Market research is very important. If done properly, it will pay off by allowing you to create products tailored to what your audience really wants. Be very careful about spending loads of time on a product before you take the time to find a market it for it. You really don’t want to put a load of time and resources into something that no one wants.
The best way to find out what the customer wants is simply to ask them. You have many choices to reach out to them, including email, surveys, calls and forum posts. Be sure to ask the customer many questions and listen, listen, listen to what they tell you! Don’t put too much of your own interpretation over their words. Let them speak and take the words as they say them.
After you have developed a beta version, you might want to test it out on some of your potential customers. Again, ask a lot of questions and listen! Take their comments and put them to good use by improving your product, so it’s as close as possible to what they are looking for.
Some great advice I picked up is not to fall in love with your products, fall in love with your customers instead. Make it your goal to deliver the best value and service you possibly can, and be prepared to shift or anticipate if possible new trends in what people want.