A member of a business and marketing forum put out the question the other day about what processes, methods and even apps do others use for screening new ideas. In came several replies but one of the most valuable was to forget about using apps and tools that will cost you a lot of money and to use your own brain. Not much was given on how to go about screening new ideas.
Generating new ideas and evaluating them is a circular process because you could start looking for a potential customer market and then come up with a new product idea. Or, you could come up with a new product idea and then evaluate or screen it for potential.
So let’s start off assuming that you already have a promising idea and you want to evaluate or screen it. When you start? The short answer to this is you need to evaluate whether your idea has a real customer benefit and if so is there a potential customer market for your solution. You see, whatever idea you come up with you are going to need to sell it to potential customers. The question then is, will they buy? Now, if the market already has competitors with similar products your challenge is to determine whether your product is equal to or better than what is already being offered. If your solution is inferior then you have a problem. But all might not be lost because you can also offer a cheaper, knocked down version with fewer features that might just win over a portion or segment of the market.
So to begin with you need to find out customer problems or needs and determine how strong their pain is in the market and how your product or service will provide a real customer benefit. Also find out how customers are addressing the need presently. Customers, for example, address their thirst needs from plain old tap water to coffee, tea, energy drinks, all the way through to alcoholic beverages.
The size of the target market is something you really need to think hard about. Do you have a way of estimating how many potential customers are in your local or national market. What percentage of these potential customers would be your specific target market? While you are assessing the target market you are aiming for also look at the growth potential of the market.
An important question to ask is about the nature of your product. Is it a physical product or is it an information product? A physical product will require a target price to cover your research and development, manufacturing and product delivery. Don’t forget about marketing and selling costs too. An information product may be relatively quickly produced but because competition is so high in most categories, you will really have to stand out with something new, different and which delivers superior value.
In evaluating an idea, look at your experience, expertise or core competence. Where do you have domain expertise that is equal to or better than competitors?
A very important question is how will the product make money. To answer this you will need to have an idea about the business model you will use to bring in revenue. Many business models exist and you will need to match your business model to the type of product that you intend developing and selling. Apart from the expected return, you will also need to consider your initial investment – how much money are you going to need to get your idea off the ground?
Ideas are developed in stages – you might want an initial three-minute test to see if your idea is viable. Next would be the three-hour test where you get your idea down on paper and see if it still makes sense. You can follow this with a three-day test where after a few days you let your idea cool down and when you come back to it, does it still hold up? Ultimately, the best test is to develop a prototype or sample of your product and test it with real customers.