Mapping the Terrain: A Startup’s Guide to In-Depth Market & Industry Research

This startup market research guide walks you through industry analysis, customer spending, and TAM/SAM/SOM estimation. Part 2 of our series.

In Part 1 of this series, we discussed why building a solid marketing foundation based on strategy is crucial for startups, rather than just chasing fleeting “growth hacks.” A key part of laying that foundation is truly understanding the environment in which your startup operates — your battlefield.

You can’t effectively build a product or service, develop compelling messaging, or sell to customers if you don’t deeply understand the market landscape, the industries you serve, and the financial realities of your potential customers. This phase of deep market and industry research is non-negotiable.

In this post, Part 2 of our journey, we’ll pull back the curtain on our process for conducting in-depth market and industry analysis at Cyberoni, providing a startup market research guide based on our own experience. We’ll cover how we investigated industry spending, customer budgets, financial readiness, and ultimately, how we used this data to estimate our market size.

Step 1 — Industry Spending Analysis (Our Process)

One of the first steps in mapping your battlefield is understanding where the money is being spent. For us, this meant analyzing different industries to identify those with significant spending potential relevant to custom software engineering and those that might be emerging areas of opportunity.

Why Analyze Industry Spending?

Analyzing industry spending helps you prioritize your efforts. Instead of broadly targeting “everyone,” you can focus on industries that have a demonstrated need and budget for solutions like yours. It helps identify market potential and avoid wasting time and resources on segments that are unlikely to convert into profitable customers.

Our Methodology for Identifying High-Spending & Emerging Industries

We started with a broad list of industries that we believed could benefit from our offerings. Our methodology involved a mix of broad sweeps and targeted deep dives. We looked for overall industry size, but more importantly, spending specifically on technology, software, services, or consulting relevant to what we provide. We also kept an eye out for industries undergoing rapid digital transformation or facing new regulatory challenges, as these often indicate emerging spending.

Tools & Techniques We Used

To gather this information, we employed several tools and techniques:

• Keyword Research: We used tools like Google Keyword Planner and explored others like SEMrush or Ahrefs (even free versions or trials can provide insights) to see what terms companies within specific industries were searching for. We looked for keywords like “Finance IT budget,” “Healthcare software spending trends,” “Custom Software spend by industry,” and “Startup digital transformation investment.” This gives a proxy for interest and potential budget allocation.

• Searching for Market Research Reports: We actively searched for publicly available summaries or snippets of market research reports from firms like Gartner, Forrester, IDC, Statista, and Grand View Research. While full reports are often expensive, executive summaries, press releases, and articles citing report data can provide valuable top-level insights into market size, growth rates, and spending breakdowns by industry. We used search terms like “[industry name] market size,” “Finacne technology spending forecast,” and “Finance trends report.”

• Competitor Analysis: Analyzing the industries that our direct and indirect competitors were actively targeting provided clues about where they were finding success and where spending was likely occurring. We looked at their website case studies, customer testimonials, and press releases.

Challenges Encountered

This process wasn’t without its hurdles. Finding specific, granular spending data for niche areas can be challenging, especially free data. Many detailed market reports come with significant price tags. We had to piece together information from various sources and make educated estimations where precise data wasn’t available. Outdated information was also a risk, requiring us to cross-reference data points.

Our Key Findings: Simplified Industry Spending

Based on our analysis, we identified several industries that showed promising spending potential and alignment with our services.

This chart represents a simplified view of our findings, highlighting industries that appeared to allocate significant budget towards solutions similar to ours or were projected for growth in relevant spending areas.

Resource Spotlight

Finding public data requires persistence, but here are types of resources that can be helpful for industry spending analysis:

• Statista provides aggregated statistics on various industries and market trends: https://www.statista.com/

• Major consulting firms often release public summaries or articles based on their market reports (e.g., PWC’s industry outlooks): https://www.pwc.com/en/research-insights.html

• Industry associations often publish reports or statistics relevant to their sector. (Find relevant associations for target industries and link to their reports/stats sections if available).

Step 2 & 6 — Target Customer Spending & Industry Forecasts (Our Process)

Understanding overall industry spending is one piece, but it’s equally important to understand the spending power and patterns within your specific target customer segments within those industries. Are the companies you want to reach typically allocating budget for solutions like yours? What are the future spending trends?

Beyond the Industry: Focusing on Customer Budgets

A large industry size doesn’t guarantee that your ideal customer profile within that industry has the budget or propensity to buy. We needed to investigate typical budget ranges for companies of the size and type we planned to target (e.g., SMBs, mid-market, enterprise, startups at a certain funding stage).

Investigating Typical Budget Ranges & Spending Patterns

Our process involved looking for data that would give us insight into the budgets controlled by our target personas or departments.

• We searched for articles or reports discussing average IT budget percentages by company size or revenue. Keywords included “SMB IT budget,” “mid-market technology spending,” “average marketing budget percentage.”

• We looked for studies or surveys focused on spending within specific departments we would target (e.g., “marketing technology spend,” “cybersecurity budget allocation”).

• While more challenging to find publicly, any insights gleaned from conversations with potential customers during early validation steps also informed our understanding of budget realities.

Researching Industry-Specific Spending Forecasts

To understand the future potential and timing, we also researched industry-specific spending forecasts. This involved looking for projections on how technology or service spending was expected to change in our target industries over the next 1–5 years.

• We searched for phrases like “Finance IT spending forecast 2025,” “future of technology spending in Finance,” “digital transformation investment trends Finance.”

• Comparing historical spending data to current forecasts helped us identify industries that were increasing their investment in relevant areas, indicating potential future growth for us.

Resource Spotlight

Finding specific customer budget data can be tricky, but here are types of resources that may offer insights:

• Technology research firms often publish summaries or articles on IT spending forecasts by company size or industry (e.g., Gartner, Forrester — look for their public blogs or press releases): https://www.gartner.com/en/research/topics/it-spending

• Business publications occasionally report on average departmental budgets or spending trends (e.g., Forbes, Wall Street Journal articles on business spending).

• Surveys on business technology adoption and spending can be found through various research outlets.

Step 3 — Financial Qualification Criteria (Our Process)

Beyond just being in a high-spending industry or having a typical budget, we needed to consider the financial health and readiness of individual companies. This step moved beyond broad market analysis to thinking about lead qualification from a financial perspective.

The “Can They Pay?” Question

It’s one thing for a company to need your solution, but can they realistically afford it, especially in the near term? Understanding financial qualification criteria helps sales and marketing focus on leads most likely to become paying customers.

Identifying Revenue Thresholds & Financial Indicators

Our process involved identifying signals that indicated a company was likely to have the financial capacity and stability to invest in our solution.

• We considered company revenue size as a potential threshold. While not always perfectly correlated with available budget for a specific solution, it often provides a baseline indicator of scale and financial resources.

• For startups, funding rounds (Seed, Series A, B, etc.) serve as a strong proxy for available capital for investment in growth or infrastructure. A recently funded startup might have earmarked specific funds for solutions like ours.

• Looking for public information indicating profitability, recent significant investments, or expansion can also signal financial readiness.

Our Key Findings: Financial Readiness Signals

This analysis helped us define criteria for financially qualified leads.

These criteria serve as signals that a potential customer likely has the financial capacity to invest in our solution.

Resource Spotlight

Understanding financial indicators for B2B sales involves sales methodology principles and resources on tracking company financials:

• Learn about B2B sales qualification frameworks like BANT (Budget, Authority, Need, Timing), which includes assessing budget: https://blog.hubspot.com/sales/bant-definition

• Track startup funding news to identify companies that have recently received investment (e.g., Crunchbase News): https://news.crunchbase.com/

• PitchBook also provides data and news on private markets, including funding rounds (though access to detailed data may require subscription): https://pitchbook.com/news

Chapter 4: Synthesizing It All — Creating Our TAM, SAM, SOM Estimates

With the data gathered on industry spending, customer budgets, and financial indicators, we were ready to synthesize our findings into market size estimations: TAM, SAM, and SOM. These concepts help define the scope of our potential market and prioritize target segments.

Understanding Market Sizing: TAM, SAM, and SOM

Let’s break down these common market sizing terms in simple terms for startups:

• TAM (Total Addressable Market): This is the total market demand for your product or service. Imagine everyone in the world who could possibly use or need what you offer, assuming no geographical or resource limitations on your part. It’s the big picture.

• SAM (Serviceable Available Market): This is the segment of the TAM that you can realistically reach with your current business model and sales channels. If you only sell within a specific country, your SAM is limited to that country. If you only target companies above a certain size, that filters your SAM.

• SOM (Serviceable Obtainable Market): This is the portion of the SAM that you can realistically capture in the short-to-medium term (e.g., the next 1–3 years). It accounts for competition, your current resources, brand awareness, and market entry strategy. This is the most practical number for setting sales and marketing goals.

Our Process for Deriving These Figures

We used the data points gathered in the previous steps to build our estimates.

• For TAM, we combined broad industry size data with the potential relevance of our solution across those industries.

• For SAM, we applied filters based on the industries with relevant spending (from Chapter 1), customer size/type with appropriate budgets (from Chapter 2), and geographical reach.

• For SOM, this required making realistic assumptions about what percentage of the SAM we could capture given our resources, competitive landscape, and Go-to-Market strategy. This is often the most debated and estimated number. We factored in potential market penetration rates based on industry growth forecasts and our capacity.

Why Market Sizing Matters

Estimating your TAM, SAM, and SOM is crucial for several reasons. It helps you:

• Prioritize: Focus your efforts on the most accessible and promising parts of the market (your SAM and SOM).

• Set Goals: Define realistic and measurable sales and marketing targets based on your SOM.

• Allocate Resources: Understand where to invest your time and budget for the greatest impact.

• Demonstrate Potential: Clearly articulate the market opportunity to potential investors, showing that you understand the landscape and have a focused approach.

What’s Next

Deep dive market and industry analysis is a fundamental step in building a robust startup marketing strategy foundation. It moves you from making assumptions to making informed decisions based on data about where money is being spent, who has the budget, and what the realistic market opportunity is. While challenging at times, the insights gained are invaluable for focusing your efforts and setting the stage for sustainable growth.

From this market research phase, some key lessons learned included the importance of cross-referencing data, the value of even partial information from expensive reports, and the necessity of making informed estimations where perfect data is unavailable.

This analysis also prepared us for the next critical phase: getting to know the “who.” In Part 3 of this series, we’ll dive deep into customer profiling and creating detailed buyer personas, moving from market segments to understanding the individuals within them.

We hope this startup market research guide based on our process helps you approach your own market analysis with more clarity!

Need help building a robust marketing foundation for your startup?

Email us today: [email protected] Give us a call: 7202586576

Read more insights on our blog: https://www.cybershoptech.com/blogs