Problem & Market
- Is there a problem that is significant, and does it need solving?
- Is your idea unique? Does your idea solve the problem better than anything else on the market
- What is the market size? Is there an upward trend in the market?
- What USP does your idea have?
- Can your idea be easily copied?
Feasibility
- Can you develop the idea with your existing resources, eg time, money, skill set.
- What external expertise is required
Monetisation
- How will it make money? If you can’t make money, it is not worth it.
- Early in development it can be hard to know what product cost price is. Experience can go a long way to predicting what the cost price may look like at assorted volumes. Sometimes you will have to start development to get an idea on cost.
- Depending on the sales method there will be varying rates of return, this is key to understanding any financial return based on a sales price.
Monetisation, financial lenses
- How long is it until you see return on investment?
- Volume vs Margin. On low volume you need larger profit margins vs high volume the profit margins can reduce.
Does it excite you?
The project must excite you or be close to your heart. There is risk in developing an idea if there is minimal excitement as it is not a quick process and comes with significant hurdles along the way.
Common mistakes
- There is always risk with developing an idea. It is common for people to be too cautious or overconfident and determined with their idea. A middle ground is beneficial.
- Development is not cheap, it is important to understand this. If you have carried out all relevant research, then you need to be committed. Having half a foot in is not beneficial, this will cost you more in time and money. A certain level of caution is good as it helps to reduce the risk, eg carrying out due diligence.
- On the other hand, over confidence or stubbornness in the idea can cost you dearly. You need to be flexible and consider the experience of others. This may be individual design details, or material choices for example.
- Most importantly, not all products are successful and worth developing. You need to know when to stop. This could be a personal mindset change or feedback from experienced partners advising that goal posts or criteria are no longer viable.
Success indicators
Primary indicators for success are, does it financially make sense, is there a market, and does it excite you and the team around you?