Use the 'FACT' Approach to Launch the Right Idea
One of the challenges every inventor faces is deciding which idea to launch first in the market from multiple potential ideas under development. Given that each idea has a unique set of strengths, weaknesses, opportunities, and possible threats, utilizing the FACT test can provide a greater probability for market success.
The FACT test focuses on four major variables as follows:
1. Financial considerations
Each idea has a financial cost and gain to be considered. It is important to consider the amount of investment that is necessary to build the idea to a marketable product. Inventors can spend thousands of dollars in prototype revisions before reaching a level of function that aligns with consumer expectations. Profitability margins will be a key component in determining the idea that yields the highest net profit. Other ideas may have a higher probability for angel financing. For example, certain angel investors put a higher value on a specific technology space or industry domain. Finally, if you are considering product licensing, note that some ideas will have a better chance in securing a licensing deal. It is important to have a projected budget in place for each idea.
2. Ability to enter the market with ease
If you are considering a product that is to be released into a regulated market, the complexity to entering that market may be significantly high and may even threaten any market launch timing (examples of such markets include healthcare, food products, and even children’s toys). In addition, specific industries may have control over a needed resource through exclusivity arrangements, or IP ownership from previous patent filings – all of which will mean higher financial burden for new entrants to that market. As an example, I worked with a small business company years ago that was developing a new solution to help with baby colic; the company spent years trying to work through all the requirements necessary to be classified as a medical device product, which they had not adequately anticipated. Reviewing each proposed idea to its specific industry for ease of entry may prevent you from pursuing a product path that may require a lot more funding or influence than you are able to support.
3. Competitive positioning
The greatest idea may never get discovered in a market of equally great ideas. Consumers are bombarded with new products daily through crowd funding platforms, online advertisements, and retail chains. Often, competitive positioning can cost hundreds of thousands of dollars and may not be feasible for a small business. A strong competitive positioning strategy requires a realistic view on the size of the market and how you plan to deliver value to your customers at the highest level possible. The quickest way to determine the positioning of a product is to poll your potential customers for feedback. I have worked with many inventors who spend countless effort developing a product to launch, and who never engaged with the customer throughout the process to determine feasibility. Just because an inventor thinks it’s a great product does not mean the customer will buy the product.
4. Team dynamics
Building a team behind each idea is always advantageous if you are focusing in multiple markets. You may have a product that is targeted for the hardware industry, hopefully you or a credible partner has deep connections into that industry to support a successful launch campaign. Having this foothold into that market and access to insights on that market, may lead to a faster launch time as a result. If on the other hand, you may are considering a product into an industry in which you have no direct experience or connections to guide, you may be faced with an insurmountable challenge to the business and the time required to build the right connections for success may be infeasible. Finally, you may decide that the best team approach is to license the product and work alongside a large organization that can provide you with the necessary tools to launch your product. The breadth and depth of your connections into a target market should be considered to qualify the potential of bringing your product to a receptive audience.
The most important part is determining the highest idea probability so that you don’t invest a lot of time and money into an idea that may never be successful. Using the FACT roadmap can give you increased confidence on the launch through a methodical planning approach.