Not a month goes by without someone spruiking an idea, concept, product that they believe I have to make, that will make me a fortune. And when people get into this mode then there is no way to talk them out of it. They have passion, have a vision. So, I sit there and listen. Then I apply my own test to this product as we are talking and decide fairly quickly whether or not it could make money or will be a waste of my time.
So, in today’s blog I am going to write about a simple test I apply to all these ideas. It is a way to just evaluate a product or idea and is just common sense.
And as part of this evaluation, instead of talking theory, I will use an idea we ha, then went and created, only to find out it was a bad idea. This idea was a rental web site, like a version of Ebay, except for rental, instead of sale. It sounded good at the time, but was never going to make it, without a lot of hard work.
Step 1 Listen
Listen to what people want. Even though people will come to me with ideas, I am always listening to what peoples issues are and trying to determine if there is something that could be made from this. And the best comments are when someone is complaining about something. Because, this is when those little light bulbs can go off.
This also means keeping up to date in what happens in IT, as any knowledge you have will help you decide on a product. So, a lot of reading is required.
This is actually market research and the first thing in product development is knowing what people would love to have in their lives and willing to use your product and pay for it.
Step 2 How hard is it to make it?
Or more to the point how much money will it cost to make this product. At the end of the day, it comes down to how much return for the investment. So, you need to ascertain how much money it will cost to make. If you are a sole operator you still need to work out how many hours it will take and what that hourly rate is.
Ultimately, what I am trying to achieve is bang for my buck. Least amount of effort for greatest return. So, the least amount of money that needs to be spent on this the better.
The rental site. We had decided to do it in MS Silverlight, as a training exercise, and was going to require 1.5 programmers for 3 months to create.
Step 3 Has anyone else done this?
If this product has already been made by someone else, what mkes you think that you can do it better?
If it is new, then great. Maybe even look at a patent to protect it.
If it is not new, then if there is nothing new and funky about it, then forget it.
For the example of the rental web site! Yes, there are a few rental websites that are already out there doing this. They do not appear to be going that flash either. So, this is a concern.
It appears that they all rely on heavy advertising budgets to get users to their sites and use their services.
So, why would anyone use this new product, if one already exists?
There is no good reason, as this site would be very similar to the others out there.
Step 4 Who would buy this?
How many people would be interested in this product?
What will this product do for them?
For the rental system! Unsure of the market. It would be a big market, but there are many issues about this market that are completely unknown.
The factors to look at include laziness to get up and use this, the fear of not getting your stuff back, the inconvenience of having to pick it up. Handling freight, pickups, returns, damage done.
It would be for anyone who wants to penny pinch and save some money.
Another risk is will people trust each other with this. I doubt it.
Step 5 How much money could we make?
How are you going to sell it?
What is the unit volume?
Has anyone else sold it this way? If so, how well have they done?
For the rental site. This would be a commission based sale. For each rental made then we receive a 10% fee. The money could be enormous.
Step 6 What are the key factors to make this sell?
What is the advertising that would be used to promote this product? Is it viral, web, door to door, etc
An advertising program must be worked out before coding starts. As it is no use making something if we cannot sell it.
For the rental site! Advertising! This is the key factor with this product. A market analysis would be required to see who would be the potential users, longevity of users, risks associated etc.
But for the rental site, I know of one other company that ran a TV campaign for a rental site. They spent a large amount of money and in looking at their site, it does not appear to be doing that well. On their site there is a lack of items up for rent. Which in turn will discourage customers. But they should have more than this because of the money they have spent on advertising.
Step 7 Does it excite you?
For the rental site! Not really. Seems like a faded version of Ebay.
And I always have to believe in what I am doing. If it do not then I will not make it work.
There would be a good market. But this could be hard work for the users and I referred to this being a penny pinching market. So, they are not going to want to part with their cash unless they have a really good reason. They may even by pass this and just go to the neighbour and ask them and see if they can get it for nothing.
I am not going to jump at this idea, I will leave it in the background and then one day will use it to write about it in a blog.
My analysis was quick and easy. The outcome is that this requires a lot more analysis before it will be given the go ahead. So, I will just forget about it and move onto the next idea.
However, the reality is that we made this, as a training exercise. And I knew it would never fly and be a killer, but it is just one of those things that we do, and we learnt a lot from it.
You may think you are having just discovered something absolutely amazing that if you turn it into a product it will make money. But the chances are it will not. An idea is the start of the process.
To make a killer app, all of the above points must be covered. And it is worth being critical at the start, rather than being broke and disheartened at the end.