7 Methods for Analyzing Your Great Idea Before You Bet the Company on It
Over the past decade I have advised more than 5,000 entrepreneurs on the feasibility of an idea. Often the most difficult task involved for any proposed concept is the proper analysis of that idea. Following a concise idea assessment strategy will save you thousands of dollars in misguided assumptions. Here are the top seven tools that can help validate your next product.
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1. Awareness Trial Availability Repeat
This used in all stages of product development and is most appropriate when estimating the market for a product prior to launch. In this method there are four questions that help determine the strength of the proposed idea:
Awareness: Who is currently aware of the proposed product?
Trial: Who is interested in trying the product?
Availability: Who has potential access to the product?
Repeat: Who is willing to purchase the product repeatedly?
2. Idea Checklist Evaluation
This a method used to evaluate an idea through a checklist of specific questions related to the idea and market. Check out the Princeton Creative Research for an excellent checklist for new product considerations.
3. Consensus Mapping
This is aimed at presenting an idea and having each prospective customer document all the activities, possibilities and suggestions for that idea. The product developer consolidates all the ideas and maps out tasks and deadlines to help define the best suggestions.
4. Delphi Technique
This a systematic forecasting method dependant on the opinion of independent experts to determine the validity of an idea. I have used this technique often to help decipher the strength of a proposed idea in a specific market.
For example, if a client was developing a product for the houseware industry, I would include Warren Tuttle, product scout for Lifetime Brands in the product review stage. Lifetime Brands manufactures and markets more than 30,000 products, and introduce more than 4,000 new products each year, under brand names including Farberware, Kitchen Aid, Cuisinart and Mikasa.
This type of independent expertise is invaluable for the inventor seeking product validation in the marketplace.
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5. Cost Benefit Analysis
This is another technique I have used often with inventors considering multiple ideas. This is an analysis of the sum of all costs to determine if the idea should move forward.
In the analysis of two or more ideas, we review costs for prototype development, patent protection, product liability, manufacturing, distribution and market entry. This strategy can help decipher the best idea to first bring to market by strictly focusing on the financial burden involved with the product.
6. Idea Advocate
The adage "two heads are better than one'' is the basis of this method. You present different ideas to different groups and allow the groups to help decide the best ideas to move forward based on specific attributes and interests. This can be a great strategy if you have several ideas that you want to pose to a focus group to gain their interest and perception.
Most recently, this strategy was used with a company considering development of several applications geared at small businesses. The product developer pitched several ideas that could be incorporated into an application to gain a sense of interest and need directly from the customers.
7. Decision Tree
This is a tool used to graph possible decisions and consequences between different actions that indicate the best chance for success based on available resources, cost and time.
I have used this strategy consistently over the last decade when a company is attempting to analyze if it is better to license the product as opposed to manufacture the product. Once a course of action is determined, specific goals can be developed.
It is more important to focus on the science of conducting a thorough analysis of a proposed product then the actual type of tool utilized. The more that an idea can be analyzed prior to commercialization, the stronger the probability that it will be adopted in the marketplace.
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