“a market research budget?…[laughs to himself]…not at my company”

I was recently introduced to a guy over email who I finally had the chance to speak with yesterday.  Very smart guy who has had a successful career to this point at various big corporations and currently works for one of the most successful consumer electronic companies in the world.  So when the subject of doing market research came up, I was shocked when he basically told me there was no budget for consumer research for any of their many products.  What?  I thought all big companies did this?  Apparently, they don’t allocate money to this so instead of hiring some outside firm to poll a bunch of random people in the product’s target market to hopefully gain insight into buying behavior, useage, etc.  Essentially, he said, they bootstrap it.  They write their own questions, then started sending them out to friends and family over email.  He said they were fortunate enough to have some people who had backgrounds in this so it was a little easier but still, I was in awe.

It just goes to show there is no right way to do things.  If a billion dollar, brand name, B2C company doesn’t spend a dime on consumer research, should your negative cash-flow start-up spend money on this?