in the AgTech and sustainability sectors. 

5 Ways to Validate Market as an Early-Stage Startup

Most businesses fail not because they don’t have the right product but because they serve the wrong audience. As budding business owners, you will likely make a lot of assumptions regarding your innovations. While being optimistic about the fruition of your idea is good, you must learn to separate emotions from business. This starts with comprehensive market research and customer analysis.  

Here are five techniques to identify and validate your target audiences as an AgTech or sustainability startup: 

 

1. 1. Conduct Comprehensive Market Research

The AgTech and sustainability industries have unique challenges, especially with policy, regulations, and data sharing. You might be tempted to follow the same approach that ideally works for other industries. Also, you need to understand your field.  AgTech includes many industries, including food processing, agroforestry, agrochemicals, and agricultural services. 

On the other hand, sustainability sectors encompass renewable energy, waste management, climate tech, and sustainable transportation. While they belong to the same sector, each has different challenges and opportunities. 

Having an in-depth knowledge of your field before you delve into creating products can prevent you from wasting time and resources and improve your chance of profitability. Deloitte research reveals that businesses with a customer-centric model are 60% more profitable than those that don’t prioritize the customer experience. Deep market research can help you identify opportunities for growth, minimize risks, and enhance your pricing strategies. 

Steps in Conducting Market Research

Market research is a daunting task that requires a lot of time-consuming processes. That explains why many startups skip two or more aspects of market research. But the good thing is that you don’t have to go alone; you can entrust your market research to a specialized digital marketing agency like eAgroTect with expertise in AgTech and sustainability. 

Here are the steps you can follow: 

 

• • Define your objectives:  Outline your market research goals; this will impact your decision-making. And when defining your goals, keep it SMART, not generic. 

• • Identify your target audience:   Specify demographics, behaviors, and preferences.

• • Choose your research type: Decide the most suitable method for your target audience. Is it like surveys, interviews, focus groups, and data analysis?

 

• • Collect data (Primary Research and Secondary Research):  Gather data from your target audience through surveys, interviews, or observations (Primary Research). Next, supplement your primary research with existing data sources like industry reports, government publications, and competitor analysis (Secondary research).

• • Analyze data: Use statistical tools (SPSS, TABLEAU, SAS, R & POWER BI), spreadsheets, or software to identify certain trends, patterns, and insights to conclude. Alternatively, you can outsource it to a trusted data analyst.

• • Identify Competitive Landscapes — Understand your competitors. Who are they? What are their strength and weaknesses? How does their product or services compare to yours?

 

2. 2. Know Your Customers

You must understand who your actual product users are and focus your attention on them. In Sean and Aiden’s case, they got validations from their academic supervisors and other scholars while ignoring the end-users – local farmers. Knowing your customers goes beyond understanding their demographics; you must know their motivations, challenges, and potential barriers to adoption. This could be pricing, trust, data sharing, and others.

Ideally, the best research methodology for businesses serving rural farmers will be one-on-one or group research. Take your time to visit their farms if they are open to that. Alternatively, you can schedule a virtual meeting to learn about their struggle and pain points. 

Knowing your customers means knowing the market, adapting to the changing needs, how to communicate, and building strong relationships. Besides knowing your customers, you can get in-depth knowledge about their needs. 

4 Reasons to Know Your Customers

Why should you invest time in knowing your customers? 

 

• • Personalization: This goes beyond knowing their age or hobbies. You must understand their wants, likes, pain points, and desires.

• • Product development: When you ask your customers about their preferences and opinions, you clearly understand what they want. This will enable you to create products that match their expectations.

• • Identifying pain points: Here is where the surveys come in; they will help you understand your target audiences’ problems and assess the existing solutions to develop better products and services.

• • Improving customer service: Customers prefer brands that give them a delightful experience. Knowing your customers will empower you to know the best way to serve them.

 

3. 3. Request Feedback 

Soliciting candid feedback directly from your target users is invaluable for product validation and improvement. Getting feedback gives you direct insight into the features and functionalities your target users need. This prevents you from developing unnecessary and overwhelming features that users will struggle to understand or find too expensive to pay for. 

Channels to Generate Potential Customers’ Feedback

Incorporating user feedback into product development improves decision-making by providing real-world insights, ensuring that development efforts align with user needs and expectations. However, leveraging prospective customers’ feedback in product development is as important as the source. Here are some ways to get honest customer feedback:

 

• • Focus groups: Gather 6-8 customers together for a discussion to share impressions, suggestions, and concerns. Offer incentives for participation.

• • Interviews: Schedule one-on-one conversations to connect more deeply with individual users’ perspectives. Use open-ended questions.

• • Surveys: Send online surveys periodically to gather user feedback on product satisfaction, desired new features, pain points, etc. Keep them concise.

• • Beta testing: Give select users early access to a prototype to trial and provide detailed usability feedback before launch.

• • Social media: Pose questions to your audience on social platforms through polls, comments, etc. Monitor replies.

• • Reviews: Enable user reviews on your website and monitor them for constructive criticism. Follow up on concerns.

• • Support tickets/calls: Analyze support interactions to identify common complaints and requests.

The key is making it easy and rewarding for users to share their candid thoughts. Listen, engage, and demonstrate you value their perspectives to foster an open, transparent feedback loop. Continually requesting and incorporating user input will ensure you build products that truly resonate.

 

4. 4. Create a Prototype before Releasing the Final Product 

Create a basic version of your product or services that can solve customers’ problems. Make it simpler for consumers to use.  Be innovative; if a certain product or service does not work, i.e., “not useful to the customers,” rather than getting frustrated, be patient and request feedback on what you can improve upon. Keep incorporating the suggestions until you develop a version that users find useful and willing to pay for.

Prototyping is crucial for the success of any business project – it gives you the necessary insights, prepares you to analyze risks, and empowers you to proffer an innovative solution. So, regardless of the industry, investing in prototypes can make a difference.  

Besides, prototyping gives you a sense of clarity- you cannot easily stumble on your basic idea over ambitious visions of the future, allows you to market through visual representation, and helps you better plan your project and scale cost.

How can you do this?

 

1. 1. Identify the core features: Focus on the functionalities that directly address their primary need. The essential component that provides the most value to consumers.

1. 1. Reduce customization: Offer a standardized solution that caters to commonly used cases to minimize the need for customization.

5. Determine the Optimal Pricing Model

Pricing is your business’s primary revenue driver. It directly impacts your ability to generate income and sustain your operations. A well-thought-out pricing model helps ensure you generate enough revenue to cover costs, invest in growth, and achieve profitability.

Depending on your target market and competition, your pricing model may need to support your market entry and penetration strategy. You may choose to enter with lower prices to gain a foothold or use premium pricing to position yourself as a high-quality, exclusive option.

Here are the steps to help you determine the right pricing model:

 

• • Understand your costs: Calculate your costs, including production, materials, labor, technology infrastructure, and overhead. Also, consider variable and fixed costs.

• • Analyze competitive pricing: Price your product in line with or slightly below the prices of your direct competitors. This can be effective when your products are similar to others on the market.

• • A/B testing: Conduct A/B tests with different pricing models to determine which generates the most revenue and customer satisfaction.

• • Stay agile: be prepared to adjust your pricing model as your business and market evolve. Monitor customer feedback, sales data, and market trends regularly.

• • Communication and transparency: communicate your pricing to your customers. Transparency can build trust and help customers see the value of what they’re paying for.

The optimal pricing model for your AgTech startup will depend on your unique value proposition, target market, and competitive landscape. 

Uncover Actionable Insights with eAgrotect’s Specialized Market Research Services

Thorough market research is crucial for AgTech and sustainability startups but can be complex and time-consuming. As industry specialists, eAgrotect offers comprehensive market research services to help you gain data-driven insights, identify opportunities, and make strategic decisions.

Our market research services deliver:

 

• • In-depth analysis of your industry trends, competitive landscape, and growth potential;

• • Identification of your target customers, their needs and motivations

• • Testing of pricing models and product prototypes

• • Primary research through surveys, interviews, and focus groups

• • Secondary research leveraging existing data sources

• • Quantitative and qualitative data analysis

As a boutique digital marketing agency dedicated to startups in the AgTech and sustainability space, we understand the unique challenges you face. Our tailored market research services equip you with the actionable insights needed to build effective branding, marketing, and product strategies.

Don’t rely on assumptions or guesswork. Partner with eAgrotect for specialized market research that fuels smart decisions and your startup’s growth.

Schedule a consultation today to get started!