Pre-project research - the stage that saves you from failure

Study a project before you throw yourself into it.

I often hear the question “How much would such-and-such a service cost?” — a pure idea with nothing behind it. I have to tell the would-be founder that you can't just up and build a product, because an idea without prior demand analysis is worth nothing. And to check whether it would survive as a real product, you need to spend time and money on pre-project research. Some refuse — but that's a mistake.

Why does this matter? A founder often pays no attention to how much other people actually need the product. They simply like the idea and the process, so they'll work on the project endlessly. That's the reason for the huge number of half-dead businesses clinging to survival.

Before you rush to design or build a service, you need to assess the risks, decide whether to act at all, and refine the direction.

The two main questions of pre-project research

To test whether an idea is viable, I suggest doing desk research. In this kind of research it's important to understand whether there's any life in the industry at all — money and prospects. To find that out, I analyse the industry and determine:

1. How many projects launched worldwide in this industry over the last 5 years — is the trend rising or falling.

2. How many millions of dollars a year are invested in these projects — is the trend rising or falling.

3. 
   

And there's no need to split the global market into separate regional ones, because complete statistics can only be assembled from an analysis of the industry as a whole. The market for software products is global by its very nature.

Methodology

The methodology of this kind of desk research comes down to gathering and analysing data about projects in the client's chosen industry, on resources such as Crunchbase. After a tedious, routine but important analysis of several hundred projects, the state of the industry becomes clear.

An example of pre-project research

A client recently came to me with an idea for a service that automates the collection of GIFs for social media. Going into the research, I was sure I'd conclude there was no money in the industry and talk them out of the project.

Number of companies and their age at the time of investment

The research showed the exact opposite. Having found that analytics services for social media marketing were gaining popularity and that the average round size was growing, I realised the industry had prospects. I then looked at which services in particular were growing in revenue, and saw what you could have guessed without any research at all: services using machine learning and big-data processing. They're growing intensively and have a revenue-per-employee figure of more than a hundred thousand dollars a year.

The trend in the number of new companies launched in the industry over the last 5 years clearly shows what's happening — whether demand for the products is rising and whether the field interests investors. The first thing to look at is how much money is being invested in these companies and how old they are. The data shows that companies just one year old received 15 investment rounds in 2025.

This means investor interest in the industry has grown, and it has become easier to raise funds.

Investment dynamics

In the end, studying the number of new companies on the market and the money they've raised makes it clear whether a particular field is worth entering.

I started analysing the information in more detail and saw that the average amount raised in the latest round is roughly the same, while the number of companies that received a latest round doubled between 2021 and 2025:

• In 2025, companies founded in 2024 received a round 15 times, and those founded in 2025 received a round 7 times;

• In 2024, companies founded in 2023 received a round 13 times, and those founded in 2024 received a round 7 times;

• In 2023, companies founded in 2024 received a round 13 times, and those founded in 2023 received a round 2 times;

• In 2022, companies founded in 2021 received a round 5 times, and those founded in 2022 received a round 4 times.

The research led me to conclude that moving toward an SMM-analytics service with machine-learning technology would make it easier to secure a round and good profit, because that industry is well understood and relevant to investors.

Interviews as part of the research

Once the product idea has been refined, it's worth not only studying the finances and prospects of the industry on a global scale, but also doing something more down to earth. At the start I mentioned that an idea on its own may be of no use to anyone. To understand whether people have a demand for the product, I run a research interview.

Every project solves some problem. The job of the interview is to find out from real people in the product's potential target audience what their problem is. And it's important not just to talk about what “hurts”, but about what hurts right now, at this moment.

Usually by around the 10th interview the answers start to repeat, and you can see a concrete direction for development, ways to simplify the idea and how to design a pilot version of the product.

Entrepreneurs are ready to invest hundreds of thousands of euros in building a project, while research like this costs only a few thousand. It pays for itself many times over when the project takes off.

Wanting to bring ideas to life is great — but it's far better to build projects people need: ones that deliver value and benefit to both their creators and their users.

And that's exactly what pre-project research helps you determine.

If you'd like to discuss your project, get in touch. Over 10 years we've launched 40 complex software products for private investors, large businesses and government organisations. We'll help you too. :)