Why Evidence-Based Decisions Matter
In the high-stakes world of fintech and real estate investments, gut instinct alone isn’t enough. WeResearchIt was founded on a simple belief: evidence-based decisions separate successful ventures from expensive failures. Investors who demand data and rigorous analysis before committing capital consistently achieve better outcomes. By starting with solid market evidence – from customer demand and competitive landscape to regulatory climate – decision-makers can mitigate risks and avoid costly surprises. In short, a market feasibility study is not an academic exercise; it’s a practical tool to “measure twice and cut once” in venture investing.
The Cost of Skipping Feasibility: A Cautionary Tale
Imagine spending over $1 billion to build a state-of-the-art international airport, only to find it nearly empty. That’s exactly what happened in Spain. Ciudad Real Central Airport was conceived as a bustling hub to relieve Madrid’s air traffic, with a 10-million passenger capacity terminal and one of Europe’s longest runways.One major flaw – no airlines or passengers actually wanted to use it. Remote location and poor transport links made the airport unattractive, so carriers and travelers stuck with Madrid. The grand vision quickly turned into a “ghost airport” with empty halls and idle runways. Years later, saddled with debt, the entire $1B facility was auctioned for as little as $10,000 – roughly the price of a used car. This real-world story shows the devastating outcome when market feasibility is skipped: massive capital burned for want of evidence that the market simply wasn’t there.
The lesson is clear. If a project’s foundation is assumption instead of analysis, investors essentially build on quicksand. Whether it’s a giant infrastructure project or a fintech startup idea, failing to validate market realities can turn ambitious plans into cautionary tales.
Five Reasons to Invest in Feasibility Studies
Feasibility studies are the investor’s insurance policy against avoidable failure. Here are five key reasons to invest in them, each illustrated by real-world cases and statistics from fintech and real estate:
1. Validate Real Market Demand (No More “No Market Need” Failures)
The number one reason startups fail is building something nobody wants.
A landmark analysis of 101 startup post-mortems found that42% failed because there was “no market need” for their product. Fintech is no exception – from digital wallet apps to crypto platforms, many have launched to crickets because founders fell in love with an idea before proving demand. (One fintech founder recalls spending $63,000 and 9 months on an app “then I launched… to no one. Turns out, no one cared… Lesson learned: talk to people before you build anything”) A market feasibility study forces you to talk to the customer first. It quantifies genuine demand, so you don’t invest in “solutions” looking for a problem. The same applies in real estate: developers who skip market research often overestimate demand. For instance, the world’s largest shopping mall (New South China Mall in Dongguan) opened at 99% vacancy – an extravagant complex with canals and theme parks that sits mostly empty because investors “never considered the importance of location” or local income levels. A rigorous feasibility analysis would have revealed that the mall’s target customers simply weren’t there. In short, feasibility studies help confirm paying customers or tenants exist before you pour money into a venture.
2. Save Capital by Stopping Bad Projects Early
A feasibility study is a small upfront expense that can prevent huge losses.
In practice, a high-quality feasibility analysis costs only about 0.75%–1.5% of a project’s total cost, but it can tell you whether to spend the other 98–99% at all.. That’s a bargain compared to blindly plowing ahead. Many entrepreneurs and developers have learned this the hard way. It’s striking how often companies will spend millions on building and marketing a project, yet hesitate to spend a fraction of that on validating if the project should be built. As one industry expert noted, owners sometimes spend more on a flashy grand opening than on finding out whether the venture will survive its first year.The result? Costly write-offs and “runaway” projects. Consider the case of Powa Technologies, a UK fintech unicorn that raised over $200 million only to crash spectacularly. Insiders later revealed the company was chasing an unproven product with serious flaws, but management pushed on, burning cash while ignoring red flags. A thorough feasibility study could have identified the product and business model issues early, potentially saving investors from a total loss. In real estate development, it’s well documented that over-optimistic cost and revenue assumptions sink projects; nearly 90% of megaprojects globally suffer budget overruns or benefit shortfalls due to unrealistic initial plans. Feasibility studies impose financial discipline – they pressure-test budgets, revenue projections, and timelines against market realities. By catching a doomed project in the planning stage or refining a shaky concept before it scales, feasibility studies conserve investor capital and time for better opportunities.
3. Mitigate Regulatory and Competitive Risks
Regulatory feasibility can make or break the venture
A recent industry report by Martechvibe, showed that nearly 3 out of 4 fintech startups fail within three years due to preventable regulatory compliance issues. In other words, brilliant code and a slick app won’t matter if you misjudge the legal requirements. Feasibility research in fintech should map out licensing, compliance costs, and partnership needs (with banks or payment networks) from the start. The payoff is huge: startups that invested in regulatory planning at pre-seed stage had a 64% higher survival rate, according to the same study.. Competitive analysis is equally crucial. Launching without a clear picture of the competition can leave a venture dead on arrival. One case in point: BitPass, a U.S. micropayments fintech, raised $12 million in the early 2000s – but it closed shop a few years later, overwhelmed by larger competitors in the payments space. A market feasibility study would have benchmarked BitPass against its rivals and possibly pointed out the uphill battle. Whether it’s understanding how strict fintech regulations are in your target country, or how many luxury condos are already on the market in a city, feasibility studies help navigate the external minefields. They ensure you’re not entering a game you can’t legally or competitively win.
4. Boost Investor Confidence and Credibility –
To an investor, a solid feasibility study is a green flagthat the founders or developers have done their homework.
It signals that the venture’s forecasts and claims are backed by evidence, not just optimism. As Investopedia notes, feasibility studies help convince investors and bankers that a project is worth funding. This isn’t just theory: data shows investors respond to due diligence. Fintech startups with regulatory or domain experts on their founding team (an indicator of thorough planning) secured funding 2.8 times faster than those without such expertise. Similarly, real estate projects accompanied by independent feasibility reports find it easier to attract lenders and equity partners because the numbers have been vetted objectively. From an investor’s perspective, seeing a feasibility study in the deck greatly improves confidence in the team’s competence and the project’s risk profile. It addresses key questions upfront: Is there really a market for this? What are the cash flow projections based on? What if things go wrong? In early-stage and capital-intensive ventures alike, transparency and realism stand out. By investing in a feasibility study, founders essentially speak the investor’s language – they present a venture with quantified demand, carefully analyzed risks, and a credible execution plan. This credibility can be the deciding factor in winning over skeptical investors. Conversely, skipping feasibility can be a red flag: it suggests a team charging ahead blindly or hiding from inconvenient truths, which is enough to make many investors pass on the deal.
5. Create a Roadmap for Execution and Success–
A good feasibility doubles as a strategic plan for execution
The research process itself yields strategic insights that guide project planning. In fact, a comprehensive feasibility study often doubles as a strategic plan for the business. It defines the target market, optimal pricing, distribution channels, technical requirements, and financial projections in detail. As one feasibility consultant put it, a good study becomes “the market-driven strategic plan and concept design that is the road map” for development and operations. This roadmap aligns the team on real data. It’s much easier to make decisions during execution – from marketing to scaling – when you have a clear fact-based profile of your market and risks. Studies have shown that projects which complete feasibility analysis before the final go-ahead are far more likely to stay on schedule and budget. The U.S. Millennium Challenge Corporation, for example, reported that when thorough feasibility studies were done up front, the chosen infrastructure projects hit the ground running and achieved their expected economic returns with far fewer hiccups.. In real estate development, feasibility studies encompass site analysis, permitting, and design feasibility as well – preventing nasty surprises like zoning conflicts or construction cost overruns mid-project. Think of the feasibility study as a rehearsal for the venture: it forces you to think through the business model, identify bottlenecks, and devise contingency plans before you’re on the investor’s dime. The result is a venture with a clearer blueprint and a team better prepared to execute effectively. In short, feasibility studies don’t just tell you if you should proceed – they inform how to proceed for maximum success.
Common Pitfalls to Avoid
While the case for feasibility studies is compelling, it’s important to do them right. Misusing or neglecting feasibility analysis comes with its own pitfalls, as highlighted in industry literature:
- Ignoring the Study (or Doing It Only as a Formality) – One common mistake is commissioning a feasibility report only to shelve it when it delivers unwelcome news. Some projects charge ahead due to the leader’s bias or emotional attachment, effectively ignoring evidence. In other cases, teams skip the feasibility step entirely in a rush to build – a recipe for “runaway” projects. It’s telling that feasibility studies are still too often “ignored, misunderstood or improperly performed”, even though they are critical to long-term success. Investors must ensure the study’s insights genuinely inform the go/no-go decision (and subsequent planning), rather than being an afterthought.
- One-Size-Fits-All Assumptions – Every market and project is unique. A notorious pitfall is using a generic template or copying a competitor’s model without examining local conditions. For instance, assuming a fintech product that succeeded in one country will automatically succeed in another, or that every mixed-use development needs the same formula of retail and residential mix. As one analysis warned, starting with a “stock formula” and failing to tailor the concept to the specific market dooms the project from the beginning, because the product won’t fit the local customer dynamics. A good feasibility study avoids cookie-cutter conclusions – it customizes recommendations to the context. Investors should be wary of studies that don’t dig into the specific demographic, cultural, and economic nuances of the target market.
- Over-Optimism and Bias in Data – Feasibility studies must be grounded in realistic assumptions. Beware of analyses that indulge in rosy “best-case” scenarios for costs, adoption rates, or revenue. A classic red flag is when projected costs conveniently stay low and profits high, unsupported by benchmarks. Research on project failures shows that “blue-sky” cost estimates (wishful thinking) versus real-world costs can invalidate a business case. In other words, if the study assumes everything will go perfectly, that’s a sign of bias. Robust feasibility studies include sensitivity analyses – they ask, what if sales are 30% lower? What if construction costs are 20% higher? – to test a project’s resilience. Investors should push for this level of rigor. The goal is an objective evaluation, not a sales pitch.
By keeping these pitfalls in mind, investors and entrepreneurs can ensure they reap the full benefits of feasibility studies. The value lies not just in doing a study, but doing it honestly and intelligently – approaching it with an open mind and a willingness to adjust course based on findings.
Conclusion: Measure Twice, Invest Once
In both fintech and real estate, the message is clear: due diligence through market feasibility studies is not optional; it’s essential for success. The most innovative idea or ambitious development can collapse if it isn’t grounded in market reality. Conversely, evidence-based ventures inspire confidence and set the stage for sustainable growth. For investors evaluating early-stage startups or capital-heavy projects, insisting on a thorough feasibility study is one of the smartest moves you can make. It’s a modest investment of time and money that dramatically improves the odds of picking winners over losers.
At WeResearchIt, we champion this evidence-driven approach. We’ve seen firsthand how an upfront feasibility study can save a fortune in future headaches, or uncover a golden opportunity that others missed. In a landscape littered with failed ventures that “seemed like a good idea at the time,” you can choose a different path – one where decisions are backed by data, analysis, and proven methodology. So the next time a fintech app or real estate development comes across your desk, ask the hard questions and look for the feasibility facts. Demand evidence over anecdotes. Encourage the entrepreneurs back to validate their vision with research. Your future self (and your shareholders) will thank you
