You’ve got a great idea for a product or service. You have a strong hunch the world needs your idea, because it solves a problem that you identified. But how do you know if you could turn it into a real business? Melanie Lindner at Forbes has some questions you need to ask yourself about your idea.
“First, do you have a compelling value proposition?”
What’s a value proposition, you ask yourself. Value is not just what a customer gets, but what the customer gets for the price. A $10 widget that appears to the buyer as being twice as good as a $2 widget won’t be perceived as good value. So you’ll need to understand how you’ll price your widget before you can identify whether your value proposition is compelling or not.
“Second, is there a viable market for your new product or service?”
If your idea is totally new, there probably isn’t pre-existing research that will answer the market question. Start by doing some anecdotal research to learn if other people you know have the same problem. Then test your theory by doing more extensive research using a broad sample of the population of potential users for your widget.
“Third, can you make enough money to pay off the cost of developing the product?”
You’ll need to do some projections of how many widgets you can sell at what price, and what it will cost to produce that many widgets.
If you’ve passed the test on these three questions, Lindner gives you the “acid test”:
“How hard are you willing to work? If you’re not ready to give everything (and then some) to your great idea, it probably won’t matter how great…” your product is.
[Tip of the hat to Business Opportunities Weblog]