So you have an idea, or several ideas. That’s great! But how do you know if it is going to be successful.
There are many factors that determine whether an idea is ultimately successful. This starts with assessing whether your idea really meets the need.
If you are a business, your objective is to make money, which means you need to know that your idea is commercially viable, i.e. will customers pay for it, and what are they willing to pay. You don’t need your product/service to make money immediate. In fact, it is rare that this is the case. However, you need to know that over time your product/service can be profitable, either as a stand-alone, or through the ancillary income it stimulates.
To make money, a product/service typically needs to do at least one of the following things:
• Meeting an unmet need. This is sometimes one that the customer is not consciously aware of.
• Tapping a new market e.g. different location.
• Providing a better product/service than that offered by your competitors.
• Providing a product/service that is cheaper to customers than existing ones.
Once you know which of these your idea satisfies, you need to work out the size of the potential market. For example, if you are meeting a previously unmet need, you should try to work out how many potential customers this need applies to, and how much they would be willing to pay for this product/service. This will involve both desk research and getting feedback from potential customers. It is the art of combining these two that will produce the most accurate estimate of your potential market size.
If you are a non-profit organization, many of the same principles apply, even though it may not seem so at first. For example, new products/services should meet an unmet need, rather than duplicating what is already out there, or should be better and/or more cost-effective.
What happens if you have several ideas? In part two next week, I’ll share how to prioritize your ideas for maximum success. See you next week!
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