How to write an effective Market Requirements Document (MRD)?

Base It on Real Data, Not Assumptions

The biggest mistake in writing an MRD is relying on assumptions rather than validated data. An MRD must be built on concrete market research, customer insights, and competitive analysis. If the document lacks supporting data, it becomes an opinion piece rather than a strategic guide. Research should be pulled from multiple sources, including industry reports, competitor studies, customer surveys, and user interviews. For example, rather than stating, “There is increasing demand for AI-powered budgeting tools,” the MRD should reference a data-backed finding such as, “According to a 2024 Gartner report, 72% of millennials prefer financial apps that provide automated spending insights, indicating a strong market opportunity for AI-driven budget management.”

Basing decisions on real numbers and trends not only adds credibility to the MRD but also guides stakeholders in making informed investment and product development decisions. Any statement made in an MRD should answer the question, “Where is the proof?” If no proof exists, more research is needed.

Keep It Customer-Centric: Define Needs Before Features

One of the most common pitfalls in writing an MRD is focusing too much on what the product should be rather than what the customer actually needs. An MRD is not a technical document outlining features—it is a strategic document that captures why the product should exist in the first place. If the document revolves around product specifications instead of customer problems, it loses its purpose.

A customer-centric MRD starts by defining who the target users are, what challenges they face, and how the product will solve those problems better than existing alternatives. Instead of saying, “The app will have a personalized dashboard with financial insights,” the MRD should highlight the real user challenge: “Users often struggle with fragmented financial data across multiple platforms. A personalized dashboard will consolidate all accounts, providing a real-time view of spending and investments in one place.” By structuring the MRD around customer pain points before discussing features, teams can ensure that every product decision is solving a real problem.

Make It Actionable: Ensure Teams Can Execute on the MRD

An MRD that is too abstract or theoretical becomes difficult to translate into execution. If it lacks specificity, stakeholders may interpret it differently, leading to misalignment. A well-structured MRD provides clear, unambiguous market insights and business strategies that product, marketing, and executive teams can use without second-guessing.

For example, instead of stating, “We should target Gen Z and millennial users who are tech-savvy,” a more actionable statement would be:
“Our primary target audience consists of millennials aged 25-34, working professionals with disposable income, who are looking for automated financial tools. Our marketing efforts will focus on digital channels such as YouTube finance influencers, TikTok personal finance creators, and fintech newsletters.”

By specifying clear market positioning, audience preferences, and distribution channels, the MRD can be directly used by marketing and sales teams for execution. A vague MRD requires constant clarification, leading to delays and misinterpretations.

Align It with Business Goals and Long-Term Strategy

An MRD should not only validate market needs but also ensure the product aligns with the company’s larger business strategy. Many organizations build products that, while innovative, don’t fit within their core strengths, brand identity, or financial model. A good MRD connects market demand with business objectives, ensuring that the proposed product is both profitable and scalable.

For instance, if a company’s primary revenue model is subscription-based SaaS, an MRD proposing a one-time purchase financial tool might not align with the company’s business model. Instead, it should suggest, “The product will follow a freemium subscription model, allowing users to access basic financial insights for free, with advanced AI-driven budgeting features available at $9.99/month.” This ensures that product-market fit is aligned with the company’s revenue model and growth strategy.

Avoid These Common Pitfalls While Writing an MRD

Ignoring Customer Research

Many MRDs fail because they are written based on internal brainstorming sessions rather than real user research. If customer research is missing, teams might build products that do not solve genuine problems. An MRD must include data from customer interviews, behavior analytics, surveys, and competitor reviews to validate that the demand for the product exists.

For example, a fintech startup may assume that users want a cryptocurrency investment tracker, but user research might reveal that most users struggle with tracking their spending habits rather than investments. If the MRD does not capture this insight, the team risks building the wrong product.

Being Too Generic and Lacking Actionable Insights

Vagueness is one of the biggest weaknesses of a poor MRD. Statements like “The market for personal finance apps is growing rapidly” or “Users want a simple, easy-to-use budgeting tool” are meaningless without supporting details. A strong MRD provides specific data, audience breakdowns, and clearly defined objectives rather than broad generalizations.

A better way to present insights would be:
“According to a 2024 Statista report, the global digital finance market is expected to grow at 15% CAGR, with 65% of users preferring mobile-based financial tracking solutions over desktop alternatives. This indicates a strong demand for mobile-first fintech applications.”

Adding specific figures, sources, and user preferences makes the MRD an actionable business document rather than a collection of vague observations.

Overlooking Competitor Analysis

A product does not exist in isolation—competition plays a huge role in determining whether a product succeeds. If an MRD does not thoroughly analyze existing competitors, their strengths, and weaknesses, the company risks building something redundant.

For example, if a budgeting app enters a market already dominated by Mint, YNAB, and Personal Capital, it must differentiate itself. If an MRD does not clearly state how the product will stand out—such as through AI-driven automated expense categorization or predictive financial forecasting—it will likely struggle to gain traction.

Competitive analysis should be detailed and should directly inform product positioning, pricing, and marketing strategy.

Lack of Measurable Success Metrics

An MRD should define what success looks like and how it will be measured. Many MRDs fail to include specific KPIs, making it difficult to track whether the product is achieving its market objectives.

A vague statement like “The product should gain a strong user base within six months” is not useful. A well-defined MRD would instead specify:
“The goal is to acquire 50,000 active users within six months, maintain a 70% retention rate, and generate $500,000 in subscription revenue by the end of the first year.”

By setting measurable targets, the MRD ensures that all teams—marketing, sales, product, and leadership—are aligned on expectations.

A well-written MRD goes beyond simply describing a product idea—it provides a clear, data-driven, and actionable blueprint for launching a successful product. By ensuring that it is customer-focused, backed by real market research, aligned with business goals, and free from vague assumptions, an MRD becomes a powerful tool that guides decision-making across all teams.

The difference between a mediocre MRD and a great one is the ability to turn insights into execution. A strong MRD is clear, precise, and ready for action—ensuring that the product doesn’t just get built, but that it succeeds in the market.