Think you’ve invented the next iPod? Has someone else? Here’s how can you measure the potential success of an idea. Answer these fifteen important questions:
- Is the idea evolutionary or revolutionary?
An evolutionary idea presents a serious improvement over existing products. A revolutionary idea changes the game and knocks all current players out of the water. If your service/product is going to succeed, it should fit into one of these categories. - Are you creating value?
You need to. - Do people need it?
Would someone actually buy it? If you have a prototype, how do people respond? Are they willing to part ways with their hard earned cash in exchange for what you are offering? - How big are your margins?
Ideally, you want your margins to exceed 30%. Mediocre margins are between 15 and 30. - Can you prevent imitation?
Patents? Supplier relationships? If anyone can go out and imitate you, there’s a serious problem. - Is your product long-term or short-term?
Make sure you have an accurate assessment of the long-term or short-term viability of your offerings. You can do well with a fad, if it is expectedly so. - Are there any substitutes in the marketplace?
What separates you from the rest? - What are the trends in the market?
You want to be in either a high growth and emerging market, or one that is predictably stable. Low price pressures from commodity markets are very undesirable. - Would people buy your product more than once?
Desirable purchase patterns are frequent and predictable. Think contact lenses. - Do you have enough resources?
You do not want to find yourself in a position where you run out of money. Even the best product can’t make it to market if there’s no cash or financing. - What are your sales volumes?
They better be strong, and run numbers seeing what will happen if you only make half of your estimate. - How reliant are you on your suppliers?
Be careful not to find yourself in a position where your suppliers are in total control. - How efficient are you?
Is waste and inefficiency minimized? - Do you have a well-rounded team?
Industry experience and a wide variety of skill sets are necessary. So are proven results. - How passionate are you?
If you have any reason to hold back, you are going to. Don’t go for it unless you’re all for it.
